American Century Investments has expanded its line of alternative mutual funds and created a new brand – AC Alternatives from American Century Investments.
The new suite of mutual funds includes the new subadvised multi-manager AC Alternatives Income (ALNNX-Investor Class) fund and two existing American Century-managed mutual funds, Equity Market Neutral (ALHIX-Investor Class) and Market Neutral Value (ACVVX-Investor Class). The latter two have been rebranded with the AC Alternatives moniker.
American Century has engaged Perella Weinberg Partners Capital Management to provide investment management and allocation services and to recommend and interact with sub-advisors for AC Alternatives Income, as well as two other multi-manager funds expected to launch in the coming months.
"We're excited to be collaborating with Perella Weinberg to bring our clients a range of alternative investment solutions," says Cleo Chang (pictured), senior vice president and head of alternative investments for American Century. "Perella Weinberg's experience managing both traditional and non-traditional asset classes serves as a nice complement to American Century's own expertise as a multi-boutique, risk-aware, institutional-quality asset manager."
While American Century offered its first alternative investment strategy a decade ago, the firm has a reputation for investing in more traditional asset classes like stocks, bonds and cash alternatives. The creation of the AC Alternatives brand delineates the company's alternative investment options from its legacy strategies. According to American Century, the AC Alternatives brand consists of "innovative solutions from experienced, specialised managers" that combine the potential "portfolio-enhancing benefits of alternatives with the integrity clients expect from American Century Investments."
AC Alternatives Income is the first of three mutual funds to be subadvised by Perella Weinberg. The new fund seeks to provide investors with diverse sources of income. Perella Weinberg uses a flexible and opportunistic investment strategy that allocates assets among various underlying subadvisors with expertise in a particular investment strategy, supplementing those strategies with its own direct investment management and hedging strategies.
The fund's principal strategies include corporate credit, structured credit, master limited partnerships and equity securities of dividend-paying companies. Subadvisors selected by Perella Weinberg include Arrowpoint Asset Management, Sankaty Advisors LLC, Third Avenue Management LLC and Good Hill Partners LP. In addition, Perella Weinberg provides tactical allocation of assets among the various underlying subadvisors and a framework for the risk management and investment monitoring of the funds. As the advisor responsible for the fund, American Century provides additional oversight. The fund is available in Investor, Institutional, A, C, R and R6 share classes.
"For the new AC Alternatives Income fund, we've assembled a team of portfolio managers and subadvisors with deep experience investing across a range of asset classes under varying market conditions," says Chris Bittman, chief investment officer (CIO) of Agility and partner at Perella Weinberg Partners. "Like American Century, our asset management business is predicated upon the principle that, over time, a client's success ultimately translates into the success of the firm."
In the coming months, Perella Weinberg is also expected to serve as subadvisor on two other alternative mutual funds: AC Alternatives Equity and AC Alternatives Multi-Strategy. Like the Income fund, Perella Weinberg will rely on a flexible and opportunistic investment strategy that allocates assets among different underlying subadvisors.
AC Alternatives Equity is designed to provide capital appreciation by combining several equity-oriented investment strategies in the pursuit of returns with a lower correlation to the traditional equity markets. This alternative approach strives to achieve less volatility than traditional equity investments over the full market cycle. Under normal market conditions, the fund will invest at least 80 percent of its net assets in equity securities.
AC Alternatives Multi-Strategy is also designed to provide capital appreciation by combining several alternative investment strategies, while maintaining a lower correlation to traditional equity and fixed-income markets. The fund is expected to include long-only equity, long/short equity and event-driven strategies.
The Perella Weinberg subadvisory team is led by Bittman, who joined the firm in 2009 to head Agility, the firm's outsourced chief investment officer investment solution. Previously, he was the CIO of the University of Colorado Foundation, the endowment supporting the university. Earlier in his career, he was the president and CEO of Jurika & Voyles, a California investment firm.
In addition to Bittman, the Perella Weinberg portfolio management team includes Kent Muckel and Darren Myers. A partner at Perella Weinberg, Muckel has been with the firm since 2010 and leads Agility's global public equity and fixed-income areas. Previously, he was the chief investment officer for Baylor University. He is a CFA charterholder.
Myers is a managing director at Perella Weinberg and leads Agility's absolute return investment area. Prior to joining the firm in 2007, Myers served as a senior research analyst at Tejas Securities Group, Inc. and as a senior analyst for The University of Texas Investment Management Company. He holds a bachelor's degree and an MBA from the University of Texas at Austin. He is a CFA charterholder.
With the creation of the new brand, two existing American Century funds have been renamed AC Alternatives Equity Market Neutral and AC Alternatives Market Neutral Value.
Launched in 2005, AC Alternatives Equity Market Neutral fund is a quantitatively managed long/short fund that aims to take long positions in undervalued stocks and short positions in overvalued stocks. The portfolio management team of Brian Garbe and Claudia Musat strives to maintain approximately equal dollar amounts in long and short equity positions.
Garbe joined American Century in 2010 from City National Bank, where he served as portfolio manager and director of research and trading. Previously, he was director of research and a portfolio manager with Sanwa Bank California. He holds a bachelor's degree in mathematics-applied science from the University of California, Los Angeles and an MBA from the Anderson Graduate School of Management at the University of California, Los Angeles.
Musat, who has been with American Century since 2005, holds a bachelor's degree from the University of Iasi, Romania, a master's degree in mathematics from Florida State University and a master's degree in financial engineering from the University of California at Berkeley.
AC Alternatives Market Neutral Value was launched in 2011 and is managed by the veteran team that also executes the firm's time-tested value approach for the Equity Income, Value and Mid Cap Value funds. Fundamentally managed, the AC Alternatives Market Neutral Value fund also aims to take long positions in undervalued stocks and short positions in overvalued stocks, while striving to maintain equal dollar amounts in its long and short equity positions.
The AC Alternatives Market Neutral Value team consists of US Value Equity Chief Investment Officer Phil Davidson, Senior Portfolio Managers Michael Liss and Kevin Toney and Portfolio Manager Brian Woglom. Davidson joined American Century in 1993 and has worked in the financial industry since 1980. He holds a bachelor's degree in business administration and a master's degree in finance from Illinois State University. He is a CFA charterholder and member of the CFA Institute.
Liss joined the firm in 1998 and has worked in the financial industry since 1991. Liss holds a bachelor's degree in business administration and finance from Albright College and a master's degree in finance from Indiana University. He is a CFA charterholder and a Certified Public Account.
Toney has been with American Century since 1999 and has worked in the financial industry since 1993. Toney received his bachelor's degree in commerce from the University of Virginia and his master's degree in business administration from The Wharton School at the University of Pennsylvania. He is a CFA charterholder.
Woglom joined the company in 2005 as an investment analyst. Previously, he served in analyst positions with Argo Partners and Metropolitan Life Insurance Co. Woglom holds a master's degree in business administration from the University of Michigan and a bachelor's degree in finance from Amherst College. He is a CFA charterholder and a member of the CFA Institute.