Professional Associations Superannuation (PAS), the $1.27 billion industry super fund previously known as PASL, has awarded a $25 million mandate to a residential mortgage-backed securities manager.

PAS has selected Macquarie’s Debt Market Opportunity No. 1 Fund for its first initial new allocation to the alternatives space.

The fund currently invests around $75 million in alternatives and investment manager Paul Kessell said the allocation to the RMBS product was part of PAS’s broader alternatives strategy.

“We regard it as being an allocation to Australian credit,” Paul Kessell, investment manager at PAS said.

“We saw it as an opportunistic investment. At this stage we’re essentially reviewing how we’re going to develop the alternatives portfolio – we haven’t made any decisions beyond the initial investment.”

PAS currently invests in hedge funds via a $15 million mandate with Bridgewater and a $26 million mandate with

an Aurora fund-of-funds.

Kessell said the fund planned to build on
its alternatives investments over time in a “considered, methodical fashion” as
it sees opportunities arise.

The fund’s strategic asset allocation
includes 53 per cent equities, 10 per cent property, 20 per cent bonds, 2 per
cent private capital and 15 per cent liquid alternatives.


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