UK - Two former senior executives of Deutsche Asset Management (DeAM) have set up a company to manage £100m (€145m) assets of three Oxford University colleges.
Karl Sternberg, former chief investment officer and Paul Berriman, former UK chief executive, have set up Oxford Investment Management (OXIM), a Scottish limited partnership, administered by State Street.
OXIM will manage the pooled assets of Balliol, Christ Church and St Catherine’s, which together will own 60% of the new business. The OXIM management team will own the other 40%.
Sternberg, who was the fund manager of the St Catherine’s College portfolio between 1994 and 2004, when Morgan Grenfell (later DeAM) managed the assets, said OXIM’s aim was to deliver real returns in excess of 5% over five year rolling periods, with less volatility than equities.
He said OXIM would achieve this by choosing top-performing managers, including long-short funds. “The rarest commodity is manager skill - there isn’t much of it around. We are focusing on getting manager skill wherever we find it.”
Investment consultants Watson Wyatt will help OXIM choose managers through its Advanced Investment Solutions, which draws on a research database of 1,200 managers and 5,000 products.
Craig Baker, head of Watson Wyatt’s manager research team in Europe and Alasdair MacDonald, senior investment consultant, will be part of the OXIM management team.
Gavyn Davies, a former chief economist at Goldman Sachs, and now chairman of Fulcrum Asset management, will be special investment adviser.
Berriman said pooling resources would enable the fund to achieve greater diversification of assets, economies of scale and lower charges.
“We wanted to rediscover the benefits of diversification, not just take equity risk. We wanted to explore the premium that comes from being in illiquid assets – property, private finance initiative and private equity.”
Berriman said OXIM would look for business outside Oxford. “There are plenty of charities and endowments out there who couldn’t replicate what we’d done because they don’t have the time or resources.”