Wilshire Private Markets has gone out of its way to appease Australian investors rocked by the exodus from its Asia-Pacific business earlier in the year, appointing a well-known private markets investor to replace Ovidio Iglesias at the helm of its advisory and fund-of-fund activities in the region.
Gary Gabriel, formerly head of the 14-person private markets team at the $69 billion Future Fund, will start as managing director of Wilshire Private Markets’ Asia-Pacific region and boss of the group’s Canberra office from February 2011.
The group, whose Australian and global private equity fund-of-funds had attracted $3 billion from local institutional investors, was disrupted in March by the departure of several senior staff around the world, including from its Canberra and Tokyo offices.
Iglesias, who had founded Wilshire’s Canberra office in 2000, subsequently formed a breakaway group called Continuity Capital Partners alongside fellow global investment committee member and Tokyo office chief Grant Fleming, senior researcher Bill Humphreys, and administration chief Justin Steven. Continuity is offering essentially the same services as the team had at Wilshire.
The global president of Wilshire Private Markets, and director of its parent Wilshire Associates, Kevin Nee, was visiting clients in Australia last week and said he had made good on his promise to them of a “significant hire” to re-establish the local franchise.
He would not comment on what triggered the departures in March, but denied it had been a move to integrate the private markets ‘carry pool’ with that of the other Wilshire Associates divisions – analytics, consulting and funds management. He said he was confident in the economic incentives aligning Wilshire Private Markets staff with their clients.
Gary Gabriel will need to convince those clients of the merits of future investment in Wilshire Private Markets product.
According to Sam Sicilia, the chief investment officer of major Wilshire fund-of-funds client HostPlus, the manager had returned all uncommitted capital to its Australian customers, and also agreed to a reduced fee in recognition of its “administrative” future role in their existing investments.
He also confirmed that HostPlus’ asset consultant, JANA Investment Advisers, was currently in due diligence on Continuity Capital Partners.
“Because we have to be honest with ourselves – if those guys were still with Wilshire, we’d be happy for them to be managing our money. Their team and their infrastructure are really no different from what they had before – it’s just that they’re a few hundred metres from where they used to be in Canberra. We’d have to consider them,” Sicilia said. The other Australian clients of Wilshire Associates are AGEST, Auscoal Super, BUSS Q, CARE Super, ESS Super, FIRST, Health Super, Maritime Super, Sunsuper, Super SA, Telstra Super and UniSuper.