MLC ditches Perpetual from Aussie equities

portfolio manager

17 October 2002
| By Ben Abbott |

MLChas refined its Australian equity strategy, terminatingPerpetual Investment Managementand appointing Dimensional Fund Advisors Australia.

MLC removed Perpetual from its Australian equities management line up in September immediately after the resignation of portfolio manager Peter Morgan, withdrawing more than $900 million in funds under management.

“We had the choice of moving from Peter to John Sevior at Perpetual, but while both are very competent managers, they had a difference in style, and given our particular needs we didn’t think John was an appropriate choice,” portfolio manager of MLC’s investment management division Paul Duncan says.

Dimensional will take over $550 million of the $900 million withdrawn from Perpetual on Monday from a transitional funds manager that was appointed after the resignation of Morgan.

In MLC’s Australian equity portfolio, Perpetual took up a 10 per cent allocation of invested funds. MLC has now allocated six per cent of these funds to Dimensional. The other four per cent went towards an increased weighting towards Concord Capital, Contango Asset Management and Jardine Fleming Capital Partners.

The management configuration ensures that the overall Australian equity strategy remains style neutral, as Dimensional’s value and small capitalisation characteristics are more pronounced than those associated with the portfolio that was previously managed by Perpetual, Duncan says.

“Dimensional has very strong academic ties, and has a sustainable competitive edge going forward due to their approach - less art and a bit more science,” he says.

“We were looking for managers that are generally doing something quite different, and Dimensional has very pronounced value characteristics being one of the deepest value managers in Australia.”

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