Client Type: Pension Fund
Sector: Superannuation / Long-Term Asset Owner
Location: Australia
Challenge:
The fund maintained a conservative, benchmark-hugging portfolio under internal governance constraints (YFYS and performance review frameworks). However, low active risk and high cash drag left the portfolio underperforming its long-term return objectives.
Solution:
- Structured derivative overlays to replace passive beta with portable alpha exposure
- Used equity index swaps and futures to maintain benchmark alignment while reallocating freed capital to alpha-generating strategies
- Delivered governance-aligned implementation with full attribution, risk, and reporting packs for board and CIO oversight
Result:
- Achieved a 150bps net uplift in returns over the core benchmark
- Preserved strategic asset allocation targets and risk tolerances
- Enabled the fund to pursue performance outcomes without additional internal resources or mandate breach
Value Delivered:
Demonstrated how smart overlay structuring can extract alpha from passive portfolios – bridging the gap between fiduciary caution and market opportunity.