State Street Global Advisors (SSgA) noted yesterday that its “strategic venturing partnership” with the giant Dutch pension fund, Stichting Pensioenfonds ABP (ABP), was five years old.
Formed in 2001, the goal of the partnership – known as “Global Alliance” – was to identify fund managers with innovative, alternative investment strategies which could complement SSgA’s existing investment approaches, and so enhance the performance of ABP’s pension funds.
SSgA says assets under management have increased at a compound annual rate of 60 percent since 2001, with seven member-companies now managing $16 billion in assets around the world.
“In our fifth successful year of operation, Global Alliance continues to provide early-stage companies that offer cutting-edge investment strategies with better access to their target market by way of SSgA’s and ABP’s infrastructure and distribution channels,” says Joseph Lyons, president of Global Alliance. “We continue to seek out these types of early-stage companies in an ongoing effort to provide clients with unique investment strategies and complement our existing capabilities.”
The concept for Global Alliance originated in 1996 when SSgA began investing in small-scale fund managers to add to its own roster of investment strategies and expand the options it offered to clients. When the deal with ABP was sealed in 2001, the two partners had just $2 billion under management.
Today, Global Alliance, LLC consists of five majority-owned companies and two minority investments. They are:
Advanced Investment Partners, LLC (AIP), a registered investment advisor that runs quantitative investment strategies. With more than $1.6 billion in assets under management, AIP manages core large-, mid- and all-cap strategies for institutional and retail investors. These include enhanced index, market neutral and tax-managed styles.
Rexiter Capital Management Limited (Rexiter), a London-based investment management company specializing in fundamental-based global, regional and country specific emerging market strategies. With more than $5 billion in assets under management, Rexiter provides management services to a number of large pension and endowment funds, corporate clients and a US mutual fund.
Shott Capital Management, LLC (SCM), a specialist in post-venture distribution management and private equity partnership investing. The firm manages the sale of in-kind distributions of public securities distributed from private equity investments and manages separate accounts for private equity investors.
SSARIS Advisors, LLC, a registered investment advisor and provider of hedge fund and hedge fund-of-funds strategies for institutional investors. It runs a Multi-Manager Japan Equity strategy, a hedge fund-of-funds strategy focused on investing in innovative Japanese equity hedge fund managers.
The Tuckerman Group, LLC, a manager of public and private real estate investments for institutional and individual investors through a series of specialized programmes, including direct investments and real estate investment trust (REIT) strategies. Tuckerman’s SSgA/Tuckerman Liquid 40 Real Estate Securities Index Strategy recently exceeded $1 billion in assets under management. Total assets under management now exceed $5 billion. Tuckerman recently launched a global REIT index product to complement its U.S. and European REIT strategies.
Global Alliance’s two minority investments include:
GovernanceMetrics International (GMI), the most recent firm to join Global Alliance and a global corporate governance research and ratings firm. GMI delivers independent evaluations of corporate governance practices at more than 3,400 publicly-listed companies in 26 countries. The firm’s analysts scour government, stock exchange, company and other sources to identify practices and patterns of behaviour. In so doing, GMI claims to have identified many companies with weaknesses long before problems became apparent.
Innovest, an internationally recognized investment research and sub-advisory firm specializing in analyzing companies’ environmental and social performance and their impact on competitiveness, profitability, and share price performance. Innovest recently joined forces with fellow Global Alliance member Rexiter to create an emerging markets sustainability strategy. Innovest is also lead advisor to the Carbon Disclosure Project (CDP), a collaboration between 240 institutional investors, with combined assets under management of more than $30 trillion, which aims to provide research on the relative climate risk exposures of 500 large-cap global companies.