The mandate is valued at $780 million and was the result of LGS identifying an opportunity to increase its return by raising the level of active risk in its fund portfolio.
“Based on the success of our long-term relationship with SSgA, we are happy to expand the partnership to incorporate active Australian equities,” LGS chief investment officer Craig Turnbull said.
“SSgA’s portfolio is customised to conform with our environmental, social and governance (ESG) investment principles and will exclude stocks from industries such as uranium, mining, gambling, armaments and tobacco.”
The mandate follows SSgA’s announcement that it is looking to expand its active capabilities in response to client demand.
SSgA’s head of active Australian equities Olivia Engel said the portfolio has been designed to meet LGS’s targeted returns without compromising its philosophy.
“We have designed an active Australian equities strategy that meets LGS’s need to increase targeted net return outcomes for their members, while adhering to their ESG investment principles,” Ms Engel said.
“The solution for LGS represents the growing client demand for smarter equity mandate design, including more explicit budgeting or risk and return and addressing the prevalence of portfolio redundancy in traditional equity portfolios.”
