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.

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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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