(L to R): Glen Holding & Nick Hamilton

Channel Capital and Fidante have announced they have entered into a binding agreement to merge, forming a new parent entity: Channel Group.

Channel Capital is a privately-held Australian investment management services business that builds, supports and distributes boutique and global managers through its operating platform and responsible entity capability. Fidante, currently owned by Challenger, is an active multi-affiliate manager with approximately A$86 billion in funds under management across equities, fixed income and alternative assets.

The combined platform will service more than A$150 billion in assets, bringing together Channel’s operating platform with Fidante’s established multi-affiliate investment model.

This scale positions Channel Group as one of Australia’s largest investment platform and services businesses, supported by over 240 professionals across 11 global offices, with the capabilities to serve a diverse range of clients.

Under the transaction, Channel’s shareholders will hold a majority interest in Channel Group, with Challenger retaining a meaningful minority stake. This structure ensures both organisations remain co-invested in the platform, reflecting the joint conviction in the group’s long-term outlook and success.

Channel Group will centralise operational expertise across shared infrastructure, including responsible entity and governance services. Within the group, Channel Capital, Fidante and Continental Funds Group will continue to operate as distinct, client-facing businesses. This model preserves the unique identities, investment philosophies and affiliate relationships that underpin each business’ success, while enabling them to benefit from shared capabilities and operational scale.

Channel Group Chief Executive Officer Glen Holding said: “Bringing together the strength and expertise of Channel Capital and Fidante creates a highly diversified, resilient platform with the ability to invest through market cycles.

“It’s a truly distinctive proposition — one that gives boutique Australian managers the resources to grow, while offering global managers a proven, trusted gateway into the Australian market. That combination is highly differentiated in the market, and it’s what will drive the next decade of growth for Channel Group.”

Challenger Managing Director and Chief Executive Officer, Nick Hamilton, said: “Our announcement today takes Fidante into its next stage of growth as part of a larger and more diversified active funds management platform. This merger ensures we can remain long-term holders of Fidante, whilst benefitting from a more diversified multi-affiliate platform.

“We’re excited by the creation of Channel Group, the broader geographic reach and wider investor base it will provide to affiliates, increased career opportunities for our people, and the benefits for Challenger as a long-term holder and partner in a business we’re building together.”

Channel Group will operate across three core business lines: affiliate partnerships providing equity and revenue participation in boutique investment managers; distribution partnerships with major global firms; and institutional infrastructure services — including responsible entity, fund services and middle-office solutions — to major institutional clients.

The merged group services a broad range of Australian and global investment managers across listed and unlisted asset classes, including equities, fixed income, real assets and private markets, while connecting investors with high-quality investment opportunities.

Mr. Holding added that the merger delivers scale without compromising independence or quality: “This transaction establishes a platform with the scale and structure to support long-term growth. We have combined complementary capabilities while maintaining the brands and relationships that sit at the centre of client engagement.”

Completion of the merger remains subject to regulatory approval.

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Joseph Smith

Channel Capital Group (“Channel”), a leading partner to global investment managers, is pleased to announce its appointment as Responsible Entity for the CBRE Global Property Securities Fund (an actively managed fund investing in a diversified portfolio of listed global real estate companies), and the CBRE Global Infrastructure Securities Fund (an actively managed fund investing in global listed infrastructure securities across a range of geographic regions and infrastructure sectors).

This follows Channel’s successful onboarding of the CBRE Global Real Assets Fund in December 2023, further expanding the partnership between Channel and CBRE Investment Management Listed Real Assets, LLC (“CBRE IM Listed Real Assets”), the listed real asset solution within CBRE Investment Management, (“CBRE IM”), a global leader in real asset management.

In addition to its responsible entity services, Channel will also provide all non-investment services, including operations, client services, and distribution and marketing for the two funds.

Joseph Smith, Chief Investment Officer, Listed Real Assets Strategies, CBRE IM Listed Real Assets, commented: “Our partnership with Channel presents an exciting opportunity to broaden client access to our listed real asset solutions. Real estate and infrastructure are fundamental to building balanced, resilient portfolios that can weather economic challenges, while delivering long term income and growth.

