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.
Frontier wins GESB contract
Frontier Advisors has nabbed a contract with Western Australia’s Government Employee’s Superannuation Board (GESB).
Frontier Advisors has won a $12.2 million multi-year contract with GESB, replacing incumbent consultant JANA Investment Advisers. Frontier will provide “tailored investment advice to help the Government Employees Superannuation Fund meet its investment objectives; insights on financial market opportunities and risks; and monitoring and assessment of incumbent and prospective external investment managers.”
One key aspect of the contract was integration of ESG and responsible investing capabilities into all of the consultant’s advice to GESB.
GESB’s $32 billion FUM is predominantly managed externally, including by Sydney-based quant-driven Vinva and “style neutral” Solaris for parts of its core Australian equities mandate. It also relies on BlackRock for its passive equity mandates as well as for listed property and infrastructure. While other funds are eyeing illiquid assets like venture capital and private equity, GESB’s private equity portfolio “continues to wind down and additional investments are not being made”, though Frontier will be required to provide an ongoing private equity strategy review.
The last time GESB replaced its asset consultant was in 2014, when Mercer was dropped in favour of JANA Investment Advisers. It’s headed up by Ben Palmer (picture at top), who was appointed CEO in 2018 after a stint as general manager for investments. He was previously head of portfolio management for Schroders’ UK private wealth business and an asset allocation strategist specializing in the not-for-profit sector.
Neither Frontier nor GESB could be reached for comment.
