Wednesday, 9 September 2015

I first realised that investing was a team sport early in my career. I was sitting across from a very experienced Australian investor as he recounted the amount of work (or ‘due diligence’) he had undertaken before deciding whether to invest in a company. He detailed the countless meetings with management, the analysis of the financial statements, the projections about the industry and the broader economy, and the five or so other investment professionals who were also involved in the work. It made me realise that investing is not an individual sport and to be done to an adequate standard a considerable amount of time and resources are needed.

So how big is the investments team that manages your money at QSuper? As you’d expect, we take our investment responsibilities very seriously, and over the last few years we have built an internal investments team in order to have greater control over how the Fund directs its investments.

This team consists of: an Investment Committee which is made up of board members and independent directors (7); a Chief Investment Officer and deputy (2); an Investment Strategy team (11); a Funds Management team (7); a Capital Markets team (5); an Asset/Liability Management team (3) and a Policy and Governance team (6). That’s over 40 people directly overseeing and managing QSuper’s $60 billion portfolio.  This has not only strengthened the focus on investment outcomes for our members, but also resulted in significant cost savings.  And like any good team, there are complementary skills sets: there are players who specialise in offense and defence, there are umpires, coaches and support staff. Everyone has a distinct role to perform.

To give you an example, the role of our Investment Strategy team is to determine the portfolio’s asset allocation (i.e. how much to invest in shares, bonds, property or cash etc.) within the strategic asset allocation ranges set by the Board of Trustees. Their job is to monitor and configure this mix of assets to ensure it has the greatest probability of meeting the return objectives that are targeted for each investment option.

Our Funds Management team is responsible for identifying and appointing the best managers within each asset allocation. So for example, should the Investment Strategy team determine the portfolio should invest in infrastructure assets, the Funds Management team will search the globe to find the investment manager who is best positioned to meet the specific objectives we set. We undertake a due diligence process which involves meeting with the manager’s own investment teams, and understanding their systems and processes. Once we eventually appoint a manager to buy assets on our behalf, we continue to periodically undertake due diligence in addition to reviewing their ongoing performance.

QSuper’s investments team consists of 40 people in Brisbane, plus hundreds of underlying specialists worldwide who buy shopping centres, gas pipelines, stocks, bonds and even day care centres for your portfolio. Once I realised investing was a team sport I adjusted my outlook on buying investments directly myself. It made me recognise the benefit of having a team with a broad depth and range of skills in building a truly diversified, quality portfolio.

The views of the author and those who provide the responses to comments posted on this blog are not necessarily the views of QSuper. This information is for general purposes only. It is not intended to constitute advice and persons should seek professional advice before relying on this information.

Past performance is not a reliable indicator of future performance. Each of our investment options has a different objective, risk profile, and asset allocation.

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