Former Russell Managers Offer Multiple Strategies
The Latin word acuitas means insight, sharpness, perception-qualities that two long-time Russell Investments veterans hope are reflected in the eponymous firm they recently launched, and which initially will focus on offering a multi-manager microcap strategy to institutions and high-net-worth investors.
Acuitas Investments LLC, headquartered in Tacoma, Wash., is the brainchild of Chris Tessin and Dennis Jensen, former portfolio managers for Russell funds who together managed over $16 billion in assets. Their approach with Acuitas is to offer multi-manager solutions in inefficient, capacity-constrained asset classes. The partners strongly believe that inefficient markets warrant a dedicated allocation within a diversified investment portfolio, and are first targeting the microcap space because, they said, it has provided the richest source of returns for investors in U.S. equities over the past decade. For its initial multi-manager fund, Acuitas seeded new products from established investment managers with a history of success buying small stocks.
"With inefficient, capacity-constrained asset classes, the key to delivering value for clients is identifying great investors early in the product life cycle before they hit other investors' radar screens, something Dennis and I have been doing throughout our careers," said Tessin.
Prior to starting Acuitas, Tessin was lead portfolio manager for the micro, small and small-midcap products at Russell; before that he held positions in asset management and investment research at Bear Stearns, Schroders and Lehman Brothers. Tessin, a managing partner at Acuitas, serves as lead portfolio manager of the small and microcap portfolios. Jensen, who served as lead portfolio manager for Russell's U.S. quantitative and style equity products, as well as a senior research analyst for U.S. equity and alternative strategies, is a partner at Acuitas and its director of research. The two founders were joined recently by Brian Stoner, a former member of Russell's capital markets research division who was hired as a senior research analyst and is a shareholder in the firm.
According to Tessin, the past decade has been witness to "a remarkable shift" in the way institutions and plan sponsors allocate capital, with passive management gaining favor when it comes to large-cap equities and other areas where the majority of active managers do not beat their respective benchmarks. Active management, he said, plays a valuable role "in these inefficient corners of the marketplace, such as the microcap space, where talented asset managers continue to deliver significant alpha for investors."
The partners believe that when investing with investment managers, constraints eat up returns, and delayed decision-making can be costly. Not so with their boutique. "By remaining small and flexible we've already felt the advantage of being nimble from both an investment and organizational perspective," said Jensen. "Additionally, in today's highly competitive environment, we believe that being independent and employee-owned allows us to more closely align the firm's interests with those of our clients." Go to acuitasinvestments.com for further information.
In other news ...
The Multi-Family Office: A Solution for the Ultra High Net Worth Client, a new report from VRL, a London-based financial and professional services information provider, examines the growing importance of the multifamily office at a time of increasing market uncertainty. Since 2008, conventional wealth management firms and private banks have been accused of not looking after the interests of their clients with sufficient competence, especially in areas of service and investment performance, VRL notes. The report examines a number of case studies of firms worldwide that have either launched or re-badged themselves as MFOs, as well as the differences between commercial MFOs and conventional wealth management firms. For information go to www.vrlfinancialnews.com or e-mail [email protected].
HoyleCohen LLC (www.hoylecohen.com), an independent San Diego-based wealth management firm, has created a new practice, Wealth by Design for Women, that focuses on financial advice for high-net-worth women, especially newly independent women and business owners between the ages of 45 and 75, according to the firm. Go to www.wbd4women.com for further information.
Seventy-seven percent of Americans-Republican, Democratic and independent-favor strong, sensible oversight of the financial services industry, including a strong and independent Consumer Financial Protection Bureau, according to a survey by Lake Research Partners that was sponsored by AARP, the Center for Responsible Lending and Americans for Financial Reform. Voters believe safeguards will help restore the economy and not, as some on Wall Street say, stand in its way, according to the survey. Go to responsiblelending.org for further information.
Hedge funds, as measured by the Dow Jones Credit Suisse Hedge Fund Index, were up 1.7% in the first half of 2011, posting positive performance in four out of six months. An estimated $33.8 billion in inflows in the first half of 2011 put the industry on track to triple the asset inflows of 2010, according to the index. Fixed-income arbitrage experienced the largest inflows in the first half, gaining $18.4 billion, followed by global macro ( up $14.4 billion) and long/short equity (up $9.0 billion). Large hedge funds (those with over $500 million) continued to dominate asset-raising in the second quarter of 2011 with over $12.1 billion of inflows. Go to www.hedgeindex.com for further information.
A series of Wealth Market China reports by Ledbury Research (www.ledburyresearch.com) and released by Dublin-based Research and Markets examines four large segments of China's wealthy population, providing insights into backgrounds, personal relationships, interests, attitudes, and motivators. Wealth Market China: Ambitious Successors studies Chinese children who aspire to take over the businesses of their successful entrepreneur parents. Maverick Entrepreneurs studies very rich Chinese individuals who have created wealth from nothing. Go to www.researchandmarkets.com for further information.
The IPO pipeline has returned to pre-recession levels, with the number of offerings swelling during the second quarter to $23.7 billion in 140 potential offerings-the highest number since late 2007, according to Ernst & Young LLP's quarterly U.S. IPO Pipeline study. The resurgence is led by the technology and oil & gas sectors. Go to www.ey.com for further information.
Philadelphia Investment Partners (www.piplp.com) has transitioned its global all-cap long/short hedge fund, initially launched in January 2007, into an Investment Company Act of 1940 mutual fund in an effort to widen its client base, according to the Voorhees, N.J.-based firm. As reported by HFM Week, the move comes as lines between traditional and alternative investments continue to blur.
