NEI Investments has signed an exclusive retail investment management agreement with OtterWood Capital Management, led by award winning portfolio manager Christine Hughes.
Hughes will serve as sub-advisor on NEI’s Ethical Balanced Fund, with a planned start date of May 14. She may also manage two new Northwest mandates, subject to securityholder and regulatory approval.
Hughes is perhaps best known for her 10-year stint at AGF, where she managed the $2.3 billion AGF Canadian Balanced Fund. She left AGF in 2010 and founded OtterWood, an independent investment management firm based in Toronto.
“We are exceptionally pleased about our new partnership with Christine and OtterWood,” said Daniel Solomon, chief investment officer at NEI. “In today’s highly charged geopolitical climate she has demonstrated a unique ability to add value by blending macro-economic assessment with quality stock selection. This active, ‘away-from-the-pack’ approach makes OtterWood a perfect match to NEI’s investment management philosophy.”
The investment strategy of the Ethical Balanced Fund will be adjusted to conform to Hughes’ investment approach, but NEI assures investors its ethical screens will remain in place. The fund will no longer be systematically re-balanced back to asset class allocation, giving Hughes more flexibility to adjust between asset classes based on her market views from time to time.
She will have the option of employing a wider array of derivatives, use ETFs, and engage in short selling. Subject to regulatory approval, the fund will be able to invest up to 10% of its assets in precious metals.
NEI also announced that it will close both the Northwest Specialty Innovations Fund and the Northwest Specialty Innovations Corporate Class to new purchases effective immediately, pending securityholder votes scheduled for May 29, 2012 to approve changes to the funds’ investment objectives.
The company plans to re-open both Funds in July 2012 with OtterWood as sub-advisor. The funds will be renamed the Northwest Macro Canadian Equity Fund and the Northwest Macro Canadian Equity Corporate Class and, subject to securityholder approval, both will be managed with a broader all cap, all sector mandate that also utilizes OtterWood’s macro approach to money management.
NEI plans to roll out a new product tailor made to fit Hughes’ investment process in July, subject to regulatory approval.
“Partnering and collaborating with NEI will allow us to create what I consider a dream product with the ultimate amount of flexibility.” said 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.”