Professional Associations Superannuation Limited (PASL), the $1.2 billion industry super fund, has overhauled its investment strategy, streamlining the investment options across its three divisions and reducing investment management fees by around 60 per cent.
Investment manager Paul Kessell, who joined PASL in June last year, said the new investment strategy included nine investment options – four pre-mixed options (aggressive, growth, moderate and stable) and five asset class options (Australian shares, overseas shares, property, bonds and cash).
The largest mandates went to Vanguard, Cooper Investors and Concord Capital for equities, and Barclays Global Investors and PIMCO for bonds.
A $140 million mandate was awarded to Vanguard Indexed Australian Equities, $190 million went to Vanguard Indexed International Equities, and $70 million went to both Cooper Investors and Concord Capital, for Australian equities mandates.
PASL has allocated $50 million to the BGI Global IL Bond Fund, $50 million to the BGI Overseas Bond Index Fund, and $50 million to the PIMCO Real Return Fund.
“The restructure of the investment strategy has resulted in improved economies of scale, lower investment management fees, a stronger relationship with the underlying investment managers and a more streamlined investment strategy that puts us in a great position to achieve our investment objectives across the economic cycle,” Kessell said.
Prior to the restructure, PASL’s three divisions – RecruitmentSuper, Accountant Super and Australian Enterprise Super – had different investment strategies and varying numbers of investment options. Accountant Super had eight investment options; Australian Enterprise Super had four and RecruitmentSuper had six.
Kessell worked with the fund’s asset consultant, Watson Wyatt, and trustee board over the last six months to develop a mission statement, new set of investment options and a strategic asset allocation, which included reviewing the existing manager roster and deciding which managers to retain and which to terminate.
PASL has also hired Paul Griffiths, previously a performance and pricing analyst at AustralianSuper, in the new role of investment analyst.
Griffiths will support Kessell in the management of the fund’s investment strategy, focusing on investment research, monitoring the fund’s asset classes and developing the fund’s investment policies.
Kessell said initially Griffiths will focus on the fund’s current asset classes and investment managers, however in the second half of the year he will begin to consider new asset classes and ideas.
“Over time, the role will develop into reviewing potential investment opportunities but at this stage, given he’s just come on board, we’re initially looking to build our internal processes and capabilities with a focus on developing a stronger understanding of our managers and their investment strategies,” Kessell said.
Zurich Global Thematic
Genesis (Emerging markets)
DEXUS Wholesale Property Fund
Charter Hall Property Office Fund
Global listed property
Bridgewater All Weather
Warakirri Alternative Strategies
Holowesko Global Fund
Management Offshore Fund II
Hastings Utilities Trust of Australia
Australian fixed interest
International fixed interest
Global inflation linked bonds