The $7 billion HOSTPLUS has appointed a former asset consultant from Russell Investments as an investment analyst to assist investments chief Sam Sicilia, and awarded opportunistic mandates totaling $320 million to equity and credit funds managers.
Dmitry Capel joined the fund to assist Sicilia perform operational duties and enable the chief investment officer to spend more time thinking strategically about investments.
“Looking at our actual exposure to emerging markets, considering manager requests to vary mandates, contacting external research providers, funds managers that want us to look at new products – all of this is valuable, but takes up enormous amounts of time and detracts from good strategic thinking,” Sicilia said.
“In this business, you can be bogged down by the important but nonetheless time consuming day-to-day operational. Dmitry shares that load, and affords me an extra day or two a week for strategic thinking.”
During Sicilia’s tenure at Russell, prior to his appointment at HOSTPLUS, he recruited Capel into the company’s traditional consulting team.
Since joining HOSTPLUS in June, Capel has worked with Sicilia on a review of HOSTPLUS’ member investment choices to assess whether there were any shortcomings or “gaps” in the offerings, and shared the operational tasks that Sicilia once undertook on his own.
The investments chief said the arrangement should improve the outcomes of HOSTPLUS’ relationship with its asset consultant, JANA Investment Advisors.
“JANA has a huge amount of resources. We can either be a recipient of that advice or provide an input into it. And you need time to think in order to put something constructive into the process.”
Meanwhile, HOSTPLUS allocated four new investment mandates in July. Two $50 million structured credit mandates were signed with US managers – New York-based Stone Tower Capital and Massachusetts-based Babson Capital – while Illinois’ IronBridge Capital Management received $120 million to invest in international equities to address HOSTPLUS’ underweight position in that sector.
For the fund’s first investment in private equity secondaries, Partners Group was awarded a $100 million mandate.
Sicilia said it was an appropriate time to invest in structured credit and private equity secondaries markets because distressed vendors were offering good assets at cheap prices.
Managers could “cherry pick” the best assets among those up for sale, he said.
All of the mandates were funded from cash flows.