UniSuper, Melbourne, Australia, is terminating all of the A$4.5 billion (US$3.9 billion) system’s active developed markets managers in favor of passively tracking the MSCI World index, while alpha is sought among specialist regional and sector managers.
Chief Investment Officer John Pearce said the overhaul had been in progress for several months.
A specialist technology manager is the first search launched. Mr. Pearce reasons that this is a natural area of underweight for Australian investors given the domestic market’s scarcity of technology stocks.
“This move is not an argument for passive management; myself and my team here are big believers in active management. It’s just a question of where will the allocation of our research time to find the best active managers yield the best results,” Mr. Pearce said.
“And at this stage, we don't believe that's in developed market equities mandates.”
About 10 such mandates have been terminated by UniSuper so far in 2010, with the money sitting passively for now, awaiting a risk budget reallocation which will seek more specialist exposures to regions or sectors where Mr. Pearce’s team believe there is value to be added.
UniSuper has maintained its existing active emerging markets mandates, run by houses such as GMO, Mondrian and Treasury Asia Asset Management.
Michael Bailey is editor of Investmentmagazine in Sydney.
