We’ve got no intention of building a big, bottom-up stockpicking team. We want to keep things manageable.” UniSuper’s investment committee – which includes a number of former funds management executives, notably Chris Cuffe, of Colonial First State fame – set two fundamental tests for Pearce as he developed the internal strategies: the funds must be “robust and logical”, and their performance competitive with similar offerings in the market. As a management company, the internal team has an investment management agreement in place with the trustee – “like an arm’s length transaction with an external funds manager,” Pearce says.

The team has linked with a panel of three brokers to mitigate counterparty risk, and uses Bloomberg systems to manage portfolios, liquidity and risk limits. Should the strategies take off, Pearce says he would not be fazed by any battle to retain team members if they were offered jobs outside the fund. UniSuper pays market rates for investment staff, but the best retention tool, Pearce says, is to ensure the team sees the fund as an employer of choice, “and if by chance they leave, then you have no problems attracting top talent”

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