Prudential Financial’s domestic annuities business hired AlphaSimplex Group and First Quadrant as subadvisers for the Advanced Series Trust Academic Strategies Asset Allocation portfolio Prudential launched in July for variable annuity clients, a Prudential spokeswoman confirmed.
Effective Nov. 24, AlphaSimplex will manage 1% of the portfolio in a hedge fund beta-replication strategy, and First Quadrant will manage 1% to 1.5% in a global macro strategy, said the spokeswoman. She declined to provide the overall portfolio’s size.
Peter Martin, president of AlphaSimplex parent Natixis Global Asset Management’s institutional services group, said the Prudential hire is the first subadvisory mandate for the hedge fund beta replication strategy since Natixis purchased AlphaSimplex, headed by Massachusetts Institute of Technology professor Andrew W. Lo, just over a year ago.
According to a Prudential filing, AlphaSimplex will earn a subadvisory fee of 80 basis points on the first $500 million of assets it manages, and 65 basis points for net assets exceeding $500 million. First Quadrant will earn a sub-advisory fee of 90 basis points of average daily net assets regardless of size of the portfolio.
