Health Industry Plan (HIP) has hired a new active extension manager for a $35 million mandate to better complement its existing long/short equities exposure.
HIP, which had previously had long/short mandates with quant managers Barclays Global Investors (BGI) and State Street Global Advisors (SSgA), has terminated the SSgA mandate and hired Tribeca Investment Partners in its place.
Ross Bernays, HIP chief executive, said yesterday that he thought Tribeca was better suited to take advantage of a return to market “normality” and that complementarity between managers was important.
The $550 million HIP fund had had an exceptionally good run since March, Bernays said.
“It’s important for us to extract reasonable performance in bad times and take advantage of the better times. That’s been working for us … You have to make sure that just because you have been burnt in one area that that doesn’t lead to being too conservative when things are improving.”
HIP’s default fund had returned 10 per cent in the first four months of the current financial year, he said. HIP is advised by JANA.
For Tribeca, the mandate also caps off a very strong year to date. Its alpha extension fund – Alpha Plus – which typically has 130:30 to 140:40 long/short, reported a return of 24.6 per cent in the year to September, compared with the S&P/ASX 200’s 8.3 per cent.
The fund bottomed for funds under management at about $80 million in February and has subsequently zoomed to more than $350 million by this month through a mix of performance and inflows.
David Aylward, the managing director, said that there were other large mandate wins recently as well.
“All our strategies have performed well: Alpha Plus, long only and small caps … the firm overall has doubled its FUM in the past seven months to about $800 million.”
Tribeca’s small-cap fund returned 16.1 per cent in the 12 months to September, against the benchmark’s 6.3 per cent, while the long-only broad market fund returned 12.3 per cent (benchmark 8.3 per cent).
Tribeca is majority owned by staff but with a large minority holding by Grant Samuel Funds Management. Grant Samuel markets the firm to platforms and the retail market, while Jim Savage, head of marketing and sales, handles institutional business.
Sean Fenton, who runs both the Alpha Plus and the Core long-only strategies, said the market this year had suited active managers very well, particularly those which use fundamental analysis. Tribeca blends fundamental with quant research.