Call for super funds to centralise portfolio management

It’s time for super funds looking for new ways to value-add with their multi-manager active equity programs to get serious about using a centralised portfolio management (CPM) approach, according to a global implementation specialist.

A CPM would ideally separate the idea-generation function of each active equity manager in a fund’s system from the implementation function, as well as separating the latter.

The approach could also see funds get a whole-of-equities risk dashboard, centralise proxy voting, and minimise tax leakage on Australian and global equity portfolios, the chief executive of the specialist’s, Parametric, Australian arm, Chris Briant, said.

He also said that current market conditions invited a CPM approach, with “market volatility, over-priced equities, scarce alpha and frugal fee budgets creating a perfect storm for super funds with multi-manager active equity programs”.

“In this investment environment, the logical response is to reconsider how the multi-manager equity ‘jigsaw’ fits together and can be implemented using CPM,” Briant added.

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