Now is the time for alternatives, says Russell Investments
In a drive to bolster its alternative-investment capabilities, Russell Investments has hired Nicole Connolly as head of alternatives advice in Australia and is looking for a director of alternatives in Japan, plus research analysts, consultants and strategists.
US-based Russell is in the middle of a major initiative to re-estimate its model portfolios, says Greg Liddell, Sydney-based director for consulting and advisory services for Asia-Pacific. "Nicole will be part of that team, in terms of making recommendations on allocations to alternatives and structuring that programme," he adds.
"If you look at private equity and hedge funds particularly, we had concerns that, globally, the sector was getting overheated," says Liddell. "We feel the financial crisis has provided opportunities to get [into alternative investments] at more favourable valuations."
Russell's alternatives push comes as institutions in Asia -- such as Korean Investment Corporation and Korea Investment Trust Company -- are acknowledging the benefits of such investments, and consultants like Cambridge Associates are highlighting the need for increased expertise in this area.
Starting on April 6, Connolly will direct Russell's alternatives strategy for consulting clients. She joins from Telstra Super in Melbourne, where her most recent role was portfolio manager for alternative assets. She has 10 years' experience in the alternative assets space and extensive knowledge of the superannuation and investment industry, having also worked at Australian firm AMP Capital Investors.
Connolly will remain in Melbourne and report to both Liddell and Victor Leverett, managing director of global alternative investments, based in Russell's headquarters in Pacoma, Washington.
The firm previously had an Australia-based director of alternative assets and strategies, Andrew Goddard. He left in late 2007 and has set up Andrew Goddard Consulting.
The research analysts' locations are yet to be determined. But with regard to a couple of the senior roles, Liddell says the company will -- for the right person -- base the position where that person is, whether in Australia, Hong Kong or Singapore.
The plan is to appoint more than 25 specialists globally across Australia, Asia, Japan, Europe and the Americas.
In the US, Russell has made several internal appointments to alternatives-focused roles, including Paul Kreiselmeier and Mark Paris as senior research analysts, Leola Ross as senior investment strategist and Lee Kayser as research analyst.
Liddell declined to give any more detail, apart from to say that Russell tends to hire staff with asset-management industry experience rather than consulting experience.
The firm is expanding its manager research and consulting advisory services globally in an effort to bolster capabilities in less traditional strategies, such as active commodities, private investments and higher-alpha strategies. Leverett says: "Expertise in less traditional strategies is becoming increasingly important as investors consider alternative assets in the wake of the global financial crisis."
Asked about post-crisis concerns over the liquidity of some alternative instruments, Liddell says: "We have looked at liquidity risk and factored it into portfolio designs for a long time, well prior to the GFC [global financial crisis]. This is not an issue we have just woken up to. We've been running scenario tests around liquidity as part of portfolio modelling for years."