From AI Engine to Mutual Fund
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Tuesday, February 19, 2019

From AI Engine to Mutual Fund

A boutique, artificial intelligence-driven arm of a employee-owned British asset manager has entered the U.S. mutual fund business. Meanwhile, watch for the parent asset manager's distribution to increase, too.

Daniel Philps
Mondrian Investment Partners
Head of Rothko Investment Strategies
The team at Rothko Investment Strategies recently rolled out their first mutual fund for U.S. investors, the Rothko Emerging Markets Equity Fund, confirms Dan Philps, head of Rothko. Philps has "no more immediate plans" to launch other mutual funds, though he adds that further launches are "quite possibly" in the cards further down the lead. He's open to prepping collective trusts, too, to go after the defined contribution retirement plan channel.

"That could be a future point of interest," Philps tells MFWire.

Rothko is a 5.5-year-old independent boutique division within London-based Mondrian Investment Partners. (Mondrian has U.S. offices in Philadelphia.) Like the rest of Mondrian, the Rothko team takes a defensive-oriented approach to value investing. The twist is that Rothko takes "a systematic approach driven by an AI engine."

"We don't use factors," Philps says. "We don't use traditional quantitative tools."

Justin Richards, senior vice president of client services at Rothko, focuses on distribution and marketing for Rothko. As for Mondrian over all, senior vice president Jim Brecker confirms that the team has no distribution expansion plans, at least "not in the short term," and they're not prepping any more mutual funds or collective trusts for now after launching this fund and adopting a set of different funds last September. Yet the team is having "some preliminary discussions" about boosting their coverage of the advisor-sold asset management market, and they may launch a "limited partnership type vehicle," Brecker says.

"We're careful about the terms retail and institutional," Brecker adds. "We're not building out a wholesaling force."

As of September 30, Mondrian had more than $54 billion in AUM.

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