Emerging Manager Fund

The Queen Street Emerging Managers Fund has been designed for institutional investors in Australia and will invest in units of the:

• Queen Street Emerging Alpha Fund, and
• Queen Street Partners Fund.

The Emerging Alpha Fund is a multi boutique manager fund which allocates its portfolio to a range of emerging Australian equity managers recommended by Queen Street. The Partners Fund invests in economic interests in emerging manager businesses, as recommended by Queen Street.

Overall, the Fund will provide the investor with a combination of an equity market plus return and exposure to the continued growth in “boutique” investment managers via economic interests in selected boutiques. Queen Street seeks out managers early in their life cycle before they have gathered substantial funds. Many boutiques close to new investors when they reach capacity, suggesting there is an emerging manager premium to be captured – that is, more alpha to early investors. Research shows that this premium has been sustained over the past 8 years. The Emerging Managers Fund provides investors with an efficient means to gain that exposure.

Institutional investors are aware of this phenomenon and a number of the larger and more sophisticated players have already set aside a proportion of their Australian equity allocation to ‘incubator strategies’. Queen Street works with these investors to give them an effective means of accessing the early stage managers, facilitating co-investment and securing the scarce capacity as the managers develop.

The combination of this business model and the empirical demonstration of excess return from early-stage managers provide the catalyst for the Queen Street Emerging Managers Fund, with its unique alignment to the interests of institutional clients and the attraction of this model to small “investee” firms wishing to overcome the Allocation Gap.