Perennial Value Management, Maple Brown Abbott, WestLB Mellon Asset Management and Barclays Global Investors were replaced by Herschel Asset Management, Lazard Asset Management, JF Capital Partners and Tyndall Asset Management. FDF investment director Sean Henaghan said the manager changes were part of a strategy to boost tracking error on the Australian fund from 1 per cent to between 2 and 3 per cent.
"As a multi-manager you need to be taking more risk to get tracking error up to that mark", Henaghan said. "The managers we replaced were running tracking errors of between 2 per cent and 4 per cent and not in a position to increase their risk profiles." He added that the managers had performed well for FDF but did not fit in with the new risk profile.
An AMP Capital report said each of the new managers satisfied the team's criteria of being high conviction, less benchmark aware and with a manageable size of funds under management. Tyndall Asset Management has taken a 16 per cent weighting in the FDF Australian share fund, Herschel Asset Management has taken 10 per cent, while JF Capital Partners and Lazard Asset Management took an 8 per cent weighting each.
