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Winston brings French quant alternative beta to Australia
Philippe Jordan
Capital Fund Management (CFM) is to launch a diversified alternative beta fund in Australia – the latest liquid alternatives product to hit the market – capitalising on increasing demand for a plethora of smart beta strategies.
The Paris-based manager is highly quantitative, boasting a mix of physicists and mathematicians alongside traders at all levels of management. Philippe Jordan, a French Canadian who runs CFM’s New York office, is to speak at tomorrow’s AIMA Australia Hedge Fund Forum in Sydney.
The Australian-domiciled fund, CFM Diversified Alternative Beta, will initially be marketed to smaller institutions, family offices and high-net-worth investors before being offered to the broader retail market, according to Stephen Robertson of Winston Capital Management.
Unlike most other liquid alternatives funds offered to the retail market, the CFM product uses systematic beta enhancement, rather than active alpha, for its outperformance. Fees are also lower, at about 100bps management fee and 10 per cent performance fee.
Winston is a manager, distributor and third-party marketer of several international firms’ products in Australia. The company was engaged mid-last year by CFM to look at the appetite for this strategy in Australia, especially by investors outside the mega funds above $10 billion in assets. CFM already has several of these as clients.
The new fund, which has Perpetual as RE, will be available as a PDS in late October or early November.
Robertson, who will be introducing Jordan to some big super funds and other investors this week, says that CFM will be looking to add other sophisticated alternative beta strategies to its offering in Australia.
The company was founded in 1991 by the late Jean-Pierre Aguilar, a French trader with a background in engineering and computer science and a passion for piloting gliders. He died in 2009, aged 49, in a gliding accident.
In the mid-1990s, Aguilar had teamed up with two theoretical physicists, Jean-Philippe Bouchaud, now chairman, and Marc Potters, a co-CEO, who recognized that their formulae could be applied to options pricing. The other co-CEO is the head of backoffice functions, Jacques Sauliere, Jordan, who is speaking at the AIMA Forum, joined in 2005.
CFM’s process emphasises research in the statistical properties of financial instruments and the development of systematic trading strategies. It uses a team of PhDs, most of them former physicists from prestigious international institutions, and a team of IT and data specialists.
