MLC Investment Management has overhauled its A$8 billion (US$5.16 billion) global equities strategy, terminating two growth managers and one value manager, all for reasons related to counterparty risk, and appointing four new managers in a move that more evenly distributes clients capital.
Following a comprehensive review of the strategy, MLC terminated mandates with Bernstein Value Equities, Alliance Growth Equities and Fortis Investments and appointed Mondrian Investment Partners and Tweedy, Browne Co. for value mandates, and Harding Loevner and Sands Capital Management for growth mandates.
Paul Duncan, portfolio manager, global shares at MLC Investment Management, said clients capital was more evenly distributed across the managers in the new strategy. MLC is the wealth management division of the National Australia Bank, Sydney.
"In the previous strategy, while the largest allocation to any one manager was Capital (International) at 18%, a harsher test is: What was the largest allocation to one institution or organization ," he said.
"So we used to have a 15% allocation to Alliance Capital and a 17% allocation to AllianceBernstein; we had almost one-third of the strategy dependent on one organization, whereas in the new strategy, the largest dependency is Capital at 18%. So theres less reliance on any one organization as well as any one investment."