CFS’ alternatives hit $1.1 billion
Amid investors seeking non-traditional alternative investments for diversification, Colonial First State's (CFS) FirstChoice Alternatives portfolio has hit $150 million funds under management (FUM).
The FirstChoice Alternatives portfolio formed part of the fund manager's broader $1.1 billion in alternatives, CFS said.
Colonial First State's head of investments, Scott Tully, said investors were attracted to their alternatives as they provided equity like returns with less volatility and less correlation to equity markets.
"Alternatives typically generate a greater proportion of their return from ‘skill' than simply market returns, which is important to investors concerned about the prospect of lower returns from equities," Tully said.
Because of that, advisers were recommending a greater portion of their clients portfolio's to alternatives, he said.
CFS' alternatives portfolio manager, Guneet Rana, said further additions were being made to the portfolio. For example, a London-based discretionary macro manager, H₂0 Asset Management was added as the fund's seventh investment manager.
"Discretionary macro managers bring diversification benefits with their returns not only lowly correlated to equity and bond markets but also across macro managers," Rana said.
"The addition of H₂0 is expected to improve the risk return profile of the portfolio," she said.
H2 o was partly owned by Natix Global Asset Management which had A$14.4 billion in FUM.
CFS' FirstChoice Alternatives portfolio was launched in 2014 and aimed to generate a before fee return of the Reserve Bank of Australia's cash rate, plus four per cent.
Recommended for you
Investment solution provider Channel Capital has appointed James Archer as its latest distribution director, joining from Pinnacle Investment Management.
Bennelong Funds Management has signed a memorandum of understanding with US private credit manager Monroe Capital to distribute its products in Australia.
Global equity manager Talaria Capital has appointed a Sydney-based sales director as it grows its distribution presence across Australia.
Global private markets firm Partners Group has launched an evergreen fund to provide Australian advisers with access to its cross-sector royalties strategy.
