Grant Samuel Funds Management has launched its first Australian-domiciled funds for its alliance partner, Epoch Investment Partners, introducing a new value-orientated global strategy to the market.
The Epoch ‘shareholder value’ style for two funds – hedged and unhedged – focuses on free cashflow of the underlying stocks which are put together in a fairly concentrated portfolio of about 90 stocks by the US-based global firm. Epoch is a listed manager with about $US6 billion under management, set up in 2004. Grant Samuel has appointed Tactical Global Management to provide a passive currency hedge for one of the new funds. Visiting Australia for the launch last week, Eric Seppenfield, Epoch portfolio manager, said the strategy provided both a steady income yield as well as capital growth. The manager focused on companies with strong cashflows and cash balances, but bought only those where directors and management were committed to its efficient use – either through high dividends or share buy-backs when the companies could not demonstrate better value from their own expansion. One Australian stock recently owned by Epoch because of its high dividend policy is St George Bank. The initial screen of about 12,000 stocks, based on the cashflow analysis, provides a universe of about 150 stocks from which to choose. Andrew McKinnon, the chief executive of Grant Samuel Funds Management, said his firm would be looking to bring other Epoch strategies to Australia in the future. The first being considered was a concentrated small-cap fund. The new funds will be available to institutional investors and the retail market via platforms.
There is one investment area where Insignia’s $180 billion super arm has not lost money for the past 17 years, which is what it calls the insurance-related investments. The alternatives strategy is gaining popularity among asset owners due to its diversification benefit, but Insignia’s super and asset management investment chief Dan Farmer warns it is a space where investors can suffer if they “stumble in without doing the homework”.
Darcy SongJanuary 23, 2025
