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.
AXA IM duo to look for new challenges
AXA Investment Managers is losing two senior executives who have been instrumental in marketing the firm’s integrated ESG capabilities in Australia and New Zealand. They are Craig Hurt, former Australian country head, who left last week (September 30), and Matt Christensen, the global head of impact and responsible investments.
While based in the firm’s headquarters in Paris, Christensen is well known in Australia because of frequent visits and the success of AXA IM’s ESG-orientated strategies in both the institutional and wholesale markets. Hurt has estimated that about 60-65 per cent of AXA IM’s Australia and NZ-sourced funds is directly ESG related.
AXA IM announced in March a global restructure of the business which adopts an interesting sales, marketing and client service model. The firm split most staff into one of two groups: those that manage or sell and service the firm’s ‘core’ products and mandates. And those that manage or sell its alternatives and private markets products and mandates. The investment teams behind them are also being split down the same lines wherever possible. The Australasian core business will be run by Michelle Lacey and the ‘alts’ business by Ben Taylor, as previously announced.
Hurt, who joined the then-fledgling Australian arm in 2007, after three years in its London office, said that he felt now was a good time to have a break and think about a new challenge. “I have thoroughly enjoyed my time at AXA and am now committed to not working for six months,” he said. “I’ve only ever worked for two firms (Investec and AXA), and am looking forward to taking my time to find the next role and supporting my wife’s career in the cochlear implant space,” he said.
“I’ve been thinking I have three main choices for my next role. I can take on a similar role in a leadership team at another big global firm or a firm with global aspirations, I can take on a manager and help build it from the ground up, or, I can do something in the ‘impact’ space.”
Matt Christensen, who leaves on November 30, joined AXA IM in 2011 from a job where he had been a founding director of a European association, Eurosif, which promotes responsible investing and corporate governance, since 2002. Eurosif also helps develop industry standards in the ESG space and makes submissions on these issues to governments and regulators.
AXA IM in Australia has changed markedly since 2007, when Hurt was promoted out of London. It’s office in Sydney then consisted of sales representation for AXA’s quantitative subsidiary Rosenberg, based in the US. More importantly, the firm still owned AXA Australia, with a large wealth management platform and tied financial planning distribution. Within two years, AXA Australia was sold to AMP and Rosenberg ran into an administration pricing problem in the US, which saw it lose all its funds under management.
“It was a re-build,” Hurt said. “We took AXA Australia, which was a retail brand, and built it into an institutional business. That effectively became my new brief two-three years into the job.” AXA IM rounded out its local alternatives business with a domestic real estate fund manager, called Eureka, which was acquired in September 2016 and built up its sales team to handle the impact fund and private debt strategies.
It also expanded the public markets range, both in fixed income and equities. Equities strategies include those of Rosenberg, Framlington Equities – a UK-based global active equities manager – and multi-strategy. The Sydney office now houses about 40 staff, mostly in the property division, but also with five dedicated sales and client service managers.
Emphasising the firm’s ESG credentials, Hurt said AXA IM launched the first global green bond for an Australian institution, Suncorp, in January 2018 and negotiated the first global aggregate fixed income mandate with meaningful and detailed ESG integration for an Australian industry fund, which was AustralianSuper.
It had already, in August 2014, launched the first fully integrated ESG-orientated global equity strategy, known as ‘sustainable equity’, for both the institutional and wholesale markets, which Hurt said was available on most platforms and highly recommended by ratings agencies.
– G.B.
