Case Study - The Hyperion Global Growth Fund
The Hyperion Global Growth Fund (HYGG) is an Exchange Quoted Managed Fund (EQMF) scheduled to list on the ASX in late-March. It will provide investors with access to the Hyperion Global Growth Companies Fund (Class B). Here, Hyperion Asset management chief investment officer, Mark Arnold (pictured), and deputy chief investment officer, Jason Orthman, explain why they decided to launch the product.
Why did you decide to launch this product?
As an alpha driven organisation, the decision was only made to launch an active EQMF due to sustained, strong levels of interest from investors and advisers who wanted to access our global strategy via an exchange.
Given the exchange-traded product market (ETPs) continues to increase in popularity, and that the Australian market capitalisation of all ETPs has now reached a record $95.2 billion, we felt the time was right to give investors and advisers yet another way to invest in our $1 billion Global Fund. On listing, we will then have a quoted and unquoted version of the same fund.
What is the fund's objective?
The fund’s portfolio is the result of over 10 years of research into listed global businesses. As with all Hyperion’s investments, the fund is committed to delivering superior long-term returns for our clients by investing in a concentrated selection of high-quality structural growth stocks that have low levels of gearing, predictable long-term earnings streams and above-average growth potential.
What goes into putting together a new product launch?
From operations to compliance, sales and marketing, there is a lot of effort which goes into launching a new product, particularly a listed one. Appointing and working with market makers, administrators, registrars and responsible entities, regulators, exchanges, and external consultants all forms part of the process.
How did you research market opportunities?
As mentioned, given the exchange-traded product market (ETPs) continues to increase in popularity, we wanted to offer Australian investors access to our Hyperion Global Growth Companies Fund in listed form.
We also wanted to provide Australian investors with greater choice, flexibility and the opportunity to diversify their portfolio away from Australian shares with an allocation to a global growth strategy which invests in international disruptive businesses.
What challenges did you face and how were they overcome?
Hyperion Asset Management is not a product proliferator nor an asset gathering business. We believe sustainable funds management firms are alpha driven and not marketing or product led firms. As a result, we are very selective about the products we offer and since inception, have launched just three funds.
How did you decide on service providers?
We have pre-existing relationships with many of the service providers including Pinnacle Investment Management, the responsible entity.
Can you explain the fee structure?
The listed fund will have the same fee structure as the unlisted fund which is 0.7 per cent management fee and a 20 per cent performance fee above the benchmark (MSCI World Accumulation Index). We believe this fee structure is very disruptive in the context of the high base fees of many large, incumbent global managers.