Russell taps First State for multimanager global infrastructure fund

Russell Investments hired Colonial First State Asset Management (Australia) to manage a 40% portion of Russell's multi-manager global listed infrastructure fund offerings.

A statement on Russell's website said effective Dec. 14, First State replaced Macquarie Capital Investment Management, which was terminated after Andrew Maple Brown, the lead manager on Macquarie's infrastructure strategy, left the firm in November.

A Macquarie spokesman couldn't immediately be reached for comment.

In a telephone interview, Peter Meany, the head of global listed infrastructure securities with First State Investments, called the win – at more than US$500 million across Russell's infrastructure fund offerings in the U.S., Canada and Australia – a significant one, especially for a U.S. market where interest in the $1.5 trillion global infrastructure market segment is beginning to gather momentum now.

Mr. Meany said the new mandate lifts First State's listed infrastructure strategy to more than US$ 2 billion, with much of its asset growth coming since June, 2012, when his firm's strategy reached its five-year mark with more than 3% annualized outperformance over its benchmark.

First State joins Nuveen Asset Management and Cohen & Steers Capital Management (CNS) on the Russell fund's multi-manager team, with Nuveen overseeing a 40% chunk of the portfolio and Cohen Steers overseeing 20%.

The Russell statement separately noted that, effective Dec. 14, Russell terminated Principal Global Investors as manager of a 6.5% portion of the $1.8 billion Russell Emerging Markets Fund, after lead manager Michael Reynal left the firm in November.

As previously reported, Mr. Reynal moved to RS Investments as co-head of emerging market equities. Principal appointed Mihail Dobrinov, a portfolio manager on its emerging markets team, as head of emerging markets equities.

According to Russell's statement, the 6.5% portion of the emerging markets fund Principal had overseen was reallocated to other multimanager team members. Arrowstreet Capital now manages 22%, up from 20%; Genesis Asset Managers to 15.8% from 15%; Delaware Management Co. to 13.7% from 12.5%; Harding Loevner to 13.7% from 13%; AllianceBernstein (AB) to 13.7% from 13%; UBS Global Asset Management to 13.2% from 12.5%; and Victoria 1522 Investments to 7.9% for 7.5%.

Principal spokesman Adam Lackey couldn't immediately be reached for comment.