Continuing a late 2021 blitz of releases, Implemented Investment Solutions (IIS) has added Australian alternative credit manager, Coolabah Capital, to its growing list of fund-host clients.
Coolabah represents the ninth IIS scheme launch this year and the fifth since September in a run that has included the Vault Bitcoin Fund, the Nicholas Bagnall-backed Te Ahumairangi Global Equity Fund and the Squirrel PIE.
Under the IIS umbrella, the Australia-based fixed interest specialist will offer two funds – the Short Term Income, and Long-Short Credit – as portfolio investment entities (PIE) to NZ investors.
Operating in the Australian cash and fixed income markets, the Short Term Income PIE aims for after-fee annual returns of between 1.5-3 per cent above NZ interbank overnight rates.
The Coolabah Long-Short fund “provides exposure to an actively managed, absolute return fixed-income strategy focused on exploiting long and short mispricings in global credit markets”, the just-released product disclosure statement says.
Founded in 2011 by Darren Harvey and well-known Australian Financial Review contributor, Christopher Joye, Coolabah targets credit market outperformance by identifying mis-priced global fixed income securities through a mix of human and quantitative analysis.
According to the manager’s website, Coolabah focuses on generating “alpha” in “liquid, high-grade credit in contrast to traditional fixed-income strategies that drive returns through adding more interest rate duration risk, credit default risk, and/or illiquidity risk (or ‘beta’)”.
Part of the ASX-listed multi-affiliate group, Pinnacle, Coolabah reported about A$7 billion under management sourced from retail and institutional clients as at July this year.
Joye told the annual Pinnacle Investment Summit this August that Coolabah is probably the most active bond trader in the Australian market.
Since inception, Coolabah has traded more than 22,800 securities (with an average A+ credit rating) collectively valued at over A$25.7 billion, generating positive returns in almost all cases while claiming capital gains close to 90 per cent of the time, he said.
“Most [credit] investors are not looking for mispricing risks,” Joye said at the time.
Hedged to the NZ dollar, the Coolabah Long-Short and Short Term Income PIEs feature respective annual management fees of 1.84 per cent and 0.94 per cent.
In a repeat of recent IIS launches, Adminis provides investment administration and custody for the Coolabah funds with Public Trust as licensed supervisor.
Coolabah marks the sixteenth fund-host client for IIS. In September this year, the Hunter global fixed income fund left the IIS stable after Harbour Asset Management bought the $1 billion manager.
Anthony Edmonds, IIS founder, said the group was seeing strong demand from both Australia-based and local investment managers for fund-hosting services.
“It can take a long time to complete the process but we have a few more managers in the pipeline,” Edmonds said. “NZ investors are increasingly looking for quality investment options packaged as tax-effective PIEs. And the growth of the NZ market is also attracting interest from more offshore managers.”
Coolabah is named after a native Australian eucalypt tree known for its durability, salt-tolerance and longevity.
The tree famously cameos in the Australian quasi national anthem, ‘Waltzing Matilda’, serving in a sun-shade role for “a jolly swagman camped by a billabong”.