Stephen Hiscock

High conviction fund manager SG Hiscock & Company Limited (SGH) is partnering with EAM Global Investors LLC (EAM) to offer an exclusive global small cap strategy to the Australian market.

Under the arrangement, EAM will join SGH’s Partnership Program alongside other global funds management businesses including Morgan Stanley Investment Management (Australia) Pty Ltd, and LaSalle Investment Management Securities LLC. SGH and abrdn have also entered into a strategic partnership whereby SGH has become the wholesale distribution partner for abrdn’s international funds in the Australian market.

EAM is a San Diego-based fund manager founded in 2007 which manages a range of strategies including Global Opportunities, a global small cap strategy established in 2017. EAM has a team-driven approach across all its investment strategies, utilising a systematic approach combined with stock selection, tailored risk management and efficient implementation to deliver outcomes for clients.

According to SGH executive chair and chief investment officer, Stephen Hiscock, the addition of EAM is a natural complement to the existing suite of Partnership Program asset managers.

“The global small cap market is a fascinating space in this economic environment, and EAM is a well-respected fund manager with a proven track record of delivering returns for investors.

“Under the Program, we’re able to provide Australian investors with access to investment opportunities across global equities and global real estate investment trusts, and now with EAM, global small caps.

“The Partnership Program is well established in the local market, and EAM sees value in our distribution team acting as ambassadors for its product and strategies,” he said.

EAM uses a systematic investment approach called Informed Momentum®, the firm’s time-tested philosophy invests in companies with positive momentum and adds rationale and risk management to deliver alpha for clients.

EAM chief investment officer, Travis Prentice, said: “SG Hiscock & Company has a strong investment network in the Australian market, and it has a proven ability to effectively deliver products and strategies on behalf of global managers.

“Our firm has existing institutional client relationships in Australia and we are thrilled our capabilities will now also be available to the adviser market. The distribution team at SG Hiscock comes highly regarded, and we’re excited to tap into their expertise and relationships with domestic adviser groups,” he said.

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Founder and managing director Stephen Hiscock will continue with the firm as executive chair and chief investment officer.

Mr Croker joined SG Hiscock & Company 20 years ago and was most recently chief financial officer. His transition to the role of chief executive has been in development for a number of years, including having acted as co-chief executive officer with Mr Hiscock for a period of time in 2021.

According to Mr Hiscock, the process in formally appointing Mr Croker to the role has been seamless and well supported by the company board and management team.

“As a business, we undertook the necessary due diligence required on the chief executive appointment and Giles has been regarded as a natural successor for some time.

“He brings extensive financial and business acumen to the table and I’m confident he will continue to lead the business on a positive growth trajectory,” he said.

Mr Hiscock established SG Hiscock & Company in 2001, and has held the roles of managing director and chair since that time. He was previously general manager, chief investment officer and chairman of the Asset Allocation Committee at National Asset Management Limited (NAM).

The appointment of Mr Croker was unanimously endorsed by the board of SG Hiscock & Company. All other executive and management positions within the business remain unchanged.

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Hamish Tadgell

SG Hiscock & Company has launched a new fund that will invest in Australian medical technology companies.

The SGH Medical Technology Fund will have a social impact focus and aims to provide long-term capital growth by investing in a portfolio of medical technology companies where innovation plays a crucial role in improving global health and economic outcomes.

Rory Hunter, portfolio manager of the Fund, says Australian medical technology is among the best in the world and the Fund will offer investors access to high quality growth companies, both established and start-up.

“Australia’s history of medical breakthroughs includes penicillin, the bionic ear, ultrasounds, spray-on skin, and the cervical cancer vaccine. In addition, there are many research facilities in Australia which are recognised as medical centres of excellence at a global level.

“Investors will also benefit from several tailwinds that are driving innovation and growth in medical research and technology.

“The nature of ageing populations in developed economies has been understood for some time, but we are starting to see the full impact of this demographic trend.  There is ever increasing pressure on healthcare institutions to invest in early intervention and prevention, with research showing that medical care is less effective in improving health outcomes than early intervention strategies.

“The COVID-19 pandemic has added a further layer to this.  We are seeing greater demand for diagnostic testing and healthcare services, and significant government spending to support the industry.  The 2021 Federal Budget included a “patent box” tax break for medical and biotech companies to help encourage research and innovation and we expect further government initiatives to follow this.

