To help develop a direct equities investing strategy, Cbus has appointed Ramanan Sooriyakumar to the newly created role of senior equities research analyst.
The investment team at the $33 billion super fund has board approval to develop a direct equities investing strategy as part of a larger three-year review, with a formal plan due to go before both the investment committee and board over the next two months for consideration.
“The strategy will still need to be developed, all the company research and so forth will need to be done before the approval, so this [appointment] is really a resource along that path,” said Kristian Fok, executive manager of investment strategy at Cbus.
“Because the review is quite extensive we have met with a large range of funds and talked to funds internationally, looked at the literature and looked at what best practice is.”
He added a couple of direct investing proposals were being considered (equities being one) but they were also looking at what strategic uplift was needed around other resources, particularly asset allocation and ESG (environmental, social and governance).
“It’s a whole package. The strategy change is to position the fund to continue to build on the very strong returns it currently has; as over the next three years the environment is probably going to be tougher for investing. And also, as the fund grows, it means some strategies we currently use can be difficult to scale, but it opens other opportunities.”
Investment team expanding rapidly
There are 34 people on the investment team, with plans to expand the teams in both Melbourne and Sydney. To this end, the Sydney office is due to move to a new floor next week as part of a strategy to attract high quality talent across the two cities.
“We’ve got approval for eight roles on both mine and Trisha [Donohue, executive manager of investment management] teams for next year and that’s outside this review. These are roles that we need from a ‘business as usual’ type of perspective,” Fok said.
“But following the review there is likely to be a further uplift in resource, assuming it’s all approved.”
The eight positions Cbus will be looking to fill include an appointment to the quant team, an ESG role focused on governance and voting, a tax role, and a role to help the oversight of the management of equities managers.
“Clearly, if we have direct equities capability we want a separate person to manage the oversight relationship around fund managers,” Fok said.
Several new roles on the cards
“We are looking for people that bring in particular expertise, but what we do see as quite valuable is not just the expertise they can bring in for a particular area, but the contribution that they can make to the whole portfolio.
“And the strategy we are trying to pursue really links those two things tightly.”
Fok added that bringing together people with different backgrounds and expertise who could contribute and identify opportunities across a portfolio was already generating ideas.
“We will be able to participate in something, because even though it doesn’t quite fit in one space, you can bring together expertise across different areas.”
For example, Fok is expecting to hire someone to a credit role who will be able to work together with Sooriyakumar, and others on the team, on equity opportunities that may touch on debt or credit.
“If we see something on the infrastructure or property side, which is not really an equity play, its more of a debt play, then we can bring a credit specialist in. This is what we’re trying to build.”
On Sooriyakumar’s appointment, Fok said he had already hit the ground running, and “it was great to keep adding on the extra capability and talent”.
“It’s only going to help with the building out of this new strategic direction.”
Sooriyakumar commenced on June 20 and will be located in the Melbourne office working with Kiran Singh, manager equities.
Sooriyakumar joins Cbus from Goldman Sachs (Melbourne) where he was an executive director and lead equities research analyst within the ASX Industrials sector. Prior to Goldman Sachs, he worked at high profile financial institutions, including BOA Merrill Lynch, Amba Research and HSBC. He has over 14 years of experience in the financial services industry, of which more than 12 years have been within the investments industry focusing on equities research.