Andrew Gowen

Bell Asset Management has appointed global equities leader Andrew Gowen to the newly-created role of director of research and portfolio manager, following an extensive global search.

Mr Gowen joins Bell from Lombard Odier in London, where he co-managed the long-term outperforming World Brands fund (c.$1bn USD), focussing on high quality, growth stocks in the Consumer and Technology sectors.

Michael Lovett, chief executive officer of Bell, says Mr Gowen has strong research acumen, honed over 25 years working in global equities across the UK and US, including more than 15 years as a portfolio manager.

“The appointment of Andrew is part of our ongoing strategy for long-term growth. His appointment will enhance our research and portfolio management capabilities to optimise client outcomes, while supporting chief investment officer Ned Bell who has built a resilient and successful global equities capability over 20 years, and whose leadership remains our cornerstone. Our strategy and investment philosophy remain the same, and we’ve retained a loyal pool of talent.

“Andrew has a strong track record of delivering high alpha, and brings a global network of relationships with top CEOs. In his role as director of research, he will lead efforts to strengthen Bell’s research capabilities and cultivate a high performing team. His role is central to supporting clients with even more in-depth and actionable market analysis,” says Mr Lovett.

In addition to the newly created role, Matt Saddington and Andrew Sleeman have been promoted to portfolio manager, a role they held at previous firms. The team will transition to a model where each strategy is managed by existing portfolio managers, Ned Bell and Joel Connell, alongside a dedicated third co-portfolio manager.

“These strategic decisions will allow us to optimise client outcomes, while ensuring that Bell is well-equipped for future growth and success,” says chief investment officer Ned Bell.

“We are confident we’ve found an exceptional candidate to drive our long-term strategic goals, and proud to foster our internal talent.”

Mr Bell also acknowledged the contributions made by portfolio manager Adrian Martuccio and senior global equities analyst Nicole Mardell, who are pursuing external opportunities following the restructure.

“We sincerely thank Adrian and Nicole for their service and loyalty, and wish them well,” said Mr Bell.

“Adrian has been a valuable member of the investment team for almost 18 years. He joined the firm when it was a small, two-person boutique with under $500m AUM. During his tenure, Adrian has been a key contributor to the asset management business, which has grown to around $5b. We acknowledge his significant contribution to consistent client outcomes over the long term, and look forward to following his continued success.”

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Adrian Martuccio

Global equities boutique manager Bell Asset Management (BAM) believes the drawdown in the United States over the last six months will ultimately provide a favourable environment for active stock pickers with good buying opportunities likely to emerge.

Returning from a trip to the US, Adrian Martuccio, BAM Portfolio Manager, , said while most US companies were more sanguine than usual, there were also many that continue to be enthusiastic.

“A lot of the companies we spoke to said margin expectations across the market are still too high so consensus forecasts need to come down. This is likely to take another couple of quarters.

“Stock prices have factored a lot of this in, but it will be hard for companies to rally convincingly in the face of downgrades.

“Companies in our portfolios such as Jack Henry, Honeywell, ICON and Ritchie Brothers continue to be optimistic as they have robust balance sheets, sustainable franchises and are well positioned to weather a high inflationary environment,” Mr Martuccio said.

Inflation is likely to remain a key issue as the full impact of employee shortages as well as elevated logistics and input cost inflation is yet to be seen in company numbers and balance sheets.

“Input cost inflation only started in March and April of this year so we believe the full margin effect is unlikely to be seen until closer to the end of this year,” Mr Martuccio noted.

Tech space facing challenges

“Funding is definitely drying up in the software and biotech space which has flowed through to valuations of listed companies, but private companies certainly still have high expectations.

“It’s likely this will reduce once these companies do another funding round or when a venture capitalist wants to exit,” Mr Martuccio said.

He added that it is likely mergers and acquisitions will increase off the back of falling listed prices and the private market flagging.

“We’re likely to see an increase in M & A’s but it will really have to be the right technologies – the equation of buy versus build versus time to market will ring true.

“Job losses at tech start-ups have also accelerated as they try to stop bleeding cash. This has resulted in larger, more established tech companies becoming more attractive to key talent.

Post pandemic demand

“Pandemic pull-forward demand remains the biggest uncertainty, especially if the consumer environment is more challenging.

“This doesn’t just apply to consumer companies but software as well,” he said.

He added that ‘the company pivot’ is still ongoing with businesses looking to broaden their product reach and addressable markets but it’s unlikely to replicate previous growth – a risk for big business as well.

“When we look at companies like BOX and Zoom they’re now in a position where they have to really focus on corporate customers because the consumer market has faded rapidly” he said.

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Ned Bell

Channel Capital, a multi-boutique investment services company, has entered into a strategic distribution partnership with Bell Asset Management, a specialist global equities asset management firm.

With A$2.4 billion assets under management as at 31 August 2019, Bell Asset Management is a specialist global equities investment manager focused on delivering long term growth through active management of global equities. Headquartered in Melbourne, Bell Asset Management provides long only fundamental/bottom up global equity solutions to a diversified investor base, including institutional and wholesale/sophisticated clients as well as financial advisers.

The distribution partnership is focused on driving engagement with research houses, financial advisers and wholesale/sophisticated investors nationally, for its flagship global equity investment strategy (Bell Global Equities Fund) and its global small and mid-cap strategy (Bell Global Emerging Companies Fund).

Ned Bell, Chief Investment Officer, Bell Asset Management said “We selected Channel Capital for its strategic capabilities and success in building long term relationships with investors, as well as its strong partnerships with its investment manager partners.”

Channel Capital’s Managing Director, Glen Holding said “After extensive due diligence in the global equity sector we are pleased to have partnered with a highly regarded investment manager that has achieved top quartile returns in both its global equities and small to mid-cap peer groups, especially over the last few years^[1]. The Bell Asset Management investment process, active returns, talented investment team and domestic and offshore institutional investor support, are qualities that highly align with the value proposition we seek in our partners.  In addition, with ‘growth’ and ‘value’ offerings being quite overcrowded, we are of the view that the Bell Asset Management ‘quality at a reasonable price’ process that has delivered world class numbers to investors to date, will have a distinct role to play in our clients’ portfolios.”

For the year to 31 August 2019, the Bell Global Equities Fund (Platform) (which invests in a globally diversified portfolio of shares) delivered a return of 14.22% and outperformed its benchmark MSCI World ex Australia Index by 6.65% and the Bell Global Emerging Companies Fund (which invests in a globally diversified portfolio of small and mid-cap companies) returned 10.07% and outperformed the benchmark MSCI World SMID Index by 8.99%, net of fees.

Both strategies are managed by Chief Investment Officer Ned Bell, and Co-Portfolio Manager Adrian Martuccio. The Bell Global Equities Fund (Platform) and the Bell Global Emerging Companies Fund have received a ‘recommended’ rating by Zenith Investment Partners, are also rated by Lonsec, and are available on a range of leading platforms.

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[1] *Source: eVestment as at 30 June 2019, Performance is for the strategy/composite and not at the Fund level and gross of fees, in USD.

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