GLOBAL - Henderson Global Investors is seeking to launch a new global equitised long/short product, an extension of its enhanced index and hedge fund range, that will target Australian superannuation funds.
Alistair Sayer, investment director, multi strategy equities, said while Australian-only equitised long/short was a well established product in Australia, the amount of assets gained by managers operating in the space indicated there was scope to extend this on a global basis.
Henderson will also launch two products in Europe – a pan-European and a US product – both run on an equitised long/short basis, in the second half of the year.
“We are looking at launching an Australian vehicle targeting superannuation funds that will more than likely be benchmarked against an MSCI World ex-Australia mandate to complement the existing exposure they’ve got to Australia,” Sayer said.
“The reason we’re looking at Australia early on is because they’ve had such success with the long/short domestic product.” The firm is currently in the process of talking to consultants with the hope of receiving a buy-rating, before meeting with individual clients.
Sayer said the product would target an excess return of 3%, but would aim to deliver that with a risk of 2%, resulting in an information ratio of 1.5.Through the new investment vehicle, the firm will apply techniques more akin to the hedge fund space to the superannuation industry.
“We will be delivering investment techniques that we’ve been using to manage our enhanced index and hedge funds for a number of years, but delivering those in a higher alpha product to a broader audience,” Sayer added.
By managing on a long/short basis, a super fund can achieve more balanced alpha generation, as Sayer explained: “In an MSCI World ex-Australia you’re benchmark weightings are 55% North America, 32% Europe and 13% Asia Pacific. If your portfolio is structured like that, when you’re trying to deliver excess return you’re quite reliant on North America. With a long/short portfolio you can restructure your alpha so whilst your market exposure is the same as the benchmark, you can deliver your alpha evenly across all three regions.”
The firm has strong relations in Australia, having been acquired by AMP, the country’s largest retail and corporate super provider, in March 1998, before the companies demerged in December 2003.
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