Kylie-Anne Richards

Leading fixed income specialist Ardea Investment Management has launched a new research partnership with the University of Technology Sydney (UTS).

The Ardea + UTS Academic Program will foster innovative and impactful academic research to advance knowledge in finance and further strengthen Ardea’s research capabilities, which is expected to benefit the large boutique manager’s clients.

Through the partnership, Ardea will jointly research projects, and author thought leadership articles with UTS researchers, and will provide industry mentorship to UTS students.

Ardea Head of Research and recently appointed UTS Industry Fellow Dr Laura Ryan will lead the participation by Ardea, with UTS Finance Discipline Group academics Dr Kylie-Anne Richards and Dr Gerhard Hambusch leading UTS’ involvement in the partnership.

The partnership is already bearing fruit, with Ardea and UTS currently investigating machine learning for trade idea identification, climate change and government bond investing, and the LIBOR transition and how it may impact trading opportunities. 

Ardea CEO and co-founder Stephen Clout said, “Ardea is thrilled to have this opportunity to work with an organisation of the calibre of the University of Technology Sydney. We believe this partnership will strengthen our offering to clients and enhance our trade idea generation process. It is a key component of our strategic plan to prepare Ardea for a strong pipeline of long-term growth opportunities and ensure we maintain our highest standards of alpha generation,” Mr Clout said. 

The partnership follows the appointment of Dr Ryan earlier this year to progressively build a research team to support Ardea’s growing investment capabilities by researching and developing relative value investment strategies.

Ardea’s relative value investment approach targets reliable risk-adjusted alpha that is independent of market direction and exhibits minimal correlation to broader fixed income and equity markets.

Founded in 2008, Ardea is one of Australia’s largest fixed income investment managers, entrusted with managing over $15bn on behalf of clients, including Australia’s most sophisticated institutional investors and a growing retail and wholesale investor base. 

The firm maintains majority ownership by employees to foster both long-term alignment of interests with clients and stability of the investment team and is partly owned by leading investment manager, Fidante Partners. 

Ardea’s flagship fund, the Ardea Real Outcome Fund, is the top performing fund in Mercer’s Australian Absolute Return Fund category for one year up to 30/06/2020 in terms of gross returns. It is also the top performing fund over three and five years^[1].

The UTS Finance Discipline was one of only four finance departments in Australia to have been awarded the highest possible ranking for research by the national research evaluation framework, Excellence in Research, for Australia in the State of Australian National University Research 2018-19: ERA National Report.

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Mr. Alexander said the elevation of Mr. Clout, who has headed portfolio implementation and client relationships at Ardea, would enable him and the rest of the investment team to maintain their full focus on investing, without being distracted by business management.

“A key reason for Ardea’s success has been the ability of our investment team to put all our energy and expertise into our differentiated, relative-value approach to fixed income investing. This has enabled us to deliver reliable risk-adjusted returns that are independent of market direction and have minimal correlation to broader fixed income and equity markets. The need for this focus was also one of the key reasons we originally teamed up with Fidante Partners to manage operations, and distribution on our behalf.”

Founded in 2008, Ardea has maintained steady growth, with funds under management exceeding $11 billion at the end of February 2019 and an investor base including Australia’s largest institutional investors.

More recently, Ardea’s top performing Real Outcome strategy has been rolled out to the wholesale/retail market as the unlisted unit trust Ardea Real Outcome Fund (ARO), as well as the ASX listed ActiveX Ardea Real Outcome Bond Fund (Managed Fund) (ASX: XARO), launched in partnership with Fidante Partners at the end of 2018.

“We are grateful for the strong support we’ve received from our clients, as well as asset consultants, and are now evolving our business structure so that we can both continue to provide a high level of service to existing clients and manage growth in a considered and measured way well into the future”, Mr. Alexander added.

Mr Alexander said the Ardea board was confident that Mr Clout would provide the firm with the operational and strategic leadership needed to manage its next stage of growth.

