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Axa considers manager of managers approach

Architas, Axa’s multi-manager subsidiary, is contemplating using more manager mandates as well as funds in its range after the introduction of its new fund screening tool.

Richard Philbin, the chief investment officer at Architas, says the division’s new screening tool Mosaique by Architas enables it to screen more than 90,000 funds worldwide.

However, many of these funds are unavailable to Architas’s UK portfolios.

Philbin says Architas could use manager mandates to access the groups running the portfolios if they were deemed to be particularly suitable.

This would enable Architas to develop a manager of managers approach further, in addition to the funds of funds approach for which the division is best known.

The division already inherited MLC, an Australian manager of managers specialist, when Axa bought bank assets that MLC was managing.

Philbin says the inherited MLC funds generally underperformed Architas’s own vehicles before the acquisition. But he says Architas has been exploring ways to improve their longer-term track record.

Any move into manager of managers as well as fund of funds would put Architas in direct competition with Skandia Investment Group, part of South African life insurer Old Mutual and its subsidiary Skandia.

However, Skandia recently rationalised its single-country manager of managers range, saying performance in many markets was too hard to come by.

Funds of funds have accelerated ahead of managers of managers as the multi-manager vehicle of choice.

Nevertheless, many overseas managers are still impossible to access through UK funds, particularly managers with local emerging markets or US equity expertise.

In several emerging markets, only local managers can access the full range of investment opportunities.

Mainland China’s A share market is only open to residents and is the preferred destination for Chinese company listings. Most overseas managers tend to invest in China through Hong Kong.

Another example is India. Insynergy Investment Management invests in Indian equities through Reliance Capital Asset Management’s Singapore division rather than using a UK manager.


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