Asset consultant Intech has terminated $187 million worth of Australian equity mandates with global fund manager GMO.

The terminated mandates follow the departure of two key staff members from GMO's local team.

In September, GMO lost head of Australian equities Max Cappetta and head of equities research Anthony Corr. They left to establish quant boutique Continuum Capital Management with former colleague Brett McElwee.

Intech's clients, Asset Super and ClearView, terminated their mandates with GMO following advice from Intech. They had $45 million and $92 million in Australian equities mandates respectively.

Intech also dumped GMO from its Australian share manager line-up, terminating a $50 million mandate.

"Intech was concerned about the departure of two key people from GMO's Australian equities team. They believed that such losses may have an impact on its investment processes," Asset Super chief executive John Paul said.

ClearView head of product and operations Michael Abbott said the key-man risk was also a factor in why the multi-manager terminated its mandate.

"We felt the investment management processes would be affected by the loss of these two staff members. The manager no longer fitted into our portfolio," Abbott said.

To date, GMO has hired Boston-based partner Rick Suvak as head of Australian equities.

Frontier Investment Consulting, which advises 20 clients and has $99.5 billion in funds under advice, however, remained confident in GMO's Australian equities strategy.

"We are confident that the processes are in place and we look forward to meeting the new portfolio manager when they come on board," Frontier Investment Consulting consultant Allison Hill said.