Industry fund Asset Super has made $182 million worth of manager changes as part of a new investment strategy to enhance its returns and diversify it exposure.
The fund has established a $55 million Global Tactical Asset Allocation (GTAA), to be run by AQR Capital, Barclays, First Quadrant and Mellon, and cut its allocation to more traditional asset classes.
It has reduced its Australian equities portfolio by $26 million, its international shares exposure by $31 million and its Australian bond investments by $67 million.
Asset Super's chief executive John Paul said the shift in strategy to less traditional asset class investments would be balanced out by the decision to dump its active bond manager BT and replace it with a $16 million passive exposure to State Street Global Advisers' international bond fund.
"We are moving from active Australian bond investments to purely passive bond investments as it's felt that the additional cost for active bonds is not being rewarded by a sufficiently higher return relative to passive bonds management," he said.
"It is the same story in Australian LPTs. We feel that better returns for the fees can be had by investing differently."
As a result Asset Super has dumped its current active Australian LPT managers SG Hiscock and Credit Suisse and awarded a $58 million mandate to index manager Vanguard's Australian LPT.
Paul said the fund was also looking to beef up its exposure to international property. "The home market is compressed and we've been advised that more opportunities lie international rather then domestic property."
As such it has signed up Lasalle Investment Management and Perennial to run a $39 million international LPT.
Asset Super has also mandated Macquarie Bank to run a $12 million cash portfolio.
Asset Super is based in Sydney and has $1.3billion under management