The 2011 Mid-Year Outlook on Emerging Markets report by Mirae Asset Global Investments, a Seoul-based investment manager, foresees a positive environment for emerging market economies in the second half of 2011, including diminishing inflationary pressures, the effects of monetary tightening, attractive valuations and healthy earnings growth. To view the report, go to investments.miraeasset.us.
Recent research from Seattle-based Russell Investments suggests a return premium for riskier stocks simply does not exist. The authors of Defensive Equity: Is the Market Mispricing Risk? argues that investors need to rethink their investment programs and how they approach equity portfolio construction. Go to www.russell.com for more information.
Giving to U.S. charities increased 9.2% in the first half of 2011 as compared to the same period a year ago, according to a new report by The Atlas of Giving, a Web-based service created by Dallas-based Philanthromax LLC. According to Atlas CEO Rob Mitchell, charities that currently are experiencing the greatest income growth are those that receive a high percentage of their support from corporations, foundations, high-net-worth individuals and bequests. Got to www.atlasofgiving.com for further information.
Events
The Financial Re-engineering:Challenges & Opportunities Seminar will be held August 26-27 at Seminar Hall, ITS Institute of Management (the event sponsor) in Greater Noida, state of Uttar Pradesh, India. Go to www.itsim.edu.in for further information.
The Offshore RMB Market Conference (China's official currency is the renminbi, or RMB) will be held September 7-8 at the Novotel Century Hong Kong Hotel in Hong Kong. Go to www.offshorermbmarket.com for further information.
The MENA Private Equity Business Summit 2011, designed for investors, funds, consultants, financiers and business owners of portfolio companies, will be held September 11-13 at the Al Murooj Rotana hotel in Dubai, UAE. Go to www.menaprivateequity.com for further information.
The MFEA (Mutual Fund Education Alliance) Retirement Investment & Income Council Forum will be held September 14 in Boston. Go to www.mfea.com for further information.
The Ninth Annual CSR Asia Summit, "Asian Growth: Global Responsibility," will be held September 27-28 at the Hotel Istana in Kuala Lumpur, Malaysia. Go to www.csrasia.com for further information.
Sidoti & Company's Emerging Growth Institutional Investor Forum will be held November 10 at the Grand Hyatt Hotel in New York City. Openings are still available for presenters (as well as general attendees). Go to www.sidoti.com for further information.
On The Move
UBS Wealth Management Americas has appointed Ajay Mehra as head of manager and fund research and managing director, based in the firm's office in Weehawken, N.J. Mehra, former portfolio manager and partner at Columbus Nova, is responsible for delivering investment advice to financial advisors and clients covering more than $100 billion of institutional and retail managed separate account assets and more than $200 billion of mutual fund assets.
Athena Capital Advisors in Lincoln, Mass., has acquired Stonehorse Capital Management of Boston, a fund of funds manager focused on emerging hedge funds. The acquired entity has been named Athena Stonehorse.
Cypress Trust Company of Palm Beach, Fla., has joined New York-based Dynasty Financial Partners, which provides wealth-management and technology platforms for independent financial advisors. The affiliation will enable Cyprus to expand its private client services for high-net-worth individuals, and provide trust services to other advisors in the Dynasty network.
Reynders, McVeigh Capital Management, a Boston-based investment management firm focused on socially progressive investments, has hired Lindsey W. Parker as vice president and portfolio manager. Previously, Parker was a trustee and partner at Loring, Wolcott & Coolidge, where she worked with SRI clients.
Catherine Austin Fitts and Charles D. Gibson have launched Sea Lane Advisory LLC, based in Pleasanton, Calif., to serve private clients and families. Fitts and Gibson co-chair Sea Lane's investment committee.
Threshold Group, a wealth management firm, has moved its East Coast office in Philadelphia from One South Broad Street to Two Liberty Place on 16th Street.
Founders Financial Network, an investment advisory firm and RIA based in Cupertino, Calif., has hired Jovita Honor as partner. Previously, Honor was a founding principal at Prialta Advisors, and a financial advisor with Wade Financial Advisory.
San Francisco-based First Republic Bank has hired Dale R. Smith, former vice president and branch manager for Wells Fargo Private Mortgage Bank in San Diego, as managing director in its San Diego office.
Raymond James has appointed Greg Williams to the new position of senior vice president and managing director of Private Client Group administration in St. Petersburgh, Fla. Williams, a 17-year veteran of Raymond James, is currently chief administrative officer for subsidiary Raymond James Financial Services and a member of the RJFS board of directors. The company's private-client group now has about 5,100 advisors and $278 billion in assets worldwide.
Washington Wealth Management LLC, of Middleburg, Va., has entered into a strategic relationship with Cornerstone Wealth Management, a $250 million-plus wealth management firm headquartered in San Diego that primarily serves families and individuals with a net worth in excess of $10 million. The alliance provides Washington Wealth Management with a new family office and establishes its first location in California.
U.S. Bank, a wealth management and private banking services provider headquartered in Minneapolis, has appointed Kurt Silberstein managing director of alternative investments for its Ascent Private Capital Management unit, which serves ultra-high-net-worth clients with more than $25 million in individual or family wealth. Previously, Silberstein was the senior portfolio manager at CALPERS, where he designed and managed CALPERS' $5.5 billion multi-strategy hedge fund portfolio.
-Cort Smith