AXA Launches $155 Billion Alternatives Unit

AXA IM Alts creation is in response to the ‘hunt for yield’ in a persistent low-rate environment.

In a move to capitalize on investors’ increasing need to seek out higher returns in a low-rate environment, AXA Investment Managers is creating AXA IM Alts, an alternatives-focused asset management unit with €137 billion ($155.1 billion) of assets under management (AUM) in real estate, infrastructure, private debt, structured finance, and hedge funds.

The creation of the unit is part of AXA Investment Manager’s reorganization into two strategic business units: AXA IM Alts and AXA IM Core, the latter of which will have €536 billion of assets under management in fixed income, multi-asset, and equity strategies, of which 82% are fully environmental, social, and governance (ESG)-integrated.

AXA IM Alts will be led by Isabelle Scemama, CEO of AXA Investment Managers, Real Assets, and will employ over 700 people in 15 offices serving more than 300 clients from Europe, North America, Asia Pacific, and Middle East. Like AXA IM Core, the unit will integrate ESG investing into its strategies.

AXA IM Core will be helmed by Hans Stoter, AXA Investment Managers’ global head of core investments, and will employ over 600 people located in 12 offices. The changes are expected to take effect in the second quarter of this year.

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“We strongly believe in leveraging both traditional and alternative asset classes to further provide investors with adequate responses to the current hunt for yield and to bring them long-term value,” Gerald Harlin, executive chairman of AXA Investment Managers, said in a statement. “We want our organization to reflect this belief and that is why we aim to implement a simplified structure comprised of two key strategic business units.”

According to financial data and information provider Preqin, the alternative assets industry surpassed $10 trillion in assets under management for the first time in 2019. Preqin also said that, based on the strong growth rate of the industry over the past five years, it is on pace to reach $14 trillion in assets in three years.

Deborah Shire, global head of structured finance, will be deputy head of AXA IM Alts bin charge of corporate development and a member of the AXA IM Management oard and will report to Scemama. Florence Dard, global head of business development for AXA IM Real Assets, will be global head of client group, AXA IM Alts, in addition to her current role, and will also report to Scemama. Matthew Lovatt, global head of Framlington Equities, will become global head of client group, AXA IM Core, reporting to Hans Stoter, and will be a member of the AXA IM Management Board.

The inclusion of three women to AXA IM Alts’ executive roster is noteworthy in an industry that has a low rate of female employment. According to Preqin data, women account for less than 20% of all alternative asset employees, and only 12% of senior employees.

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HOOPP’s Jeff Wendling Elevated to Chief Executive

The current CIO helped develop the liability driven investment approach the Ontario health care fund is known for. 

Jeff Wendling (photo courtesy of HOOPP)

The Healthcare of Ontario Pension Plan (HOOPP) has appointed Jeff Wendling as its new president and chief executive, the fund announced Tuesday. 

Wendling, the current executive vice president and chief investment officer, is taking up the helm starting April 1, roughly one year after former Chief Executive Jim Keohane announced his retirement. The incoming CEO first joined HOOPP on the fund’s public equities team in 1998. 

“After an extensive search inside and outside Canada, the HOOPP Board determined that based on his deep knowledge of HOOPP, pension plans, and the global investment landscape, Jeff stood out among the many strong candidates as the best person for the job,” Dan Anderson, chair of pension plan’s board of trustees, said in a statement. 

The appointment comes at a troubled time for global markets, after heightened tensions over oil prices between Saudi Arabia and Russia triggered an equity drop so steep that Wall Street halted trading for 15 minutes on Monday. The coronavirus impact on businesses is also weighing on investors this week. 

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But the market swing presumably could seem like an opportunity to Wendling, who helped develop the liability driven investment approach made famous by his predecessor Keohane, according to the HOOPP website. 

Keohane considered the strategy significant in helping the C$80 billion fund (US$58 billion) weather the financial crisis. As of 2018, HOOPP had a 121% funded status. 

The Canadian pension system uses two portfolios—a liability hedge portfolio and a return-seeking portfolio—to reap returns and minimize volatility. 

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How HOOPP’s Jim Keohane Beat the Crisis

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