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.
AustralianSuper wants best of both worlds with combined real assets function
AustralianSuper has combined its property and infrastructure teams in recognition of the “increasingly close” relationship between the two asset classes and to drive global economies of scale as it looks to double the size of its mid risk portfolio to more than $150 billion by 2030. Nik Kemp will oversee the merged teams in his new role as head of global real assets.
“By bringing the expertise and knowledge of the two asset classes together, we can maximise the best of both to support global deal origination and continue to drive value creation in ownership for Fund members,” Kemp said. “By combining the teams, we can take a more research and sector-led approach to investing, aligned to our broader one portfolio approach.”
Head of mid risk Jason Peasley will lead the combined real assets team, while Monica Ryu has been appointed as the team’s head of asset management. Paul Clark will become head of European real assets and Derek Chu will take on the role of acting head of American real assets pending finalisation of the property component of the real assets strategy in North America. The fund will also recruit a new head of Australian real assets and create a new head of strategic opportunities role.
“Over recent years, we have seen the importance of sector selection in driving performance across both property and infrastructure as well as a blurring of investment opportunity classification across the two asset classes, which we expect to only increase in the future,” Peasley said.
“We have ambitious investment performance objectives for both property and infrastructure and have been aligning our asset class strategies to invest in operating businesses and platforms which have the dedicated talent and opportunity to create more value across the real assets spectrum. This aligns with our objective to source large-scale transactions as well as building real asset platforms, rather than developing individual assets.”
