Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
Towers Watson restructures manager research
(Pictured: Graeme Miller)
Towers Watson has restructured its manager research in Australia, moving to an asset class orientation rather than geographical, and has made the position of head of manager research redundant. The new structure is more in line with the firm’s overseas practices.
While Hugh Dougherty, who most recently held the head of manager research position, has left the firm, Graeme Miller, Melbourne-based head of investments, said a new hedge fund specialist was in the process of being recruited – an appointment which was flagged at the recent AIMA conference.
The new hire, from the UK, will fill some of the gap left by Ross Barry, who has moved from a full-time role to a three-days-a-week contract position. Barry was one of the few experienced alternatives advisers at any of the mainstream consulting firms. He decided he no longer wanted to do manager research.
Dougherty joined Towers Watson as a senior consultant in 2007. He was previously CIO of InTech Investment Consulting.
Miller said last week: “In recent years, our global manager research structure has evolved to be structured largely around asset class lines. To a large extent this reflects the increasingly global nature of investment markets – the world is interconnected and the country in which a company is domiciled, or happens to have its shares listed, is increasingly irrelevant as major companies derive their revenues and profits from all around the globe. To have a deep understanding of an Australian fund manager (or asset class), it is essential that our researchers also have deep understanding of their global competitors.
“Against this backdrop, Towers Watson’s manager research teams now span all major markets and are fully integrated on a truly global basis. This has been an evolution that’s been occurring over several years now. In fact for some time now, globally we only have had regional heads of manager research – Australia has been an anomaly, and we have now moved to align ourselves with our global corporate structure.
“It is especially important to emphasise that we continue to have a large and very well-resourced Australian manager research team – in fact in net terms our manager research team continues to grow strongly, both in Australia and around the world. Our Australian manager research team has never been better resourced. All of these team members are fully integrated into our global teams, and for some time now the leaders of these teams have had both local as well as global reporting lines.”
Miller pointed out that Towers Watson has had a successful past 12 months for new business, picking up the Australian Catholic Super and Retirement fund, Tasmanian Motor Accident Insurance Board, Funds SA and ANZ Wealth. Seven new associates had been added to the team in that time, too, Miller said.
