Insight. Foresight.

Investments

Our Investment Objective

VFMC's primary objective is to manage the long term assets of Victorian State entities. Client portfolios are constructed to meet their specific objectives, liabilities and time horizons.

Our Approach

Our Clients’ Boards set their specific investment objectives. In managing client assets, VFMC seeks to maximize the advantages of scale and access to the world’s best investment views and resources. These combine with our long term investment horizon to provide unique insights.

VFMC adopts a centralised asset management approach. The methodology for the strategic asset allocation was devised in conjunction with Watson Wyatt who prepared asset / liability studies for each client. This has enabled VFMC to develop individual investment strategies which maximize the probability of meeting their liability profiles and unique investment objectives.

As part of this process, client liabilities are categorized as either

  • Short term
  • Inflation Sensitive
  • Long Tail

And asset classes are categorized as either

  • Debt and Absolute Return (Australian Bonds and Cash, AUD hedged international bonds, Absolute Return Funds)
  • Inflation Linked (infrastructure, property, CPI bonds)
  • Equities (Australian, International, Private Equity)

VFMC utilises the skills of our in-house investment team to build investment portfolios as efficiently as possible. The investment team operates under delegations from the VFMC Board. In making specific investment decisions, VFMC’s investment team is driven by four core Investment Beliefs:

  • Only take risk where you expect to be rewarded
  • Fees, taxes and transaction costs matter
  • Markets mis-price assets creating opportunities to add value
  • Implementation / Execution is critical

Investment portfolios are constructed via a combination of in-house investment management and external fund managers. Internal management is practiced where we have the capabilities to generate superior performance net of fees. Approximately one third of VFMC's funds are managed internally. 

By achieving outstanding long term performance results for its clients, VFMC aims to be a centre of investment excellence and lead the development of the Melbourne funds management industry.