Suncorp Aussie equities to rebuild as ‘corporatised boutique’

A rebuilding Suncorp Australian equities team will lure staff with the ‘corporatised boutique’ model used by fellow Promina business Tyndall Investment Management, whereby senior investment staff co-own the business with their parent.

That model was rejected by Denis Donohue and his eight colleagues, who last week opted for 60 per cent ownership partnering with Ian Macoun’s incubator, Pinnacle Investment Management. Donohue’s team, who will become known as Polaris, are currently working out a notice period under interim head of equities Stephen Lam. Suncorp’s head of wealth management, Brett Himbury, said the plan was for new investment staff to be offered equity up to a cumulative 50 per cent in the rebuilt business. He said the team would not necessarily continue to be based in Brisbane, but “;wherever we can find the highest calibre people”;. Pinnacle’s Macoun hoped Polaris would be operational by late January, offering a similar product range to that which the team ran at Suncorp: a core style-neutral Australian equities fund, a concentrated Australian shares offering, a 130:30 long/short fund and a socially responsible investment product. Pinnacle has seeded Polaris with $20 million but it is likely at least some of the $1 billion in non-Suncorp, external mandates managed by Donohue’s team will follow it across the street: major external customers include van Eyk’s Blueprint fund, the Queensland Local Government Super Scheme and the AMP Future Directions multimanager fund. The $4 billion plus of internal Suncorp/Promina money (from insurance statutory funds and the like) will be managed by the rebuilding team, according to Suncorp’s head of wealth management Brett Himbury. He said Tyndall’s value style was too different from Suncorp’s style-neutral approach for any significant transitioning to occur to it. Himbury said a successful investment business depended equally on good investment management, good business management and good marketing/distribution, with staff from all three disciplines well incentivised. “;When the investment part of that equation is controlling the business, our worldwide experience and research has told us there’s the potential for less success, than a model where all three are working equally in a well-resourced corporate environment,”; Himbury said.