Long term structural investment themes are fuelling demand for real assets, and we believe that listed REITs currently represent very attractive total return potential within both equities and real assets.”

Glen Holding, Managing Director of Channel, said: “This partnership strengthens our investment offering by expanding across both private and public markets within real assets, working alongside one of the world’s leading real asset managers. As the Responsible Entity, Channel remains dedicated to maintaining strong governance, operational excellence, and exceptional client-focused service.”

Both funds are independently rated “Highly Recommended” by Lonsec, reflecting their strong investment process, experienced management team, and robust track record, and are also rated “Recommended” by Zenith Investment Partners.

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Glen Holding

Channel Capital Pty Ltd. (Channel), a leading Australian multi-affiliate investment management company servicing more than A$16 billion in assets, will undertake a management buyout from minority equity partner Highbury Partnership (Highbury), subject to customary approvals.

New York-based Kudu Investment Management, LLC (Kudu), an independent provider of permanent capital solutions to asset and wealth managers, is providing financing for the buyout and additional capital for the firm. Upon completion of the transaction, expected in November, Channel’s employee shareholders will control a greater share of the diversified investment management group. Kudu will own a passive, minority share in the business. Financial terms were not disclosed.

Channel provides incubation, operations, distribution, marketing and responsible entity services to a select group of investment management companies and their clients across the institutional, family office, high net worth and advisor-led investor space in Australia and New Zealand. Channel’s subsidiary, Channel Investment Management Limited (CIML), is licensed as a responsible entity in Australia, enabling it to act as both trustee and manager.

“While the business has prospered in partnership with Highbury, we’ve reached the next level of growth, requiring a renewed strategy to both consolidate and capitalise on what we’ve built,” said Glen Holding, Channel’s co-founder and managing director. “Partnering with Kudu will greatly enhance our ability to pursue larger growth opportunities both within and outside of Australia.”

“As our first transaction in Australia, one of the world’s largest pension markets, we jumped at the chance to support Channel in achieving its full potential,” said Charles Ruffel, chairman and managing partner of Kudu. “Channel’s leadership and strong focus on investor outcomes permeate the organisation, and we look forward to a long and fruitful working relationship in Australia and globally.”

Established in 2013, Channel has 27 employees across Sydney, Brisbane and Melbourne. Channel currently partners with eight investment management firms. Channel subsidiary CIML provides responsible entity services to a limited set of funds managed or advised by its partner firms as well as a select group of institutions.

With Channel, Kudu will have 14 affiliated firms that collectively manage or advise approximately US$75 billion on behalf of individual and institutional investors worldwide in traditional and alternative strategies, as of Sept. 30, 2020. Kudu, with US$475 million in capital commitments to date, is backed by White Mountains Insurance Group, Ltd. (NYSE: WTM), a financial services holding company. Berkshire Global Advisors served as financial advisor and Hall and Wilcox served as legal advisor to Channel. Minter Ellison served as legal advisor to Kudu.

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Ned Bell

Channel Capital, a multi-boutique investment services company, has entered into a strategic distribution partnership with Bell Asset Management, a specialist global equities asset management firm.

With A$2.4 billion assets under management as at 31 August 2019, Bell Asset Management is a specialist global equities investment manager focused on delivering long term growth through active management of global equities. Headquartered in Melbourne, Bell Asset Management provides long only fundamental/bottom up global equity solutions to a diversified investor base, including institutional and wholesale/sophisticated clients as well as financial advisers.

The distribution partnership is focused on driving engagement with research houses, financial advisers and wholesale/sophisticated investors nationally, for its flagship global equity investment strategy (Bell Global Equities Fund) and its global small and mid-cap strategy (Bell Global Emerging Companies Fund).

Ned Bell, Chief Investment Officer, Bell Asset Management said “We selected Channel Capital for its strategic capabilities and success in building long term relationships with investors, as well as its strong partnerships with its investment manager partners.”

