The A$65 billion (US$56 billion) Queensland Investment Corp. will drop traditional Australian equity management and most of its implemented strategies following a restructuring.
CEO Doug McTaggart said the restructuring took place because major investors are reviewing their approach to the separation of alpha and beta, and "winding back their alpha options and rethinking the relevance of global tactical asset allocation."
QIC will discontinue its implemented international equities, implemented absolute-return and global tactical asset allocation businesses. James Christensen, joint managing director-active management, and head of alpha and implemented strategies, will assist with the wind-down before considering other possible roles within QIC, Mr. McTaggart said.
The lone implemented multimanager business to survive will be implemented Australian equities, which has outperformed its ASX 200 benchmark by a net annualized 78 basis points in the seven years since inception.
The traditional low-risk active Australian equities business also will be closed, and the current team reconfigured into two specialized boutiques: small companies and large companies. Simon Hudson, Australian equities director, will assist with the restructuring and leave QIC by the end of the year.
The other remaining units — each with its own profit/loss statement and a pay structure being designed by consultants Oliver Wyman and Mercer Human Resources — are: capital markets; global fixed interest; quantitative management; global real estate; global infrastructure; global private equity; and strategy. The strategy boutique will work with investors on asset allocation and assign mandates to underlying QIC boutiques accordingly.
Mr. McTaggart said staffers cut during the restructure had been "redeployed to emerging and growing areas of the business" where possible.
Michael Bailey is editor of Investment & Technology newspaper in Australia.