Asia-Pacific equities boutique Eight Investment Partners (8IP) has merged with a neighbouring manager in the Sanlam stable.
In a move pitched as a boost to 8IP’s ability to invest in the Australian market, Atom Funds Management, a domestic small-cap equity shop, is being “consolidated” into the Asia-Pacific manager and will bring its funds under management to $249 million, confirmed Rick Steele, CEO at 8IP.
The heads of Atom Funds Management, managing director Drew Wilson and CIO David Shearwater, have sold their combined 32 per cent equity stake to Sanlam, which was already the majority owner of the boutique.
Speaking from a stretch of road near Stanwell Tops, on the return trip from the Corners for Kids motorcycle rally fundraiser, Wilson said the consolidation was driven by the “obvious synergies” between the two businesses.
Steele said the South African financial services business, which is also 8IP’s backer, would continue as majority owner of the beefed up boutique and offer equity participation to its staff.
Kerry Series, CIO ay 8IP, said the major change for the boutique’s investment capabilities would be its strengthened Australian equities research. 8IP’s funds typically had a 25 per cent exposure to Australian equities, and the boutique had always invested across the market capitalisation spectrum, but Atom’s resources would “add input” to its domestic small-caps research.
This would come from Atom’s portfolio manager, George Raftopulos, and analyst Daniel Rolley, in addition to the financial modelling and stock-specific research performed by the Bangalore-based Sanlam Equity Analytics Team. 8IP currently draws on the team for thematic research across the Asia-Pacific region.
Series believed 8IP’s knowledge of Asia-Pacific markets would benefit its management of domestic equities.
“I’ve got a strong opinion that understanding Asia is critical to investing in Australian equities,” he said. “Australian equities teams which don’t have direct access to Asian [equities] expertise are at a disadvantage to those that understand Asia better.”
Both Series and Steele foreshadowed that 8IP would build on the Atom resources to offer Australia-focused funds to the institutional and retail markets.
“I always thought it was an obvious extension of our product range. And the advantage we have in offering Australian equity product is our knowledge of Asia.”
Roughly one year ago, Atom won a $60 million mandate to become the first small-caps manager to be awarded a place in Ibbotson Associates’ active Australian equity trust. CIO Daniel Needham said the multi-manager was reviewing 8IP’s ability to run the mandate and would make a decision within four weeks.