The former Australian equities investment team at Suncorp, which defected as a group to form new fund manager Solaris Investment Management last December, has received its first investment mandate since opening for business.
A private company gave the Brisbane-based manager a $25 million mandate for one of its three investment trusts, the Solaris Core Fund, according to Solaris managing director Denis Donohue. Solaris is now managing $45 million, including the $20 million seed capital from fund incubator Pinnacle Investment Management, Donohue said. The total $45 million is in Solaris’ core fund, a long-term strategy investing in the top 200 Australian stocks with the objective of outperforming the S&P/ASX200 by 3 per cent over rolling three-year periods. Solaris’ other two trusts – the Solaris 130/30 Fund and the Solaris High Alpha Fund – are still without investors. The three-trust structure and their respective strategies are “very similar” to what the nine-person Solaris team ran at Suncorp, Donohue said. He said there had been “;a lot of interest”; for the other trusts, given the unique opportunity they presented to investors. “It’s a high quality team with a long track record suddenly appearing in a boutique with a lot of capacity – it doesn’t happen very often,” he said. “We were expecting a relatively quiet start but that isn’t how it’s played out – we’ve had a very busy start.” The former Suncorp team had managed about $5.5 billion, with $1.3 billion sourced from wholesale investors outside the Suncorp group. One such investor was van Eyk’s Blueprint fund suite, which has not assigned Solaris the $200 million it stripped from Suncorp following the defection, because the manager has not undergone its ratings process (which considers operational factors as well as personnel and investment process). Solaris is 60 per cent owned by staff and 40 per cent owned by the Wilson HTM-owned Pinnacle. Donohue’s team had wanted the same ownership split with Suncorp, but was rebuffed by wealth management head Brett Himbury, who has said that a 50:50 split provides a better “;balance”; for clients. Pinnacle provides all the administration, compliance and distribution for the Solaris funds.
Future Fund chief investment officer Ben Samild said that FY24 has been a great year for alpha creation, thanks to strong returns in equities and, unusually, across multiple hedge fund strategies all at the same time. He reflected the past few years have been “a difficult time to be an asset owner and to generate positive returns for risk assets” but the Future Fund is tracking well of its long-term mandate.
Simon Hoyle and Darcy SongSeptember 4, 2024
