A new boutique small caps manager is set to launch its first fund this month.
Melbourne-based Blue Orbit Asset Management will launch the Blue Orbit Australian Small Caps Systematic Alpha Fund to institutional investors this month.
The boutique, which was initially founded in 2018, is specifically focused on quantitative small caps investing.
The Blue Orbit Australian Small Caps Systematic Alpha Fund is benchmarked to the S&P/ASX Small Ordinaries Index and will hold about 85 stocks in total. The Active Share sits at about 50% while the tracking error is currently around 4%.
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Blue Orbit is led by former IFM Investors investment director Adam Randall who told Financial Standard he and his team saw an opportunity to excel in the space.
"There are very few really good small caps managers in Australia in the moment and those that are here are closed to new investors," he explained.
The ideal number of investors in the fund is about four or five, Randall said. This is to ensure client alignment throughout the investment process and to enable deeper relationships between the Blue Orbit team and its clients.
The team has spent the last 12 or so months meeting with superannuation funds and, with more than 60 years combined experience, leveraging the relationships they have to ensure a successful launch.
In addition to Randall, Blue Orbit comprises former IFM Investors portfolio manager Megan Talmage and former IFM Investors director of equities Julie Andrews.
Randall serves as chief executive and portfolio manager, Talmage as chief operating officer and portfolio manager and Andrews as director and head of institutional.
Former Morgan Stanley head of asset management Damien Green is Blue Orbit's non-executive chair and Costa Asset Management chief executive Liza Whitmore also sits on the board.
The team's composition also reflects Blue Orbit's values, including a strong commitment to gender diversity and diversity of perspectives - the team is qualified across a broad range of sectors, including outside of financial services such as law and aerospace engineering.
Looking ahead, Blue Orbit already has two other strategies in the pipeline with a September 2020 launch planned for the Blue Orbit Global Small Caps Systematic Alpha Fund and the Blue Orbit Emerging Markets Systematic Alpha Fund set to launch in September 2021.