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.
JANA nabs another not-for-profit
With the addition of Uniting Financial Services (UFS), JANA now advises more than 35 non-profits clients, picking up four over the last 12 months. Winning more remains a “key strategic focus” for the asset consultant in 2024.
“There’s a lot of opportunity for JANA to support more NFP organisations, such as for-purpose organisations, foundations and universities, who can benefit from having an independent, institutional investment consultant,” said Michael Maher, senior consultant and head of NFPs.
“We understand the diversity of the NFP sector and the unique requirements when it comes to investing, especially in the religious and charitable sector, whom often have unique ESG commitments. This rings true for most NFP organisations whose investment strategies need to be deeply aligned to their mission and generate revenue streams that support them in their long-term success.”
UFS provides lending and investment services to the Synod of NSW and ACT, having managed the finances of Uniting Church organisations for more than 90 years. It currently has around $1.75 billion in assets under management and offers conservative, balanced and high growth ethical funds, with a stable of managers including Ausbil, Pendal and Revolution Asset Management. It has been at the “forefront” of responsible investing for more than 40 years, and was an early signatory to the UNPRI; JANA will provide it with “strategic advice, manager research, portfolio construction and ESG advice”.
Asset consultants have increasingly been shopping their services to endowments, family offices and wealth managers as their traditional super fund asset allocation work is handed to in-house teams and funds keep consolidating. While the pace of investment internalisation has seen asset consultants pulled in to provide investment oversight and governance advice to boards – and some funds retaining multiple providers for different levels of expertise – it’s clear that most asset consultants see future growth coming from outside the super system.
“Right now, our focus in terms of broader growth across markets are on areas outside of superannuation that might previously not have had an investment consultant or used other models,” JANA CEO Georgina Dudley told ISN in early 2023. “We’re thinking around the not-for-profit sector, family offices, insurance clients and broader diversified clients – wealth partnerships, and those types of areas. And deeper within client relationships in the markets we already have – whether that’s projects for sustainability research or areas like retirement and broader responses to regulatory change.”
To drive its own growth, rival asset consultant Frontier has begun to expand offshore and is pursuing Asian prospects with an office in Japan, but has also been pushing into the wealth management and endowment space. In late 2023 it picked up the Australian Ballet and Perks Private Wealth, as well as the University of Adelaide in January.
