Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
Tyndall builds on core strategies, Asian expansion
(Pictured: Mike Davis)
Peter Sartori, the founder of Treasury Asia Asset Management (Treasury Asia), will become head of Asian equity for Nikko Asset Management, (Nikko AM) following the firm’s purchase from the Australian multi-affiliate Treasury Group.
Mike Davis, the managing director of Tyndall AM (owned by Nikko AM), says the purchase enhances the Nikko range in the region, adding an important institutional capability.
“Peter will have responsibility across a range of funds, based in Singapore,” Davis says. He will report to Yu-Ming Wang, the International CIO. Davis believes there are opportunities to build out further capabilities for both Australian and Asian investors based on both the core Tyndall AM and Nikko AM platforms. New offerings may include diversified debt strategies and other alternatives such as infrastructure.
“We will be building on the base we have,” Davis says. “People are telling us that they don’t want anything too complicated. But there’s a new challenge, for super funds and managers, for the group of people moving into retirement phase. That market is in its early days. It’s a big opportunity. They are looking at multi-asset funds, as we’ve seen in the UK and the US. They are also looking for outcomes. This mindset will create a need for new products. We’d like to think we can satisfy some of that demand.”
Tyndall AM has a long history in Australian equities and fixed interest as its core strategies. It was a 1980s high-flyer, then known as Clayton Robard, which managed to survive the 1987 stock market crash. It became a known manager of insurance funds, was acquired by Suncorp for a time and then found a more natural home with Nikko AM.
“Nikko AM is Asia’s largest independent manager, with A$169 billion in funds under management,” Davis says. “And the firm is still evolving.”
Treasury Asia, which will be absorbed into Nikko AM, was launched in 2005 and opened its Singapore office two years later. Davis says there are no current plans to re-brand Tyndall AM.
Critical mass is becoming more important for funds managers because of the rising costs of compliance with increasing regulations in Australia and elsewhere.
Tyndall AM’s most recently launched new fund is a concentrated equity fund, which is finding traction in the retail market in Australia. Davis says there’s also, clearly, a growing demand for credit products and private debt, which fall under Tim Martin’s alternatives department at Tyndall AM. Martin and Davis both worked together for a number of years prior to joining Nikko AM in 2012.
There are other opportunities too, such as emerging markets, which will be helped by the Treasury Asia acquisition. Emerging markets and other international strategies will benefit from the continuing growth of SMSFs, because of the difficulty of investing directly rather than through managed funds.
Tyndall AM is also a member of the formation group which will be trialling some of their funds under the ASX’s ‘AQUA II’ initiative early next year. This potentially opens up a whole new distribution avenue to the SMSF market through stock brokers.
