The A$25 billion ($21 billion) UniSuper is revolutionising its $4 billion international equities portfolio, terminating every active developed markets manager in favour of passively tracking the MSCI World, while alpha is sought among specialist regional and sectoral managers, with a listed technology mandate to be first cab off the rank.
The chief investment officer of UniSuper, John Pearce, said the overhaul had been in progress over several months, given the volume of assets involved.
“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,” 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 over the course of 2010, with the money sitting passively for now, awaiting a risk budget re-allocation which will seek more specialist exposures to regions or sectors where Pearce’s team believes there is value to be added.
A specialist technology manager is currently being sought, with Pearce reasoning that this was a natural area of underweight for Australian investors given the market’s scarcity of technology stocks.
UniSuper has maintained its existing active emerging markets mandates, meaning houses such as GMO, Mondrian and Treasury Asia Asset Management continue to run money for the big industry fund.