The $5 billion NSW Local Government Superannuation Scheme (LGSS) has cut all investment ties with Chifley Financial Services, the services provider it part-owns, after allocating a redeemed $50 million international small-caps mandate with Chifley to another manager.
LGSS replaced Chifley as the manager of its sole international small-caps exposure with Schroders Investment Management, Peter Lambert, chief executive officer of the fund, said.
Schroders was chosen to replace Chifley, which appointed US firm Turner Investment Partners as underlying manager, because of its “good track record and commitment to sustainability principles,” Lambert said.
He confirmed the manager change “exits us out of all Chifley investment vehicles”.
Since the appointment of its first chief investment officer, Craig Turnbull, in mid-2008, the fund has culled its hedge fund-of-fund, domestic property, listed property, international small-caps and ‘specific share’ mandates with AQR and AllianceBernstein.
“We were ready to go, but wanted to appoint a CIO first. It’s easy to terminate a mandate, but you need to have replacements there. And it wasn’t appropriate to select managers prior to the CIO coming on board,” Lambert said.
Chifley manages the $264 million FuturePlus Super, a public-offer fund, in addition to an insurance broking business and the Chifley Investment Fund, its funds management operation, which runs wholesale and retail vehicles.
According to the 2008-09 annual report for the wholesale version of the Chifley Investment Fund, the manager held $663 million under management. But in January LGSS told I&T News it had redeemed $580 million in direct property investments from Chifley.
The fund also revealed it aimed to sell its 33 per cent stake in Chifley to either of the other joint-owners, the Energy Industries Superannuation Scheme (EISS) and Unions NSW. But these discussions were scuppered when LGSS learnt of a plan, formulated by the EISS and NSW Treasury and with apparently no input from LGSS, to merge the two funds.