BlackRock’s Australian Quantitative Equity team will no longer take long/short mandates after reaching capacity with mandates it has won over the past couple of months.
BlackRock’s Australian Quantitative Equity team won a $470m Australian Equity active-extension mandate from the Local Government Superannuation Scheme (LGSS) and an $80m 150/50 long/short mandate from TASPLAN.
BlackRock head of quantitative investments Australia Ken Liow said he was delighted that the market had recognised the benefits of BlackRock’s quantitative approach.
“We started our quantitative Australian equity business just over four years ago and we have now built a very strong team and developed systems specially tailored for the Australian market,” Liow said.
“The other reason there has been so much interest in our business in recent times is that the market has come to appreciate the benefits of tax aware investing.
“Nearly all of our new institutional client portfolios are managed on an after-tax basis, where we focus on delivering the clients strong net performance, which is the performance the members care about.”
According to BlackRock head of distribution Damien Frawley, the other key change in the market is the general acceptance of long/short funds.
“Unfortunately the downside of this success means that, due to the small size of Australia’s stock lending and low levels of liquidity in the convertibles market, the quantitative equity team has ceased to take long/short mandates,” Frawley said.
“We are now focusing on marketing our strengths in managing long only mandates where we have a reasonable amount of capacity left.”
