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.
Pinnacle will keep kissing frogs
(Pictured: Ian Macoun)
Boutique incubator Pinnacle Investments is continuing to look for outstanding asset managers and is willing to kiss as many frogs as it takes to find the next “Pinnacle prince or princess”, according to chairman and managing director Ian Macoun.
“We haven’t started any new boutique managers in Pinnacle since we partnered with the Sigma team a couple of years ago,” he says.
“But that doesn’t mean we haven’t been actively looking. It just means we have a very high ‘hurdle’ in the standard we set in deciding whether to partner with talented investment professionals,” he says.
The only standard the group is interested in is “outstanding”.
The evolution in funds management in recent years means that super fund investors are looking for lower overall portfolio volatility than in the past, but they still want returns to be reasonable.
“Defensive assets won’t yield high enough returns to do the job – especially as these are at very low levels now – bank deposit rates have dropped and bonds are not a very good proposition, and won’t be for a long time,” Macoun said.
Pinnacle managers such as Plato, Palisade and Metrics Credit are innovating to try and meet this demand for new solutions.
“We have looked at several other possible new boutiques in the alternatives space, including what might be described as hedge funds, got close to doing a couple but didn’t proceed, and none is currently imminent. But I would be surprised if we don’t do some over the coming year or two,” Macoun said.
