Get more! Sign up for PLANSPONSOR newsletters.
Alger Launches Fund With ESG Mandate
Fred Alger Management LLC (Alger), a growth equity investment manager, has announced the launch of the Alger Weatherbie Enduring Growth Fund, a high-conviction, focused portfolio of approximately 25 growth equities.
The portfolio management team incorporates an environmental, social and governance (ESG) scoring methodology into the investment process and looks to invest in companies that consider their ESG impact while delivering consistent results for shareholders. The portfolio is managed by senior portfolio managers George Dai and Josh Bennett, who each have more than 20 years of investment experience.
The entire investment team at Weatherbie Capital, LLC, the sub-adviser to the fund, has received the Chartered Financial Analyst (CFA) Institute Certificate in ESG Investing, which recognizes that an investment professional has the knowledge and skills to analyze and integrate ESG factors into the investment process.
“As investors are increasingly considering ESG in their portfolios, we recognized an opportunity to incorporate these important factors with our long-standing team-based approach toward creating a high-conviction portfolio of what we believe are our best ideas across dynamic areas of the market,” Bennett says.
Dai, the chief investment officer (CIO) of Weatherbie Capital, and Bennet, Weatherbie Capital’s chief operating officer (COO), have a long history of working together as analysts and portfolio managers. Along with Edward Minn, they also manage the Weatherbie Specialized Growth Strategy, a more than $4 billion portfolio of primarily small and mid-cap growth equities with a track record dating back to 1996.
VERMEG Adds New Margin Analytics Capabilities With Acquisition
VERMEG, a specialized software house providing banking, capital markets, insurance and digital solutions, and Cassini Systems, a provider of pre- and post-trade margin and collateral analytics for derivatives markets, have partnered to assist financial institutions in complying with initial margin (IM) requirements for uncleared over-the-counter (OTC) derivatives, exchange-traded derivatives (futures and options) and prime brokerage.
VERMEG has integrated Cassini’s margin analytics platform into its COLLINE collateral suite, giving its clients a new tool for achieving cost efficiencies and helping to meet requirements of the uncleared margin rules (UMR).
As margin requirements have continued to increase across different business lines such as OTC derivatives, repo and securities lending, firms are under greater pressure to capture and attribute how margin impacts the front and back office alike. The firms say the VERMEG-Cassini partnership provides clients with a comprehensive workflow for managing intraday and end-of-day collateral requirements centrally within COLLINE’s standardized workflow inclusive of collateral optimization. The integration includes Cassini’s Standard Initial Margin Model (SIMM) and standard approach calculation service at pre- and post-trade, as well as margin methodologies of exchanges, central counterparties (CCPs) and prime brokers providing firms full transparency across all asset classes.
COLLINE is VERMEG’s integrated platform for cross-product collateral management supporting cleared and uncleared derivatives in all asset classes.
Cassini’s platform provides a full front-to-back solution covering margin, collateral and cost analytics for all classes of cleared and uncleared OTC derivatives, as well as futures and options. It integrates into post-trade collateral management, Treasury and risk systems—enabling clients to bring post-trade cost analytics into the pre-trade process. Many of the world’s leading asset management platforms rely on Cassini to facilitate leveraging analytics with little implementation overhead.
Security Benefit Expands EliteDesigns Variable Annuity Series
Security Benefit has announced the expansion of its EliteDesigns and EliteDesigns II variable annuity fund lineups with three products from two emerging fund managers.
The following subaccounts were added to the EliteDesigns and EliteDesigns II variable annuity products:
Donoghue Forlines Momentum VIT fund seeks total return from capital appreciation and income by emphasizing high momentum stocks across sectors. The fund tactically manages risk in attempting to mitigate drawdowns during times of market stress. It can move up to 100% of assets into short-term Treasurys when intermediate-term trends suggest a defensive posture.
Donoghue Forlines Dividend VIT fund seeks total return from capital appreciation and income by emphasizing high-yield, deep value stocks across sectors. The fund tactically manages risk in attempting to mitigate drawdowns during times of market stress and could be used in a portfolio to hedge against rising rates. It can move up to 100% of assets into short-term Treasurys when intermediate-term trends suggest a defensive posture.
Little Harbor Advisors (LHA) Tactical Beta Variable Series fund seeks to limit U.S. equity market drawdowns, while providing upside participation from exposure to the S&P 500, ranging from 80% to 120% of the index, with a dynamic risk overlay. The strategy views the market through a volatility lens and seeks high correlation to index returns in rising equity markets and low or negative correlation to returns in falling markets.
