Towers Watson has won its fourth advisory client from Russell Investments in about 12 months, following the appointment of a new asset consultant by a $3.5 billion institution.
The ACT Department of Treasury’s Finance & Investment Group (ACT Treasury) decided to replace Russell only 30 months after hiring them, following a review led by the group’s manager, Patrick McAuliffe. The three other advisory clients which Towers Watson has won from Russell recently are Funds SA, the Westpac staff super fund and IncoLink.
It is understood the managers of the $3.5 billion funds were affected by turnover at Russell over the last two years. ACT Treasury’s initial ‘principal consultant’ was Sam Sicilia, who left for HOSTPLUS in March 2008, while its latest was Jim Franks, who retired this March after 17 years with Russell, mostly in Canada.
ACT Treasury is not a super fund, but rather a group of funds the bulk of which look to cover the unfunded pension liabilities of employees of the ACT Government, in a similar fashion to the Federal Government’s Future Fund.
Russell has recently sought to re-energise its investment advisory business, bringing in former implemented equiites head at QIC, Greg Liddell, to run the arm last year. Liddell and other key hires have translated to notable recent wins in the advisory space, such as the mandate to advise on IOOF’s $10 billion of portfolios. Russell’s managing director in Australasia, Chris Corneil, recently said Russell Investments had had “more meetings with industry funds in the past five weeks than we’ve had in the past five years”.
Towers Watson’s principal consultant to ACT Treasury will be Graeme Miller, the head of Towers Watson’s investment business in Australia.
Graeme Miller, said the ACT Treasury mandate was a “high-quality new business win” which fits with the firm’s strategy of steady growth at a pace which matched resources.
Miller said that most new business tenders recently included questions on how the consulting firm handled the global financial crisis.
“I think funds are particularly interested in how we reacted to the crisis,” he said.
Funds were also interested in global reach – not so much in having offices in every country but more in terms of having the scale to cover the global universe.
While the nature of the relationship between funds and consultants changed, Miller said: “As funds’ internal teams expand, we can have richer and deeper conversations with them.”