Australian fixed income manager, Coolabah Capital, has landed a US$1.1 billion global mandate with Russell Investments.
In a statement, Russell said it had appointed Coolabah as a new underlying manager for its flagship Global Bond Fund as part of “an ongoing effort to ensure the Fund is exposed to the best ideas from our portfolio management and manager research teams”.
“We also adjusted the weightings to the existing managers to achieve the desired exposures,” the release says. “These changes were implemented in the final quarter of 2024.”
Coolabah will manage 15 per cent of the fund with RBC (BlueBay) and Russell in-house strategies cut slightly to accommodate the new manager.
“We believe that Coolabah’s global credit strategy is a compelling addition due to its record of effective security selection, advanced quantitative tools and consistent alpha generation,” the statement says.
The Russell win is a big coup for Coolabah, which carved out a reputation as a high-stakes, fast-trading player in the Australian bond market initially.
According to the group’s website, Coolabah specialises in a highly active alpha-seeking investment style via “the generation of credit and sovereign mispricing alpha rather than driving returns through different risk levers, or betas, such as interest rate duration risk, credit risk, and/or illiquidity risk”.
Founded by Chris Joye in 2011, the Sydney-headquartered Coolabah reported about A$12 billion under management prior to securing the Russell money.
Part-owned by the ASX-listed multi-affiliate group, Pinnacle Investment Management, the firm runs a number of institutional mandates as well as wholesale and retail funds. After launching four FundRock-hosted portfolio investment entities in NZ starting in 2021, Coolabah has accrued more than $200 million under management plus a further $50 million or so into Australian unit trust versions on this side of the Tasman.
Last year the manager also acquired sponsorship rights for the Super Rugby Pacific team, Canterbury Crusaders.
In September Russell revealed plans to remove Western Asset Management as an underlying manager on several of its global fixed income strategies.
Western, a manager in the Franklin Templeton stable, has seen about US$55 billion of outflows since news of an investigation into alleged trading irregularities involving co chief investment officer, Ken Leech, emerged this July.
Leech stepped down in August as both the Department of Justice and the Securities Exchange Commission (SEC) continued investigations, laying formal criminal and civil charges late in November. Western opened an internal probe into the allegations in October 2023.
Russell appointed Western in 2019 to share management duties in its now $135 million NZ fixed interest fund with Harbour Asset Management.