Michael Drew and Evan Reedman joined Queensland Investment Corp. in the firm’s effort to enter the lifecycle fund market.
Mr. Drew recently resigned as a member of QSuper’s investment committee and Mr. Reedman was head of portfolio construction research at asset consultant JANA Investment Advisers.
The pair will lead QIC’s attempt to design a lifecycle fund superior to the target-date and target-risk products seen to date. It is the first major initiative for QIC since Hazel McNeilage started as head of funds management in January.
Ms. McNeilage said QIC’s work on lifecycle funds had been going on for at least three years, but would synthesize and learn from recent experiences in the U.S., where target-date funds have become the default option in most employer-sponsored 401(k) plans.
She said it was too early to speculate on the final design of a QIC lifestyle offering, including whether it would employ external managers.
Mr. Drew, a former finance professor at Griffith University, testified at a joint hearing on target-date funds held by the Securities and Exchange Commission and U.S. Department of Labor in June. At that time, he presented the findings of work done with Anup Basu of the Queensland University of Technology that found that “autopilot” investing, where asset allocation decisions are made simply on the basis of age, “may provide only limited downside protection for investors, while materially capping the upside.”
He told the hearing that dynamic target-date funds would include a feedback loop that kept risk on the table when a fund was below its accumulation target, and potentially derisk when ahead of the retirement savings goal.
At JANA, CEO Ian Patrick said while “it’s always disappointing to lose somebody,” the consultant’s 60-person team had the “depth of research” to cover Mr. Reedman’s absence, and that he had “reassigned responsibility within the team.”
Michael Bailey is editor of and Simon Mumme a reporter with Investment & Technology, Sydney.
