China's second biggest insurance firm, Ping An, and Australia's UniSuper, which manages retirement money for the higher education and research sector, were honoured as standout institutional investors in their respective countries. Here we explain why.
AsianInvestor has already announced the full list of winners by country, category and proficiency, and published details of how we came to our final decisions. Scroll to the end of this article for links to the award write-ups we have already published.
The full list of write-ups, along with photos of the winners, will appear in the December issue of AsianInvestor magazine.
Fondly described by peers as a nimble giant, UniSuper attributes its consistently strong performance to the autonomy it grants its internal investment team. Almost half of the superannuation fund’s A$55 billion ($41 billion) in assets are managed in-house and the investment team is trusted to make big calls, without every decision passing through the investment committee.
Chief executive Kevin O’Sullivan and chief investment officer John Pearce have assembled a group of highly qualified executives with experience from across big fund management firms. The team is guided by 10 investment principles that cover areas such asset allocation, valuation, diversification, market inefficiencies, liquidity, risk and ESG. Investments that don’t meet all the principles don’t get through.
UniSuper’s balanced option has returned 10.2% annually over the past three years, ranking it second in a field of 170 superannuation fund peers. Indeed, all of its pre-mixed accumulation investment options rank in the top 25% of peer funds for one-, three-, five-, seven- and 10-year returns.
The fund’s assets under management have almost doubled since 2011. Some of its more savvy investments this year have included sizeable orders for private placements and hybrid securities issued by investment-grade corporates, and increasing its exposure to direct infrastructure.
UniSuper is committed to keeping members informed and has the courage to communicate investment missteps as well as winning calls. Each month Pearce features in a video on the fund’s website titled ‘Five Questions for the Chief Investment Officer’, in which he talks about market trends and macroeconomic indicators.
In a country blessed with many capable and sophisticated institutional investors, UniSuper stands out. That is some achievement.
China’s insurers liabilities are growing fast and are hungry for returns. Ping An Life Insurance has led the way in finding means to locate them – no simple task in today's markets and constrained by mainland regulations.
The life unit of Ping An Group does not disclose many details, but the parent group (82% of whose assets come from life business) will boost its offshore exposure to 7% of its overall portfolio and eventually to 10% in the coming years. Mainland insurers cannot invest more than 15% overseas by their regulator.
To do so, Ping An Life has mandated Rmb50 billion ($7.3 billion) to external managers for domestic and foreign markets, increasing this amount by 67% during the past 12 months. Apart from investing in Hong Kong equities, it has built exposure to overseas alternatives such as private equity funds, infrastructure, real estate and private debts, via external managers or co-investments.
Consultants credit Ping An Life’s investment capabilities in overseas alternatives deal sourcing and its advanced practices in selecting managers. For example, it has established a dedicated team for real estate investments and included boutique specialists for alternatives on its screening radar.
Additionally, the low-yield environment locally has led Ping An to adopt unique strategies for mainland asset owners such as risk-parity, multi-asset and quantitative equity strategies. It also added domestic alternatives such as private equity and real estate.
Industry observers also praise the group’s improvement in team structure and governance. Its investment team has restructured several reporting lines in the past two years, aiming to improve its investment efficiency.
Ping An has clearly justified its reputation as China's most adventurous and progressive insurance investor in recent years.
Write-ups already published (and what they were awarded for):