Colonial First Statehas signed an agreement with 452 Capital, the group set up by ex-Perpetual senior analyst Peter Morgan and Warwick Negus, to exclusively distribute the fund offerings of the boutique manager to the retail, wholesale and master trust markets.
The new duel branded Colonial First State 452 funds will be rolled out exclusively through FirstChoice, Colonial First State’s masterfund, for the first three months, after which time other master funds and wholesale investors will have access to 452.
452 Capital will also have the ability to target institutional investors directly, with the term of the arrangement to depend on targeted performance hurdles.
“The combination of Colonial First State’s distribution and marketing strength and business infrastructure with Peter’s funds management skills will present a powerful force to the market,” says Colonial First State general manager investments John Pearce.
452 Capital’s Warwick Negus says the arrangement is seen as a way to fast-track the fund manager in the retail market place, hard to do as a small start-up manager, through Colonial’s distribution, brand and service reputation.
The first Colonial First State 452 fund will be launched in the first quarter of 2003, to take the form of a value-based “vanilla product” that will look for consistent, long-term performance through investments in good quality companies that are undervalued.
The product will have a fee structure positioning it as a premium product, due to a perceived brand equity by the managers.
Morgan says 452 will have no hesitation in closing off managed funds if funds under management become to large for effective management.
The new 452 Capital deal will put Morgan in competition with Perpetual Investments, where he recently resigned from the position of senior portfolio manager due to growing difficulties in managing increasing amounts of money while maintaining investment performance.
Morgan says that 452 Capital will be a small operation, with approximately five investment professionals expected to be employed under Morgan.
“Our reputation is on the line here to perform and if we don’t we are the losers,” says Morgan.
