Up to 50 per cent of the earnings of the largest 100 companies in the Australian market were derived from their offshore operations, he added. This kind of proprietary research could provide the manager with different insights into companies than those gleaned by its boutique competitors, who usually relied on broker research for information about companies. Brokers “broadcast” their findings to all of their clients. Jenneke argues that brokers with global reach did not often amalgamate research from various markets to comprehensively cover multinational companies. The same could be said of large institutional funds managers operating under a regional architecture, whose analysts were incentivised to see their ideas reflected primarily in regional portfolios.

But this view of broker research doesn’t mean that T. Rowe Price uses them only for execution, Jenneke emphasised. “Brokers are a source of information. Depending on the experience of brokers, they can help us with the provision of information and access to relationships to get more information. “We use them for information access. We don’t care about their ratings. Their earnings estimates are only how we judge how different we are form the market.” Another point of differentiation in ‘the land of boutiques’ was T. Rowe Price’s standing as an independent asset management company with $1.5 billion in cash on its balance sheet, Alderson said. Although the firm is listed on the NASDAQ, it is 25 per cent staff-owned, and regularly conducts share buy-backs to maintain this weighting and the stock options it supplies to employees. “It would be impossible for anyone to take us over without it being friendly.”

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