BlackRock Australia stands ready to “defend” at least $10 billion in legacy Barclays Global Investors Australian equity strategies, according to country head Damien Frawley, as two recently-departed BGI senior executives – including the all-important head of technology – consider whether to launch a boutique.
Nick Burt, the portfolio manager responsible for BGI’s long/short Australian equity funds from 2006 until his resignation in January, said he had been “investigating” setting up his own shop.
He confirmed that Duncan Forrest, BGI’s former head of technology who resigned from acquirer BlackRock two weeks ago, was interested in working with him. Forrest’s loss has been seen as a blow for BlackRock’s continued aspirations in quantitiative (or “scientific”) funds management, given he built BGI’s systems under a CEO – Morry Waked – who is famously a stickler for technology.
“Morry wanted people who were strong programmers as well as strong analysts,” remembers a former employee, adding that Waked insisted BGI’s automatic trading platform use the sophisticated MATLAB programming language, instead of Microsoft’s more common Excel VBA.
Burt insisted there was “nothing definite” on the boutique front, admitting there had been overtures from established firms since his resignation. He said rumours that Morry Waked would parachute into his boutique once he’d fulfilled obligations to BlackRock “just shows that brokers always need something to talk about”.
He did scotch a rumour that Glen Harris, the senior portfolio manager responsible for BGI’s long-only Australian equity funds, who just left after ten years with the firm, might also join his boutique.
Meanwhile BlackRock’s Frawley said the full composition of the new-look Scientific Australian Equities team would be finalised later this week. Andrew Jackson has been confirmed as head of the team, which will be made up of what remains of BGI’s Sydney-based team, and eight BlackRock investment professionals in Melbourne.
Frawley said products were forthcoming which would blend the legacy BlackRock’s predominantly fundamental approach with the quant techniques of legacy BGI.
There has been a rush of resignations from former BGI executives, including marketing head Katherine Allchin (who turned down a job running the ishares ETF business) and country head Will Britten, whom Frawley replaced last Wednesday. Frawley said it was a fact of the merger that entitlements in Barclays stock were brought forward. He added that the investment cultures of the two legacy firms were complimentary.
Frawley acknowledged it would take hard work to convince every client of the new-look BlackRock – “but we know what we are in for, and we’re ready”.