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.
US property debt manager hires for expansion
Pal Sarai, the former senior executive at bfinance who pioneered the establishment of an Australian-based operation for the disruptive manager search and research company, has resigned to join a US-based specialist real estate firm.
Sarai was a leading force behind bfinance’s expansion in the Asia Pacific and elsewhere for almost 10 years, most recently as global head of client consulting. He has joined Prima Capital Advisors LLC, as managing director responsible for ex-US operations, including Australia and New Zealand.
Prima Capital Advisors is a boutique which specialises in US real estate debt, which has been an increasingly popular asset sub-class since the fall in interest rates to record lows following the global financial crisis. Its strategies include: whole loans; commercial mortgage-backed securities; select mortgage ‘B’ notes; mezzanine loans; bonds; and preferred shares issued by REITs.
Prima Capital got started in the space in 2002 by buying a book of real estate debt business from Conning Asset Management, which had acquired it from Schroders, where Gregory White, now Prima Capital’s managing director and chief executive, had worked since 1992. It currently has about US$5 billion (A$7.0 billion) under management.
The manager is based in Scarsdale, NY, but Sarai will continue to be based in London, where he had been for bfinance. He becomes managing director of subsidiary Prima Europe Ltd. At bfinance, after servicing Australia and New Zealand himself for several years, Sarai recruited Frithjof Van zyp the Sydney-based senior director, to open an office in 2016.
Fridge (as he is generally known) had previously launched the eVestment business in Asia Pacific, based in Sydney, but had moved to the US with the firm. He was keen to return to Australia and to launch another new business, which has subsequently established a solid position alongside the traditional asset consultants.
bfinance’s disruptive proposition is that it charges managers, rather than super funds, for each manager search, under a system of constraints aimed to avoid conflicts. Established in 1999, it has serviced more than 350 asset owners, with assets totalling more than US5 trillion, in 35 countries since inception and had developed a regular Australian client base of users.
– G.B.
