American Century Investments launched a new investment unit, Avantis Investors, led by former senior investment executives from Dimensional Fund Advisors.
Los Angeles-based Avantis Investors will operate under its own name, led by Eduardo Repetto, chief investment officer, and Patrick Keating, chief operating officer.
Messrs. Repetto and Keating both were long-tenured Dimensional executives who left the firm in 2017. Mr. Repetto was co-CEO and Mr. Keating was chief operating officer.
Avantis Investors will offer quantitatively managed equity and fixed-income strategies, which Mr. Repetto characterized in an interview as "systemized active management," similar to DFA's investment approach.
Mr. Repetto stressed that the Avantis strategies "fit seamlessly into investors' existing asset allocations" and are characterized by low turnover, high diversification, low cost and index-topping returns. He declined to provide specific fee information but said costs will be "at the low end of active management, close to index fund fees."
Avantis will offer its investment strategies for retail investors in mutual fund and ETF formats through financial intermediaries. The firm has registered five equity mutual funds and ETFs with the Securities and Exchange Commission and expects to launch the funds in September, said Philip P. McInnis, vice president and director of investments for Avantis, in an interview.
Separate accounts are available now for institutional investors, he said.
Mr. McInnis was vice president and head of portfolio solutions at Dimensional and joined Avantis on June 10.
Mr. McInnis said other Dimensional employees have been hired to work at Avantis, but they have not joined the firm yet. The new additions to the firm will be announced later, he said.
“Given the growing popularity of factor investing, it’s not surprising to see another entrant to the field,” said Darcy Keller, head of corporate communications at Dimensional, in an email.
“Dimensional has been a leader in systematic, factor investing for nearly 40 years. Guided by an unwavering investment philosophy, we have a long track record of combining rigorous academic research with dynamic implementation to deliver greater returns for our clients,” Ms. Keller added.
When asked about a replacement for Mr. McInnis and other Dimensional employees who have or will move to Avantis, Ms. Keller said: “While we don’t comment on individual personnel moves, with 1,400-plus employees spread across 13 global offices, we are fortunate to have a deep and talented bench. Our clients benefit from the team structure we’ve built in all areas of the firm.”
"Eduardo and Pat bring new skills and capabilities that will benefit American Century clients around the world," said Jonathan Thomas, American Century's president and CEO, in a news release.
Mr. Thomas added: "They are proven leaders who have delivered incredible growth and success by creating, honing and managing strategies informed by academic research and financial theories."
American Century manages $168 billion, predominantly in actively managed investment strategies.
