Fund Managers

Enhanced Cash, International Equities

Aberdeen Asset Management Limited is a wholly-owned, Australian-based subsidiary of Aberdeen Asset Management PLC, a UK-based global asset management group.

Aberdeen’s business is the active management of financial assets, chiefly equities, fixed income and property.  Aberdeen invests worldwide, following a predominantly long-only approach, based on fundamentally sound investments.

The Group has offices in 23 countries around the world.  It has had a presence in Australia since December 2000, growing organically and by acquisition since that time.  The Australian business manages around A$18 billion (as at 31 December 2011) for global and domestic clients including listed investment companies, managed investment schemes and segregated mandates.

Australian Equities

AllianceBernstein Australia Limited (ABAL) is a wholly-owned subsidiary of AllianceBernstein L.P. Group (AllianceBernstein), a leading global investment management firm that offers high-quality research and diversified investment services to institutional clients, individuals and private clients in major markets around the world. AllianceBernstein employs more than 500 investment professionals with expertise in growth equities, value equities, fixed income securities, blend strategies and alternative investments and, through its subsidiaries and joint ventures, operates in more than 13 countries.

As at 31 December 2011, AllianceBernstein managed A$406 billion in assets. Their clients include pension plans, superannuation schemes, charities, insurance companies, retail investors, high net worth individuals and families, central banks, and governments in more than 50 countries throughout the Americas, Europe, Asia and the Pacific Rim.

Bernstein Value Equities’ (Bernstein)* core investment philosophy is to purchase stocks with the most promising long term earnings for the best price. Bernstein believes that investors frequently overreact to short term events and, thereby, overestimate the long term impact of current negative trends. This causes securities to become mispriced relative to their objective long term earnings prospects, creating compelling buying opportunities. Bernstein relies on its quantitative and deep fundamental research capabilities to identify these opportunities.

*Bernstein Value Equities (a division of ABAL, ABN 53 095 022 718 AFSL 230 698)

Australian Equities

AMP Capital Investors is one of Asia Pacific’s largest investment managers. Their strength in Australia and New Zealand has helped them to grow internationally and allows them to provide tailored investment solutions for both local and international investors. They have a long history of leadership, from being one of the first investors in infrastructure in the 1980s, to being the first Australian company authorised to trade China A shares.

Their team of equity specialists manages over A$30 billion* in equity investments. This includes the multi strategy team which manages funds on behalf of SSFS. The team uses a systematic stock selection approach focusing on value and momentum styles and applies a statistical risk assessment approach to stock selection, designed to enhance portfolio returns for our clients.

*as at 30 September 2011

Australian Fixed Interest, Global Listed Property Securities, International Equities

BlackRock is a premier provider of investment management, risk management and advisory services to institutional, intermediary and individual investors around the world. These include individual and institutional separate accounts, mutual funds and industry-leading iShares® ETFs. As at 31 December 2011, BlackRock managed around A$3.51 trillion across equity, fixed income, real estate, liquidity, alternatives and asset allocation strategies.

BlackRock employs more than 9,100 professionals in 25 countries around the world and has a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa.

Underpinning the International Enhanced Equity Index strategy is the belief that superior risk adjusted returns can be achieved by capitalising on a broad set of quantitative stock selection techniques and trading strategies designed to exploit predictable market anomalies. Similarly, the Australian Fixed Interest Enhanced Index strategy systematically exploits market inefficiencies validated by research. The Global Listed Property Securities Index strategy is passively managed and is designed to provide low cost exposure to the performance of the listed property market globally.

Global Listed Infrastructure Securities, Global Listed Property Securities

Cohen & Steers Capital Management, Inc. (‘Cohen & Steers’) pioneered the field of listed property securities investing in 1986 and today maintains the largest team of professionals solely dedicated to managing listed property securities portfolios. In 2003, the firm expanded into listed infrastructure securities managed by a separate dedicated team with 11 years of average experience. The size of Cohen & Steers, the experience, depth and continuity of their teams, and their time-tested, disciplined investment processes, provide them with a superior information advantage.

Cohen & Steers is a wholly owned subsidiary of Cohen & Steers, Inc., a public company listed on the New York Stock Exchange (NYSE:CNS). The majority of the firm’s equity is owned by its employees. Headquartered in New York City, with offices in London, Brussels, Hong Kong and Seattle, Cohen & Steers serves institutional and individual investors worldwide. At 31 December 2011, the company had A$41 billion in assets under management.

