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.
Williams to depart Parametric next month
Raewyn Williams has resigned from Parametric Portfolio Australia and will leave the firm at the end of February, after seven years there. She is Australia’s best-known exponent of after-tax investing, who has been a prolific producer of global and Australian research on the topic.
It is understood Williams, the managing director, research, who started her career as a taxation lawyer in the 1990s, intends to have a break while considering her various options, which may or may not include the investment management industry.
Parametric, an Eaton Vance affiliate, has a small Sydney office run by Chris Briant, the former head of Parametric in Australia who now oversees the combined Eaton Vance/Parametric operation. Ty Thurgood, recruited by Bryant in 2019, heads up Eaton Vance’s Australian and New Zealand institutional business development.
It is still unknown what will become of the Eaton Vance Sydney office after finalisation of the global merger with Morgan Stanley, which is likely to take place within the next few months. Morgan Stanley announced in October last year that it had reached an agreement to buy Eaton Vance, which had more than US$500 billion under management, for an equity value of about US$7 billion. The combined business would have more than US$1.2 trillion in investment management and, with other business lines, oversight of about US$4.4 trillion.
Morgan Stanley is the senior partner in Australia, with an estimated A$30 billion under management, but most of this is in wealth management and private client business. Both Parametric and Eaton Vance, which also promotes some other affiliates in Australia and New Zealand including Hexavest and ESG specialist Calvert, are predominantly institutional.
Morgan Stanley said the deal was expected to close in the second quarter this year. Information on the impact on operations in various regions has been scant and confined mainly to conjecture since the initial announcement.
It is understood, though, the takeover had nothing to do with Williams’ planned departure. She has been a strong advocate of after-tax investing since well before her current position at Parametric and has said that she is as interested, or more interested, in advocacy than research – perhaps because of her legal background.
“I think that, one day, what Parametric offers in efficient after-tax management will become standard. The only question is when,” she has said.
Immediately prior to Parametric, Williams spent four years at Russell Investments as director of after-tax strategies, and before that filled similar roles at QIC and Barclays Global Investors (now BlackRock). Both Briant and Thurgood also held senior positions at Russell.
