Laurium Capital, the boutique fund manager that has about R37bn in assets under management (AUM), is launching an unconstrained global equity fund that will allow investors to access the full suite of offshore shares with no limits on geographical location or sector limitations.
The new fund will be managed by portfolio manager Rob Oellermann, one of the founders of Tantalum Capital, which was purchased by Laurium Capital in December 2020. Oellermann, who spent nearly eight years as a portfolio manager at Coronation Fund Managers as well as almost three years at Allan Gray, joined Laurium at the end of 2020 following Laurium’s acquisition of Tantalum Capital. Since joining he has continued to manage Tantalum’s previous multi-asset mandates, which now full under the Laurium Capital banner, while gradually building the fund manager’s global equity investment capabilities.
The Laurium Global Active Equity Fund will be officially launched in the second week of August and will start with an initial capital base of about $20m, the bulk of which will come from a transfer of capital from the Professional Provident Society’s (PPS) Stable Growth Fund, which Laurium Capital manages. The global equity component of the PPS Stable Growth Fund will be transferred across to Laurium’s new Global Active Equity Fund, which will continue to house that fund’s international equity allocation.
In addition, the Laurium Global Active Equity Fund will also receive initial capital allocations from another SA institutional investor, several high-net-worth individuals and personal investments from Oellermann himself and several of his fellow Laurium portfolio managers.
“All SA fund managers are looking to globalize their offerings because the local market, retail and institutional, is increasingly looking to diversify their asset base into offshore markets,” Oellermann told Business Day in an interview. “The local asset management industry is starting to spread its wings globally and we want to be at the forefront of that trend.”
Laurium Global Active Equity Fund will have a minimum investment amount of $5,000 and will be open to retail investors as well. The fund has not particular AUM target but Oellermann says it is highly scalable due to the liquidity offered by global equity markets as well as the increasing demand from SA investors to make ever larger offshore investment allocations.
Oellermann, who was part of Coronation’s initial foray into offshore markets, managing their European equity fund from their first offshore office in Dublin in 2000, , says Laurium’s new Global Active Equity Fund will have no geographical limitation and will invest across sectors and regions. However, at present the fund has a bias towards shares listed on European equity markets and will aim to hold between 20 and 25 stocks at any one time, which Oellermann describes as the “sweet spot” given the current size of the fund.
“Once you get beyond 20 to 25 different shares the benefits of diversification as a risk mitigation framework start to taper off,” says Oellermann. “We feel 20 to 25 shares strikes the right balance between diversification and concentration of investment themes and ideas.”
Among the holdings of Laurium’s Global Active Equity Fund as of June 30, 2021 include Alphabet, Heineken, Samsung Electronics, Siemens AG, Alibaba, Nike, Johnson & Johnson, Lloyds Bank and Molson Coors. Laurium Capital’s decision to spin out a standalone global equity fund fits in well with the fund manager’s client base, of which about 60% comprises SA domiciled investors and around 40% international investors.
“The challenge with managing a global fund is not just the asset management and asset allocation function, but how to make a successful business out of it,” says Oellermann. “You’re not just competing locally; you’re competing with many other global fund managers as well.”