Managers of low- or managed-volatility equity strategies are reporting a sharp increase in RFPs and finals competitions this year, as the approach continues to fight its way toward the investment management mainstream.
Martingale Asset Management LP will compete in five finals presentations over the next six weeks for its U.S. large-cap managed-volatility strategy, noted William E. Jacques, executive vice president and chief investment officer of the Boston-based quantitative manager.
It's “the first time in our firm's history that we've been in more than two” finals at any one time, he added.
Ross Dowd, senior vice president and head of global marketing with Acadian Asset Management LLC, Boston, reported a similar trend for his firm's global and emerging markets equity managed-volatility strategies. Acadian won a $300 million allocation from an Australian institutional investor last week, and will compete in three finals over the coming weeks for combined assets of $750 million, he said. He declined to name the Australian client.
Analytic Investors LLC, Los Angeles, is competing in three finals with combined assets of $400 million, said Harindra de Silva, president of the quant firm.
That momentum is coming roughly a year or two after a number of investment consultants — including Mercer, Wilshire Associates, Russell Investments and Segal Rogerscasey — began recommending that clients consider the strategy.
Timothy Barron, CIO of Segal Rogerscasey, New York, said there has been “a significant pick-up in searches (for managers of the strategy) ... and we would expect to see more of this.”
Acadian's Mr. Dowd said the global pipeline of likely managed-volatility searches for the coming year stands around $9 billion, but could swell further.
In years past, Europe, Japan, Australia and Canada would have dominated that activity, but this year, U.S. investors are likely to account for more than half of the total, he said.