Sunsuper’s increasing scale and investment team enabled it to pull a $1.3 billion multi-manager international equities mandate from AMP Capital Investors and back itself by splitting the redeemed money among five managers. The $15 billion super fund withdrew the long-standing mandate with AMP Capital Investors’ core international equities fund [a multi-manager product in the Future Directions Funds (FDF) stable that is co-advised by Mercer Investment Consulting] and allocated the money itself in five customised mandates, giving it ownership of individual securities, more control over tax events and clearer visibility of the effects of currency movements, David Hartley, chief investment officer at Sunsuper, says.

Hartley confirmed the $1.3 billion was invested in mandates of “roughly equal” size with the following managers: Edinburgh’s Baillie Gifford, London’s Taube Hodson Stonex Partners and three US managers [GMO, Lazard, and Tweedy, Browne]. Sunsuper appointed AMP Capital to run core international equities when it was considerably smaller than its current $15 billion, so it could club together with other investors to achieve greater scale. As the fund grew, the mandate became a major chunk of the fund’s $3.1 billion international equities portfolio.

The move out of the product illustrates the greater control that super funds can exercise as they grow larger and recruit investment staff. “When we didn’t have much money, we were pooling ourselves with [AMP Capital] and Mercer to get benefits of scale,” Hartley said. “Now we’re a lot bigger than what we were, and are getting a more tailored approach.” In allocating the redeemed money, Hartley and Joshua Bloom, Sunsuper’s international equities portfolio manager, awarded mandates to two mainstays in the AMP Capital product, Baillie Gifford and Taube Hodson Stonex Partners. Hartley was “quite happy” with the outcomes of the fund’s investment in the AMP Capital product, and said there were no plans to redeem its allocations to the multi-manager’s emerging markets and “extended markets” funds.

The latter product accesses more diverse strategies, such as small-caps, and international markets. However these investments were smaller than the $1.3 billion core international equities mandate, so that “the rationale for having them pooled still exists,” Hartley said. “They’re smaller and a bit more esoteric.” Hartley, who represented Sunsuper on the AMP Capital investment committee, stepped down from this position when the fund terminated the mandate. It was his second posting to the group, following his time there while he was CIO of Mercer from 2000 to 2003. In other news, Sunsuper negotiated a $50 million mandate with Anchorage Capital, a distressed debt manager based in New York.

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