“Making a greater range of strategies available, across equities and alternatives, means advisers have the flexibility to design portfolios that more precisely meet client needs based on their risk profile,” says Mike Reidy, head of registered investment adviser (RIA) distribution for security benefit. “We have made a concerted effort to provide financial professionals with greater choice for accumulation, and tax-efficient withdrawal strategies for decumulation, across our annuity products.”
The Donoghue Forlines Funds are complementary large-cap growth and large-cap value products that are defensive in nature. The LHA Tactical Beta Variable Series Fund also has a defensive theme and is designed to work for any point of view of the market is at any given time.
Clients in nonqualified accounts can benefit over time in the accumulation phase from tax-deferred growth.
AllianzIM Debuts Second Buffered Outcome ETF and New Upside Caps for January Series
Allianz Investment Management LLC, a wholly owned subsidiary of Allianz Life Insurance Co. of North America, has launched a new buffered outcome exchange- traded fund (ETF) with a six-month outcome period: the AllianzIM U.S. Large Cap 6 Month Buffer10 Jan/Jul ETF (NYSE: SIXJ).
Using FLEX Options, AllianzIM’s new ETF seeks to match the returns of the S&P 500 Price Return Index up to a stated cap, while providing downside risk mitigation through a buffer against the first 10% of S&P 500 Price Return Index losses for SIXJ over a six-month outcome period. The initial six-month outcome period goes from January 1 through June 30, with subsequent six-month outcome period from July 1 through December 31 or January 1 to June 30.
“Investors are facing a significant level of uncertainty to start the year as a result of COVID-19 variants, inflation and other risks,” says Johan Grahn, vice president and head of ETFs at AllianzIM. “Amid record-low interest rates and volatile equity markets, SIXJ offers investors another option to help mitigate risk in their portfolios.”
With an expense ratio of 0.74%, Allianz says SIXJ is one of the lowest-cost buffered outcome ETFs on the market. The ETF may serve as an alternative to short-term, low-yielding investment options and provide tactical applications within an investment portfolio.
AllianzIM debuted its six-month outcome period buffered outcome ETFs in October with the launch of the AllianzIM U.S. Large Cap 6 Month Buffer10 Apr/Oct ETF (NYSE: SIXO). SIXJ and SIXO are the latest evolution in AllianzIM’s suite of buffered outcome ETFs. Between the two ETFs, investors can now benefit from defined outcome periods with an opportunity to invest in such a way that caps and buffers reset every three months.
Additionally, the AllianzIM U.S. Large Cap Buffer10 Jan ETF (NYSE: AZAJ) and the AllianzIM U.S. Large Cap Buffer20 Jan ETF (NYSE: AZBJ) today begin a new one-year outcome period with new upside caps.
T. Rowe Price Acquisition Expands Alternative Investment Market Footprint
T. Rowe Price Group Inc. has completed its acquisition of alternative credit manager Oak Hill Advisors (OHA).
Under the terms of the transaction, T. Rowe Price acquired 100% of the equity of OHA and certain other entities that have common ownership for a purchase price of up to approximately $4.2 billion, with $3.3 billion payable at closing, approximately 74% in cash and 26% in T. Rowe Price common stock, and up to an additional $900 million in cash upon the achievement of certain business milestones beginning in 2025. The purchase price includes the retirement of OHA debt outstanding at closing.
OHA will become T. Rowe Price’s private markets platform, as T. Rowe Price seeks to accelerate its expansion into alternative investment markets while also complementing its existing global platform and ongoing strategic investments in its core investments and distribution capabilities.
OHA had $53 billion of capital under management as of July 31 across its private, distressed, special situations, liquid, structured credit, and real asset strategies, and more than 300 employees in its global offices. OHA has raised $19.4 billion of capital since January 2020.
Given the limited overlap in investment strategies and client bases, the two firms expect to leverage complementary distribution opportunities. In addition, they plan to codevelop new products and strategies for T. Rowe Price’s wealth and retail channels, including its broker/dealer (B/D), bank, registered investment adviser (RIA) and platform businesses. T. Rowe Price has agreed to commit $500 million for co-investment and seed capital alongside OHA management and investors.
While seeking to leverage the combined strengths of the two businesses, OHA will operate as a standalone business within T. Rowe Price—meaning it will have autonomy over its investment process and maintain its team, culture and investment approach.
Glenn August, OHA founder and CEO will continue in his current role and will join T. Rowe Price’s board of directors and management committee. Alongside August, all members of OHA’s partner management team will sign long-term agreements and continue to lead the business in their current roles.