Australian Unity has formed another joint venture boutique fund manager that takes it into the international equity sector for the first time.
The new joint venture is with the Melbourne-based financial services company Wingate Group to take over management of the Wingate Opportunity Fund and Spectrum Fund.
Ownership of the new boutique fund manager — Wingate Asset Management — will be with Australian Unity and the Wingate Group holding equal stakes.
The founders of Wingate’s funds management team — Farrel Meltzer (group managing director), Chad Padowitz (chief investment officer) and Joel Beebe (portfolio manager) — will also have a stake in the new boutique manager.
Padowitz and Beebe will move to the new joint venture, while Meltzer will be a strategic adviser and continue to manage the group’s other private investment business.
Wingate has $17 million of funds under management in the two funds, which is commercially unviable for a successful funds management business.
Meltzer told Money Management the joint venture was not driven by the need for capital to grow the business.
“We made it very clear to Australian Unity that we did not need any capital,” he said.
“Wingate Group is very well capitalised and we could grow the business without outside assistance.”
Meltzer said the fund’s management business was started in October 2005 and inflows have been attracted from Wingate’s private client business.
“When we reached our third anniversary we said we would invest in distribution so we could reach $50 million of funds under management,” he said.
Wingate had initially talked to Australian Unity about a separate matter, which didn’t happen, Meltzer said.
“In October of last year, we approached Australian Unity again and asked whether they were interested in a funds management joint venture.
“We weren’t looking for a partner for the business, but we liked the way Australian Unity did business.
“We never looked at forming the joint venture with anybody else.”
Australian Unity liked the idea and conducted due diligence on the group, David Bryant head of Australian Unity Investments said.
“We want businesses that have a strong cultural fit with ourselves,” he said.
“The people in our joint venture businesses are highly skilled and we are respectful of the team led by Farrel.”
Under the joint venture, Australian Unity will look after distribution, compliance and marketing, while Padowitz and Beebe will handle investment decisions.
Australian Unity will also become the responsible entity for the new venture and unit holders in the two funds will vote on the change at the beginning of June.
Bryant said the two international funds would be offered to both retail and wholesale investors.
The minimum retail investment will be $1,000 and $25,000 for wholesale investors.
Australian Unity will also seek ratings for the products to allow them to be put on platforms.
This is the fourth boutique funds management operation created by Australian Unity.
The first was Acorn in 2000, which specialises in Australian micro caps, then Vianova (fixed interest) and Platypus (Australian equities).
