Buffeted by staff departures and asset allocation moves away from Australian equities, GMO hopes three new hires and an emphasis on tax-effective strategies will halt outflows.
As reported by I&T News on June 17, veteran quant Geoff Wells has joined GMO from Macquarie Investment Management. His near-20 years’ funds management experience is exceeded only by that of Australian equity head Rick Suvak, who was imported from Boston last year following the departure of predecessor Max Cappetta (along with research head Anthony Corr) to form a boutique. Those departures have conspired with a period of poor performance – the quant manager’s flagship Australian Equities Trust returned 0.4 per cent below the ASX300 before fees for the three years to May 31 – to almost halve FUM in the asset class from its $8 billion peak. GMO has also hired Mark Thompson away from State Street Global Advisors, where he was a quant portfolio manager in charge of the SSgA’s short-enabled strategies (market neutral, equitised long-short and 130/30 portfolios). A senior portfolio trader has also been added, 12-year sell-side veteran Bradley Grehan, to bring GMO’s team to seven – one higher than before last year’s departures. Suvak said Wells’ Macquarie experience with tax-aware mandates would come to the fore in a new offering being prepared by the firm, while Thompson’s alpha extension expertise would assist a renewed focus on GMO’s equitised long/short product, which Suvak said was closer to a 160:60 than a 130:30 fund. Suvak said GMO was currently positioned against resources and pro-financials in its Australian equity portfolios.
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
