State Super has announced it has awarded an All China Equity mandate to Ninety One (formerly Investec Asset Management).
State Super’s senior investment manager, Andrew Huang, led an extensive tender process to search for niche opportunities for State Super’s Global Best Ideas satellite manager portfolio. ‘We canvassed the marketplace for equity strategies targeting an attractive segment of the global investment universe. An All Shares approach to China was the most compelling due to high alpha potential while diversifying beta. Skilled alpha hunters should thrive well in this broad and highly inefficient retail driven market.’
Ninety One was successful with its long running 4Factor ‘All China’ Equity strategy.
‘We believe Ninety One’s 4Factor process is well suited for generating alpha in one of the world’s most liquid and inefficient equity markets. We believe the strategy’s focus on exploiting behavioural biases and disciplined fundamental research are important advantages for this market. During an increasingly uncertain political climate, we also required a manager with very high standards of ESG integration in portfolio construction research and corporate engagement.’
After establishing the 4Factor investment process 20 years ago, the 4Factor team recognised early on the future importance that China will play in the global investment universe and begun investing heavily in their dedicated China team based in Hong Kong. Now with six Mandarin speakers the fundamental research conducted on the ground in China ensures that they can build a high conviction portfolio of 30-50 Chinese companies that exhibit strong Quality, Earnings, Value and Technical characteristics. It is also this on the ground company research which is critical for identifying and minimising any ESG related risks. The firm manages AUD $205 billion with $92 billion in listed equity investments.
Justin Cowper, Head of the Institutional business for Ninety One in Asia Pacific and Middle East, said: “In the past, many Australian Institutional investors have resisted a discrete allocation to Chinese Equities, given China’s close trading links to Australia and the potential double up in exposure through their Australian Equities and Emerging Markets allocations. State Super have led the way in evolving from this thinking and seeing the potential in the China A shares market, which allows investors access to the true nature of the Chinese market. We are proud to have worked with State Super, as one of our Partners in Business, to tailor this All China mandate to meet their specific needs and the needs of their members.
