SPEC(Q) has seeded the Solaris High Alpha Fund with a $33 million mandate, becoming the fourth investor in the boutique comprised of the entire former Suncorp Australian equities team.
Bob Hendricks, chairman of the $450 million industry fund, said that SPEC(Q) had invested in a similarly concentrated vehicle run by the Solaris team in its previous form as the Australian equities division of Suncorp Investment Management. “When the team were at Suncorp, we were happy with their performance,” Hendricks said. “We’ll see if they deliver similar returns. Hopefully they will. And if they don’t, we’ll be looking around.” SPEC(Q) invested the mandate on February 4. The High Alpha Fund is a more concentrated version of the boutique’s Core Fund. Both fundamental, bottom-up vehicles adopt a long-term view of the performance of Australian stocks, and the alpha fund aims to outperform the ASX200 Accumulation Index by 5 per cent across rolling three-year periods. It is currently underweight bank and LPT securities. The manager has gathered $210 million from four mandates since it opened its doors in January. Denis Donohue, Solaris managing director, said: “We’ve got four mandates in seven weeks. That’s not too bad.” Both funds had tracked 1 per cent above their benchmarks since their respective January 9 and February 4 inceptions, Donohue added. SPEC(Q) and Non-Government Schools Superannuation Fund (NGS Super) are the only publicly known investors in Solaris, with NGS Super directing $150 million to the boutique’s Core Fund in the past fortnight. Hendricks said that JANA’s John Coombe, who focuses on Australian and international equities at the consultant, recommended that SPEC(Q) invest with Solaris. The fund’s board will meet today to finalise a review of its three-year contract with JANA, which is due to expire soon. Hendricks said the probability that the fund would put this contract out to the market was small. “Frankly, that’s unlikely. We’re very happy with JANA’s performance,” he said.
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
