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 firms up overseas ranks
Mark Hargraves joins the fund after 23 years with AXA Investment Management, including two years as head of AXA IM Equity with overall responsibility for $110 billion of assets and a team of 60 managers. The new role will see Hargraves take on responsibility for building out internal management capabilities, hiring new talent and “leading the processes underpinning the growth and development of those portfolios”.
“Mark’s appointment is an important leadership role within the fund, bringing together the management, research and strategy for international equities and private equity investments,” said AustralianSuper CIO Mark Delaney. “His investment experience within complex multi-market organisational structures will be invaluable as we build our own capabilities alongside outside investment mandates.”
AustralianSuper expects to have around $700 billion of FUM by 2030 and to deploy around 70 per cent of that into global markets. Its global equities portfolio will swell to $225 billion – almost the current size of the fund – from $69 billion while its private equity portfolio will total around $55 billion. Around half of its $300 billion FUM is already invested outside Australia, with $85 billion in the United States and $40 billion in the United Kingdom and Europe.
“I’m delighted to be joining the fund at a time when it is undergoing significant growth, building the international capabilities necessary to manage a globally significant member-focused retirement fund,” Hargraves said.
“The past few years have highlighted the importance of agile, integrated investment strategies able to manage short-term macroeconomic and geopolitical volatility and the longer-term sustainability challenges created by climate change. I look forward to playing my part in the Fund’s growth and the unique opportunities that process will create.”
