Superannuation and other large investment funds should now be prepared for imminent changes to tax law – the Taxation of Financial Arrangements (TOFA) legislation – and know the impacts it will have on their backoffice operations and investment returns in the future. TOFA aims to align taxation more closely with the commercial recognition of gains and losses, and requires super and investment funds with more than $100 million under management to keep accurate transaction records for assets defined as ‘financial arrangements’ – typically debt instruments and derivatives – in which taxpayers have the right to receive, or have an obligation to provide, a financial benefit which can be settled in cash.
All grown up now: Sunsuper pulls $1.3b from AMP Capital and backs itself
Sunsuper’s increasing scale and investment team enabled it to pull a $1.3 billion multi-manager international equities mandate from AMP Capital Investors and back itself by splitting the redeemed money among five managers. The $15 billion super fund withdrew the long-standing mandate with AMP Capital Investors’ core international equities fund [a multi-manager product in the Future Directions Funds (FDF) stable that is co-advised by Mercer Investment Consulting] and allocated the money itself in five customised mandates, giving it ownership of individual securities, more control over tax events and clearer visibility of the effects of currency movements, David Hartley, chief investment officer at Sunsuper, says.
Russell’s big win supports alternatives entry
Russell’s pipping of an industry fund and a corporate master trust competitor to win the coveted OneSteel super outsourcing contract will see the steelmaker’s employees saved $2 million a year in admin fees, and be exposed to alternative assets for the first time. Russell’s Balanced Opportunities pooled super trust will seed three new ‘alternatives’ sector funds underlaid by six new managers, as it becomes default option for the 11,000 new OneSteel members of the Russell SuperSolution Mastertrust, with a push into unlisted alternatives to follow.
Corporate actions shift Pengana’s event-driven hedge fund
Backed by Pengana Capital, Antonio Meroni brought the Asia-focused hedge fund he ran under the banner of Rubicon Asset Management – which fell with its owner Allco Finance Group in early 2008 – back to market, while hiring Singapore-based staff for manufacturing and distribution. At Rubicon, Meroni and former co-portfolio manager Tony Wolfe oversaw the event-driven fund as it grew from $23 million at the end of 2006 to $174 million in February 2008. But in the early stages of the financial crisis, Allco collapsed, leaving them without commercial support to run the strategy.
Catholic Super’s new CIO a familiar face
In the space of a fortnight last month, the $3 billion, Melbournebased Catholic Super lost chief investment officer Tim Hughes but was able to rapidly appoint Mercer’s global head of research and a former lead consultant to the fund, Garrie Lette, as manager of investments. It emerged in early February that Hughes, who had been CIO at Catholic Super for seven years, had left the fund to commit more time to advising the $2.7 billion Non- Government Schools Super (NGS Super), in addition to other funds, on investment strategy.
Condon exits MLC in revolving door
In a revolving-door style of exit, Chris Condon is leaving MLC as its CIO but retaining his link with the Golden Nest Egg because MLC will be the first major client of his new company, Chris Condon Financial Services Pty Ltd. Industry veteran Condon will focus on advice to instos for asset strategies, governance and investment product design. After 12 years at the helm at MLC, Condon says it’s time to “build something else, and it’s time to do it now”. [He was 52 in mid-February.] “MLC is one of the best places to do what I want to do – in Australia, if not the world. It’s a tremendous group of people and a very experienced team after 25 years in the business,” he says.
Blackstone and Paradice: two sides of the same coin
Australian institutional mandates are the shared goal, but US private equity giant Blackstone Group is setting up a Sydney office to get them, while Paradice Investment Management is extending the other way, establishing a beachhead in Denver, Colorado. Blackstone has tapped Phil Levinson, most recently of DB RREEF in Singapore, to establish a Sydney office both to service existing clients such as Telstra Super, and also raise money for subsequent Blackstone funds. Levinson was last month understood to be in the process of getting an Australian Financial Services Licence. Meanwhile with all its existing funds soft-closed, Paradice Investment Management has set up an office in Denver, Colorado, staffed by three analysts formerly of Artisan Partners, to launch a global small-mid cap capability which has already found seeding of AUD$200 million from an existing Australian client.
QIC’s bid to build a better lifecycle fund
The Queensland Investment Corporation has poached senior executives from QSuper and JANA Investment Advisors under a bold plan to enter the ‘lifecycle fund’ market. Michael Drew, the former Griffith University finance professor and just-resigned member of QSuper’s investment committee, and Evan Reedman, a fellow Queenslander and academic collaborator who was head of portfolio construction research at asset consultant JANA, will attempt to design a ‘lifecycle fund’ superior to the ‘target date’ and ‘target risk’ products seen to date, with the hope that major super funds may want to tailor it for a member investment choice option.
Changing Stripes
Roger Ibbotson has stepped back from the investment consulting and academic fields – in which he built his reputation – to spend most of his professional time running money. He is an external advisor to Ibbotson Associates, and lectures one course at Yale University, where he is professor of finance, but spends most of his … Read more
Powis endures at FuturePlus
Richard Powis will continue as chief executive of FuturePlus, after a NSW Local Government-appointed board member of the services provider voted against a motion from peers to sack the embattled CEO over his role in the attempt made by Energy Industries Superannuation Scheme (EISS) to merge with the NSW Local Government Superannuation Scheme (LGSS) in 2009. Future Fund's first investment in timberland
The Future Fund is set to make its first investment in timberland as it increases its allocation to “tangible assets” from 3 to 6 per cent, the general manager, Paul Costello, told a Melbourne conference yesterday.
