The industry fund has increased its investment in small caps following a positive outlook on the sector.
AustralianSuper has hired fund manager Northcape Capital to manage a small caps mandate.
The investment shows AustralianSuper's confidence in the Australian small caps market, according to AustralianSuper chief investment officer Mark Delaney.
"An improved outlook for the global economy means we expect to see continued Australian company earnings growth in 2010/11 and beyond," Delaney said.
"Small caps have generally outperformed large caps in rising equity markets and valuations remain reasonable, particularly on normalised trend earnings."
The super fund hired Northcape because of its strong business model, accountability and the team's pedigree.
"Portfolio managers Mike Cowin and John Whiteman have long track records as specialists in managing small caps," Delaney said.
Northcape did have an existing mandate with AustralianSuper, but it was terminated a year ago following a rationalisation of the fund's equity mandate.
The mandate was terminated because the fund had invested in a very small incubator fund with the manager.
AustralianSuper now has 8.5 per cent of its $30 billion portfolio allocated to the small caps sector.
Last week, AustralianSuper invested $500 million in a QIC property fund.
The two non-consecutive alphabetic letters encountered most often last week caused more controversy than the underlying policy they represented, Wouter Klijn writes.... read more »
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