AXA Rosenberg, the US-based quant equity manager which has about $A5 billion sourced from Australian investors, is in the process of converting several mandates from long-only to its 130:30 long/short strategy.
When the conversions are completed, the 130:30 fund will have about $1.5 billion in Australian-sourced funds – up from $400 million currently. In Australia this week visiting clients, Bill Ricks, the firm’s chief investment officer for the Americas, said 130:30 strategies were “a real rage among certain investors”, both in the US and elsewhere, such as Australia. AXA Rosenberg has been managing long/short portfolios since 1989 and offers its 130:30 and 140:40 funds to clients with a fee structure of 32bps management fee plus 20 per cent of performance over a benchmark. As a rule, a 130:30 fund will provide on average 1.6 times the alpha of a long-only fund and a 140:40 fund will be 1.8 times the alpha. Ian Webber, the new director of sales and marketing for AXA Rosenberg in Australia, said that areas of most interest from clients and potential clients currently included: . customised solutions, including customised benchmarks by very large investors . global market neutral strategies with alpha transport . emerging market equities, and . the 130:30 and 140:40 mandates. Market neutral strategies, with or without alpha transport, have been more spoken about than acted upon in Australia in the past couple of years. However, AXA Rosenberg’s clients include two of the best-known funds which have used alpha transport programs – VFMC and QIC. The manager did not offer an emerging markets capability in Australia until last year, but Ricks said that it was now very clear that its quant process and style were suited to these markets. “The data quality (in emerging markets) has improved over time and many of the relationships which drive the developed markets are now there,” Ricks said. “We ask the question: ‘does the price of a stock respond to fundamentals?’. If the answer is ‘no’ then we’re not interested. Over the last five years the relationship between future earnings and stock returns has become clear … We’re convinced we can earn alpha in these markets.” AXA Rosenberg is just about to close its global small caps fund, which has been something of a flagship product, with the last $200 million being committed to an existing
The Australian Competition and Consumer Commission has recently released its draft guide on sustainability collaboration, but investors, businesses, and other groups have politely – and not so politely – told the competition watchdog that its principles need to be more flexible and accommodating.
Russell BakerSeptember 17, 2024