Cohen & Steers listed property analysts scrutinize companies’ strategies, corporate structures, property quality and financial strength through market and balance sheet analysis, interviewing management teams and viewing the properties themselves. Analysts’ assessments are incorporated into a proprietary valuation model that recommends a target weight for each security. Using a macroeconomic overlay, portfolio managers make the final investment decisions in the context of risk control, diversification, liquidity and client guidelines. The company’s listed infrastructure process begins with the identification of the core global infrastructure investment universe. Analysts formulate independent views on fundamentals, regulatory trends and company financials on all companies in this universe. After ranking infrastructure sub-sectors using a proprietary macro sector overlay, portfolio managers determine appropriate security level weightings based upon the output of their analyst-driven fundamental research and valuation models.

Australian Fixed Interest

Colonial First State Global Asset Management (CFSGAM) is the consolidated asset management division of the Commonwealth Bank of Australia, which is one of the largest financial institutions in Australia. CFSGAM is one of Australia’s largest managers of Australian-sourced funds, employing more than 230 investment professionals around the world. At 31 December 2011, CFSGAM managed more than A$142 billion across a diverse range of asset classes.

CFSGAM’s Global Fixed Interest and Credit team is a value-based manager of Australian fixed interest portfolios, with a long-term time horizon. The team’s goal is to deliver superior returns by making investment decisions that seek to maximise the income earnings of the portfolios over time, appropriately balancing return prospects against investment risks.

The Global Fixed Interest and Credit team actively manages duration, curve, inflation, country and sector and security selection strategies by evaluating longer term income earning potential rather than speculating on short term market movements. Basing decisions on longer term criteria does not mean that portfolios are ‘static’. On the contrary, because of market movements there are continual opportunities to exploit new value adding opportunities. This is because these market moves are unpredictable and driven by short term thinking. Taking advantage of them through their disciplined, active processes is expected, over the medium to long term, to generate steady and reliable income.

International Equities

Epoch Investment Partners, Inc., “Epoch”, a New York based US and global equity investment manager, was established in 2004 and is a wholly owned subsidiary and the sole operating business of Epoch Holding Corporation (NASDAQ listed, ticker EPHC). As of 31 December 2011, approximately 40% of Epoch’s shares were owned by the employees, executives and directors of the firm and Epoch had A$18.7 billion funds under management.

Epoch believes that a paradigm shift is taking place in the sources of return for investors in global equity markets and that the key to producing superior risk adjusted returns will be to focus on free cash flow, instead of traditional valuation measures such as Price-to-Earnings or Price-to-Book ratios. Epoch focus on companies generating free cash flow run by management committed to deploying that cash flow for the benefit of shareholders through dividends, share repurchases and debt reduction. Epoch define these uses of free cash flow (dividends, share buybacks and debt reductions) as “Shareholder Yield”.

Epoch’s Global Equity Shareholder Yield strategy pursues attractive total returns with an above-average level of income by investing in a diversi?ed portfolio of global companies with strong and growing free cash ?ow. Companies in the portfolio possess management that focus on creating value for shareholders through consistent and rational capital allocation policies with an emphasis on cash dividends, share repurchases and debt reduction — the key components of shareholder yield. The portfolio generally holds between 90 and 120 stocks from equity markets worldwide, with risk controls to diversify the sources of shareholder yield and minimize volatility. Epoch selects stocks that can meet its 6% shareholder yield requirements, with 4.5% coming from dividends and 1.5% coming from share buybacks and debt repayments. Epoch also look for a 3% minimum growth rate of cash flow. Risk management is integrated with the investment process, seeking to achieve the least possible volatility for the return characteristics sought and capital preservation in down markets.

Australian Equities

Fidelity Worldwide Investment was established in 1969, it has offices in 23 countries and manages A$212 billion (as at 31 December 2011) in assets for individuals and institutional clients.  Fidelity has invested in Australian equities for over 35 years. Its Australian equities team is backed by one of the largest proprietary research groups in the world covering more than 90% of the world's largest listed companies (as defined by the MSCI World Index).

