Star managers may be an increasingly rare breed today, but some big names still carry clout.
Global equity star Rajiv Jain has made a case for this, pulling in $7.5 billion in assets in just 13 months since launching his new business GQG Partners.
The numbers are impressive but may not be quite enough to put Jain ahead of another star name, Jeffrey Gundlach, in the race for fastest flows.
While Los Angeles, California-based DoubeLine is by no means a boutique today, back in May 2011 it was named the fastest-growing start-up fund company ever by financial research firm Strategic Insight, which cited 25 years of data. The research found that DoubleLine had amassed $6.1 billion in assets in 12 months since launching in April 2010.
GQG, the Fort Lauderdale, Florida-based boutique set up by former Vontobel Asset Management CIO Jain in June 2016, is slightly behind DoubleLine, racking up $5.3 billion in its first year, according to flow data from the firm.
When one month is added to the time frame GQG is slightly ahead, as over 13 months it has $7.5 billion in total assets, according to data from the firm, versus $6.8 billion for DoubleLine, according to data from Morningstar.
DoubleLine probably still edges it over this period however, as the Morningstar and Strategic Insight figures for the firm only account for mutual fund assets, while GQG's numbers include institutional money.
Of GQG's $7.5 billion, less than $1 billion is in the two mutual funds it runs for US investors. The Goldman Sachs GQG Partners International Opportunities fund has $367.2 million and the GQG Partners Emerging Markets Equity fund $307.3 million, according to Morningstar. A much larger portion of DoubleLine's assets sit in mutual funds. At the end of the second quarter of 2017, $74.5 billion of its $109 billion assets under managers were in its own mutual funds, with a further $17.4 billion in funds it subadvises.
DoubleLine declined to comment on its assets under management.
Both fund shops were set up by highly regarded managers who broke away from larger firms to start over.
Gundlach famously left TCW in 2009 in acrimonious circumstances. He had previously been CIO and overseen some $194 billion.
Jain departed Vontobel in March 2016, having joined in 1994, rising to become chief investment officer in 2002 and then co-chief executive in 2014.
Bill Harding, Jackson National Asset Management chief investment officer, said Jain and Gundlach's respective reputations had been a pull for investors.
'DoubleLine and GQG were both likely popular with investors right out of the gate because they were founded by star portfolio managers who built strong track records in their respective asset classes over several years,' he said. 'Both managers were also responsible for running a lot of assets at their prior firms so they also had more investors that were willing to follow them over to their new shops.'
DoubleLine is the subadvisor on a number of funds on the Jackson platform, including the $2.3 billion JNL/FPA + DoubleLine Flexible Allocation fund, the $1.1 billion JNL/DoubleLine Shiller Enhanced Cape fund and the $442.1 million JNL/DoubleLine Emerging Markets Fixed Income fund.
In June, Jackson filed to drop Pimco in favor or DoubleLine on a $3.5 billion fixed income offering and separately to launch the JNL/GQG Emerging Markets fund, to be managed by Jain. The latter fund was one over 20 new offerings Jackson plans to unveil later this month.
Jain said almost 95% of the inflows had come from institutional clients such as university endowments and pension funds, with the remainder from retail investors and his private client base.
He attributed the amount of support he has received in such a short period of time to his 'hands-on' approach.
‘I’ve always been very hands-on so there would be no name in any portfolio unless I have worked on the name myself,’ he told Citywire. ‘I am the sole decision maker on these portfolios.’
The chief investment officer of GQG has a 20-year track record of investing as a sole portfolio manager on emerging market and international equities funds, which he believes ‘for better or for worse is probably one of the longest continued unbroken emerging market records as a sole PM.’
In March, Jain told Citywire how he had shifted his portfolios away from India while overweighting Russia, for the first time in his career, as well as Latin America.
He said he was still finding opportunities in Russia and Latin America in particular Brazil despite US sanctions against the former and news of frequent corruption scandals in the latter.
The allocation has not paid off for him in the short-term, but the former Vontobel Asset Management co-chief executive maintains his ‘three to five year’ investing view when it comes to these bets.
‘One of the things which people who follow me know is that I try not to be dogmatic about certain areas or sectors. In 2007, I had 20% in energy and then we had zero in energy for a very long time,’ said Jain.
‘You have to grow where the opportunity set is while still buying quality assets at acceptable prices. That’s essentially what has led me to reduce India and add to Eastern Europe and Latin America,’ he added.
‘I’m used to being controversial, the opportunity has to come from what people typically don’t like.’