Martin Currie Investment Management’s Australian office opened for business in July with the firm’s flagship international Global Alpha fund chosen as the launch strategy to offer super funds.
The Global Alpha ex-Australia fund has been seeded by UBS Wealth Management, which has offered the fund to its high net worth client base. Visiting Australia last month, Willie Watt, the company’s Edinburgh-based chief executive, said the fund was chosen as the initial focus of the Australian office, run by Kimon Kouryialas, because it represented the most active part of the business.
The Global Alpha fund, a concentrated long-only portfolio which is agnostic across countries and sectors, has been going since December 2002. It has averaged a return of 10.4 per cent a year since inception, which is 5.4 percentage points above the index.
The firm already had long-term and good relationships with consultants through regular visits prior to setting up the office in Melbourne. Martin Currie, which dates back to the 19th century, is primarily staff owned, with Jacob Rothschild and a US limited partnership – Crestview – recently taking a combined 24.9 per cent stake. This enabled some older partners to get some liquidity and younger ones to gain access to shares.
The firm is a specialist international equity manager. Its three strategy groups are: index relative (plus 2-4 per cent), index agnostic (such as Global Alpha) and absolute (long/short against a cash benchmark).
Watt, who started his career as a private equity manager, said he was not perturbed by the current trend for funds to sit on their cash or reduce their exposures to equities. “The current trend is for risk aversion … In most economies cash yields are attractive. We’re all prone to behavioural biases and if you keep on getting beaten up by the equity markets it produces a reaction to reduce your exposure,” he said.
“But a sensible strategy might be to take the cash that builds up and gradually move back into equities over six or 12 months, allowing you to average your price. If you take a five-year view, equities don’t look unattractive. Other viable strategies might be to invest in more absolute return equity, but equities will still be the place to be,” Watt concluded.