The Fidelity Australian Equities Fund employs a bottom-up, research driven investment style. The Portfolio Manager, Paul Taylor, favours stocks that are likely to generate better relative earnings and cash flow growth than the market expects. He seeks stocks whose return on capital is rising due to cyclical or structural improvements. Paul also favours companies that possess good management, strong competitive advantages and favourable industry dynamics.

Global Listed Infrastructure Securities

Macquarie Funds Group (MFG) is Macquarie Group's funds management business. MFG is Australia's largest asset manager and a top 50 asset manager globally, with A$314 billion in assets under management as at 31 December 2011. MFG is a full-service asset manager, offering a diverse range of capabilities and products including infrastructure and real asset management, securities investment management and structured access to funds, equity-based products and alternative assets. MFG has been managing assets for pension funds, institutions and retail investors since 1980 in Australia and 1929 in the US (through Delaware Investments). MFG has global reach, with a large team located in over 20 countries.

Macquarie began investing in the infrastructure sector almost 20 years ago. Infrastructure funds, established by Macquarie, invest money from clients including Australian superannuation funds into these stable, cash-generative infrastructure businesses. Since this time, Macquarie has developed a wide range of experience in the infrastructure sector and is generally acknowledged as a global leader with significant depth of industry knowledge.

Macquarie has been managing Global Listed Infrastructure since 2004 and has one of the largest dedicated listed infrastructure investment teams in the world. Macquarie believes infrastructure is an under researched sector of the equity market, where knowledge asymmetries exist. The use of financial models based on rigorous proprietary fundamental research by an experienced investment team can provide insights to take advantage of market inefficiencies and opportunities. Macquarie believes that portfolios based on these opportunities, combined with risk management, will deliver attractive risk adjusted returns.

Australian Equities

Orion Asset Management is a boutique fund manager, providing high quality equity investment products to the wholesale and retail markets in Australia. It is a small, efficient, and flexible operation with a strong investment culture.

Orion is regarded as a growth-style manager, and identifies mis-priced stocks via a rigorous bottom-up fundamental research process, intensive use of technology, and proprietary valuation techniques.

The company was founded late 2002 by Tim Ryan, who has a long and successful track record in the investment industry. Tim was joined in early 2003 by John Lobb and Dushko Bajic, both former colleagues with extensive experience in senior investment roles. Orion is 42% owned by Treasury Group, a company listed on the Australian Stock Exchange, and 58% by staff. As at 31 December 2011, the firm had approximately A$4.6 billion under management in Australian Equities, and a further $3.1 billion in Global and Emerging Markets Equities on behalf of Trilogy Global Advisors.

International Equities

Pareto is a specialist global institutional investment management firm with its head office in London and FSA appointed representatives, in New York, Sydney and a branch in Tokyo.  Pareto is a specialist in currency management strategies and one of the largest currency overlay managers in the world. Pareto also manages currency absolute return strategies.

Established in 1991 with A$45.4 billion under management as of 31 December 2011, Pareto retains a diversified global client base. The firm's client profile is predominantly large pension funds and managed funds.

Pareto is a wholly owned subsidiary of The Bank of New York Mellon (BNY Mellon). Pareto operates as an independent BNY Mellon investment manager within BNY Mellon, in keeping with BNY Mellon's business model. Pareto believes that the best way to add value in currency management is by controlling probability of loss successfully. Accordingly, Pareto does not attempt to forecast future currency returns. Instead, the focus is on estimating and managing the currency risk embedded in the international portfolio.

Pareto has developed a proprietary, statistical model-based approach known as Currency Risk Management (CRM). It is designed to protect the international portfolio against losses when the Australian dollar strengthens, and to participate in gains when the Australian dollar weakens.

International Fixed Interest

Founded in 1971, PIMCO, with A$1.3 trillion of assets under management, has grown to be a leading global investment authority. With more than 1,976 dedicated professionals in 10 countries, PIMCO is focused on a single mission: to manage risks and deliver returns for clients.

The Australian business of PIMCO was established in 1997 and now serves more than 100 clients invested in a wide range of domestic and global fixed interest strategies. Assets managed on behalf of investors through PIMCO’s Australian office totalled over A$32 billion as at 31 December 2011.

