Alleron Investment Management, which recently received a $440 million mandate from AustraliaSuper, says it may not want to manage more than $5 billion as its clients returns may suffer.
“As funds under management goes up your capacity to generate excess return goes down which puts you in a conflict of interest with your clients,” says Barry Littler, Alleron’s chief executive.
Sydney-based Alleron was managing $15 million in February 2005. Now it manages $2.3 billion on behalf of 11 institutional clients with a five member investment team under Albert Hung.
The fund has had a 8.95 percent annual gross return since February 2005 by largely investing in companies that are part of the S&P/ASX 100 Index. The S&P/ASX 100 Index has risen 5 percent a year during the same period.
“There have been quite a few boutique managers who share a similar story with us,” says Littler.