Sunsuper’s decision to pull a $200 million mandate with Everest Financial Group was caused by the departures of key executives from the alternatives manager, which triggered a contractual termination clause.
Everest announced that Sunsuper was redeeming the tailored mandate in the days after it was reported that John Peterson, head of investments and risk with the manager, had joined Sovereign Investment Research as a principal.
At the same time, Steve McKenna, head of Everest’s absolute return funds, was preparing to leave the manager. He later resurfaced at the $8 billion GESB as head of credit and alternatives [see related story].
The departures triggered a termination clause in the mandate that Sunsuper held with the manager, David Hartley, chief investment officer of the $12 billion industry fund, confirmed.
Sunsuper awarded the mandate – to build an absolute return fund-of-funds – in June 2008. It was Everest’s first institutional win in the Australian market.
According to Everest, Sunsuper will pull the mandate by August 31. But Hartley said the fund had, at least temporarily, “taken over the role that Everest played” in managing the tailored product and was mulling whether it should keep its allocations to the underlying funds chosen by Everest.
“We had an agreement with Everest about key people, which got triggered, and we’ve now taken the opportunity to look after it ourselves," Hartley said.
“The underlying hedge funds are still there…and the investments are in our own name.”
Bruce Tomlinson, who oversees Sunsuper’s investments in alternatives managers, is assessing the managers.