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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The purchase increases Plan B’s shareholding in the My Adviser business to 93% and strengthens its foothold in the eastern states. The remaining 7% is held by My Adviser’s Managing Director, Ms Philippa Sheehan, and will be acquired by Plan B subject to My Adviser meeting agreed performance hurdles.

The transaction is a significant growth initiative for Plan B under the leadership of Chief Executive Officer, Mr Andrew Black. An increased presence in the eastern states of Australia has been an important part of that growth strategy.

My Adviser comprises 62 advisory businesses with 134 Authorised Representatives and has approximately $1 billion in funds under advice.

“We’ve always known that My Adviser represented a great opportunity and a strategic fit for us. We share the same fundamental values and client-focused approach,” said Mr Black.

He went on to say that the timing was particularly opportune given the current industry uncertainty in relation to FoFA.

“We’ve been relatively comfortable with the unfolding changes because, in most regards, they align with what we’ve been doing at Plan B for some time. This move gives us the chance to realise operational efficiencies and provide support and benefits for both Plan B and My Adviser” he said.

Philippa Sheehan also welcomed the move. “As far as we are concerned, completing the transaction ahead of schedule has delivered greater certainty in the face of a changing environment by combining resources with a highly respected and like-minded organisation sooner,” she said. “We’re very happy with the direction in which Plan B intends to move and believe that the combined group will benefit both our Authorised Representatives and their clients.” 

Sixteen years after establishing My Adviser, Michael Summers said the change in ownership represented an ideal time for him to step down from his current position as Chairman and to retire from all executive functions. Mr Summers is pleased that the company is in the capable hands of the next generation of managers to carry it forward. He will work with the business for a transitional period and will continue to be involved in industry associations.

The total consideration for the purchase of $1.733 million, which includes $0.49 million that is subject to future performance hurdles, will be funded from a combination of drawing down against existing bank loan facilities and from Plan B’s existing cash reserves.

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