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 fund manager Ardea Investment Management has celebrated the five-year milestone of its flagship fixed income fund – the Ardea Australian Inflation Linked Bond Fund – and predicts ongoing demand for defensive long-term assets as a protection against inevitable market changes.

The manager revealed its funds under management had grown by approximately 30% to over $5.5bn over the past 12 months, with demand being driven by new and existing investors seeking defensive strategies to balance the volatility in equity-heavy portfolios.

Ardea Principal and Portfolio Manager, Tamar Hamlyn, cautioned investors against complacency in the low-rate, low volatility and low inflation expectation market environment. While he predicts inflation will remain low in the short term, he urged investors to consider the medium and long-term implications of changes to current market expectations.

“Central banks around the world are sidelined due to growth concerns. We believe inflation will remain low in the short term, but will rise over the next few years as a lower Australian dollar, possible taxation increases and rising health and education costs begin to exert themselves.

“We are seeing low rates, low volatility and low inflation expectations in the current market; however it would be a mistake for investors to expect this to last. A slight backlash in any one would damage most investors significantly; a correction of all three could be catastrophic,” Mr Hamlyn said.

Debt investments become better understood

In addition to market conditions, Mr Hamlyn credits the growing popularity of the Ardea funds to an increasing understanding of debt investments by super funds, as well as Ardea’s experienced team and consistency in approach.

“Over the past few years there has been a strong shift to mandates that focus on absolute returns, rather than just the market beta, driven primarily from super funds. Delivering a stable return above inflation is at the core of almost every super fund’s objective, and inflation-linked bonds are a natural fit for their long-term protection against inflation.

“Australia’s use of the inflation-linked debt market is still comparatively low and sits at about ten per cent of total government debt, compared with other developed countries like the United Kingdom where the figure is closer to thirty per cent. Greater use of fixed income, including inflation-linked investments, is fundamental to a diversified portfolio,” Mr Hamlyn said.

In response to ongoing growth, Ardea founders and principals Tamar Hamlyn, Ben Alexander, Andrew Bartlett and Stephen Clout, have expanded the firm’s research and investment capabilities, adding two additional staff in the past two years.

The Ardea Australian Inflation Linked Bond Fund has returned 10.84% p.a. (after fees and expenses) over five years to 31 March 2015, delivering returns 1.26% p.a. in excess of its benchmark (Bloomberg Aus Bond Govt Inflation Index 0+). The fund aims to deliver risk-managed exposure to the fixed income investment market to its institutional and wholesale clients.

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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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