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.
Parametric promotes from within for head research role
Parametric Portfolio Associates has promoted Whitlam Zhang to fill the research role formerly held by Raewyn Williams, who resigned late last year. He becomes manager research and strategy for Australia and New Zealand.
In the role, Zhang reports to both Chris Briant, the Australia and New Zealand head of Parametric’s parent Eaton Vance, and Paul Bouchey, Parametric’s global head of research, based in Seattle.
Eaton Vance, which operates a multi-affiliate model, but where the Eaton Vance and Parametric offices are combined for Australasia, is being taken over by Morgan Stanley worldwide. The merger is scheduled to take effect in the second quarter of this year. Morgan Stanley is expected to look for the Eaton Vance capabilities to provide better leverage in the region, especially among institutional clients.
Zhang, who joined Parametric in 2015, has worked with Raewyn previously but has held a broader remit. His most recent role has been as ‘enterprise data management architect’ working with the firm’s global core technology team.
Briant said that Zhang was both very experienced and well qualified, having worked at APRA as an analyst, Russell Investments as an asset consultant and Tibra Investment Management as a portfolio manager. He is a qualified actuary and CFA charter holder as well as having experience in software development.
Briant said: “While we are excited about Whitlam’s promotion, we are disappointed to see Raewyn leave and sincerely thank her for her enormous contribution to the business over the past seven years.” As reported last edition (January 23), Williams, who started her career as a tax lawyer, is taking time off to consider various options which “may or may not be in investment management”.
Parametric has diversified its offering in Australia and New Zealand in recent years to include six live strategies of its own and two more with which it works on behalf of affiliates.
It is best known for its core Centralised Portfolio Management (CPM) strategy, which gives super funds control over the best-possible after-tax outcome across all their portfolios. The others, which also use Parametric’s research engine for efficiencies, are: tax-managed passive strategies; tax-managed factor investing; post-retirement solutions; overlays, for both assets and currencies; and, tax-managed RAFI strategies (increasing the tax efficiency of the Research Affiliates Fundamental Index).
The two other strategies so far offered in Australasia are an emerging markets debt capability from Eaton Vance and various ESG strategies from responsible investing specialist Calvert. Australian clients of the group also have some long-held global equity portfolios with associate Hexavest.
Briant said: “Our Australian business has experienced significant growth in clients’ assets under management and product breadth during the past eight years. In this phase of our growth, Whitlam is critical to developing our business. He has an intimate knowledge of the funds management industry, has consulted to superannuation funds in Australia, and has deep, local subject matter expertise.”
Partly by coincidence and partly by design, Briant, Zhang, and Ty Thurgood, head of Australasian distribution, all worked at Russell Investments in past lives, as did Williams. Briant was head of institutional business, of which Thurgood was a senior team member, and both Zhang and Williams were asset consultants. Williams also headed up an after-tax consulting unit.
In Australia, Russell was at first known solely as a big asset consulting firm, when it set up shop in Sydney in 1986. It subsequently expanded into implemented consulting and multi-manager products, while retaining a special expertise developed by the consultants and researchers known as Russell Implementation Services, now available only via Russell funds.
Briant and Zhang were reunited at Tibra, by coincidence, when Briant was recruited to run a start-up asset management arm of the securities trading firm and Zhang was hired as a developer. Briant coaxed those involved to allow Zhang to move into portfolio management, where he had direct experience on a tax-managed Australian equities portfolio.
In his new role, Zhang works with the Parametric and Eaton Vance overseas offices to plan, research and deliver internal and client-facing research and publish thought leadership pieces relevant to Australian super funds. He focuses on the firm’s growth in after-tax investing, post-retirement and responsible investing capabilities. He also oversees Joshua McKenzie, Sydney-based research analyst, and is a member of Parametric’s global research team.
