Investment consultant Ibbotson Associates (Ibbotson) has awarded a new mandate worth $75 million to Vinva Investment Management’s long/short product for the Ibbotson Australian Shares High Alpha Trust (HAT).
The mandate makes Ibbotson the first client of the Vinva Australian Equity Alpha Extension Fund.
Vinva will now have a 25 per cent target weighting in HAT, the same as Platypus Asset Management, Orbis Investment Management Australia and Northcape Capital.
The trust’s allocation to Northcape and Platypus was cut from 40 per cent to fund the new mandate.
“We believe this is an excellent opportunity to invest early with a new manager that will generate high alpha and be successful as a business,” Ibbotson head of equities and property Fraser Murray said.
“We believe Vinva is well funded and well structured and its investment approach is leading edge in the quantitative space.”
During early 2010, Ibbotson reduced the number of managers in HAT from four to three as it terminated a mandate with Barclays Global Investors (BGI) Alpha Advantage Fund, following BlackRock’s acquisition of BGI.
That fund was managed by Vinva’s current key personnel, including managing director Morry Waked, head of research Andrew Jackson and head of portfolio management Nick Burt – all of whom departed BlackRock after the BGI acquisition.
“Ibbotson had a positive view on this trio for much of the 2000s and in our opinion they were instrumental in the success of BGI. We have invested in a range of BGI products historically,” Ibbotson portfolio manager of equities and property Matthew Tuxford said.
“We also believe the addition of the fourth manager and the equally weighted structure will ensure considerable diversity of alpha, while still retaining a high tracking error similar to the previous three manager structure,” he said.
Ibbotson is owned by research house Morningstar.
