Invesco Australia has hired a senior JANA consultant to spearhead the rebuilding of its Australian equities large cap fund more than 12 months after its top two managers exited, leading to mandate losses over $2 billion.
Arthur Roumeliotis will start at the Melbourne-based fund manager on April 21 to head the quantitative Australian equities “broad cap” portfolio developed by the Invesco Quantitative Strategies (IQS) team based in Frankfurt, Germany, with offices in Boston and New York, USA. Roumeliotis came to Melbourne from Sydney about six months ago as JANA’s quantitative strategies divisional director, but in practice he consulted across a broader scope of investments, according to a JANA spokesperson. He has worked with the asset consultant since about October 2006. As I&T news reported last December, Invesco chief executive Mick O’Brien had sought assistance from the company’s international parent mid-last year for the IQS team – formerly called Global Structured Products – to build an Australia-specific portfolio. The company is satisfied the 55-person IQS team has developed a robust Australian equities portfolio after months of building and then backtesting over 20 years its custom-made quant model for the S&P/ASX 500. The portfolio holds around 100 stocks with large caps the predominant exposure, according to O’Brien. Roumeliotis’ title is Australian head of quantitative portfolio management of IQS. His job was not to be considered as an over-riding judgement on the Australian portfolio but rather as a “final sensibility check”, O’Brien said. O’Brien said the portfolio was competitively placed in the top quartile as the backtesting process found the IQS model delivered “consistent alpha above 2 per cent per annum, with only 2 negative years out of 12 years, with a reasonable tracking error of less than 3 per cent”, O’Brien said. Meanwhile, Invesco’s plans to acquire an Australian equities fund manager have been shelved. O’Brien said the firm was no longer looking, but would be open to being approached nevertheless. Invesco had hunted for a suitable acquisition in parallel to the IQS developments, however it was unsuccessful. “We were close to making an acquisition last year but for various reasons we didn’t complete it,” he said. Invesco’s Australia large cap fund was around $2.5 billion in March 2007 before its top two personnel, Rohan Walsh and Luke Sinclair, departed to start Bell Potter-backed boutique Karara Capital. The fund was left with $60 million under management only months after the Walsh-Sinclair exit. It is now around $200 million including offshore accounts, according to O’Brien.
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
