Towers Watson has displaced Strategic Capital Management (SCM) as the main investment consultant to the $3.3 billion MilitarySuper, with SCM continuing to advise on specific areas, according to the fund’s chair, Tony Hyams (pictured).
“We’re not yet specifying what SCM will be doing,” he added. “It’s not necessarily specific investments, but rather specific areas.
“It’s a continuing relationship which is in the process of being defined.”
SCM had been the investment consultant for the Military Superannuation and Benefits Scheme (Military Super) for more than seven years – “a long marriage by any standards”, Hyams said. “The (new) consulting agreement begins immediately, and has, in fact, begun.”
MilitarySuper had a “broad and fairly exhaustive tender to look at the market” over about three months, he said, “and in the end, the board chose Towers Watson because they provided us with the best fit”.
While Hyams would not say how many consultants tendered, he said “quite a few” had responded to the Request For Proposal. The tender was assisted by former Australian Reward Investment Alliance (ARIA) portfolio manager, Ephraim Grunhard, who left the big Commonwelath public sector fund last year after 16 years.
The tender process began before current CEO Michael Seton came on board, but Seton “was involved in the selection process, along with the board”, Hyams said.
The Towers Watson principal consultants to MilitarySuper will be Graeme Miller, head of investment consulting, and Ross Barry, head of alternatives, with “access to quite a range of other Towers Watson staff”, said Hyams.
“We’re very happy with the thorough process we undertook and we appreciate those who made tenders – which were very impressive.”
Hyams is also chair of the ARIA, which currently lacks an holistic asset consultant, but he said the Towers Watson appointment to MilitarySuper had “no relationship whatsoever with ARIA”.
MilitarySuper’s new CEO, Michael Seton – who joined at the beginning of October this year – said the decision to review the fund’s consultant was simply a matter of good governance. “It has been many years since a review has occurred, so we recently undertook a comprehensive tender”.
Commenting on SCM’s retention, Seton said the consultant had been “a significant partner for MilitarySuper over many years and they will have an ongoing relationship with us.”
MilitarySuper has $3.3 billion in assets and 150,000 members, who are either current or past members of the Australian Defence Force.
