Ankura Capital closes, will return $1 billion (Corrected)*

A correction to this article was issued November 11.

BNY Mellon Asset Management has closed Ankura Capital, its Australian and Japanese equities boutique, and will return $1 billion to clients.

Bruce Murphy, managing director of BNY Mellon in Australia, says the boutique manager of quantitative long-only equity strategies was closed after it failed to gain “broad institutional support.”

“It would be hard to grow to large scale in the Australian market from where it is,” says Murphy.

The decision was made after a strategic review involving BNY Mellon and Ankura principal Greg Vaughan.* Ankura had a total investment staff of six people.

Vaughan and Jason Davis launched Ankura in 1995. The boutique became part of BNY Mellon on 31 December 2008 and was its only Australian equities manager.

Most of Ankura’s $1 billion in funds under management was invested in segregated Australian equity mandates. Its equity income strategy, which targeted high dividend-yielding shares, won mandates from the $16 billion multi-manager ipac and the Russell Australian Shares Enhanced Income Fund.

Ankura’s long-only Australian equities strategy returned 0.2 per cent in the five years ending September 2011 and -7.5 per cent in the year ending the same month, according to Mercer Surveys.

Murphy declined to comment about whether the company planned to acquire another firm.

“Our focus is making sure we do the best job for clients in Ankura,” says Murphy. Ankura has offered to hold investors’ assets until March 31, 2012, as they decide how to reallocate the capital.

(*Correction: The article was corrected to state in the third paragraph that the strategic review of Ankura involved BNY Mellon and Ankura co-founder Greg Vaughan.)