Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
New boss at Parametric as Eaton Vance builds presence
Chris Briant has been appointed chief executive of the Australian and New Zealand arm of specialist manager Parametric Portfolio Associates, one of the five affiliates of the listed US manager Eaton Vance, which has also been boosting its Australian presence in other ways.
Briant finished up recently at Tibra Investment Management, where he was chief executive for the past two years, but prior to that was at Russell Investments for four years, most recently as head of institutional sales. Before that he spent six years at BNP Paribas as head of sales and relationships.
Briant said last week that the Eaton Vance executives in Australia would continue to distribute all of the firm’s affiliates’ strategies and he would work closely with them. However, Parametric is also bringing to Australia from its Seattle head office an experienced operations manager, Jackie Viars.
The previous Australian managing director of Parametric, Scott Lawrence, has resigned but is expected to be replaced.
Eaton Vance is represented in Australia and New Zealand by Nicholas Allen, who set up the office last year, and marketer Louise Bradshaw, who joined the firm in March. Allen had been a third-party marketer for Eaton Vance for the previous three years. The firm has about A$6 billion in Australian-sourced assets from 10 client funds.
Briant’s appointment at Parametric late last month coincided with the visit to Australia of Eaton Vance’s managing director of international business, Niall Quinn. With a refreshing lack of dotted lines, however, Briant reports directly to Parametric global chief executive, Brian Langstraat, in Seattle.
Quinn said that Eaton Vance “may bring other affiliates” to Australia, but pointed out that the firm was a little different from other larger multi-affiliate managers.
The five affiliates compare with more than 20, for instance, at Affiliated Managers Group, and about 16 at BNY Mellon. Eaton Vance, which has its own investment capabilities dating back to 1924, chooses only specialist affiliates which complement – or fill gaps in – its offering.
But that is not to say that Eaton Vance does not have specialist capabilities. It has a Boston team which manages more than US$35 billion in floating rate loans and also has a large Boston-based emerging markets-focused global macro team. The two affiliates so far offered in Australia are Parametric, which has about US$100 billion under management, and the more recently acquired interest in Hexavest, which has about US$15 billion under management.
Hexavest, a Montreal-based top-down global equity shop, became an affiliate in August last year when Eaton Vance bought 49 per cent. An Australian fund for Hexavest was launched under the Eaton Vance umbrella this February. Hexavest already had about A$2 billion of Australian-sourced assets at the time of the acquisition.
With respect to its range of investment talent, Quinn says that Eaton Vance looks to bring in “fully formed” teams which do not disrupt the existing lineup.
Australia is attractive, he says, not withstanding a certain “fee sensitivity” by super funds. And the effect of further consolidation of the Australian market on funds management firms, is outweighed by the expected growth in the market.
Parametric also has a range of offerings itself. It was one of the first proponents of what is now known as “smart beta” and which Parametric refers to as “systematic alpha”, almost 20 years ago. In Australia to date, it has been successful in offering centralized portfolio management, where Qantas Super was an early adopter, and after-tax benchmarking. Its subsidiary Clifton Group offers derivative-based solutions.
Briant says that, as of July 1, under the new regulations, trustees are being forced to focus on returns which are net of fees and taxes.
“That is everything that Parametric does,” he says. “Alpha is not guaranteed at any time but you know for certain that there are going to be costs. I’m not against active management but it pays off in cycles. If you implement efficiently, members will get an extra benefit over time.”
