The $2.5 billion Non-Government Schools Super Fund has gone for a distinctly boutique flavour in a complete overhaul of its $600 million international equities portfolio, with AMP Future Directions and Barclays Global Investors the big losers.
Those two firms, which once shared the bulk of the portfolio, have been usurped by eight mostly boutique names in a review co-ordinated by NGS’ investment committee, chief investment officer Bill Dwyer and asset consultant JANA.
The eight new funds, which according to Dwyer have received roughly equal weightings, are: Baillie Gifford Long Term Global Growth Fund, from a bottom-up, active manager of concentrated portfolios with a quantitative overlay; Deutsche Global Thematic Fund, which aims to be broadly cycle-neutral; Orbis Global Equity Fund from the long term contrarian value manager; Pzena Global Value Fund from the deep value manager focused on underperforming companies; Holowesko Global Equity Fund from the boutique bottom-up house; Taube Hodson Stonex Partners Global Equity Fund from the thematic bottom-up manager; Wellington Special Strategy Portfolio from the high conviction, technically driven offshoot of this global equity manager; and the Charlemagne Emerging Markets Fund which takes a core, bottom-up approach to the asset class.
The one mandate retained is with the Colonial First State Emerging Market Fund.
The chief executive of NGS Super,Anthony Rodwell-Ball, commended the transition management performed by Citi.
Rodwell-Ball said Citi had kept costs very low despite extreme volatility in international equity markets.
"The decision of the Fund to equitise with futures the cash component of its applications into the new managers also added significant value as markets rebounded from the transition date to the point that the applications were finalised on December 31, 2008," Rodwell-Ball added.
From this Friday, Bill Dwyer will embark on on-site meetings with all of the new managers.
Rodwell-Ball said the new manager line-up diversified NGS Super’s risks in the global shares asset class.