Wealthpac makes first long/short move with Jenkins fund

The $430 million Wealthpac Superannuation Services master fund has made its first investment in an Australian long/short equities fund – with Jenkins Investment Management.

Wealthpac has put about $20 million into the Jenkins Australian Equity Long Short Fund, which was launched last September, after terminating two mandates with Alpha Investment Management. The new mandate followed a review, undertaken by Wealthpac’s new research manager, Gregor Murton, which may lead to a few more changes to the portfolio, according to Adrian Young, Wealthpac chief executive. Young said the review was designed to look at the existing manager line-up and seek to diversify that with the addition of some new sources of uncorrelated alpha. “We had confidence in Jenkins as an up-and-coming boutique,” he said. “But we’re still working through the process.” Murton joined Wealthpac last year. He was previously with AMP Financial Services as an investment analyst. Wealthpac, which is a subsidiary of Equity Trustees, had had two mandates with Alpha, an absolute return fund benchmarked to interest rates and an Australian equities mandate. For Jenkins, the new client takes its long/short fund to about $80 million under management, having been seeded last year by Sunsuper. The fund has performed well since inception, returning 17 per cent between September and January, beating the S&P/ASX 200 benchmark by 2.0 per cent. Sean Fenton, Jenkins’ portfolio manager in charge of the fund, said the portfolio is constructed with several stock selection techniques: “Quantitative factor rankings are employed to provide a broad base of active stock positions. These are then enhanced with analysts’ research and a top-down sector model to provide higher conviction positions. Portfolio construction is tightly monitored to minimise style biases while providing a high targeted return.” The fund’s biggest current bets are Macquarie Bank, Rio Tinto and Aristocrat Leisure, although smaller, more speculative, resources stocks tend to be excluded by the manager’s screening process. James Savage, Jenkins head of sales and marketing, said Wealthpac was the second institutional investor into the long/short fund. van Eyk Research is the consultant to Wealthpac.