Access to retail distribution was a key factor in National Australia Bank’s new fund incubator, nabInvest, clinching the deal to house the $1.3 billion institutional investment manager Northward Capital, formerly the inhouse Australian equities team from Insurance Australia Group Investment Management.
Northward Capital will open its doors to retail investors this month, with an adviser roadshow to follow next month, according to Northward chief executive Darren Thompson. Thompson said there was no shortage of offers to incubate the six-man investment team when it was looking to move out of IAG.
However, a definite factor which made nabInvest’s offer more attractive was the access to retail investors. Thompson said nabInvest also has a like-minded approach to investing, it was a robust financial partner, and it was comfortable with eventually becoming a minority shareholder.
The ownership is currently split 51:49 with nabInvest holding 51 per cent, and the portfolio managers sharing the rest. Seed capital was not a concern for Northward in its incubator search as it already managed $1.3 billion for 9 clients, including IAG. It has not lost a client since the move, although it’s officially yet to gain one either – that has not stopped industry speculation as to whether Northward will earn a coveted place on NAB-owned MLC’s Australian equities multimanager portfolio.
The retail product disclosure statement to be released this month will be for Northward Capital Australian Equity Fund, the same strategy it has had since inception in May 2004 and employs for its institutional clients.
It invests in the S&P/ASX 300 ex-listed property trusts. It has a “multi-sector portfolio manager specialisation” approach where five of the six man team are portfolio managers who oversee an allocated sector and manage their own portfolio within the overall Northward portfolio.