Blackwattle launches funds with a better investment model

By Penny Pryor

New boutique Blackwattle Investment Partners has launched three new funds for Australian investors - the Mid Cap Quality Fund, the Large Cap Quality Fund and the Long Short 130-30 Quality Fund.

Managing director, chief investment officer and partner Michael Skinner, said the funds, and the boutique, have been nearly three years in the making.

"Effectively the inception of it started almost three years ago when myself and some of the other portfolio managers looked at the funds management industry ... [and saw] there was a number of inadequacies in the industry," Skinner told Industry Moves.

"We really set out with a goal of trying to design a better investment model and funds management model for ourselves and for the clients we represent. And that really snowballed from that conversation three years ago into where we are today. We're coming up to 12 employee partners with an independent board of five, two external councils, an ESG review council and an investment review council. And we've got capital backing on our balance sheet and our portfolios."

Blackwattle has eschewed the traditional boutique modus operandi of testing the waters with one fund and has instead launched three this month with another one to be launched in September.

"We don't think it's necessarily the best strategy just to launch one portfolio for a few reasons," Skinner explains.

"One, things can go wrong over time and if a business is tied to a single portfolio, it can be quite a binary outcome. By having three, four or five pilot portfolios at start, it builds a more resilient business for our investors and our shareholders. It gives us more portfolios to talk to investors about when we when we engage with our investor base. And it's we've got the capital support to launch with the three great teams that we managed to attract."

Blackwattle has attracted lead portfolio managers from Schroders Investment Management, Aware Super, Ellerston Capital and Watermark Funds management.

"We could have actually launched with seven or eight portfolios. Some other Australian and global equity teams are quite interested to be involved, but we thought four was the right number to start with and then we'll be stepping that up in time."