SWEDEN - Dublin-based currency overlay specialist Lee Overlay Partners has entered into a tie-up with Stockholm based Intervalor, a third-party marketing firm, in a bid to target the Nordic market.
Intervalor, which has also teamed up with specialists in global emerging markets, small caps and European high yield in the past, will now market Lee Overlay products on an exclusive basis. Other managers on its roster include F&C Management, Invesco, Liberty Ermitage, New Star and Scottish Widows Investment Partnership.
Anders Bladh, chief executive officer of Intervalor, which has an 11 strong team, believes that the climate is right for Nordic institutions to look at currency overlay as an uncorrelated strategy.
”In the US and Europe there has been a trend towards increasing interest in currency overlay among larger institutions who either seek specialist active management of the currency exposure of their international portfolios, or who see currencies as a separate asset class,” he said.
Lee Overlay Partners said that Intervalor’s “long experience and unique contacts” in the Nordics rendered the firm an ideal distribution partner.
Adrian Lee, president & chief investment officer of Lee Overlay, said: “The Nordic region is an interesting market for us with competent and sophisticated institutions and we see Intervalor as the ideal partner for us.”
Lee Overlay Partners was founded by five former JP Morgan overlay specialists in 1999 and currently manages assets of US$1.9bn. Its client base covers North America, Europe, UK and Australia.
Currency managers say that they have seen a marked rise recently in interest among investors for overlay strategies
According to James Binny, senior investment manager with Gartmore, returns of 2% per year, which went largely undetected in the bullish 1990s, are now making a notable difference in portfolios as the scramble for alpha continues.
“We are seeing a huge increase in currency management at the moment,’ he said.
“Not so much from the risk control perspective, which is how currency overlay used to be perceived, but much more from a return generation perspective.”
Binny also added that Gartmore was on the verge of clinching new currency pension fund mandates but did not offer details.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers