Blackwattle will launch three funds next month and at least two after that with the firm focusing on the strict capacity constraints they will face.
The fund manager was set up earlier this year and its leadership team includes many senior industry executives such as chief executive, Jarred Rubin, formerly with Citi Institutional Equity Sales; executive director, Matthew Dell, previously with Pinnacle; and head of distribution, Maggie Mills, former head of investment sales at Zurich.
The first three funds to launch in July will be:
- Mid Cap Quality
- Large Cap Quality
- Long Short Quality
This would be followed by Small Cap Quality fund in September and manager, Rob Hawkesford, noted there could be multiple small-cap funds in the next 12 months such as a small-cap long-short and small-cap long only.
Going into 2024, the firm also expects to launch global equity funds.
Dell, executive director, said the firm had been in discussions with platforms such as Macquarie, HUB24, Praemium, and Netwealth and expects it to be available on all major platforms in the future.
A strict capacity constraint limit on the funds was a key differentiator for Blackwattle with funds being capped at around half of their peers. Mid-cap quality would be capped at $2 billion, large-cap quality at $5 billion, and long-short quality at $1 billion. The small-cap quality fund would be capped at $750 million.
Rubin, chief executive, said: “We want to focus on achieving performance for investors, not fee gathering. We will have significantly capacity-constrained portfolios which will ensure we can perform and continue to do so over the long term.
“Our Small Cap Quality fund will be capped at $750 million instead of $2 billion on other small-cap funds because what happens is it becomes difficult to perform at that size.”
The portfolio managers of its four investment offerings came from some of the country’s best-known firms, like Ellerston Capital, Watermark, Schroders, and Aware Super.
Managing director and chief investment officer, Michael Skinner, noted that they each brought an average of 20 years of experience to the roles.
They had each personally committed $1 million, taken salary reductions, and are equity owners to ensure they are aligned with investors in the fund. There was no personal trading and remuneration was performance-based.
Rubin said it had $30 million in total commitments and foregone remuneration with portfolio managers having foregone $20 million in compensation over five years.
The Long Short Quality and Large Cap Quality funds would be led by Ray David and Joe Koh, who had previously helped manage over $12 billion at Schroders Australia.
Tim Riordan and Michael Teran would head up the Mid Cap Quality fund, having previously managed a $2.2 billion similar fund for over five years at Aware Super. Riordan had been head of direct equities at the super fund before he departed in March this year.
The Small Cap Quality fund would be managed by Robert Hawkesford and Daniel Broeren, who together hold over 40 years of investment experience at Ellerston and Watermark.
The firm said it has six years of working capital, higher than the five years it sought to raise, to ensure the firm would be around for the long term and had the resources to invest in best-of-breed companies.
As well as the board and portfolio managers, the firm also had an independent ESG Review Council and an Investment Review Council that would meet quarterly to challenge the team on their investments.
