Following a review of VicSuper's investment strategy, VicSuper is pleased to announce the appointment of four international equities investment managers - Martin Currie Investment Management, Walter Scott & Partners, Global Thematic Partners and Sanders Capital. The transition was completed in late July and the four managers will deliver their first full month of performance at the end of August 2012.
VicSuper has appointed these additional managers with the aim of achieving returns above benchmark with the aim of improving performance of member investment options with an exposure to equities. Three of the managers will invest globally and one manager is limited to global emerging markets (Martin Currie, using the Morgan Stanley Capital International definition of 'emerging markets').
In 2011, VicSuper's Trustee resolved to change the structure of VicSuper Fund's international and emerging market equities portfolio to allow for a 'core' and a 'satellite' component, where the core would be 70% for developed markets and 50% for emerging markets. The balance would be allocated to satellites, where the satellites may be a mix of actively-managed investment styles, structured to obtain diversification in the sources of return and exposures to risk. VicSuper engaged a third-party transition manager who took a slice of VicSuper's existing international equity portfolio and then actively traded the company shares in this portfolio to achieve the company names identified by the target managers.
VicSuper's new investment managers
Martin Currie Investment Management - global emerging markets
Martin Currie is an Edinburgh-based organisation with approximately US$6.8 billion in funds under management. Martin Currie will manage a global emerging markets mandate on behalf of VicSuper, benchmarked to the MSCI Emerging Markets index. Martin Currie has a fundamentals-driven, growth-oriented style. They are active investors (in that they are 'stock-pickers') and engage with management of investee companies to build a concentrated portfolio of companies (around 50 stocks). Further, given the nature of investing in emerging markets, Martin Currie integrates environmental, social and corporate governance factors into their company analysis and portfolio construction.
Walter Scott & Partners - global markets
Walter Scott is Edinburgh-based and was founded in 1983. Walter Scott and Partners currently manage A$49.2 billion, which is all invested in equities. Walter Scott is a 'growth' style investor, using a bottom-up, fundamental and research-driven process to achieve real returns over the long term by identifying companies capable of sustainable wealth creation. As stated by Walter Scott, 'Our core conviction is that over the long term, return to shareholders can only ever be as great as the wealth generated by the underlying businesses in which they are invested. Our primary task is therefore identifying those companies capable of sustaining the highest rates of wealth generation. We do so using original, fundamental research carried out by our own team across an investment universe that is unrestricted by region, market sector or benchmark'.
Global Thematic Partners - global markets
Global Thematic Partners (GTP) is a US-based investment manager with that employs a thematic investment approach. GTP seeks to identify forces driving global markets and define what can change dramatically going forward. Utilizing rigorous reason and research, GTP discovers and defines long-term trends in an actionable framework. This is coupled with deep, thorough, and independent bottom up research to identify best-of-breed companies geared to the thesis that also offer the greatest risk-adjusted upside. One particular theme for GTP is the investment case for agribusiness, which in their words revolves around 'food security, discontinuity, scarcity, and the solutions to overcome them'. Hence, GTP addresses issues surrounding sustainability from both a top-down thematic view (such as food security) and bottom-up perspective (along with fundamental company factors, which integrates environmental, social and corporate governance factors). The approach typically results in a portfolio of between 80 - 120 companies.
Sanders Capital - global markets
Sanders Capital was founded by Mr Lewis A Sanders. Mr Sanders previously held roles including Chairman, CEO and CIO of AllianceBernstein and is acknowledged as a leader in in-depth, fundamental company research and disciplined value investing. VicSuper has selected Sanders Capital to manage a global equity strategy (benchmarked to the MSCI All Country World Index, which includes both developed and emerging market countries) primarily because the 'value' style of investing (which is defined by Warren Buffet as 'finding an outstanding company at a sensible price') has, over the long term, proven an effective approach to deliver returns in excess of the market to investors and Sanders Capital was selected for their investment experience, their company values (primarily, 'to place fiduciary responsibility above all else') and their bottom-up, disciplined, research-driven and fundamental value-investing style.