United States-based active manager Janus Capital has targeted Australia for the roll out of three of its funds.

Janus has already opened an office in Melbourne, in February, and will be targeting institutional investors.

The funds, which base their investment decisions on mathematical techniques, have been developed by Janus subsidiary Enhanced Investment Technologies (EIT).
Janus has hired John Landau from Bank of Ireland to lead the Australian operation and plans to hire more staff in the future.

EIT bases its investment decisions on a mathematical technique developed in the 1980s by a Princeton University academic.

"This is not a quantitative approach, which applies quant techniques to fundamental data. We do not look at any fundamental factors at all," EIT international president David Schofield said.

Instead, the fund aims to generate alpha through analysing the volatility of stocks and how they move relative to an index.

Schofield said it was then possible to create a portfolio that could deliver above index returns while retaining index-like levels of risk.

"Generating more return with low levels of relative risk has become crucial in the current investment environment," he said.

He estimated that some of EIT's more aggressive strategies could deliver returns of between 3 per cent and 4 per cent above the index.

Australian investors will have access to three funds through Janus, comprising a traditional research-based fund and two alpha-generating funds developed by EIT.

EIT has US$65 billion under management globally, the vast majority of which is based in the US.