In this industry, every downturn can lead to an upswing.

At least that seems to be the case with the $15-billion Cincinnati-based asset manager Touchstone and its Touchstone Global Real Estate Fund (TGACX).

Seeded in October 2009 with 11 other Touchstone funds, the mutual fund had been sub-advised by Cornerstone Real Estate Managers until March of this year.

Touchstone president Steve Graziano explained to MFWire that Cornerstone at that point had to resign from the sub-advisory mandate due to a conflict of interest brought about by a request from its parent Oppenheimer.

He explained the situation in this way:

One of the things that we require from our managers is that we have exclusivity in that space in which we compete. Any new sub-advisor I bring in, they are free to sign on to other sub-advisor relationships, as long as they are not in our space. We think Cornerstone did a very good job for us, they have a competitive track record, but their parent came to them and asked them to launch a domestic real estate fund under the Oppenheimer brand. Domestic real estate and global real estate was too close for comfort for us, so they resigned from the mandate.

This cloud had a silver lining though, Graziano said. After temporarily hiring out the fund to Russell Investments, Touchstone hired on Forum Securities Limited as Cornerstone's permanent replacement. Forum, Graziano said, offers the advantage of a global footprint as well as income elements.

Graziano said that Touchstone would not look to reconsider any other sub advisor mandates this year.

"It's not in the cards," he said. 

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