Australia’s oldest mandate…probably When MLC rejigged its debt securities portfolio recently, a forward-looking approach was taken. For instance, global government bonds were split out as a specialist sector, and underlying managers were pigeon-holed so that the multimanager could try and control exposure to interest rate and credit risk. However, few would have realised the restructure was also a case of history coming full-circle. You see, the architect of MLC’s new-look fixed-interest strategy, debt portfolio manager Stuart Piper, was in fact the recipient of Australia’s first-ever outsourced specialist fixed-interest mandate, way back in 1985 – and it was awarded by MLC. The company, which at that point had only just become wholly owned by Lend Lease, had been managing its fixed interest in-house. However after a review by what was then Frank Russell, it decided to focus on advice and distribution instead, and went searching for something novel – an external manager. It found Dominguez Barry Samuel Montagu, later to become SBC Dominguez Barry and now UBS Australia, where Piper was a young bond manager somewhat frustrated by his investment universe.

“It was very much a sovereign market back then, you were managing duration around government and semi-government bonds. There was very little credit, although you’d have industrials issuing bonds direct to super funds. But there was no index that measured more than one sector,” Piper remembers. In an attempt to better measure their own performance, Piper and colleagues designed the benchmark that eventually became the UBS Composite Bond Index. Ironically, it’s the sort of all-in-one index that Piper is now moving away from with his MLC re-jig. Asked how it felt to invent something as widely known as the ‘UBS Composite’, Piper confessed it made him “feel old” more than anything else. Unfortunately it’s done nothing for his bank balance, either – the intellectual property behind the index remains firmly in the hands of its eponymous investment bank. Piper stayed on with UBS and kept managing the MLC mandate, only relinquishing control when he was stationed overseas.

However he left UBS in 2008 and returned to Sydney from London, where he joined MLC later that year. UBS Global Asset Management still runs the fixed income mandate for MLC, by the way, which at 25 years, and counting, has to be close to an Australian record. A Greek hairdresser’s lot was never perm The laid-back lifestyle of the Greeks looks like becoming a thing of the past, especially if the government manages to comply with the IMF requirements to cut back the deficit. And, from a distant view, there is certainly room for the Greeks to follow Australia’s lead to increase the retirement age. As is now well known, Greeks retire early, but until the crisis we didn’t realise just how early and how some professions allowed for longer retirement than others.

Leave a comment