Pinnacle’s planned UK affiliate loses $3bn Ironbark mandate
The launch of a new UK affiliate by Pinnacle Investment Management has hit a snag as delays mean Ironbark Asset Management has pulled a planned mandate from the firm.
Earlier this year, it was announced that the former head of equities at UK-based Royal London Asset Management (RLAM) Peter Rutter would be leaving with his team to set up their own boutique global equities fund manager.
This would be an affiliate of Australian-based Pinnacle Investment Management called Life Cycle Investment Partners, that would invest in style-neutral, long-only global equities.
Australian firm Ironbark has held a mandate with RLAM for many years on its global equities funds: Ironbark Royal London Concentrated Global Share Fund, Concentrated Global Share Fund – Class H (Hedged), Core Global Share fund – Class A, and Core Global Share Fund – Class H.
According to Morningstar, its Ironbark Royal London Concentrated Global Share Fund, launched in 1996, is $2.1 billion in size; the Core Global Share Fund – Class A is $779 million; its Core Global Share fund – Class H is $131 million, and the Concentrated Global Share fund – Class H is $86 million, totalling $2.96 billion.
At the time of Rutter’s departure, Ironbark originally backed him and said it intended to take the assets over to his new firm when it was formally launched. However, delays mean the firm now has been forced to look elsewhere, it said.
“We anticipated that Peter and his investment team would be able to manage the assets within their new structure by August 2024. While we have been working closely with Pinnacle, we have come to understand that Peter and his investment team will not be in a position to manage the funds within a time frame that Ironbark considers to be in the best interests of investors.”
In Pinnacle’s FY24 results earlier this month, Pinnacle founder and managing director Ian Macoun flagged that the team has employment restraints from RLAM which limit the work they can do.
“It is early days, these employees have employment restraints that they have to honour so we won’t see much activity in this calendar year. It takes time to build a new boutique and we build carefully and deliberately,” Macoun said.
“This should be a very big, successful boutique over time, and we will do it at the pace that makes sense for building a quality affiliate. We will update in due course, but we tend to go slowly and carefully at the beginning.”
As a result, Ironbark has appointed American investment manager Brown Advisory and international asset manager Robeco to the funds instead.
“Ironbark maintains a shortlist of alternative ‘best-in-class’ investment managers, and following a thorough due diligence process, we have selected Robeco and Brown Advisory to be the appointed investment managers of the Core and Concentrated Funds, respectively. Both managers are well-experienced to manage the assets of the funds and can do so within a time frame that is in the best interests of investors.
“Ironbark intends to appoint a transition manager in the coming weeks to support an orderly transition of the fund’s assets to the appointed investment managers. Ironbark anticipates the transition will be finalised in late September 2024.”
In response to the move, a spokesperson for Pinnacle told Money Management that the development of Life Cycle remains on-track.
"The establishment of Life Cycle Investment Partners remains on-track as planned, with Pinnacle’s operational support set up and well advanced. There has been strong engagement with Australian and international investors who were not previously clients of the team’s former employer. Pinnacle remains delighted with the partnership and Life Cycle’s prospects for strong growth as a new world-class Pinnacle Group affiliate.
"Ironbark worked with Pinnacle collaboratively towards the Life Cycle team managing Ironbark’s Australian retail funds, however, this did not materialise as it was contingent on certain restraints applicable to the team being waived by their former employer."
AUTHOR
Laura Dew
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