Bennelong seeks 2 boutiques to diversify product range
Bennelong Funds Management chief executive John Burke says the firm is seeking two boutiques specialising in multisector fixed income and global equities.
Burke joined the active fund manager as chief executive last year from Fidante, where he was the global head, having previously set up Challenger Investment Solutions.
As active managers are urged to diversify their product ranges, Burke shared with Money Management where he believes gaps lie in the firm’s product range.
When deciding whether to back a boutique, he said Bennelong looks for a firm or team which is experienced, which has a good performance track record, who have worked together for a number of years and are a stable team.
One area would be fixed income as currently, the only fixed income product offered by the firm is UK-based Leadenhall Capital Partners, which Bennelong formed a distribution partnership with earlier this year.
Under the agreement, Bennelong distributes the Leadenhall Capital Partners range of insurance linked securities (ILS) fund strategies to institutional investors in Australia and New Zealand.
“We don’t have much fixed income, the only product is an insurance linked security product which we distribute through Leadenhall so we want to look at that more, and multi-asset fixed income would be important there as interest rates are far higher than before.
“Multisector fixed income is definitely of interest for us,” he said. “Bonds will be higher for longer, so you need a manager who has experience in working in that type of interest rate environment, who can navigate that.”
Asked if there are any managers in Australia who are already doing this well, he said the depth and breadth of a team which can offer a multisector fixed income fund, encompassing areas such as emerging market debt, corporate bonds and government bonds, for example, is difficult to find in Australia.
“We are on the look out for them, that’s what we are investigating. It’s probably something we would have to look for offshore. It would be hard to do in Australia as it would need to be a big team to cover all those different sectors.”
The other area he said Bennelong would consider is large cap global equities. It recently backed Canopy Investors which was set up by former Magellan manager Kris Webster, but this is a global equity small and mid-cap manager rather than large caps.
At the time of the acquisition in June 2024 and launch of the Canopy Global Small & Mid Cap Fund , Burke said: "We believe there are great opportunities in the small to mid-cap market in the current environment. The fund offers diversification away from an increasingly concentrated global large-cap index. This is an opportune time to launch a partnership with a specialist and experienced team of investment managers."
Much interest has been driven towards private credit in recent months, but Burke said this would probably not be a priority for Bennelong as this is an asset class where investors would typically only have a small allocation.
“Eventually, everyone will be holding enough private credit.”
The existing Bennelong affiliates are 4D Infrastructure, Skerryvore, Touchstone Asset Management, Quay Global Investors, Bennelong Long Short Equity and Bennelong Australian Equity Partners.
AUTHOR
Laura Dew
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