PERTH, Australia — The A$7.8 billion (US$6.16 billion) West Australian Government Employees Superannuation Board has overhauled its $2.5 billion international equities portfolio, replacing its regional orientation, style-specific and passive core with an all-active, all-global and "thematic-biased" lineup.
The fund terminated three managers, hired two and altered two other portfolios.
Sharon Hicks, acting chief investment officer, said the systemic reduction of cross-sectional volatility in markets has made it harder for value or growth managers to consistently outperform, while the rise of multinational companies made regional mandates less relevant, at least for large-cap stocks.
For that reason, GESB terminated Europe Australasia Far East mandates with Fidelity Investments and Wellington Management Co., while a U.S.-only equity portfolio with Goldman Sachs Asset Management also was dropped. Wellington continues to manage global bonds for the fund.
Ms. Hicks said GESB would only return to regional mandates in the developed equities markets if it decided to have specialist midcap or small-cap exposures.
Grantham Mayo van Otterloo & Co. and Genesis Investment Management remain emerging markets managers for the fund.
In place of the regional mandates, GESB has hired two managers — Newton Investment Management Ltd. and Lazard Asset Management — for the thematic mandates, which Ms. Hicks said would help deliver the more top-down orientation the board was seeking.
Meanwhile, a U.S. value mandate with AllianceBernstein LP has been transferred into the firm's "global blend" strategy which, as the name suggests, combines Alliance's growth-biased stock picks with Bernstein's value-oriented calls.
Finally, a passive core mandate with State Street Global Advisors has been changed to an enhanced approach.
Ms. Hicks would not reveal the size of the allocations to any of the new or retooled mandates. She also would not identify the transition manager, but said it helped deliver "the smoothest changeover I've been involved with while at GESB."