It is the inaugural rating for the Fund, which provides access to Aikya’s flagship emerging markets strategy.

Aikya portfolio manager, Ashish Swarup, said the rating is a testament to the team’s experience and differentiated approach to investing in emerging markets.

“Our investment philosophy is focused on stewardship and people, which is differentiated versus typical emerging markets managers. It’s a philosophy our team has developed over decades of investing in emerging markets, and we are very pleased Zenith has acknowledged its merits,” said Mr Swarup.

Pinnacle Investment Management’s Director, Distribution, Chris Brookman also commented: “Gaining a highly recommended rating upon the initiation of coverage from a respected research house is a rare outcome, so this is really a great endorsement of the Aikya team and their unique approach to managing emerging markets equities.”

“We thank Zenith for initiating coverage on this Fund and, together with Aikya, we look forward to continuing to provide more Australian investors access to this asset class and the strong long term investment track record of the Aikya Team.”

Aikya is a specialist emerging markets equities manager, based in London. The core investment team partnered with Pinnacle to form Aikya in 2020, after resigning from Stewart Investors.

Aikya’s flagship emerging markets strategy has been available to European investors via a UCITS Fund since 2020. The Australian Unit Trust was launched earlier this year. The strategy has delivered 3.23% per annum since inception (5 March, 2020) vs the MSCI Emerging Market Index -2.98% (in AUD terms, to the end of September 2022).

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The A$170m mandate to the Aikya Global Emerging Markets Strategy is the first secured by the UK-based investment boutique after being established by a team of highly experienced Emerging Markets investors in March 2020.

Aikya is an affiliate of Pinnacle Investment Management Group Limited (ASX:PNI) (Pinnacle). Pinnacle is a minority equity partner and provides distribution services and other non-investment support functions.

Aikya Portfolio Manager, Ashish Swarup, said the appointment demonstrates a high degree of confidence in Aikya’s well-established Emerging Markets investment processes.

“We are pleased to be partnering with a forward-thinking Australian superannuation fund, with a sound reputation for investment acumen and responsible investing,” said Mr Swarup.

“We follow a disciplined investment process that focuses on identifying businesses with the highest quality of stewardship, which requires deep understanding of the various jurisdictions where we invest. The team has many years’ experience investing in emerging markets, having worked together through previous market cycles.”

Pinnacle Investment Management Director, Institutional Distribution, Wes Campbell, also commented on the appointment.

“Aikya’s experienced investment team is a global leader when it comes to Emerging Markets and after just a few months since coming together as Pinnacle’s sixteenth investment boutique we are delighted to secure this major mandate,” said Mr Campbell.

“Importantly, legalsuper members can rest assured Aikya’s intensive focus on stewardship and ESG factors means funds will not flow into companies with negative social utility such as coal, gambling, tobacco and arms manufacturers.”

Legalsuper CIO, Norman Zhang, said: “legalsuper’s scale and agility allow us to pursue truly innovative investment opportunities and Aikya aligns well with this strategy. We are confident in their capability to protect capital and deliver healthy long term returns from socially responsible businesses in this asset class.”

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Five former senior members from Stewart Investors are among the founding members of new London-based investment boutique, Aikya Investment Management (Aikya).

The investment boutique, specialising in emerging markets, will be based in London and becomes the first European-based affiliate of Pinnacle Investment Management Group Limited (ASX: PNI) (Pinnacle).

The former Stewart Investors team members include Ashish Swarup, Tom Allen, Alan Nesbit, Michael Summers and Alex Khosla.

Mr. Swarup was the Lead Portfolio Manager on several Emerging Markets and Asia Pacific strategies offered by Stewart Investors. Mr. Allen was co-Manager with Mr. Swarup on a number of these strategies.

Other founding members of the firm are former Fidelity Institutional Asset Management (FIAM) Emerging Markets All Cap Strategy Portfolio Manager, Rahul Desai and former Income Partners Asset Management Senior Analyst, Trevor Fung.

Mr Desai was Assistant Portfolio Manager to Mr Swarup on the FIAM Emerging Markets All Cap Strategy for four years, before taking over as Lead Portfolio Manager in 2014. Combined, the new Aikya team has significant experience investing in emerging markets, through multiple market cycles.

The majority of the Aikya team have all worked closely together on Emerging Markets strategies at leading investment firms, allowing us to forge strong relationships and gain an intricate understanding of the compelling investment opportunities within Emerging Markets across the globe,” said Aikya Portfolio Manager, Ashish Swarup.

“We believe our combined experience and knowledge can now better serve investors in an independent, investment-led boutique, majority owned by the investment team,” added Mr Swarup.

Pinnacle is Aikya’s minority equity partner and will provide non-investment support functions including a distribution force of 30 people located in London, New York, Sydney, Melbourne and Auckland and industrial grade middle office and infrastructure services.

“Since opening our London office in 2018 we have made great in-roads into the European marketplace and we now look forward to supporting the growth of our first European-based affiliate investment manager, said Pinnacle Investment Management, Managing Director, Ian Macoun.

“We believe Pinnacle and Aikya are a natural fit. Both teams have a strong belief that investment excellence is best sustained within an environment of supported independence. We have immense confidence in the capabilities of Aikya’s esteemed investment team,” added Mr Macoun.

Aikya’s flagship Global Emerging Markets strategy comprises a concentrated portfolio of 30- 35 companies, with a focus on buying high quality companies at sensible valuations. Aikya applies a holistic approach to judging quality, with quality of executive stewardship, quality of the franchise and quality of financials being the most important criteria. The Aikya portfolio is designed with a view to protect downside to capital, while generating healthy long term returns for investors.

“Aikya is being set up with a strong sense of purpose. We will be taking the analysis of stewardship to the next level – incorporating analysis of Environment, Social and Governance related issues with as much rigour as traditional financial metrics. Our investment approach enables us to ignore thousands of sub-standard companies that make up the Emerging Markets universe, and instead focus on building a highly concentrated portfolio of only the best,” said Aikya Portfolio Manager, Rahul Desai.

“We are not going to allocate capital to industries with negative social utility such as Coal, Gambling, Tobacco and Defence Equipment makers.

”Pursuing an active engagement agenda on every company held in the portfolio is a key part of our investment process, which not only helps us in enhancing the investment case on the company, but also enables us to forge closer relationships with company management teams,” added Mr. Desai.

The Aikya Global Emerging Markets Strategy is available to eligible investors as a separately managed account (SMA) and will be launching a UCITS ICAV pooled fund in the near future.

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