Steady client inflows added over $1 billion in new money to the Compass Group’s Ucits platform in 2017, more than doubling total assets by year-end.
Compass started 2017 with about $1 billion under management in its Ucits funds and closed with $2.3 billion, US country head Jorge Aguiló told Citywire Americas. The growth came on the back of new investments from clients around the world, including in Latin America, Europe, the US, the Middle East and Asia.
The expansion shows a steady trajectory over the past two years, a period in which Compass boosted assets from $590 million to $2.8 billion as of April 30. One fund alone has gained over $500 million in assets since December 2017.
Aguiló said 90% of the overall growth since 2016 was due to net new money and 10% to performance.
The group has broken into the global stage in partnership with Investec, which distributes the Latin American specialist’s Luxembourg funds in the US offshore market as well as in Europe, the Middle East and Asia.
Compass entered the Ucits space with the South African manager back in 2010 with two funds, and the platform has since grown to four vehicles.
In recent years, Compass has been able to spot attractive investment opportunities as Latin America emerges from the economic slump fueled by the commodities collapse, he said. This recovery has, in turn, sparked foreign investors’ interest in the region, creating an opening for local experts like Compass.
‘We’re hearing more and more that clients have decided to grant their emerging market strategic allocation to local specialists,’ he said. ‘Other clients use us for satellite allocations complementing their global emerging market positions or ETFs to generate extra alpha.’
As of May, the platform included the following Investec funds in which Compass is the sub-advisor:
- The $895 million Investec GSF Latin American Corporate Debt, launched in 2010. Managed by Tomas Venezian and Matthew Claeson.
- The $110.9 million Investec GSF LatAm Investment Grade Corporate Debt, run by Venezian and Claeson. Launched in 2017.
- The $704.4 million Investec GSF Latin American Equity, launched in 2010. Managed by Rafael Mendoza Grendi.
- The $1.1 billion Investec GSF Latin American Smaller Companies, run by Carina Güerisoli and Ignacio Goñi. Launched in 2012.
Aguiló said he’s seen the most interest for the two equities strategies, primarily from institutional clients in Latin America, Europe, the US and the Middle East, given that the current cycle is more favorable for stocks.
Grendi’s fund grew from $198 million in December to $704 million on April 30, and Güerisoli’s and Goñi’s from $889 million to almost $1.1 billion, according to data Aguiló shared.
‘These portfolios are differentiated and high conviction, very different from the indices or ETFs that look for opportunities in companies all across the capitalization spectrum,’ he said. ‘We capture much more than exposure to commodity-related firms through secular domestic themes.’
Aguiló said the firm offers US clients segregated mandates. It doesn’t have locally-domiciled 40 Act funds at the moment, but ‘it’s constantly evaluating’ the possibility, he added.
In addition to its asset management business, Compass also distributes funds from global managers such as Investec to clients in Latin America.
The firm oversees a total of $37 billion in assets under management, custody, administration, advisory and distribution.