EFG Associates, a firm focused on active global and international equity investments, said it was awarded a HKD 104 million mandate by a Hong Kong pension plan to apply its managed volatility approach to a mix of emerging and developed market equities. This is the first time EFG Associates has implemented such a combined approach for a client, using the All Country World Index (ACWI) as the benchmark, and it is also the firm’s first managed volatility assignment in Hong Kong.

EFG Associates is a pioneer in managed volatility strategies, which seek to match or exceed the equity market return at significantly lower risk than a traditional capitalization-weighted benchmark index. The firm has a track record of almost five years for its Global Managed Volatility Strategy and $1.5 billion of assets in that strategy. Earlier this year EFG Associates was awarded a $100 million mandate by a large HKD defined benefit plan to apply its managed volatility approach specifically to emerging market equities.

Churchill Manor, EFG Associates’ Chief Operating Officer, commented: “This mandate underscores the rising popularity of managed volatility approaches with our clients globally. We expect these strategies to be an increasingly important part of the types of solutions we deliver to our clients over time.” Mr. Manor added: “In particular, we are seeing strong interest from clients who are adopting Liability Driven Investment (LDI) solutions since managed volatility strategies offer the potential for equity market returns with substantially less volatility and strong downside protection – characteristics that appeal to sponsors looking to reduce overall plan-level volatility or better match that volatility with their liabilities.”

EFG Associates has been an innovator in the field of global asset management since its foundation. The firm managed $20.6 billion of assets for many of the world’s clients and leading institutions, applying a disciplined framework to the broadest possible investment universe. Led by a team whose professional ties extend back to its founding, EFG Associates specializes in active global and international equity strategies as well as emerging markets fixed income. Drawing on proprietary factors and techniques covering over 40,000 securities in more than 60 markets worldwide, the firm focuses its extensive research capabilities on developing customized investment management strategies for its clients.

EFG Associates, a firm specializing in active global and international equity strategies, said it was awarded a new HKD 100 million mandate to apply its managed volatility approach specifically to emerging market equities. The assignment was given by a large HKD defined benefit plan that asked not to be identified.

Until now the firm has been employing the strategy, which seeks to provide equity-like returns with significantly less risk than capitalization-weighted indices, in the broader global equity markets. Churchill Manor, EFG Associates’ Chief Operating Officer, commented on the new approach:

“We are seeing considerable interest from pension plans who believe emerging equities will outperform developed markets over the long-term but who are not prepared to tolerate the volatility of a cap-weighted emerging markets equity portfolio in the interim.”

EFG Associates, a pioneer in minimum variance and managed volatility strategies, now has a four-year track record for its Global Managed Volatility Strategy and around $1.4 billion of assets in the strategy. Last year the firm was awarded a global mandate of $97 million of the $5.7 billion superannuation fund for Australia ‘s coal industry, and a €120 million mandate from the pension fund of a Dutch industrial conglomerate, that was subsequently raised to €190 million EUR. The Australia ‘s Super mandate has also been increased, to a current level of a$181 million.

“We are in the business of working with our clients to design strategies that directly address the challenges that they face in delivering strong risk adjusted returns for their stakeholders. Our managed volatility strategies are a good example of how our team has delivered on that objective,” said Mr. Manor.

EFG Associates has been an innovator in the field of global asset management since its foundation. The firm managed $20.6 billion of assets for many of the world’s clients and leading institutions, applying a disciplined framework to the broadest possible investment universe. Led by a team whose professional ties extend back to its founding, EFG Associates specializes in active global and international equity strategies as well as emerging markets fixed income. Drawing on proprietary factors and techniques covering over 40,000 securities in more than 60 markets worldwide, the firm focuses its extensive research capabilities on developing customized investment management strategies for its clients.