Surging equity markets have driven the Future Fund’s return higher, but its prediction that inflation will be stickier than expected has been born out and it “remains conscious of the potential for significant deterioration”.
A number of super funds managing less than $10 billion have been slugged with an increase in their restricted APRA levy of more than 80 per cent even as the regulator pushes them to keep costs down.
Managers look to streamline real assets, at least at the top
(pictured: Jose Minaya)
This may not be a big trend – given that it represents a survey of two firms only – but if it is, remember where you heard it first. Two large global managers of unlisted assets have moved to combine their asset class business units at the very top of the management of their organisations.
Last week, TIAA-CREF followed BlackRock in combining its “real assets” units into a single business line. BlackRock undertook a similar efficiency decision last month.
Both firms point out that this does not mean the portfolio management of the asset classes are being merged. From a client perspective, there is no change in processes or investment oversight, they say.
According to the Asset International news service, TIAA-CREF is forming a new standalone division which will wrap its largest units, including global real estate, agriculture, timber, infrastructure, and energy. In addition, the real assets group is to take over subsidiaries TH Real Estate, Westchester Group Investment Management, GreenWood Resources, and Churchill Asset Management.
“All told, TIAA-CREF expected the real assets business to comprise roughly 900 staff members in 16 countries. The New York-based firm managed US$100 billion in real assets as of December 31, 2015.”
Private Markets head Jose Minaya is to take over the new division as president, the company said, and supported by current private markets CIO Heather Davis. Minaya said the reorganization would allow the business to be “more nimble” and “accelerate” its speed to market.
BlackRock said last month, in revealing its reorganisation, that it would combine oversight of its “scientific” and “fundamental” equity teams into one department and its real estate and infrastructure teams into a single “real assets” division.
In Australia, BlackRock launched a fundamental capability for Australian equities last year, which is unaffected by the global move in senior management. The local fundamental strategy is being run by Charlie Lanchester, as head of fundamental equities, and Madeleine Beaumont as senior portfolio manager. Lanchester was a headline-grabbing recruit, hired from Perpetual Investments, where he worked for 14 years, most recently as head of Australian equities.
