AMP Capital has awarded a $135 million risk-premia mandate to GAM Investments. The mandate will sit inside the multi-manager’s ‘alternative growth’ category of its multi-asset funds to complement other alternative beta and absolute return strategies.
GAM systematic alternative risk premia portfolios typically target around 15 risk premia strategies across the style categories of value, momentum and carry.
The team is led by Lars Jaeger, who, like his competitors at CFM, also has a scientific background. GAM has about A$3 billion in Australian-sourced funds across a range of strategies for both institutional and wholesale markets. It is represented in Australia and NZ by Shed Enterprises.
The risk-premia strategy uses a disciplined research process to design, systematically implement and trade the various risk premia. AMP Capital has decided on a new higher-octane version which it will seed.
Celine Kabashima, portfolio manager at AMP Capital, said: “GAM systematic alternative risk premia plays an important part in our absolute return program by providing our portfolios with diversification benefits against traditional asset classes and attractive risk-adjusted returns in a liquid and cost-efficient manner.
“The strategy acts as a complement to our existing suite of absolute return and risk-premia strategies. It also offers a solution with a higher volatility profile that meets the objectives of our portfolios.”
The strategy dates back to 2004 when Jaeger developed it with his previous firm, Alternative Beta Partners, which was acquired by GAM.
Greg Bright is publisher of Investor Strategy News (Australia)