“Stephen knows our business well, having helped found it more than 10 years ago. He also has deep, extensive relationships with our clients and is already very well-known and respected by the team.”

Mr. Clout, who will continue to have ultimate oversight of portfolio implementation, will be supported in this function by Chief Operating Officer Tracey Kellett, who joined Ardea from Fidante’s parent company (Challenger Limited) in February this year. Additionally, Ardea’s investment team was strengthened last year with the hire of relative value specialist and Portfolio Manager Jean Dumas from Deutsche Bank, while it’s dealing capacity was increased with the appointment of Darren Wadhera to the Portfolio Implementation team.

Ardea’s unique relative value investment approach now has a successful ten year track record across a range of actively managed domestic and global fixed income investment strategies, including absolute return, benchmark aware and customised objective based solutions.

ARO is the top performing absolute return fixed income strategy in the Mercer Survey of Australian Absolute Return funds over three and five years, as at the end of February 2019*.

Notably, ARO maintained strong performance throughout the difficult market conditions of 2018 and now has a six-year track record of delivering low volatility returns exceeding cash rates and CPI, independent of market direction. ARO has delivered a return of 5.02% p.a. (net of fees) over the past three years, which is 3.19% p.a. above the Benchmark**.

* From 28 February 2014 to 28 February 2019. Source: MercerInsight ®, Mercer Investment Performance Survey of Australian Absolute Return universe.
** As at 28 February 2019. Performance figures are calculated after fees have been deducted and assume distributions have been reinvested. No allowance is made for tax when calculating these figures. Past performance is not a reliable indicator of future performance. ARO’s benchmark is the Australian Consumer Price Index.

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Tracey Kellett

Fixed income specialist Ardea Investment Management is pleased to announce the appointment of Tracey Kellett in the role of Chief Operating Officer (COO), effective immediately.

This role was created to cater for Ardea’s recent strong growth. Ardea now manages approximately $10.5bn* in funds under management for clients within the superannuation, insurance and government sectors. It successfully launched the ActiveX Ardea Real Outcome Bond Fund (Managed Fund) (ASX: XARO) in December 2018 and further growth is anticipated over the coming 12 months.

Ardea Investment Management Principal and co-founder Stephen Clout said; “The COO position is a newly created role that will take on new responsibilities as well as a number of tasks that were previously shared by the rest of the team, allowing investment personnel to focus on investing.

“As COO, Tracey will be responsible for ensuring growth is undertaken in a measured and appropriate manner so that Ardea can continue to deliver consistent and reliable returns for clients.

“She will also take on the responsibilities of the Compliance Manager to ensure Ardea meets all of its regulatory and investment compliance requirements. Ardea also maintains a number of third-party relationships which will be maintained and managed by Tracey.”

Ms Kellett is very well known to the Ardea team, having spent nearly six years with Challenger Limited in various roles, including Head of Investment Operations Support and Derivatives for three years. Ardea is owned by its staff in conjunction with Fidante Partners, the boutique investment management business of Challenger Limited.

Tracey Kellett, COO of Ardea Investment Management said; “I am delighted to join the Ardea team, which is supported by a unique relative value investment approach. Ardea has robust systems and processes that have delivered reliable risk-adjusted returns that are independent of market direction and exhibit low correlation to broader fixed income and equity markets.”

Ms Kellett will have oversight of portfolio and risk management systems development and continual improvement processes to ensure that, as technology improves, so do Ardea’s systems and ability to manage risk and deliver consistent returns.

In addition, Ms Kellett will be responsible for all of the operational requirements of the business which includes monitoring and supporting day-to-day tasks to ensure the deliverables of the business are met.

Ardea has a successful track record of actively managing a range of defensive fixed income strategies, including absolute return, benchmark aware and objective based solutions. The firm is an active investor across Australian and global government bonds, fixed income derivatives, inflation linked bonds and investment grade credit.

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Tamar Hamlyn

Fixed income specialist Ardea Investment Management’s Real Outcome Fund has been added to the BT Panorama, BT Wrap and BT SuperWrap platforms.

