Exchange-traded funds might have stolen some of their airtime of late, but the managed account industry is reasserting itself with the resurrection of its industry association. MICHAEL BAILEY reports.
Emerging markets: understanding the risks
Emerging markets offer compelling long-term return potential, but continue to present risks that every investor should understand. NORIKO KUROKI, of the emerging markets equity team at J.P. Morgan Asset Management, discusses the risks inherent in emerging markets and looks at the effect they have had on economic and investment performance.
Boon for managers: Korea fund outsources billions
The National Pension Service (NPS) of Korea will outsource 26 trillion Korean won – the equivalent of $23 billion – to external funds managers this year as it moves towards its 2015 strategic asset allocation (SAA), which will see a dramatic increase in equities and alternatives. The fund’s long-term SAA sees domestic equities shifting to more than 20 per cent, from its current 15.9 per cent allocation, and by 2011 the fund aims to have that allocation sitting at around 18 per cent of the fund, the head of institutional networks and communications at the NPS, Ha- Young Kim, said. The other major shift will be in the alternatives allocation, shifting from the 2010 allocation of 5.5 per cent to 7.8 per cent at the end of this year, and ultimately to more than 10 per cent by 2014.
Australia’s Catastrophe Crossroads
Natural disasters belted parts of Australia and New Zealand this summer. As affected people of Queensland and Christchurch begin to rebuild their lives, and governments and insurers tally up the costs, there has been speculation about whether this episode of nature’s fury warrants a domestic catastrophe bond market. MIRANDA WARD reports. It will be some time until reinsurers determine whether the earthquake that hit Christchurch on February 22 was a standalone seismic event, or an aftershock from the quake that rocked the city in September 2010. In other words, it will take weeks to determine who, be it reinsurance companies or the New Zealand Government, has to foot the multi-billion dollar damages bill.
ESG matters in emerging markets
Martin Currie has unveiled its new emerging markets strategy ahead of the launch of an Australia-domiciled fund. The new team, recruited from Scottish Widows Investment Partnership (SWIP) last year, has a strong sustainability bent. GREG BRIGHT spoke with two of the team leaders, Kim Catechis and Andrew Ness.
State Street plans next 25 years in Australia
State Street celebrated its 25th anniversary in Australia last month with the opening of a new office in the heart of Sydney which enables, for the first time, the company’s 700 local staff to come together in the one building. Jay Hooley, the company’s chairman, president and chief executive, elaborated on the milestone. GREG BRIGHT reports.
Call to action adapting to super’s next evolution
The drive for superannuati on reform has shifted gears: new polici es have been committ ed to, and the gritt y work of imp lementati on is under way. It’s essential that the Stronger Super panel, set up to advise the Government on making MySuper, SuperStream and better trustee governance a reality, achieves consensus in this crucial stage. Can this be done? And what do these far-reaching changes, in addition to the forces of consolidation at play, mean for the future of the peak bodies representing the industry? SIMON MUMME and PHILIPPA YELLAND report. The small-cap effect in PE – different but worthwhile
When Kevin Kester was running a US$4 billion private equity and real estate portfolio for the big Colorado Public Employees Retirement Fund a few years ago, he became aware of how difficult it was to invest in smaller companies. This was a bit frustrating because he was also aware that the small end of the private equity market seemed to be less efficient than the large end, and exhibited different characteristics. For instance, unlike the public markets, smaller private companies tend to trade at lower price:earnings ratios than their larger counterparts. This allows potential purchasers the ability to buy cashflows for less money. With less money at stake, there is also less pressure to leverage the businesses in order to get target returns of 20 per cent or more. Life under the macroscope
The major investment themes for this year, according to a report from MLC Investment Management, were meant to be the ongoing “muddle-through” global recovery, sovereign debt blues and China’s slowdown. The risk of asset bubbles in Asian equity and property markets, and in commodity markets and economies, were also highlighted. But this was before March. MLC’s note was current enough to forecast the impacts of the summer floods on the Australian economy, but not the civil strife in the Middle East. Nor the 9.0 Richter Scale earthquake and tsunami that devastated parts of northern Japan. 
