Provide additional information relevant to your organisation`s appointment processes of external managers.
The Board has formally delegated responsibility for the appointment of Investment managers (with the exception of strategic investments) to the Investment Committee.
The Investment manager appointment process can be summarised as follows
Step 1 Decide to initiate an investment manager search
• The Investment Committee will resolve to commence an investment manager search
• This decision will generally be based on the written advice of the Investment team
Step 2 Agree prospective investment managers
• The internal Investment team and the consultant will agree up to three prospective investment managers, for recommendation to the Internal Investment Committee, or directly to the Investment Committee
• The Investment advisor will provide recommendations
• The Investment team will consider the recommendations from the Investment advisor, and may conduct additional research if required
Step 3 Conduct due diligence and finalise recommendation
• The Investment team will conduct or facilitate due diligence assessments, including
o Detailed Investment due diligence
o Preliminary Operational, legal and tax due diligence
• Prospective Investment managers may be asked to make a presentation to the Internal Investment Committee
• (If applicable) The Internal Investment Committee will then finalise a recommendation to the Investment Committee
Step 4 Decision
• The Investment Committee will consider the recommendation for the appointment of an investment manager from the Investment team or the Internal Investment Committee, unless otherwise required by the Investment Committee.
• The Investment team must prepare a report for the Investment Committee, outlining the basis for its recommendation, referenced to the principles and criteria set out in Investmnet Manager Appointments and Termination Policy. The Investment Advisor may also be asked to provide a report.
• As a minimum, the recommended prospective Investment manager is required to make a presentation to the Investment Committee.
• The Investment Committee’s decision is generally subject to completion of operational, tax and legal due diligence.
Step 5 Complete due diligence assessments
• The Investment team will complete (or facilitate completion of) the due diligence assessment
• The CIO will determine whether completion of the due diligence process has raised material concerns, to be raised with the Investment Committee
• The Investment team will complete the Material Outsource Service Provider Checklist
• The Compliance team will review the completed Material Outsource Service Provider Checklist, provide it to the Internal Auditor and advise APRA as and when required under the Outsourcing Policy and relevant regulation
Step 6 Implement appointment
• Including negotiation / review of IMA, side letter or other applicable contractual agreements
Due diligence assessments
The Investment team is responsible for ensuring that detailed due diligence (Investment, Operational, legal and tax) is performed by appropriately experienced and skilled professionals, who may include
• Investment team members
• Internal compliance, legal or tax specialists
• External Investment due diligence providers
• External Operational due diligence providers
• External legal advisors
The approach to due diligence and analysis of potential investments will differ depending on the type, structure and complexity of the proposed investment. For example, the risks and complexities of investing in unlisted assets require additional research and analysis.
All investment management agreements entered into by Vision Super in relation to the management of assets of the Fund must comply with all relevant requirements of SIS and APRA’s standards in relation to material outsourcing agreements.
The Investment team or the Compliance team (at the request of the Investment team) must review the relevant contractual agreement(s) to ensure that it complies with
• SIS legislation
• APRA prudential standards
• Any other legal requirements in operation from time to time
• Any other applicable Investment policies, including but not limited to the Derivative Management Policy
The Investment team may engage an external legal advisor to review any contractual and legal documentation relating to a new investment, including
• For mandates, the Investment Management Agreement
• For Collective Investment Vehicles, the relevant contractual agreement(s)
The over-riding principle is that appropriately detailed diligence is conducted, aligned to the complexity and risk profile of the investment.
The criteria against which potential investment managers are assessed includes (but is not limited to) the following
Business: Organisational and ownership structure, Organisational stability, Long term focus on investment management & Clear alignment with the interests of its clients
People: Demonstrated integrity, skills, expertise, knowledge and depth of experience of the investment personnel responsible for managing the portfolio
Investment philosophy and process: Alignment with our Investment philosophy, A clearly articulated and consistently applied Investment process, including alpha generation, portfolio construction and implementation
Fees and terms: Favourable commercial terms and fees, consistent with Vision Super’s Investment fee targets
Performance: High conviction that the manager can achieve expected returns for the level of risk.
Investment risk factors: Impact on the risk profile of the asset class and Investment options, including Liquidity risk
Operational risk factors: Strong internal operational risk and control environment and investment operations capability
ESG: Consideration of environmental, social and governance risks when making portfolio investments, as required by the Environmental, social governance policy
Taxation: Management of after tax outcomes
Reporting: Ability of the manager to provide the reporting required, To facilitate timely daily unit pricing of Vision Super Investment options, For effective overight and monitoring by Vision Super & For Vision Super to comply with regulatory reporting requirements.