This follows the Fund’s addition to the Netwealth and PowerWrap platforms and receipt of a ‘Recommended’ rating from Zenith Investment Partners last year. Zenith’s consulting clients have also shown strong support for the Fund with it being added to the Zenith Elite blend models.

Ardea Principal and co-founder Ben Alexander said a strong focus in the first half of 2018 would be increasing financial adviser and retail investor access to the five-year-old fund through platforms.

“Ardea’s investment strategies have long been supported by Australia’s largest institutional investors, which helped us achieve more than $10 billion funds under management at the end of 2017. We are particularly proud of our Real Outcome Fund and the way it has consistently outperformed against cash and inflation since inception, while remaining uncorrelated to broader equity and bond markets.”

“To date, it has proved to be a reliable defensive fixed income solution that prioritises liquidity and capital preservation, with minimal credit risk and no leverage. We believe it can play an important role in diversified portfolios, especially at a time when returns available from conventional fixed income performance drivers are low,” he said.

The Fund primarily invests in government bonds and seeks to deliver stable returns that protect purchasing power and grow wealth, while also profiting from inflation surprises. Managers can use a broad range of opportunities to generate consistent returns irrespective of the direction of interest rates. The strategy now has in excess of $1.2bn under management and returned 4.65% over the past year, with low volatility.

Established in 2008 by Mr Alexander, Andrew Bartlett, Tamar Hamlyn and Stephen Clout, who together own the majority of the firm, Ardea Investment Management is partly owned by Fidante Partners, which supports specialist funds management businesses.

Since inception Ardea has forged a successful track record of actively managing a range of defensive fixed income strategies, including absolute return, benchmark aware and objective based solutions. It actively invests across Australian and global government bonds, fixed income derivatives, inflation-linked bonds and investment grade credit.

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Tamar Hamlyn

Fixed income specialist Ardea Investment Management today announced its total funds under management had exceeded $10 billion.

Ardea Principal and co-founder Ben Alexander welcomed the achievement, saying it was underpinned by his investment team generating attractive returns throughout market cycles and consistently exceeding investor expectations.

This strong performance and careful risk management has driven institutional and retail client growth, generated endorsement by major asset consultants and enabled Ardea to become a trusted partner to some of Australia’s largest investors.

“Key to this has been the stability of the team, the diversity of our experience across global markets and our ability to tailor performance outcomes for larger clients. Most importantly, Ardea is grateful to the many clients who have supported us over the years and given us the opportunity to build a significant business” Mr Alexander said.

Established in 2008 by Mr Alexander, Andrew Bartlett, Tamar Hamlyn and Stephen Clout, who together own the majority of the firm, Ardea is partly owned by Fidante Partners, which supports specialist funds management businesses.

Ardea has forged a successful track record of actively managing a range of defensive fixed income strategies, including absolute return, benchmark aware and objective based solutions. It actively invests across Australian and global government bonds, fixed income derivatives, inflation-linked bonds and investment grade credit.

Of particular note has been the strong growth in Ardea’s absolute return focused, ‘Real Outcome’ strategy, which now has in excess of $1bn under management. Investors have been attracted by the strategy’s ability to deliver absolute returns irrespective of broader market conditions. The highly liquid and defensive strategy has returned 5.70%* over the past year, with low volatility, minimal duration risk and no credit investments.

Recognising its strong track record, differentiated investment philosophy and the quality of the investment team, Zenith Investment Partners has awarded the Real Outcome Fund a ‘Recommended’ rating, supporting growing demand from retail advisors.

Ardea’s long established and highly regarded inflation linked investing capabilities are well known and accessed by institutional investors via tailored mandates or more broadly through Ardea’s Australian Inflation Linked Bond Fund, which currently has $800 million under management.

Ardea offers tailored mandates to institutional investors, as well as broader institutional, wholesale and retail access via three unit trusts; Ardea Real Outcome Fund, Ardea Real Outcome Plus Fund and Ardea Australian Inflation Linked Bond Fund.