PIMCO emphasises active decision making with a long term focus. Their investment approach concentrates on top-down economic research to identify those factors likely to affect the levels of worldwide interest rates and bottom-up credit analysis of individual bonds and issuers to identify the best value within and between sectors. In keeping with this, PIMCO applies a wide range of strategies including duration, credit analysis, relative value analysis, sector rotation and security selection. PIMCO avoids extreme swings in duration or maturity in order to create a low volatility stream of returns.

International Equities

The Schroders Group is one of the largest and most internationally diverse independent investment managers providing investment management, research and marketing services from offices located in 25 countries. While many financial institutions try to provide all things to their clients, Schroders specialise in just one - pure investment management. As at 30 September 2011 the Schroders Group managed investment assets of approximately A$292.1 billion worldwide.

In Australia, Schroders is a wholly owned subsidiary of Schroders plc, a publicly listed UK company descending from a group that can trace its origins in banking and finance back over 200 years. Financial services has been the core business for Schroders in Australia since 1961 and as at 30 November 2011 it managed A$25.6 billion across a broad range of asset classes.

Schroders has a balanced approach to investing in Emerging Market equities. They use a mix of top down analysis and bottom up stock selection and look to derive 50% of their added value from country allocation and 50% from stock selection. Fundamental research from their team of 35 highly experienced and locally based emerging market equities analysts forms the basis of the stock selection process and portfolios are constructed by three global Emerging Market fund managers focusing on their highest conviction ideas.

Cash, International Equities

State Street Global Advisors (SSgA), the institutional asset management arm of State Street Corporation, has been providing comprehensive investment management services to investors in world markets for over 32 years. As at 30 November 2011, SSgA had funds under management globally of A$1.8 trillion across a range of investment strategies and markets. SSgA Australia, Limited is the Australian affiliate of the SSgA group. SSgA Australia had funds under management of A$77.8 billion, on behalf of Australian and New Zealand based clients, as at 30 November 2011.

With a global investment platform that provides clients access to all major investment styles and capitalisation ranges, SSgA has the ability to combine a disciplined, precise investment process with robust research and risk management tools.

SSgA Australia manages a passive international equities mandate for SSFS tracking the MSCI World (ex Aust) Index and a Term Deposits mandate for SSFS with the UBS Australia Bank Bill Index as the benchmark.

Australian Equities, Australian Listed Property Trust, Cash, International Fixed Interest

Established in 1975, The Vanguard Group Inc (US). manages over A$1.7 trillion and is one of the largest investment management companies in the world. Vanguard Investments Australia is a wholly owned subsidiary of The Vanguard Group Inc, and combines the skills of its team of Australian investment professionals with the strength of its parent.

In Australia, Vanguard had A$58 billion of funds under management as at 31 December 2011 and offers index funds in all major asset classes, including diversified funds. Vanguard's products are generally less than half the cost of comparable actively managed products.

Beyond its indexing sector specialist capabilities, Vanguard has developed a portfolio ‘rebalancing’ service. This service has been tailored to suit SSFS’ investment strategies and effectively and efficiently controls and directs all cash flows. This results in fewer transactions, lower costs and ensures the strategic asset allocation of each sector trust is maintained.

International Equities

Walter Scott & Partners Limited (Walter Scott) is a global equity investment manager serving institutional investors around the world including pension plans, foundations, public funds and financial organisations. It sub-advises a number of mutual funds and equivalent vehicles in the USA, Canada, the UK, Europe and Australia. The firm operates from a single location in Edinburgh where it was established in 1983.

Walter Scott is a wholly owned subsidiary of The Bank of New York Mellon (BNY Mellon). As of 31 December 2011, the firm managed A$46 billion in global, international and regional portfolios.

Walter Scott’s core conviction is that the return to a shareholder can, over the long term, be no more than the wealth generated by the underlying business. Original research to identify companies capable of sustained high rates of wealth generation lies at the heart of the firm’s investment process. This is the firm’s primary value-adding activity and is carried out by its own investment professionals. Portfolios are the result of stock picking and the firm's long term 'buy and hold' approach has led to low turnover. Resultant industrial and geographical structures reflect the firm's independent judgement rather than the composition of indices. Portfolios are managed by bringing together the skill, judgement and experience of Walter Scott’s entire investment team. Low staff turnover together with the long investment experience of the senior staff ensures consistency of philosophy, process and culture.