Omega Global Investors, the fixed interest manager formed in 2008 by three former Vanguard Investments executives, is to widen its client offering with the launch of two trusts this quarter.
Omega’s two main strategies to date are an enhanced global government bonds fund and a global credit opportunities fund. Its first client was the Optimix multi-manager arm of ING, which invests in the enhanced government bond fund. The quant-based firm has two other clients, one of which will seed the new trusts, which will enable the manager to approach smaller investors.
The three ex-Vanguard managers, who are executive directors of Omega, are Matt McCrum, Andrew Gruskin and George Vassos. Macquarie Global Investments is a minority shareholder in the company.
Vassos, who heads up sales and marketing, said Omega differentiated itself from other fixed interest managers by approaching the asset class as a risk management exercise. It has developed a “dynamic risk control” model.
“We saw benchmarks as being inefficiently constructed,” he said. “They are constructed more on behalf of the issuers of debt rather than in the best interests of investors.”
A big theme in fixed interest markets over the past year, which puts more emphasis on the importance of appropriate benchmarks, is the disaggregation of the market. Increasingly institutional investors are appointing specialist managers for various sub-classes of fixed interest investments.
“We see a lot of opportunity for a better beta story, Vassos said. “Because the benchmarks are inefficiently constructed, institutions are looking for better ways to access the market.”
Early in its life Omega attempted to attract interest in a diversified strategy which would invest in both equities and bonds. This strategy seeks out the best income-producing beta prospects around the world, but to date there have been no takers among clients.