Sustainability and environmental, social and corporate governance (ESG) were key considerations in VicSuper appointing four new international equities managers as part of an investment strategy review.
The $9-billion fund has announced the appointment of international equities managers to share mandates of just under $550 million.
The open-ended mandates followed an investment strategy review and were awarded to the following fund managers:
– $200 million to Walter Scott & Partners
– $124 million to Global Thematic Partners
– $124 million to Sanders Capital
– $120 million to Martin Currie Investment Management
Chief investment officer at VicSuper, Oscar Fabian, said that the fund’s trustees had changed the international and emerging-market equities portfolio to create “core and satellite components” in which the passive core would be 70 per cent for developed markets and 50 per cent for emerging markets. Previously, the core was 100-per-cent passive for both markets.
The balance would be allocated to “satellite” managers with a diversity of active investment styles.
“To make a difference the satellite managers need to be quite active,” Fabian said in a telephone interview.
“So we’ve ended up with three developed-market managers and one emerging-markets manager.
“They are all different but complimentary, and all have very well thought-out themes in their different styles.”
The allocations were funded by drawdowns from two passive index funds, the Vanguard Emerging Markets Shares Index Fund and a BlackRock international indexed fund.
Fabian said principles of sustainability were key criteria in selecting the managers, all of whom had demonstrated they had integrated sustainability and ESG into their investment processes.
VicSuper worked with Frontier Investment Consultants to identify potential new managers, who were then invited to present to the fund.
The new managers will report their first full month of performance for VicSuper at the end of August.