Channel Capital’s Managing Director, Glen Holding said “After extensive due diligence in the global equity sector we are pleased to have partnered with a highly regarded investment manager that has achieved top quartile returns in both its global equities and small to mid-cap peer groups, especially over the last few years^[1]. The Bell Asset Management investment process, active returns, talented investment team and domestic and offshore institutional investor support, are qualities that highly align with the value proposition we seek in our partners.  In addition, with ‘growth’ and ‘value’ offerings being quite overcrowded, we are of the view that the Bell Asset Management ‘quality at a reasonable price’ process that has delivered world class numbers to investors to date, will have a distinct role to play in our clients’ portfolios.”

For the year to 31 August 2019, the Bell Global Equities Fund (Platform) (which invests in a globally diversified portfolio of shares) delivered a return of 14.22% and outperformed its benchmark MSCI World ex Australia Index by 6.65% and the Bell Global Emerging Companies Fund (which invests in a globally diversified portfolio of small and mid-cap companies) returned 10.07% and outperformed the benchmark MSCI World SMID Index by 8.99%, net of fees.

Both strategies are managed by Chief Investment Officer Ned Bell, and Co-Portfolio Manager Adrian Martuccio. The Bell Global Equities Fund (Platform) and the Bell Global Emerging Companies Fund have received a ‘recommended’ rating by Zenith Investment Partners, are also rated by Lonsec, and are available on a range of leading platforms.

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[1] *Source: eVestment as at 30 June 2019, Performance is for the strategy/composite and not at the Fund level and gross of fees, in USD.

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Sean Fenton

Sean Fenton, one of Australia’s most experienced Australian equities long/short managers has announced the establishment of Sage Capital – an investment management boutique bringing to life Mr Fenton’s vision for a contemporary and specialised firm, which seeks to generate alpha over the long term through its unique investment approach combining fundamental and quantitative analysis.

Sage Capital is backed and supported by institutional-focused boutique incubator Channel Capital.  Channel is providing the full suite of investment services, including distribution and Responsible Entity services through its incubation platform.

The boutique is wholly owned by its directors and staff – four highly credentialed and experienced portfolio managers – Kelli Meagher, Peter Moore and James Delaney, who have all worked with Mr Fenton throughout his portfolio management career. Sage Capital’s two initial funds are also open for investment – the CC Sage Capital Equity Plus Fund, an Australian equities long/short strategy and the CC Sage Capital Absolute Return Fund, an absolute return strategy, both issued by Channel Investment Management Limited (a subsidiary of Channel Capital) as Responsible Entity.

Managing Director, Sean Fenton said “The formation of our firm marks the continuation of the investment management style that our team and I have been running over many years, with the dedication and discipline that is required to actively manage equities portfolios in today’s complex market environment. We seek to provide a solution for investors to help lower correlation to equity markets by holding both long and short positions – in a very risk controlled way.

Mr Fenton adds “Our differentiated stock selection process utilises two complementary sources of return, employing both a quantitative and a fundamental process. The objective of this process is to identify companies that will deliver superior earnings outcomes on an attractive risk/reward basis.  Diversification is a key attribute of the portfolio construction process and a suite of sophisticated risk management tools are employed to ensure that the impact of unexpected risks is minimised.

Long/short strategies have gained in popularity over the years as Australian investors have become more comfortable with strategies that involve short selling. The different structures can meet the needs of investor portfolios that allocate to equities for long term income and growth potential or given heightened market volatility and the need for capital protection and yield, provide a source of uncorrelated returns to the equity market.” he said.

Channel Capital’s Managing Director, Glen Holding said “We spend a great deal of time searching for differentiated investment teams of the highest quality, and we are pleased to have launched Sage Capital with Sean Fenton and his colleagues. The Sage Capital long/short strategies offer our clients investment options which provide diversification and the potential for uncorrelated returns within their portfolios.”

Both funds are open for investment and may suit investors with a medium to long term investment horizon and who seek to complement existing long-only Australian equities portfolio exposures.

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