Telstra changes long-distance managers

The $6.9 billion Telstra Superannuation Scheme, the largest corporate fund in Australia, has appointed and terminated a number of its investment managers following an extensive international equity and fixed interest review.

The fund, which has almost 75,000 members, has awarded both Massachusetts Financial Services (MFS) and Bank of Ireland Asset Management (BIAM) with $265 million global core mandates each - replacing Lazard Asset Management and JP Morgan Investment Management.

PIMCO Australia and Black Rock Financial Management have also been appointed as global active core fixed interest managers with mandates of $140 million each, replacing Credit Suisse Asset Management (Australia) and UBS Global Asset Management (Australia).

Telstra Super chief investment officer Steve Merlicek says the equity manager changes were fuelled by an acknowledgment that the extreme out-performance of first growth then value stocks over recent years is unlikely to be repeated going forward.

“Each of these [new international equity] managers has an emphasis on stock picking rather than deep value or extreme growth styles, which is appropriate for the anticipated market environment going forward,” he says.

As for the changes to the fund’s international fixed interest managers, CEO Terry McCredden says these were the result of the fund moving its benchmark from the Salomon Bros World Government Index to the broader Lehmann Global Aggregate Index in line with industry trends.

Four incumbent international equity managers were retained Clay Finlay, BNP Paribas Asset Management, Wellington International Management and Commonwealth Investor Services.

Towers Perrin acts as asset consultant to the fund.