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TGM re-emphasises alpha with new CEO’s direction
(pictured: Peter Higgs)
Tactical Global Management, the Australian-owned currency and global macro manager, which pioneered tactical asset allocation in the 1990s, has appointed a chief executive alongside executive chair Peter Higgs and is looking to redouble its marketing effort in macro-alpha strategies.
Higgs, visiting Australia from his London base last week, said the firm, which has about 15 staff in his home town of Brisbane, recently picked up a rebalancing mandate for $7 billion in assets. This took the firm’s core rebalancing strategies to a total of $27 billion. The overlay strategies typically provide clients with about 20bps of added value for a cost of only two bps, he said.
The new chief executive is Neil Fletcher, who has about 20 years experience in financial markets, in particular OTC and listed derivatives products. He previously headed up Macquarie Bank’s listed derivatives capability in the US, UK and Australia. Fletcher will be based in Brisbane.
The new $7 billion mandate is for rebalancing, currency and dynamic asset allocation (DAA). Higgs said that, with Fletcher on board, the firm would be able to put more marketing effort into its active alpha (global macro) strategies. “Neil [Fletcher] will look at the growth prospects and, hopefully, we’ll launch a fund off the back of it,” Higgs said.
TGM has an interesting history. It started as a division within Suncorp in the 1990s, but quickly outgrew the Queensland bank. Higgs orchestrated a buyout backed by Legal & General in Australia, which was in turn bought by Colonial, which was in turn bought by Commonwealth Bank.
Supported by Mercer, which was then the most influential asset consultant in Australia, TGM at one stage had about 50 per cent of the entire market for TAA mandates. That market, however, dissipated after a few years, with asset consultants and investment committees taking on a lot of the previously outsourced medium-long-term asset allocation function and moving away from the shorter-term TAA function as a separate mandate altogether.
Higgs then orchestrated a management buyout, after the ownership merry-go-round, and having moved to London with his family in 2000, set about building out TGM’s investment strategies on offer, including global equity market neutral and other hedge-fund-like strategies.
In recent years, having adapted to the post GFC environment, Higgs has been developing a strong interest in the ESG and impact investing space. He said that with a London-based affiliation – he is a non-executive director of Truestone Impact Investment Management – he was able to bring some important socially responsible investment opportunities to Australia.
“While many institutional funds are interested to increase their investments across socially responsible investments, it is not always easy to find suitable investable deals,” he said “especially outside Australia where the need is, arguably, the greatest.”
This new area aligned with TGM’s overall tailored investment solutions philosophy, he said, by looking at areas to partner with and contribute to help achieve clients’ targeted outcomes.
TGM turns 20 years old next year. To a large extent, its evolution, with many ups and downs, reflects the evolution of the Australian funds management industry as a whole.
– Greg Bright
