As managers wait nervously to learn if their mandates with QIC’s closing implemented programs will be transferred or terminated, the chief investment officer at major client QSuper, Brad Holzberger, has clarified where his fund’s internal investment arrangements are up to.
As speculation grows that every listed-asset manager on QIC’s implemented global equities, absolute return and tactical asset allocation programs could lose their mandates, Holzberger said QSuper was yet to insource a single investment function from its foundation funds manager.
He said he had been in discussions with QIC about its restructuring on “the alpha side of things”, but confirmed that all of the implemented mandates, and indeed QIC’s mandates in every asset class including Australian equities, remained in place.
“Earlier this year QSuper made some statements, that its long-term strategic intention was to have more independent decision-making. We’re starting to put together research and investigate our options to do that,” he said.
Rejecting a market rumour that QSuper had ‘taken back’ $7 billion from Simon Hudson’s disbanded low-risk Australian equity strategy and was preparing to index it, Holzberger said the fund’s internal team had no intention to directly manage money at all.
He said questions on day-to-day portfolio management or transition management of the implemented programs were best left to QIC.
Announcing QIC’s new business strategy spearheaded by ten specialist internal boutiques on September 7, CEO Doug McTaggart said the manager was “working with its clients [of the three affected implemented programs] to facilitate the efficient transfer or wind-down of these investments within agreed time-frames”.
McTaggart was reluctant to get into specifics last week, however there is strong market evidence to suggest that programs previously overseen by Aongus O’Gorman, including active currency and hedge fund-of-funds, are being wound up. O’Gorman, previously the head of implemented absolute return, was one of 40 redundancies associated with the September 7 announcement (although McTaggart said of the 40 in those affected roles, 15 had been redeployed).
Global equity managers for QIC say they have heard nothing official from their big implemented client, although some say they have heard enough unofficially to fear the worst. The trust for ‘external’ clients looks likely to be closed and money returned, while there is some hope that mandates for which QSuper and Queensland Treasury are beneficial owners may be retained via in specie transfers.