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.
Series and crew buy back the farm
(Pictured: Kerry Series)
Kerry Series and key staff at Eight Investment Partners (8IP), the boutique small cap and Asian equities specialist, have bought back the firm from major shareholder Sanlam.
Sanlam, a South African financial services firm, backed the establishment of 8IP by Kerry Series after earlier acquiring another Australian boutique, Atom Funds Management.
Following the latest deal, Sanlam will invest an extra $20 million in the small-cap fund, managed by Series and senior portfolio manager Stephen Walsh. Nial Gooding, based in Hong Kong, is the senior research analyst on the China fund.
Both strategies have been strong outperformers in recent years. The small-cap fund returned 21 per cent in 2013 and 9 per cent so far this year. The China fund has returned 160 per cent over the past five years, which is about 70 percentage points above its index.
Rick Steele, 8IP’s chief executive, said the ownership change would enable he firm to provide greater equity incentives to the investment team.
8IP is in the process of launching a concentrated – 20 stocks – version of its small-cap fund. The manager’s style is to invest in turnaround situations and “stars”. It recently recruited a new BDM, Antony Blazey, from Melbourne-based OC Funds Management.
