Press Release – Foresight Analytics Assigns ‘SUPERIOR’ Rating to Four Coolabah Capital Investments Pty Ltd Funds.
Sydney, 24th August 2023
Foresight Analytics has recently completed an assessment of four funds managed by Coolabah Capital Investments Pty Ltd.
The Smarter Money Long-Short Credit Fund (CSMLSCF), the Smarter Money Higher Income Fund (CSMHIF), the Smarter Money Fund (SMF) and the Active Composite Bond Fund (Hedge Fund) (CACBF). All four funds managed by Coolabah Capital Investments Pty Ltd have been assigned a SUPERIOR investment rating, reflecting Foresight Analytics’ highest level of confidence that the funds are likely to deliver a risk-adjusted return in line with its investment objectives.
The Foresight Product Complexity Indicator (PCI), which considers the complexity of an investment product based on a range of factors, was assigned as RELATIVELY SIMPLE for both the Smarter Money Higher Income Fund and the Smarter Money Fund. The strategies may include the use of very liquid derivatives such as index futures.
The Smarter Money Long-Short Credit Fund and the Active Composite Bond Fund (Hedge Fund) were assigned MORE COMPLEX PCI, reflecting the fact that these funds generate returns through a variety of non-standard strategies. These may include the use of leverage, the ability to go both long and short, investment in sub-investment grade securities and the use of over-the-counter credit derivatives.
All funds rated by Foresight Analytics & Ratings are managed by Australia-based Coolabah Capital Investments Pty Ltd, an active credit alpha manager responsible for managing numerous institutional mandates. The firm is 65% owned by its investment team and 35% owned by the Pinnacle Investment Management Group Limited (ASX: PNI), an Australia-based multi-affiliate investment firm.
In 2020, Coolabah Capital opened a London office, in addition to Sydney and Melbourne-based offices. The manager intends to continue expanding overseas and believes that its overall FUM capacity across all the strategies is between $15BN to $20BN. Pinnacle, which has offices in London and New York, is leading CCI’s overseas expansion and is exploring the best structures for offering the manager’s capabilities in overseas markets.
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About Foresight Analytics’ Investment Due Diligence Rating (IDD Rating)
The objective of Foresight Analytics’ Investment Due Diligence Rating (IDD Rating) is to identify the best funds and opportunities for future investment. We assess the fund’s historical risk-adjusted performance – compared to its peers – to form a holistic view of the manager’s ability to deliver future returns. The IDD rating indicates the quality of the investment option within the context of a diversified portfolio and full investment cycle.
Foresight’s analysts use a 5-point scale to determine how the fund will perform against a range of risk factors.
- SUPERIOR indicates the highest level of confidence that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is highly suitable for inclusion on APLs.
- VERY STRONG indicates a very strong conviction that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is suitable for inclusion on most APLs.
- STRONG indicates a strong likelihood that the fund can deliver a risk-adjusted return in line with its investment objectives and that it is suitable for inclusion on most APLs.
- COMPETENT indicates the fund may deliver a risk-adjusted return in line with its relevant benchmark and that it may be suitable for APLs.
- WEAK indicates the fund is unlikely to deliver a risk-adjusted return in line with its investment objective and that it is not suitable for most APLs.
A ‘Hold’ designation is applied to a fund’s rating if a material change impacts the fund manager, and we need to review the rating. A ‘Sell’ designation indicates the Foresight Investment Ratings Committee considers risk factors to be elevated enough that maintaining an investment in the fund as part of their diversified portfolio is questionable.
Foresight Analytics Foresight Complexity Indicator
A Foresight Complexity Indicator (FCI) highlights the complexity of an investment product based on a range of indicators. These typically include its terms and conditions, performance-based fees, liquidity structure, financial leverage, use of derivatives, rare and niche asset class/opportunity set, currency exposure and the level of transparency offered for investors. Foresight believes these factors can disproportionately affect risk–adjusted return outcomes for investors even if a manager is very skilled. Investors can use FCI as a guide to portfolio position sizing within a diversified portfolio context.
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About Foresight Analytics
Foresight Analytics, an independent investment consultancy, provides investment diligence, data analytics, and advisory solutions to leading investment management companies, superannuation funds and wealth groups across the Asia Pacific. Foresight’s innovative, evidence-based approach blends both human and forensic insights to provide a range of analytical, predictive and market intelligence solutions to investors. Foresight Analytics was founded in 2015 by Jay Kumar, a former executive of Morningstar, Optimix Investment Management, ANZ Wealth & Private Bank and the Reserve Bank of Fiji.
Foresight’s fiduciary solutions includes Diligence Services (Investment, Operational, ESG & Risk Diligence), Data Analytics and Asset Consulting. Foresight’s fund strategy solutions include Data Analytics for asset managers, Fund Strategy Benchmarking Solutions and Strategic Research.