VicSuper hires Colchester Global to manage A$320 million in sovereign bonds

VicSuper, the Melbourne-based A$17 billion ($13 billion) superannuation fund, hired Colchester Global Investors to actively manage A$320 million in sovereign bonds with an absolute-return mandate.

CEO Michael Dundon said in a news release Thursday that Colchester will play a “key role” as a satellite manager with an “active, absolute-return-oriented global” directive that will help diversify the fund's broader fixed-income allocation.

A spokeswoman couldn't immediately provide further details about the fund's current bond allocations.

The VicSuper allocation will be managed to a proprietary Australian dollar-hedged benchmark the fund designed in conjunction with investment consultant Willis Towers Watson. Colchester will aim to outperform that benchmark by 2 percentage points, with two-thirds of that targeted outperformance to come from bond risk and the remaining from actively managing currency on a long/short basis.