Macquarie Global Investments (MGI) has acquired a 19.9 per cent holding in Omega Global Investments, a boutique founded by former Vanguard executives that aims to employ an ‘outcomes-focused’ strategy in listed markets worldwide.
MGI declined to comment on whether it had seeded the first vehicle from the manager, due for release in two months, but stated that it would provide fund accounting services and was considering putting it in the Macquarie Professional Series, a collection of funds distributed to the retail market.
Three former Vanguard executives comprise Omega: George Vassos, the executive director of the business, previously held a senior retail distribution role with Vanguard. Matthew McCrum and Andrew Gruskin, both directors of investments at Omega, were respectively the heads of fixed interest and equities at Vanguard.
While McCrum left the index manager in June 2007, Gruskin left in 2001 for Alpha Investment Management, a high-conviction Australian equities boutique. Omega was in the final stages of appointing an operations manager when Investment & Technology went to press. Outcome investing begins with deciding on tolerable levels of risk and then investing within those boundaries, Vassos said.
It does not pigeonhole managers as operating with either a value or growth style. “It’s about building portfolios for defined risk-return targets….We’re trying to lock in a level of risk and squeeze out every bit of return from it.” Omega will invest in equities, bonds, currencies and derivatives from listed markets in more than 30 countries, and manage broad, diverse portfolios. “In highly-concentrated portfolios, if one of your 10 stocks bombs out, that’s 10 per cent of your portfolio wiped out,” Vassos said.
He said the outcomes-focused approach was best deployed in listed markets. “Trying to hit return targets becomes dangerous when you’re investing in unlisted markets.” Omega will predominantly use quantitative methods, but make room for fundamental decisions based on “material events” such as political disruptions or environmental disasters affecting countries, industry sectors or businesses, Vassos said.
It would also be capable of providing separate services, such as currency overlays, for funds. Omega is the final letter of the Greek alphabet. The team chose the name because the initial step of its investment strategy is to begin with a defined end.