New York-based investment manager Cullen Funds is looking to deepen its relationship with Latin American intermediaries by partnering up with third-party distributor Becon Investment Management, Citywire Americas can reveal.
The US group has accumulated $1 billion in Ucits assets since it initially launched its Ucits platform in 2010 and this partnership marks a new direction for their Latin American business.
Until now the bulk of their Latin American assets came from recommendations from global private banks, like Julius Baer, who added their Ucits funds to their buy-lists, generating business for them in offshore hubs like Montevideo, Miami and Houston.
The partnership also marks an important step for Becon Investment as it is the group's first since being set up by former MFS trio Jose Noguerol, Fredrick Bates and Florencio Mas in late 2016.
Of the Ucits funds Cullen has available, Becon will market three Ireland-domiciled strategies that focus on low valuation, conservative, large-cap stocks that pay dividends and equity income:
- Cullen North American High Dividend: a US large cap equity strategy managed by Jim Cullen and Jennifer Chang
- Cullen US Enhanced Equity Income: a US large-cap equity strategy where 25-40% of the holdings are ‘covered calls’. The fund is managed by Jim Cullen, Jennifer Chang, Timothy Cordle and Mike Kelly
- Cullen Emerging Markets High Dividend: this portfolio consists of high quality, high dividend paying emerging market equities and is managed by Jim Cullen and Rahul Sharma
Jeff Cullen (pictured above), managing director of Cullen Funds, who leads distribution efforts for Cullen’s Ucits business, said the firm’s strategy is to reach private banks and wealth firms before entering the institutional market.
‘Our bread and butter has been getting recommended from a research list and having a person who is explaining our story and supporting it locally,’ said Cullen.
‘That’s worked well for us in the United States and other countries and we think it will work well here [in Latin America] as well’.
Becon is wasting no time in promoting the funds and will be hosting two events in March for up to 150 advisors and gatekeepers in Montevideo, Uruguay and Buenos Aires, Argentina. Following that they will be looking to sign on firms in Chile and Colombia.
‘If you think about asset managers that have penetrated the market in Latin America their success has been mainly in fixed income products,’ said Noguerol. ‘Why fixed income? It’s because of the dividend. Where is there space to grow? It’s in those equities where you can add a dividend. It’s a perfect fit.’
His partner Bates added that the enhanced strategy will specifically look to aid brokers who have tried to implement covered calls themselves.
‘We’ve had over the years lots of brokers in some of the big wirehouses down in Latin America actually trying to do this business themselves. They were writing covered calls on equities and there was never a product to really offer them, so it’s fantastic [Cullen Funds] have a dedicated strategy that’s quite different and sophisticated,' he added.
The countries Becon will be covering for Cullen Funds include Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Panama, Paraguay, Peru, Uruguay and Venezuela.