Philadelphia-based discretionary portfolio shop Brinker Capital has launched a range of 10 mutual funds subadvised by a host of top portfolio managers called Destinations Funds.
The firm currently runs a range of fee-based portfolios also branded Destinations, which invest in third party mutual funds.
These portfolios will now invest in Brinker’s own mutual funds, which will be run by the same managers as clients used before, only the managers will now run money on a subadvised basis.
Noreen D. Beaman, Brinker Capital chief executive, said the switch to a mutual fund structure with multiple subadvisors had been made in order to ‘lower costs and give advisors better access to certain investment strategies.’
The changes were also made with the now delayed fiduciary rule in mind, specifically to comply with the level fee requirements of the rule.
On average client costs will fall by around 21% and the firm has also lowered the minimum needed to invest in the portfolios to $10,000 in an effort to make them accessible to a wider audience. The funds are available on the Fidelity and Pershing institutional no-transaction-fee mutual fund platforms.
The funds will be managed by Brinker director of investments Jeff Raupp, head of discretionary portfolios Amy Magnotta, and investment manager Leigh Lowman.
Magnotta (pictured) said the change was structural and would not affect clients’ ultimate holdings.
‘For the investor it is not really any different except they see different holdings on their custodial statement but they are getting the same managers,’ she said.
‘We have got the same managers that we used in third party funds to become the subadvisors in the new structure,’ she said. ‘Instead of owning five different large cap equity funds, we are going to own the Destinations Large Cap Equity fund, with those five subadvisors managing the fund.’
The table below sets out the 10 funds and their subadvisors.
|Fund name||Subadvisors at launch|
|Destinations Large Cap Equity||T. Rowe Price Growth Stock, Columbia Focused Large Cap Growth, Delaware Value, TCW Relative Value Dividend Appreciation, Fort Washington Focused Large Cap|
|Destinations Small‐Mid Cap Equity||Ceredex Mid Cap Value, Driehaus Micro Cap Growth, LMCG Small Cap Value|
|Destinations Equity Income||Federated Strategic Value Dividend, Columbia Dividend Opportunity|
|Destinations International Equity||T. Rowe Price International Growth, MFS International Value, Baron Emerging Markets, Wasatch International Microcap|
|Destinations Multi Strategy Alternatives||Driehaus Active Income, Driehaus Event Driven, Avenue Credit Strategies, RiverNorth Opportunities, JPMorgan Strategic Income Opportunities*, Legg Mason Brandywine Absolute Return*|
|Destinations Core Fixed Income||BlackRock US Aggregate Index, DoubleLine Total Return Tactical|
|Destinations Low Duration Fixed Income||CrossingBridge (Cohanzick) Low Duration High Yield, DoubleLine Low Duration|
|Destinations Global Fixed Income Opportunities||CrossingBridge (Cohanzick) Corporate Credit, Nuveen Preferred Securities, DoubleLine Low Duration Emerging Markets|
|Destinations Real Assets||SailingStone Global Natural Resources|
|Destinations Municipal Fixed Income||Northern Trust Intermediate Municipal|
*The firm currently uses the mutual fund version of JPMorgan Strategic Income Opportunities and Brandywine Global Absolute Return Opportunities. This is expected to change to hiring the managers as subadvisors as the funds grow in assets.
The Destination portfolios currently have $9.3 billion in assets under management. Around $7 billion of qualifying assets will be moved to the new mutual funds, while all new business will also be put into the Destination funds. In total the firm has $19.1 billion in assets under management.
Jeffrey Gundlach, chief executive of DoubleLine Capital, which will subadvise three of the Destination funds, said he was pleased to support the new launch.
‘Brinker Capital, highly regarded for their commitment to investors and skilled asset allocation, was an early institutional investor when we launched DoubleLine Funds in 2010. So naturally we look forward to continuing our strong, working relationship with Brinker Capital and are pleased to support the launch of their new fund family,’ he said.