NEI Investments Wednesday announced the signing of an exclusive retail investment management agreement with OtterWood Capital Management Inc., led by portfolio manager Christine Hughes.
OtterWood is an independent investment management firm based in Toronto and founded by Hughes. Hughes will serve as sub-advisor to NEI in respect of the Ethical Balanced Fund and two new Northwest mandates, subject to securityholder votes and regulatory approval.
Hughes is known for her highly successful 10-year career at AGF Management Ltd. where she managed over $2 billion in one of the industry’s most recognized balanced funds.
“We are exceptionally pleased about our new partnership with Christine and OtterWood,” says Daniel Solomon, chief envestment Officer at NEI, adding the firm’s “active, ‘away-from-the-pack’ approach makes OtterWood a perfect match to NEI’s investment management philosophy.”
It is expected that OtterWood will assume investment management responsibilities for the $330 million Ethical Balanced Fund on May 14. The investment strategy of the fund will also be adjusted to conform to Hughes’ investment approach. The fund will no longer be systematically re-balanced back to asset class allocation as the sub-advisor will be given more flexibility to adjust between asset classes based on its market views from time to time. Also, the fund will be given the potential to use a wider array of derivatives, make exchange-traded fund investments, and engage in short selling, and invest up to 10% of its assets in precious metals.
“Partnering and collaborating with NEI will allow us to create what I consider a dream product with the ultimate amount of flexibility,” says Hughes. “As the sovereign debt crisis unfolds over the next decade, I look forward to managing these funds and seeking maximum returns in all market conditions.”
NEI also announced that it will close both Northwest Specialty Innovations Fund and Northwest Specialty Innovations Corporate Class to new purchases effective immediately, pending securityholder votes scheduled for May 29, to approve changes to the funds’ investment objectives.
NEI intends to re-open both funds in July 2012 with OtterWood as sub-advisor. The funds will be renamed Northwest Macro Canadian Equity Fund and Northwest Macro Canadian Equity Corporate Class. Both Funds will be managed with a broader all cap, all sector mandate that also utilizes OtterWood’s macro approach to money management.
NEI Investments, with approximately $5 billion in assets under management, is owned 50% by the Provincial Credit Union Centrals and 50% by Desjardins Group.