MLC adds ‘unconventional’ LTAR strategies

MLC has appointed two new investment managers for its Long-Term Absolute Return (LTAR) portfolio, in line with the portfolio’s overall strategy of “investing in unconventional investment strategies”.

The two new managers are Bridgewater Associates, which brings its Pure Alpha Strategy to the LTAR portfolio, and Nephila Capital, which offers an Insurance Related Investments (IRI) strategy.

Launched in 2005, MLC’s LTAR strategy is a multi-manager, multi-asset class portfolio designed to deliver net real returns to investors over a 20-year period

MLC chief investment officer Chris Condon said the inclusion of the Pure Alpha Strategy was aimed at “enhancing the real return characteristics of the LTAR strategy by exploiting manager skill, while the IRI provided an excellent source of diversification”.

Condon described both the Pure Alpha Strategy and the IRI as “great examples of LTAR’s investment strategy of applying unconventional investment strategies to create wealth over the long term”.

“Both of these investments require a long-term investment perspective that is fearlessly independent of traditional approaches and, because they are uncorrelated to other sources of return currently accessed by the LTAR, they reduce the overall risk of the portfolio,” he said.

“In fact, because the reduction in risk is more than what is required for the portfolio’s 20 year objective, we have increased the level of gearing to improve overall expected returns without materially impacting overall risk.”