J.P. Morgan AM awarded fresh portfolio structuring mandate

J.P. Morgan Asset Management (JPMAM) has secured a mandate to implement portfolio structural capabilities for improved operational and cost efficiency for Findex Group.

Findex currently manages approximately $8.5 billion under its managed discretionary account (MDA) platform - carried out by Specialised Private Capital - and has appointed JPMAM as implementation manager for a tactical asset allocation (TAA) portfolio structure designed to improve portfolio efficiency and reduce costs.

The mandate will help Findex and Specialised Private Capital to overcome several issues inherent in TAA implementation, including reduction of transition time between exposures across two physical managed funds and deploy better controls during market volatility.

Findex will also be able to offer zero transaction costs in FX hedging when moving funds or unit classes and reduce costs or client capital gains tax (CGT) when implementing asset allocation recommendations.

Commenting, JPMAM head of wholesale Mark Carlile said the mandate underscores its expertise in structuring and customising portfolios through the tailored solution.

"Every client is different and we wanted to ensure we were able to provide Findex and Specialised Private Capital with a tailored solution that benefited them and their clients," Carlile said.

"Our flexible approach and deep engagement enabled us to deliver a solution that addresses their operational and investment challenges, setting them up with a foundation for long-term success.

"Both our teams were highly engaged from the outset, discussing and debating a range of options to find the best fit. We look forward to working closely with and growing the relationship with the team."

He added that JPMAM proposed a progressive framework that leveraged local structuring experts, which involved the creation of two trusts, one equity and one fixed income, integrated within Findex's MDA.

Each fund is actively managed with defined alpha and tracking targets, and importantly fees are kept low. A TAA overlay enables efficient portfolio tilts and FX implementation, addressing the challenges set out above.

"This initiative reflects our commitment to continually improve how we serve clients and deliver investment solutions which are responsive, cost-effective and aligned with their long-term goals," Specialised Private Capital chief investment officer Kieran Canavan said.

"By addressing some of the inherent limitations of traditional managed structures, we are strengthening our ability to implement portfolio decisions efficiently, while maintaining the governance, accountability and transparency that sits at the heart of our investment philosophy."

Canavan also noted 20% of its MDA funds under advice (FUA) are currently structured under this approach, providing greater flexibility to scale.

"We have already successfully implemented TAA changes at a significantly reduced cost for clients which reinforces the value of this model," Canavan said.

"We're proud to be partnering with JPMAM on a solution that we believe aims to set a new benchmark for how managed accounts can work for clients."