A $2 billion industry fund client of Access Capital Advisers has issued tender documents to selected asset consultants following a year in which its default option returned -20.9 per cent.
Statewide Super’s chief executive, John O’Flaherty, confirmed to I&T News the fund was “going to the market for asset consulting services” through a selective tender which included Access, its consultant of five years.
O’Flaherty said the tender, which is being run by chief investment officer Con Michalakis, was driven by a governance policy mandating that all major contracts be tendered upon expiry, and was not spurred by the recent underperformance of its default option, Statewide Growth, or the asset allocation pursued under Access and principal consultant Tim Wrigley.
Access has been rocked recently by the departure of Paddy Jilek, a founding director of the business who remains a 24 per cent shareholder (see previous coverage), and a big writedown in the value of its investments in the Carrix group of ports as imports to the US slumped during the financial crisis, it is understood.
Statewide was exposed to these US ports, O’Flaherty said, but the fund’s size meant that “any one investment is quite small”.
“There’s always going to be – in any portfolio – some assets that will underperform other assets,” he added.
The centrepiece of Access-advised investment strategies is a ‘target return portfolio’ mostly containing illiquid assets such as infrastructure, direct property, private equity and high-yield debt. While Statewide still manages this portfolio, it has closed it as a member investment option because of the extensive return horizon it demands.
“We’re happy to see it in the mix, but not as a pure investment option,” O’Flaherty said.
The $2.9 billion Westscheme, also an Access client, announced in February that it would not offer the target return option to members from June 30.
As it invites consultants to pitch for its business, Statewide will also openly tender its group insurance contract, currently with MetLife. The aim of the tender will be for Statewide to access cutting-edge product features, such as occupation-based premiums, O’Flaherty said.
“We want to feed more accurate information into insurers to get better pricing for the various occupational categories that we’ve got.”
With input from RiceWarner, the head of business development and client services at Statewide, Bill Watson, will conduct the tender.
Michalakis and Watson should deliver the outcomes of their respective tenders within the next three months, O’Flaherty said.