LONDON — Fixed-income manager Rogge Global Partners PLC is turning to Europe and Asia for business growth.
At year-end 2000, 80% to 90% of the firm's roughly $7.5 billion of assets under management were from U.S. investors; now, only 45% of the $14 billion under management is from U.S. clients, said John Graham, one of four portfolio managers at the firm. About half of the total assets under management are from European and Asian clients, roughly divided equally between the two.
Rogge's growth was spurred by increased demand for higher-alpha fixed-income strategies, some of which are used in a portable-alpha context.
"We realized early on that the game was going to change," said Olaf Rogge, the founder of the company, which was founded in 1984 and among the first to offer active global fixed-income asset management to institutional investors. "Clients suddenly are looking at liability, or told to look at liability, and as a result, they no longer want index huggers, or index-plus managers. What they want is a total return manager."
About three-quarters of all new portfolios in the past year have involved either a high-alpha or portable-alpha strategy, Mr. Graham said. So far this year, 50% of the $4.5 billion in inflows has involved such strategies. All but one of the mandates have involved new clients, who generally transfer assets from either equities or more traditional bond strategies such as domestic fixed income.
"We've been able to greatly diversify our client base, and that can only be a good thing," he said. "The result is that we are able to tap into a more extensive range with which to develop our skills as portfolio managers."
Meanwhile, Rogge still runs traditional global bond portfolios. The manager runs a $1.28 billion portfolio for the $193.3 billion California Public Employees' Retirement System, Sacramento. In the five-year period ended Aug. 31, Rogge chalked up a compound annualized return of 9.31%, beating the Lehman International Fixed Income index by 24 basis points. In the 12-month period ended Aug. 31, Rogge has returned 8.25%, outperforming the benchmark's 7.11% return.
In the year ended Sept. 30, Rogge's unhedged global fixed-income portfolio returned 4.11%, beating the Citigroup World Government Bond index by 108 basis points. Over the five-year period, the portfolio returned an annualized 9.22%, beating the same benchmark by 98 basis points, according to data from Atlanta-based eVestment Alliance.