Clyde Rossouw

Ninety One, the $170.9 billion (AU$ 246.3bn as at 30.09.24) active global asset manager, is expanding its Australian presence with the launch of the Global Franchise Fund to a wholesale investors.

Managed by Clyde Rossouw, Head of Quality, the Global Franchise Strategy, has $22.4billion ($AU32.2 billion) assets under management and aims to achieve long-term outperformance primarily through investment in a concentrated number of high quality, attractively valued, well-run companies that have strong balance sheets and dominant market positioning, such as Visa, ASML and Microsoft. The investment team focuses on fundamental research to identify companies offering these characteristics. This results in a resilient portfolio with a low carbon footprint, characterised by durable, defensive and differentiated alpha.

Ninety One has offered a range of strategies across equities, emerging markets, fixed income, multi asset and sustainable investing to Australian institutions since 2008. This will be the firms second offering to the wholesale market, creating access for professional investors such as endowments and foundations, family offices and high net worth individuals to the Global Franchise Fund.

Justin Cowper, Head of Institutional, Asia Pacific and Middle East, Ninety One says: “The market undervalues the ability of quality companies with enduring competitive advantages, disciplined capital allocation and a focus on sustainability to deliver persistently high or improving cash flows and returns on invested capital. Global Franchise seeks to invest in a concentrated portfolio of high-quality businesses with exceptional characteristics which enable them to compound free cash flows over long periods.

“The launch of Global Franchise to the Australian wholesale market will be beneficial to professional investors because we believe that an active quality approach, driven by proprietary fundamental analysis and engagement, is best placed to compound shareholder value over the long term, while reducing the risk of a permanent loss of capital.”

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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.

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The Investec Diversified Growth (Australian) strategy will be managed as part of Investec Asset Management’s successful range of global multi-asset strategies. Michael Spinks and Philip Saunders, co-managers of the fund, will be supported by the 24-strong multi-asset team, and backed by Investec’s expert in-house investment capabilities.

The Investec Diversified Growth (Australian) strategy is powered by one consistent investment process, centring on dynamic allocation across a globally diverse range of asset classes grouped together into three baskets categorised by behaviour rather than labels; Growth, Defensive and Uncorrelated, including equities, fixed income, currencies, commodities, infrastructure and broader alternative assets. Taking a flexible approach to asset allocation, exposure to each asset class is achieved through a combination of Investec’s in-house funds, passive funds and direct investments.

Domiciled in Australia, the strategy aims to provide real returns of Australian CPI+5% with half the volatility of Global Equities.

Justin Cowper, Country Head, Australia, Investec Asset Management, said: “The launch of our dedicated strategy, in an Australian domiciled unit trust, is a natural development in the evolution of our business in Australia and helps to open up this opportunity to a wider investor base.

“Increasingly institutional investors are looking for a standalone multi-asset investment solution that can fit within a broader investment portfolio, without overpowering the overall investment strategy. We believe this solution is best met by investment managers with a global mind-set and investment platform, who are able to utilise their expertise across a broad range of asset classes with the aim of delivering a consistent outcome.

“In recent years we have seen increasing demand from our clients globally for diversified growth strategies and have already won a number of segregated mandates. Increasingly, we believe that they will be a solution for investors globally in the future.
“Australia is currently faced with a low interest rate, low inflation environment, leading institutional investors to question the source of future returns. Our Diversified Growth Fund targets a return of Australian CPI+5% over a rolling five year period with half the risk of global equities, which could make it a suitable addition to a liquid alternative portfolio or a tool for de-risking an equity allocation.”

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