MLC’s MasterKey, a $20 billion retail multimanager platform, has just turned 10 – and one-quarter of its managers have been with it the whole way. KRISTEN PAECH reports on the funds managers behind MasterKey and the evolution of the platform amid hefty competition and industry consolidation.
Almost a quarter of the managers on MLC’s MasterKey have been managing money for MLC since before the platform’s inception in 1999. Capital International has been part of MLC’s global equity portfolio strategy since 1985, when MLC’s multimanager funds were first launched, while UBS Global Asset Management has managed an Australian nominal bonds mandate for the same length of time. Currency specialist Bridgewater, boutique equities manager Concord Capital, Aussie equities manager Maple Brown Abbott, fixed income manager PIMCO and index house Vanguard Investments are among other managers that have managed money for MLC for up to 17 years. Michael Clancy, executive general manager of investment platforms at MLC & NAB Wealth, says while the MasterKey platform has evolved, many of the managers have been there since the start.
“Capital International has been part of our global equity portfolio strategy since 1985 when MLC first launched our multimanager funds,” he says. “Other firms like Maple Brown Abbott have been with us since the early 1990s in Australian equities, and PIMCO has been with us on the bond side for many years as well.” Maple Brown Abbott was appointed in 1992, while PIMCO has been managing global diversified debt securities and a real return strategy since 1997. High-yield debt manager W.R Huff has been on board since 2000, and MLC’s chief investment officer Chris Condon remembers that for most of that time, the New Jersey–based manager did not allow its analysts access to the internet. “If you wanted to get in touch you had to send them a fax…the firm wanted to do everything it could to stop its analysts ever seeing a broker’s report on a company. They were encouraged to form their own view on the debt,” he says.
The tumultuous year of 2008 saw MLC re-evaluate its global shares strategy, resulting in the termination of growth managers Alliance Growth Equities and Fortis Investments and value manager Bernstein Value Equities. As part of the overhaul, MLC appointed Mondrian Investment Partners and Tweedy, Browne Company on the value side, and Harding Loevner and Sands Capital Management on the growth side. UK-based manager Ruffer was also added to the platform this year, and has been managing a ‘global go-anywhere’ strategy since February. The Horizon Series of diversified funds formed the foundation for the manager of managers platform, which currently counts 34 funds managers in its stable. The series, Horizon 1 to 7, remain the core of the platform, which has evolved over time to include a range of externally managed funds. “The core of MasterKey is still the Horizon series of investment funds and that series of funds has evolved and developed, and the investment strategies used within those funds have become more sophisticated,” Clancy says.