The alternatives sector is unique in that it’s largely defined by what it’s not. Accordingly, how you fit alternatives within your existing asset class structure will depend on relativity, and how the investments interact with the other asset classes according to Atchison’s Kev Toohey.
The private markets juggernaut is one that has also thrown up a wealth of data that other players can use to sharpen up due diligence when making their own investment decisions – especially in the growing secondaries market.
Finalists for Zenith’s funds management awards
The 10th annual Zenith Investment Partners funds management awards will be live-streamed this year, on October 15, with the list of 22 awards having been fine-tuned for the occasion.
A new award has been added – global small-cap equities – but two previously separate awards – Best Exchange Traded Fund and Best Listed Investment Company – have been amalgamated and broadened to include all exchange-quoted funds.
The inclusion of global small-cap equities followed considerable work on the category by the research firm in recent years, and the inclusion of the increasingly popular asset class in some of its model portfolios.
Bronwen Moncrieff, Zenith’s general manager and head of research, said last week (September 9) that going back five years there were only one or two global small-cap equities funds which fit the Zenith investment criteria, but this had grown to about 15 currently.
With the listed vehicles category, the lines had become blurred between the various structures, from companies and trusts through to traditional funds, in just the past two years with a spate of new listed active funds expanding the market segment.
She said with respect to this year’s entrants overall, the standard was at least as good as in the pre-covid past, despite the market volatility and operational difficulties caused by the pandemic.
The fact that the markets were global meant that, by their nature, the managers had to be digitally connected already. From Zenith’s perspective, she said, people were able to switch to working from home almost overnight, even though everyone originally thought the lockdowns to be short term.
“We’d set up Teams about nine months before it happened,” she said. “From an operational perspective, we had back-up plans in place. This was a live test.”
The live stream will take place from a studio in Melbourne, starting at 12pm, over which Zenith’s David Wright, the CEO and co-founder, and John Nicoll, national head of sales, will preside along with Bronwen Moncrieff.
The winners of the three main awards – Fund Manager of the Year (last year awarded to Pendal Group), Distributor of the Year (last year Fidante Partners) and Industry Contribution Award (last year Anne Anderson) – will each also give a short acceptance speech.
| Category | Finalists |
| Australian Real Estate Investment Trust | Cromwell Funds Management |
| DWS Investments/Ironbark Asset Management | |
| UBS Asset Management | |
| Global Real Estate Investment Trust | Quay Global Investors |
| UBS Asset Management | |
| Vanguard Investments Australia Ltd | |
| Real Assets | Australian Unity |
| Charter Hall Group | |
| UBS Asset Management | |
| Infrastructure | ATLAS Infrastructure |
| ClearBridge Investments Limited | |
| Maple-Brown Abbott Global Listed Infrastructure | |
| Global and Diversified Fixed Interest | Ardea Investment Management |
| Macquarie Asset Management | |
| PIMCO | |
| Australian Fixed Interest | La Trobe Financial |
| Metrics Credit Partners | |
| Realm Investment House | |
| Listed Entities | iShares by BlackRock |
| Metrics Credit Partners | |
| VanEck Australia | |
| Alternative Strategies | Ellerston Capital Limited |
| Firetrail Investments | |
| Man AHL | |
| Multi Asset – Diversified | BlackRock |
| IOOF Investment Services Limited | |
| Macquarie Asset Management | |
| Multi Asset – Real Return | MLC Asset Management |
| Perpetual Asset Management Australia | |
| PineBridge Investments | |
| International Equities – EM & Regional | GQG Partners |
| RWC Partners | |
| UBS Asset Management | |
| International Equities – Alts Strategies | Apis Capital Advisors/Ironbark Asset Management |
| PM Capital | |
| Talaria Asset Management | |
| International Equities – Global | AllianceBernstein |
| Macquarie Asset Management/Arrowstreet Capital | |
| T. Rowe Price | |
| International Equities – Global Small Cap | Bell Asset Management |
| Fairlight Asset Management | |
| Pengana Capital/Lizard Investors | |
| Australian Equities – Alternative Strategies | Merlon Capital Partners |
| Milford Australia | |
| Perpetual Asset Management Australia | |
| Australian Equities – Small Cap | Eiger Capital |
| Fidelity International | |
| Spheria Asset Management | |
| Australian Equities – Large Cap | Bennelong Australian Equity Partners |
| Greencape Capital | |
| Pendal Group | |
| Sustainable and Responsible Investments | Alphinity Investment Management |
| Pendal Group | |
| Stewart Investors | |
| Rising Star | Eiger Capital |
| Federation Asset Management | |
| Sage Capital |
Bronwen Moncrieff said the methodology (available on the Zenith website) involved a combination of quantitative factors, such as investment performance in the asset sector categories, as well as fund flows and adjustments for style when necessary. For instance, with value out of favour for nearly 10 years until late last year, an adjustment has been necessary to enable consideration to be given to the good performers within that style.
“The methodology really comes down to two key components,” she said. One, is the rating we give them, the most significant parts being to capture their philosophy, people, process and portfolio construction. Second is their performance, which is not just for the past year but also for previous years.”
In the categories with a large and growing universe, such as international equities, emerging markets funds and ETFs are broken out, as well as the new global small-caps category.
In its upcoming sector review, to be published this November, Zenith will be adding another 20-25 managers to its already-large universe of managers this year, Moncrieff said, taking the total to about 170, not including ETFs.
The researchers look at whether managers are being true to label with their offerings by studying the underlying holdings, which is relevant when checking for ‘greenwashing’ in the rapidly expanding ESG-focused market, or the level of turnover of portfolios for those which espouse to be long-term investors.
For further information, go to www.zenithpartners.com.au or phone (03) 9642 3320.
– Greg Bright
