The $660 million Aussie equities fund at Antares is bidding farewell to the "linchpin" of its investment strategy.
Richard Dixon's departure was announced on Monday, after almost three months of extended leave.
Dixon leaves after nearly 12 years, and with an impressive track record with the fund outperforming the S&P/ASX 200 Accumulation Index during the trailing three, five, and 10-year periods up to the end of November 2018, Morningstar analyst Andrew Miles said.
He used short-selling, opportunistic trading and enhanced long positions alongside the traditional long-only positions.
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Stepping into Dixon's role is co-head of equities and deputy portfolio manager Nick Pashias, supported by new deputy portfolio manager and head of research Andrew Hamilton.
Pashias has been at the fund for over four years. He intends to significantly increase the short book to 20% from the usual 12%, increasing the chances of outperformance but adding risk to the strategy, Morningstar said.
"Pashias is an experienced investor and one we hold in high regard, but his lack of experience managing a short book fundamentally changes the investment proposition and is a risk too large to bear. Similarly, Hamilton doesn't have a demonstrable track record managing a portfolio of this type," Miles said.
"The team may develop into a cohesive long-short unit but we would prefer to see a track record of performance, preferably through the business cycle before conferring a level of conviction."
Morningstar put the fund under review last month following Dixon's extended leave. The analyst now has a negative rating for the fund, Morningstar's rating is four stars.
"There isn't any institutional money which reduces the probability of a wave of large redemptions. Nevertheless, outflows could occur when the changes in personnel are announced," Miles wrote.
"All things considered, the change in portfolio manager has impaired the investment case and investors should seek alternatives."