Who are the Energy Industries Superannuation Scheme fund managers?
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The following provides information about the fund managers the Energy Industries Superannuation Scheme (EISS) uses to manage its investments. The descriptions, broken up by asset class, provide a brief account of the fund manager's investment style and areas of expertise. | ||
Australian Shares EISS has a little under $900 million invested in Australian shares. These assets are managed by four investment managers. Approximately half of the funds are with a BlackRock Investment Management (Australia) Limited (BlackRock) index fund. Index funds are set up to replicate the performance of the whole market by buying shares in each company that is in the index. Blackrock is one of the largest index managers in the world. EISS uses index funds to control risk and lower the management fees of the investment portfolio. | BlackRock Investment Management (Australia) Limited | |
There are also three "active" managers running part of the portfolio. Active means that these managers make investments in companies that they believe will outperform other companies in the relevant index, and they will change their positions from time to time. The first is BT Financial Group which has been managing EISS assets since November 2004. | BT Financial Group | |
Another long time manager for EISS is Fortis Investments, formerly ABN Amro. This manager was appointed at the same time as BT and has also performed strongly. Fortis believes that companies with sustainable growth will provide the best returns in the long run. | Fortis Investments | |
The final part of the Australian Shares portfolio is an allocation to Schroder Investment Management Limited. This manager has a quality bias within the portfolio, which means that it will focus on companies with low debt and stable management. A manager like this is likely to exhibit significant outperformance in a falling market. | Schroder Investment Management Limited | |
International Shares Investments in this sector total over $800 million. The structure is similar to the Australian Shares sector, with a large index fund allocation, plus a number of active managers. The index fund is run by BlackRock. BlackRock holds shares in approximately 1,500 companies, giving EISS an interest in nearly every large listed company in the world. | BlackRock | |
LSV Asset Management (LSV is named after the founders - Lakonishok, Schliefer and Vishny) has managed funds for EISS for since February 2006 and has performed over 6%* above the MSCI World ex-Australia (AUD) Net index since this time. LSV has a focus on shares that appear to be valued cheaply, and this is called a value bias. | LSV Asset Management | |
EISS also has allocations to two specialist emerging market funds. LSV Asset Management and Genesis Investment Management buy shares in companies that operate in the developing world to offer diversification of returns. | Genesis Investment Management | |
The currency exposure associated with the international shares is normally 50% hedged. Fixed Income and Cash EISS has more around $950 million of fixed income assets made up of:
The Australian Government Bonds are managed in semi-passive mandates by Kapstream Capital, Schroder Investment Management and UBS Global Asset Management. A semi-passive mandate means that the manager buys nearly all the securities in an index, but will hold a higher weight in securities that they expect to outperform that index. | Kapstream Capital | |
Ardea Investment Management was recently appointed to run a semi-passive Australian Government Inflation Linked Bonds mandate and Kapstream Capital was appointed to manage the Australian Cash portfolio with the aim of outperforming the Bank Bill Index. | Ardea Investment Management | |
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The International Loans and High Yield Bonds are invested with two US managers - Canyon Capital Advisors and Highland Capital Partners. The Loans are securitised bank loans and the high yield bonds are usually long-term bonds issued by corporations. | Canyon Capital Advisors | |
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Property EISS invests in Australian Unlisted Property trusts through three specialist managers. AMP Capital Management, Charter Hall Funds Management and Valad Property Group each manage about a third of the $60 million portfolio. These three managers offer diversification across a range of different property types and geographic segments. Private Equity This term refers to equity investments that are not listed on the share markets. With an equity investment, your income comes from dividends (or distributions) rather than fixed interest payments. Whilst returns from successful private equity investments can be high they can be difficult to sell, and often they have to be held until the assets are liquidated. EISS has a portfolio of private equity investments, with a total value of around $50 million. EISS has invested with the following Private Equity managers:
These funds make many direct investments in private companies that range from warehouse development at Ingleburn, to European infrastructure projects. | ||
EISS also has investments with Wilshire Private Markets, a private equity fund that invests with other underlying managers. The Wilshire fund invests in mature companies located in Asia and Australia. | Wilshire Private Markets | |
* As at 31 March 2010