Paul Kessell


The board of the $1.5 billion Professional Associations Super (PAS) has authorised its investment team to perform dynamic asset allocation.

The investment manager for the industry fund, Paul Kessell, said his team was yet to use the discretion recently granted it by the PAS trustee.

Kessell will work with the asset consultant to PAS, Towers Watson, on implementation of any shorter-run asset allocation changes, using an approach similar to the ‘Dynamic Strategic Asset Allocation’ (DSAA) concept recently developed by the firm.

In a 2010 paper discussing DSAA, Towers watson differentiated it from the better known tactical asset allocation (TAA) in this way.

“TAA aims to make profits by ??predicting the movements of investment markets over short term periods—often measured in weeks or months. TAA is typically implemented by investment managers (often hedge funds), and TAA positions are implemented only in liquid asset classes—by taking either long or short positions.

By contrast, DSAA decisions ??are made with a longer time horizon in mind (typically a medium-term horizon of more than three years, but less than the ten year view of strategic asset allocation. Decisions are typically made and implemented by the fund fiduciaries rather than investment managers, and DSAA positions tend to be long only exposures in both liquid and illiquid asset classes, although the time horizon and level of conviction required is likely to be longer for illiquid asset classes.”

Kessell did not expect any major deviations away from the “fairly conservative” prfoile currently adopted by PAS, which allows only a “nominal” exposure to unlisted assets.

PAS counts among its divisions Recruitment Super and Accountants Super.

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