Two institutional investors have all but locked-in up to $200 million in mandates with boutique Hyperion Asset Management (Hyperion AM) for its concentrated portfolio of large cap Australian growth stocks.

Hyperion AM launched the 15-25 stock portfolio, which is exclusive to institutional investors, in November 2007, presenting the product as an alpha generator. While the investment team of Hyperion AM manage a model portfolio, each mandate constitutes a separate account. While the manager decides how the mandates will be invested, it never physically handles the capital as clients’ custodians execute the trades and hold the cash, Tim Samway, Hyperion AM institutional business director, said. “The money is with the custodian, and trades are passed through the custodian,” Samway said. “The custodian has possession of the assets at all times. We keep a composite of the accounts.” He said the fund was viewed by investors as a satellite investment. “They’re looking to focus their managers, to get their beta from index providers and alpha from recognised alpha managers.” While return figures for February had not been finalised, Samway said the fund slightly underperformed the benchmark ASX300 throughout in the month. “You should expect that for our style. There’s been a substantial amount of P/E compression. “Whole sectors have been crunched, so you haven’t seen much cross-sectional volatility. “Value managers should be shining.”

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