BlackRock Investment Management (Australia) Ltd. will manage 45 per cent of VicSuper assets after the not for profit Melbourne-based fund gave it $3.8 billion to manage.
Blackrock will manage VicSuper’s money in Australian stocks, bonds, cash and global bonds based on index mandates. VicSuper has undertaken a review of its investments. It now wants to put as much as 70 per cent in index funds and 30 per cent in actively managed funds.
“Our allocation at the moment is as high as it will be to BlackRock,” says Oscar Fabian, VicSuper’s chief investment officer.
“When we appoint active managers we will fund those mandates from the BlackRock allocation,” he says.
VicSuper manages about $8.5 billion for about 250,000 people including Victorian government employees and small and medium sized companies. New York-based BlackRock is the world’s largest asset manager with US$3.3 trillion assets under management.
Fabian says the decision to index a significant percentage of its assets under management to BlackRock has meant VicSuper has cut the number of people in its investment team to three from six. Two people have lost their jobs and one has been transferred internally, he says.
The VicSuper pension had a compound average net earnings rate over 10 years to June 30, 2011 of 5.1 per cent. That was below the objective of 8.91 per cent.
“These are our first mandates from” VicSuper, said BlackRock Australia chief executive Damien Frawley in a statement.
“We are both signatories to the United Nations-backed principles for responsible investment and act on the belief that excellent corporate governance is essential for sustainable value-creation,” he said.