Multi-affiliate manager Legg Mason is looking to expand its global equities capabilities with the separation of the value-orientated global team from US manager Brandywine Global Investment Management into a new affiliate to be called Global Currents.
Global Currents is scheduled to start on its own in July with about $US9 billion under management, including money from three Australian clients. This will leave Brandywine with about $US40 billion under management, mainly in global fixed interest and US large and small-cap funds. Safa Muhtaseb, Brandywine portfolio manager, said last week that the formation of Global Currents would give the investment managers more focus and autonomy. Technical support, compliance, legal, operations and distribution would continue to be handled by Legg Mason. “We will be a brand new affiliate of Legg Mason,” Muhtaseb said. Kimon Kouryialas, head of distribution for Legg in Australia, said the parent company wanted to expand in global equities and forming a specialist global equities value house was one of the ways it would do so. He said Legg was in the process of having the Global Currents funds rated by retail research houses to put them onto platforms. The two main funds are a concentrated value global funds and an SRI fund, both of which have Australian clients. The concentrated fund is “benchmark agnostic”, Muhtaseb says, with very wide constraints between sectors and countries. It typically has about 60-70 stocks and can invest across large, mid and small-cap stocks in up to 48 countries. Geographical constraints include no more than 75 per cent in the US, no more than 50 per cent in any non-US country and no more than 15 per cent in emerging markets. Befitting the value approach, portfolio turnover is very low, at about 30-40 per cent a year. Performance for the main global fund over recent years has been very good, with a return of 19.98 per cent in the five years to March this year, compared with an MSCI return of 15.96 per cent. Since inception, in 2002, the fund has returned 9.61 per cent, against the MSCI’s 1.58 per cent.
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