The $2.5 billion Westpac Staff Super scheme has terminated its primary asset consulting contract with Russell in favour of another traditional consultant, while increasing strategic allocations to alternatives across its growth investment options.
The corporate fund has chosen Watson Wyatt as its primary investment advisor following a review, ending a relationship with Russell that begin when it bought Towers Perrin’s Australian business in 2003.
It could not be confirmed at presstime whether Russell had re-tendered for the business, as it continues to review its areas of focus in Australia (it did not seek reappointment at FuturePlus’ investment advisor).
Sovereign Investment Research continues on as the fund’s alternatives advisor. It is unclear what role was played in Watson Wyatt’s success by recent hire Ross Barry, who left Sovereign in December to become head of portfolio construction and diversity.
Jim O’Connor, plan secretary of Westpac Staff super, declined to comment on the change of asset consultant.
Russell currently maintains other lines of business with the fund. In 2008, Westpac Staff Super introduced emerging markets into its portfolio by investing in the Russell Emerging Markets Fund, and the Russell Global Property Fund I features among the fund’s 13 mandates to alternatives managers. The administration of Westpac Staff Super is conducted by Russell Employee Benefits.
Watson Wyatt also has an existing relationship, with director Brad Jeffrey performing actuarial duties.
Meanwhile, the fund’s changes to the strategic asset allocations of its higher growth, balanced growth and moderate growth member investment options were implemented on April 1.
The proportion of growth alternatives in the higher growth option increased from 5 to 15 per cent, at the expense of fixed interest and defensive alternatives.
The weighting to growth alternatives in the balanced growth option was increased from 5 per cent to 10 per cent as allocations to domestic and international equities were cut.
Defensive alternatives were introduced to the moderate growth portfolio, receiving a 10 per cent wedge at the expense of cash and fixed interest.