Melbourne-based super fund Catholic Super has appointed Parametric Portfolio Associates to provide customised after-tax performance measurement services for its $4.1 billion investment portfolio.
Parametric will review the individual mandates of the fund and build indices that track the performance of each manager.
"It is a customised approach, so they look at the history of our mandates with each of our managers - when they were set up and the cash flows of the transactions that have happened over the term of their appointment - and they develop a customised index for each of our managers," Catholic Super chief investment officer Garrie Lette said.
The super industry has increased its focus on after-tax performance in recent years, given more impetus recently by the Cooper review, and the Association of Superannuation Funds of Australia (ASFA) has built, in partnership with FTSE, a number of benchmarks to measure after-tax performance.
Lette said the Parametric service would go beyond the ASFA indices.
"[The ASFA indices] are a starting point; they are not tailored. [But] they don't look at the circumstances and managers of our mandates in the way that the Parametric approach will do," he said.
He said he did not expect the data to lead to drastic changes in the portfolio, but it provided another source of information to optimise the portfolio.
"Our managers are already focused on after-tax performance, however, the additional focus on it might lead to some behavioural changes at the margin amongst our managers," he said.
"I don't expect any drastic changes in the short to medium term, but potentially over the long term it could improve at the margin our performance."
Catholic Super rationalised its investment portfolio in the middle of last year after the fund finalised a merger with the National Catholic Superannuation Fund, scaling back the number of Australian equity managers from 15 to five.
Lette said future changes to the portfolio could come from the fund's increased focus on sustainability.
In September, Catholic Super hired the former global head of research of Mercer's responsible investment business, Danyelle Guyatt.
"She will be building sustainability issues into our portfolio, and we will see the impact of that on our portfolio gradually over the course of 2012 and beyond," Lette said.
"We see this as being a significant issue for us, but it is not something that we need to rush at."