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Tamar Hamlyn

Fixed income fund manager Ardea Investment Management has received a ‘Recommended’ rating for its Real Outcome Fund from Zenith Investment Partners and strong endorsement of the quality of its investment team.

Ardea’s Real Outcome Fund is a defensive fixed income solution that targets a stable return in excess of inflation. The Fund primarily uses government bonds to create a diversified portfolio of high quality fixed income securities that prioritises liquidity and capital preservation.

The investment team has been endorsed by the major asset consultants and has grown funds under management to A$9.5bn, as a trusted investment manager for some of Australia’s largest and most sophisticated investors. Building on this strong foundation, the rating by Zenith supports the expansion of Ardea’s long established investment capabilities into the retail fund market.

Over the past year the Fund has generated a return of 5.31%*, exceeding CPI by 3.7% and cash rates by 3.6%. The Fund has generated a return of 3.51% since inception in July 2012.

In its rating report, Zenith said the Fund is managed by “a high-quality investment team”, with a focus on “relative value trades that offer high risk-adjusted returns, and are combined with other lowly correlated trades to generate a consistent and stable return stream.” They further stated that “Ardea has a competitive advantage in identifying and structuring relative value trades that offer incremental returns with low downside risk”.

The benefits of this approach are reflected in the Fund’s significant outperformance relative to the negative 1.40% return of the Australian bond market over the past year.

Ardea’s investment team has a depth and diversity of skills and experience, that is reflected in the firm’s strong track record. Zenith singled out Ardea principal, co-founder and Real Outcome Fund leader Ben Alexander as an “impressive investment professional with strong portfolio management skills”.

Ardea was established in 2008 by Mr Alexander, Andrew Bartlett, Tamar Hamlyn and Stephen Clout, who together own the majority of the firm. Ardea is partly owned by Fidante Partners, which supports specialist funds management businesses.

Mr Alexander said Ardea was delighted that Zenith thought so highly of the investment team and the quality of its investment approach. Both factors had underpinned the Fund’s performance since inception. “This rating is tremendously encouraging as we begin making this Fund available to a broad retail audience,” he said.

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Tamar Hamlyn

Specialist fixed income manager, Ardea Investment Management, has recorded total funds under management exceeding $4 billion as it celebrates five years of investment performance in the Australian fixed income market as at 31 May 2014.

With a focus on delivering controlled returns, Ardea offers a range of products to institutional investors, including customised mandates, a traditional benchmark-focused unit trust and an objectives-based inflation-plus fund which is also available to retail investors.

Co-founder and principal, Tamar Hamlyn, said the firm predicts significant increases on the current rate of inflation over most investment horizons, with concerns for long-term inflation given the international adoption of quantitative easing and the potential for reprioritising of inflation at a global policy level.

“Inflation over a long-term time frame would be extremely damaging for investors. However, the current subdued demand for inflation protection following the GFC, together with increased issuance of inflation linked bonds by Commonwealth and State governments, has created an opportunity to obtain inflation protection at extremely cheap levels relative to history,” he said.

The firm’s sound investment philosophy and consistent approach to risk-controlled investing has led to measured and consistent returns since inception of the business in 2009.

“Ardea was formed on a strategy which sees a longer-term approach to investments and one whereby portfolio diversification is critical to achieving sustainable investor returns.

“As a boutique, we always seek to deliver better value for clients and are very proud of the business and its performance over the past five years,” he said.

Mr Hamlyn, along with Ardea co-founders Ben Alexander, Andrew Bartlett and Stephen Clout, have also expanded its resourcing capability in response to growth in the firm’s investor base with the addition of portfolio analyst, Cameron Shaw. Prior to joining Ardea, Mr Shaw was head of performance and risk analytics at UK-based asset manager Ashmore, and was previously head of investment analytics at Challenger.

The Ardea Australian Inflation Linked Bond Fund has returned 9.76% p.a. over three years to 31 May 2014. Over the same period the UBS Government Inflation Index returned 7.96% p.a.

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