The $1.4 billion Asset Super has
consolidated its currency overlay management, dropping its two previous overlay
managers and appointing a single manager across international shares and
John Paul, chief executive officer of Asset
Super, said the fund has selected Tactical Global Management (TGM) for currency
overlay across its $254 million international shares portfolio and its $42
million international alternatives portfolio, having previously used State
Street Global Advisors (SSgA) to overlay global equities and Quentin Ayers for
The fund’s relationship with Quentin Ayers
was terminated in March this year after its three-year contract expired.
“Our alternative assets were nearly all
overseas investments, and Quentin Ayers did an overlay for us for those
particular assets,” said Paul.
“We didn’t think it was efficient to have
different overlays put in place across our international exposure. We wanted to
consolidate it and make it more efficient, so we arranged for some quotations
to do the job which included SSgA.
“The pricing we got was very competitive
from TGM so we arranged for them to take that for us across both our
international alternative investments and our international equity investments.
We’ve got one manager going forward who will look at our exposure to currency
for international investments.”
Paul said most of the fund’s international
bonds exposure was already hedged.
Asset Super is also reviewing its $72
million listed property portfolio, which is split between La Salle, Perennial
and Vanguard, and considering increasing exposure to unlisted real estate. The
fund has a $14 million investment in the Australian unlisted property sector
via Lend Lease.
Paul said the fund’s asset consultant,
Mercer, was looking at opportunities across the entire portfolio, including
“We’re primarily exposed to listed property
and as you’d be aware, listed hasn’t done particularly well in the marketplace,” he said.
“We’re looking at that to see whether
there’s some latitude for us to consider some unlisted as well as listed
Mercer was appointed by Asset Super in July
last year, and Paul said the portfolio-wide review had taken longer than
expected due to the global financial crisis.
Earlier this year, the fund overhauled its
international equity manager line-up, assigning four new mandates in a
portfolio of six names.
AllianceBernstein and Franklin Templeton
were retained while Martin Currie, Lazard and Schroders picked up new mandates.
The fund also redeemed a passively managed
international bonds mandate with SSgA worth $115 million and split its
international bonds portfolio among four new managers: Franklin Templeton,
Mondrian (UK), Kapstream and BlackRock.