Andrew Swan has lured his former Blackrock colleagues Alethea Leung and Anand Agarwal to Man GLG as he prepares to launch his first fund since jumping ship.
Swan (pictured) ran $25bn in Asian and emerging market equity strategies at Blackrock but exited in April, departing Hong Kong for his native Australia to join Man GLG, which runs $26.6bn across all strategies. Now his new employer has revealed he will launch a high-conviction Asian ex-Japan equities fund in October. It will be an Oeic for UK investors.
The fund will hold 35 to 45 positions across all market caps, with a preference for mid-cap companies. The team will invest in companies it expects will see positive revisions to their earnings over a 12-18 month period. Macro views will be overlaid so that the portfolio is overweight on factors the team views as favourable, such as geographies, sectors and styles.
AJ Bell head of active portfolios Ryan Hughes said the approach sounds very similar to Swan’s strategies at Blackrock.
Man GLG said fees on the fund are to be confirmed. “They have no reputation for pricing things competitively, so we will watch with interest on this one,” Hughes said.
Blackrock loses impressive manager in Alethea Leung
The press release announcing the launch also revealed Leung and Agarwal had defected from Blackrock to join him as analysts on the fund. Man GLG has also recruited Sydney-based Andrew Hill as a third analyst from Australian superannuation fund Unisuper where he covered unlisted investments as well as global financials and healthcare including portfolio management responsibility for European banks.
Hughes said clarity about the shape of the team was welcome. “That immediately puts to bed any questions about whether they’ve got enough resource. He would have come from a huge team at Blackrock with lots and lots of capability. This is smaller but I don’t think anyone would be looking at an experienced team of four and saying that was under resourced.”
When Morningstar downgraded Swan’s former $1.9bn Blackrock GF Asian Dragon fund it said replacement lead manager Stephen Andrews had been shown up by co-manager Leung.
Morningstar said it was not able to comment on whether Leung’s departure would result in further ratings action on the fund, which had already been downgraded from bronze to neutral.
Agarwal was a director in the fundamental active Asian and emerging markets team at Blackrock, focused on India market research. Portfolio Adviser is awaiting a response from Blackrock about who will replace the pair.
Fidelity and Schroders set to be main competitors for Swan in the UK
Fidelity and Schroders were the two Asian equity teams Hughes named as potential competitors to Man GLG’s new product in the UK.
While Swan managed $25bn for Blackrock, Hughes said a lot of that would have been with investors outside the UK, which he said was likely a function of Blackrock’s global distribution. “I would say he was reasonably well known here but not spectacularly well known. He wasn’t in the same camp as Matthew Dobbs at Schroders.”
He thought Man GLG may have chosen to launch Swan’s first fund as an Oeic because it has a strong following in the UK, particularly among discretionary managers. “It’s a natural hunting ground for them to try and raise capital for a new fund.”
The retirement of Dobbs could be an opportune time for the fund to raise assets, he said.
Swan, who is now head of Asia ex-Japan equities at Man GLG, said Asian equities have prospered due to structural improvements in the last two decades, coupled with high levels of GDP growth. “Despite this, they remain relatively under-researched and less efficient than developed markets, so we believe they offer ample opportunities for investors over the economic cycle.”
Man GLG chief executive Teun Johnston described Asia as a market where fundamentals dictate returns, and one with high dispersion at the stock level.
