The global slowdown has exposed the vulnerabilities of traditional asset allocation, according to senior managing director of State Street Global Advisors (SSgA), Shawn Johnson, while sharing the AA implications he believed would be relevant depending on the ‘shape’ of the global economic recovery. “Correlations tend to ‘1’ during a crisis, so the theoretical minimum variance, maximum return portfolio construction doesn’t really help,” Johnson told an SSgA client conference in Sydney last month. Most institutional investors were not able to react quickly because “they are slaves to longterm asset allocation models and committee decisionmaking”, said Johnson, giving the example of one US fund which needed three committee meetings and 45 days to shift managers.
Giving Medicare the clearing house could be a hospital pass
The Federal Government’s choice of Medicare as its free super clearing house for small businesses has baffled private service providers, who say the hasty decision smacks of a Band-Aid applied hastily to cover election promises . However, the Association of Superannuation Funds of Australia (ASFA) is cautiously optimistic that “SupiCare” (as industry wits have dubbed the proposed Medicare exchange) could introduce much-needed mandatory standards and possibly cut SMEs’ costs. In theory, the clearing house/ exchange service will be working from July next year for small- to medium-enterprises with fewer than 20 employees. But, as one industry source said: “It took us more than 10 years to get clearing house processes correct: how’s Medicare going to get it right in three months? “The announcement reeks of knee-jerk political opportunism.
Giving Medicare the clearing house could be a hospital pass
The Federal Government’s choice of Medicare as its free super clearing house for small businesses has baffled private service providers, who say the hasty decision smacks of a Band-Aid applied hastily to cover election promises . However, the Association of Superannuation Funds of Australia (ASFA) is cautiously optimistic that “SupiCare” (as industry wits have dubbed … Read more
Why wallow in the Myer when there’s mid-market PE
The Australian Tax Office might be seeking more than $500 million of Texas Pacific Group’s Myer profits, but its deals whose entire enterprise value is less than that which represent the best opportunity in private equity today, according to Credit Suisse.
Why wallow in the Myer when there’s mid-market PE
The Australian Tax Office might be seeking more than $500 million of Texas Pacific Group’s Myer profits, but its deals whose entire enterprise value is less than that which represent the best opportunity in private equity today, according to Credit Suisse.
Mercer anoints its three alternative assets to watch
Mercer Investment Consulting has predicted that the next “big things” in the alternatives market will be private debt, insurance-linked securities, and aircraft leasing. “We’ve recently experienced an alternatives bubble as investors, chasing ‘alpha’ or above-index returns, sought greater exposure to alternative asset classes such as hedge funds – many of which haven’t delivered,” according to Mercer IC’s alternatives research manager, Dragana Timotijevic. Private debt investments are currently offering above-average returns, relative to history, because of capital scarcity and the credit market dislocation. Timotijevic describes private debt investments as “highly idiosyncratic” because almost every one is unique and so must be researched individually.
Mercer anoints its three alternative assets to watch
Mercer Investment Consulting has predicted that the next “big things” in the alternatives market will be private debt, insurance-linked securities, and aircraft leasing. “We’ve recently experienced an alternatives bubble as investors, chasing ‘alpha’ or above-index returns, sought greater exposure to alternative asset classes such as hedge funds – many of which haven’t delivered,” according to Mercer IC’s alternatives research manager, Dragana Timotijevic. Private debt investments are currently offering above-average returns, relative to history, because of capital scarcity and the credit market dislocation. Timotijevic describes private debt investments as “highly idiosyncratic” because almost every one is unique and so must be researched individually.
New CIO mulls global revolution at Universities Super
Roger Gray has become the first new chief investment officer of the £27 billion Universities Superannuation Scheme (USS) in 17 years, and will reconsider the fund’s use of regional equity mandates. In the British pension environment, USS is in a privileged position as one of the few defined benefit schemes that is still open, contributions positive and relatively immature. From an investment point of view, and for the fund’s new CIO, Roger Gray, this allows its investment allocations to be more aggressive relative to its more liability-driven peers, and the opportunity for more exciting investments to be explored, including alternatives. The fund has a broad strategy to move to 20 per cent alternatives, and Gray started the job in September with plans to work “with USS’ investment team and with the trustees to generate the required long-term returns from a broad and judicious mix of asset classes and strategies”.
New CIO mulls global revolution at Universities Super
Roger Gray has become the first new chief investment officer of the £27 billion Universities Superannuation Scheme (USS) in 17 years, and will reconsider the fund’s use of regional equity mandates. In the British pension environment, USS is in a privileged position as one of the few defined benefit schemes that is still open, contributions positive and relatively immature. From an investment point of view, and for the fund’s new CIO, Roger Gray, this allows its investment allocations to be more aggressive relative to its more liability-driven peers, and the opportunity for more exciting investments to be explored, including alternatives. The fund has a broad strategy to move to 20 per cent alternatives, and Gray started the job in September with plans to work “with USS’ investment team and with the trustees to generate the required long-term returns from a broad and judicious mix of asset classes and strategies”.
Hermes taking over the world, one boutique at a time
Hermes Fund Managers, the investment management arm of the BT Pension Scheme (BTPS) in the UK, is following the lead of OMERS in Canada and QIC in Australia by branching beyond the province of its principal client with the aim of being a funds manager for pension funds globally. Hermes’ head of investment, Saker Nusseibeh, said the group’s newly created boutique-of-boutiques structure was “so clearly the future…it’s the crossover we’ve been waiting for.” Nusseibeh said he was excited about the fee flexibility and alpha sources that could be achieved by a funds manager which is owned by an institutional investor.
Hermes taking over the world, one boutique at a time
Hermes Fund Managers, the investment management arm of the BT Pension Scheme (BTPS) in the UK, is following the lead of OMERS in Canada and QIC in Australia by branching beyond the province of its principal client with the aim of being a funds manager for pension funds globally. Hermes’ head of investment, Saker Nusseibeh, said the group’s newly created boutique-of-boutiques structure was “so clearly the future…it’s the crossover we’ve been waiting for.” Nusseibeh said he was excited about the fee flexibility and alpha sources that could be achieved by a funds manager which is owned by an institutional investor.
Greencape soft-closes fund…halfway to capacity
Challenger-backed Australian equity boutique, Greencape Capital, has soft-closed its Broadcap Fund to ensure its funds under management do not exceed $1 billion, even though there is only $550 million in the strategy at present. The Melbourne-based boutique, majority-owned by its four staff (of whom three worked together at Merrill Lynch Investment Managers) will take top-ups from existing institutional investors in the Broadcap Fund, and it remains open for relatively lucrative retail flows. But it will turn away prospective wholesale investors because the firm was “serious” about keeping FUM under $1 billion, according to Greencape co-founder and portfolio manager Matthew Ryland.
