Statewide Super, an Adelaide-based super fund with A$10.8 billion ($8.3 billion) in retirement assets, hired Loomis, Sayles & Co. to manage A$180 million in U.S. asset-backed securities.
The "mandate has been customized for Statewide Super and is targeting returns of cash plus 2% to 3%," according to a news release by Boston-based Loomis' parent company, Natixis Investment Managers.
Con Michalakis, Statewide Super's chief investment officer, said in a written response that the Loomis strategy will be a new addition to the fund's "defensive alternatives" allocations, with funding for the investment coming from cash and fixed income.
As of the June 30 close of its latest fiscal year, Statewide Super's MySuper default option reported allocations of 6% to defensive alternatives, 8% to diversified bonds and 6% to cash.
Mr. Michalakis, in the Natixis news release, said: "We appointed Loomis Sayles following a review of our defensive alternatives asset class at the end of last year. Cash gets you nothing and developed market sovereign bond yields remain low so by investing in this strategy I can get some yield pick-up."
Louise Watson, Natixis' managing director and head of distribution, Australia & New Zealand, in the news release said the strategy was specifically designed to reflect the "current, low rate, environment," but Mr. Michalakis said in his response that it should also do well in a rising rate environment.