Investment Magazine

GESB eyes infrastructure and debt

  • 27 April, 2012
  • 0
  • print
This is an archived article originally published on I&T News
“Where we feel we are underweight at the moment is the middle, the medium-risk category,” GESB CIO Steven McKenna

The $12.8 billion GESB fund, responsible for the superannuation of Western Australian public servants, wants to increase the diversity of its portfolio, investing more in infrastructure and different types of debt and credit.

Acting chief investment officer Steven McKenna says the fund is looking for different risk exposures in the overall portfolio and is interested in increasing exposure to what he describes as “medium risk” asset classes.

“Internally we look at our asset classes as low risk, medium risk and high risk. Equities and property sit in the high risk category and bonds and cash in the low risk category but where we feel we are underweight at the moment is the middle, the medium-risk category,” McKenna says.

“We are looking to introduce asset classes like infrastructure, where we don’t have any investments at the moment, and perhaps other types of debt that are not investment grade, such as emerging-market debt and private debt, where we also don’t have any investments.”

The fund, which manages the superannuation of more than 320,000 members, also recently announced a major overhaul of its fixed-income portfolio, providing four new mandates, worth $2.28 billion, to three managers.

The new mandates evolved from GESB splitting its fixed-income portfolio into global government bonds and global investment-grade bonds.

The big winner from the review is incumbent fixed-income manager Wellington Management Company, which was awarded more than $1.1 billion in mandates.

Pimco Australia, while holding on to a mandate for $427 million to manage part of the global investment-grade bonds, saw its total funds under management fall from more than $900 million.

“Pimco also had a global aggregate-bond portfolio with us and they now have a focused-credit portfolio. We think Pimco is very good as well, that is why we are staying with them,” McKenna says.

As part of its investment strategy, McKenna says the investment team focuses on maintaining the overall liquidity of the fund.

Non-liquid assets like infrastructure would have to fit into an overall liquidity budget that aims to keep illiquid investments to a maximum of 15 per cent of the overall assets.

Along with these so-called tertiary assets, secondary assets that can be liquidated in less than three months can make up a maximum of 15 per cent of total assets. While what the fund describes as primary assets, which can be liquidated within seven days, must make up between 70 and 100 per cent of the total assets.

Private equity currently makes up 5 per cent of total assets in the largest balanced fund and listed and unlisted property make up 10 per cent.

© Copyright: Whole articles from this website and newsletter cannot be reproduced without permission from the editor. If you wish to publish introductions to any article please ensure that it links to original content site, and that it shows clear attribution to Investment Magazine, plus author name and date. Failure to abide by this request will be considered a breach of copyright and legal action will be taken.

Is core property and global infrastructure heading for a price bubble?
in News

Cbus wants impact study of pension at age 70

Cbus is to undertake an examination into the potential impacts on its members of shifting the pension age to 70. The fund has ... [more]

in News

Door opens onto full Chinese equity market

The diversity of Chinese equity portfolios is to increase when the number of companies accessible to foreign investors doubles at the end of ... [more]

in News

The great post-retirement opportunity

Australia has the opportunity to lead the world in post-retirement products and export its know-how, according to Moshe Milevsky, the internationally renowned author ... [more]

in News

Super Fund Awards’ finalists announced

The finalists of the Chant West/Conexus Financial Super Fund Awards have been announced by the research house Chant West. The fund ratings firm ... [more]

in News

New Vision Super CIO to target investment costs

Michael Wrysch has been tasked with reducing Vision Super’s investment costs as part of his new role as chief investment officer of the ... [more]

NGS rebrand – ‘for those who understand the true meaning of wealth’

A week after trustees of industry funds were warned that without a brand strategy they would not survive the ‘medium term’, NGS Super ... [more]

in News

Sunsuper confronts lack of board diversity

Sunsuper has improved the gender and geographical diversity of its board with the appointment of the Sydney based Elizabeth Hallett as an employer ... [more]

in News

QSuper’s cohort strategies pose challenge to US and UK schemes

QSuper’s creation of eight different investment cohorts for its members has sparked curiosity and admiration from defined contribution experts in the US and ... [more]

in News

Jana clients gain access to greater range of research

Jana will research a greater range of investment strategies for its clients following its merger with MLC Investment Management. Ian Patrick, whose job ... [more]

in News

CBUS members welcome income projections

CBUS has gained a 97 per cent approval rate from members for statements which confront them with an estimate of their income in ... [more]

in News

Sunsuper: a growing provider of private capital

Sunsuper is expanding its investment team to help it take greater advantage of investment opportunities. The fund, which runs $28 billion in assets, ... [more]

in News

Cost of Stronger Super leads to Media Super cutting CIO role

The cost of Stronger Super compliance and product development has led Media Super to cut the role of chief investment officer. Jon Glass ... [more]

in News

Sunsuper expands investment team to 18

Sunsuper has increased the size of its investment team to 18 with the appointment of Lounarda David to the newly created role of ... [more]

Tackling lawyer led insurance claims

Some of the most influential people in the group insurance space met in Sydney in March to discuss the sustainability of the sector. ... [more]

in News

Managers bullish on Chinese and Indian corporate debt

Australian investors are being urged to increase their exposure to Chinese and Indian credit, owing to imminent political change, low default rates and ... [more]