Strategic asset allocations are formally reviewed at least annually, or more frequently as market conditions and events dictate. Manager combinations are reviewed regularly and at least on a quarterly basis.

Managers are monitored closely to assess performance against the selection criteria and benchmark. The managers employed by ipac agree to performance objectives. These are set with reference to a market index or a peer group benchmark. ipac also maintains a watching brief on candidates that could potentially be a compelling alternative.

At ipac, fund managers are classified as either 'Preferred', 'On Watch' or ‘On Review’. These classifications are defined as:

Preferred
Currently included in the portfolio.

On Watch
A Preferred manager where ipac is formally reviewing its role in the portfolio.

On Review
ipac’s list of alternatives for each manager appointed within its portfolios. The existence of the ‘On Review’ list ensures changes take place swiftly.

A manager is placed 'On Watch' when:

• Performance is inconsistent with the stated investment process and performance objectives.
• There are concerns about the implementation of a manager’s investment process.
• Another factor emerges (such as staff change, ownership change or change in market environment) that erodes the manager’s competitive edge and/or is likely to impact on future performance.
• ipac identifies a compelling alternative.

ipac understands the sell discipline

There is an art to how you review managers that is only learnt through experience. We want to sell a manager for the right reasons at the right time.

You need courage to hold your nerve when your research shows a manager with low returns has an investment process that will be rewarded in the future. Other times ipac has been quick to act when a new option is more compelling or where there has been a change in the people or another key factor that will reduce the competitive edge. Here are examples of two recent decisions ipac has made and the benefits.

date	sector	change	benefit
Jan 06	International Property Securities	Appointed CB Richard Ellis Global Real Estate Securities and LaSalle Investment Management to manage exposure to this asset class on a 50/50 basis.	ipac moved from a generalist to two specialist managers to take advantage of emerging opportunities within this asset class. This decision has helped performance and diversification.
Apr 06	International Smaller Companies	Arrowstreet Capital replaced Capital International as International Smaller Companies manager.	Review of the sector led to preference for a manager with an innovative quantitative approach and low funds under management.