“Finally, we believe investors who are interested in social impact investing will find the Fund attractive.  Through its investments in Australian medical technology and innovation, the Fund will actively contribute to the welfare of future generations as well as donating a portion of management fees to Australian medical research and commercialisation.”

The SGH Medical Technology Fund will invest in a mix of established and start-up medical technology companies, listed and unlisted, in Australia and New Zealand.  It will typically hold between 40 and 60 investments.

The Fund will be run by the SGH Emerging Companies Team and will be guided by the SGH Medical Technology Advisory Board, made up of industry leading experts including:

• Brenda Shanahan AO as chair (non-executive director, SG Hiscock & Company; non-executive director, Clinuvel Pharmaceuticals; former chair, St Vincent’s Medical Research Institute; chair, Aitkenhead Centre for Medical Discovery)
• Professor Mark Cook (chair of medicine, St Vincent’s Hospital; chair of medicine, University of Melbourne; state chair, Victoria, Australian and New Zealand Association of Neurologists; director, Graeme Clarke Institute for Biomedical Engineering)
• Sam Lanyon (co-CEO and co-founder, Planet Innovation; executive chair, Lumos Diagnostics).
• Stephen Hiscock (chairman and managing director, SG Hiscock & Company; director, DMP Asset Management)
• Hamish Tadgell (head of research, SG Hiscock & Company; portfolio manager, SGH20)

Additionally, SGH will establish a registered charitable foundation which will be funded by 10% of net revenue from the SGH Medical Technology Fund, including performance fees.

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The investment reports for both the hedged and unhedged versions of the funds cite the highly experienced investment teams and successful track record in implementing the respective investment philosophies.

The Global Quality Fund focuses on high-quality, well managed companies with the aim of compounding shareholder wealth at attractive rates over the long term.

The Lonsec investment report said: “Underpinning the rating is Lonsec’s conviction in the investment team…Lonsec has a positive regard for the senior members of the team and highlights their considerable tenure at the manager, while noting the strong investment culture and collaborative research process. Lonsec also considers the investment approach to be well-devised and structured.”

Similarly, Lonsec also noted the strength of the investment team in the report for the Global Sustain Fund, which invests in high quality companies at reasonable valuations that can sustain their high returns on operating capital over the long term. Its fundamental point of difference is its superior approach to environmental, social and governance (ESG) investing with a clearly defined process.

“The Fund explicitly excludes eight controversial sectors and the underlying companies as assessed by the manager, and avoids carbon-intensive industries,” said the report.

“The manager has articulated a commitment to the integration of ESG within their investment process with evidence of a policy framework and public positioning. The level of disclosure with respect to the manager’s proxy voting policy and voting outcomes is considered better than peers supported by an industry leading policy framework.

“…furthermore, the manager has a well-structured approach to the collection and use of ESG specific data, including the use of a proprietary data collection model. Overall, Lonsec considers the level of ESG integration within the Fund to be moderate to high on a peer relative basis,” it read.

Late last year, Melbourne-based boutique fund manager SG Hiscock & Company entered into a partnership arrangement to exclusively distribute both funds in Australia.

According to its chairman and managing director, Stephen Hiscock, the ratings provide further validation of the partnership, with both the Global Quality and Global Sustain funds continuing to draw strong interest from local investors.

“Despite the level of uncertainty over the past year, the funds have performed well during the relatively unusual nature of trading conditions.

“Investors continue to be attracted to investment products with a strong track record of delivering above-market returns, and these two funds deliver on that.

“The ability for local investors to access global equities capabilities in such a way will see the partnership strengthen even further over time, and we’re pleased to see the Lonsec rating support our business strategy,” he said.

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Stephen Hiscock

In its first review, Zenith has rated two Morgan Stanley Investment Management (MSIM) global equities funds as “recommended”, following the partnership formed with SG Hiscock & Company in July to exclusively distribute the funds in Australia.

The funds are:

• Morgan Stanley Global Quality (hedged and unhedged): This fund invests in high quality companies that have the ability to consistently compound shareholder returns over time, and
• Morgan Stanley Global Sustain (hedged and unhedged): This fund uses a similar methodology to the quality strategy, offering a high quality, carbon light portfolio. The Fund also appeals to those seeking a tobacco-free, alcohol-free and fossil fuel-free portfolio.

Zenith said it “has a high opinion of MSIM’s differentiated and successful investment process, believing that it is clearly defined and consistently applied since 2009. Zenith believes MSIM’s investment team is well-resourced and highly experienced. In addition, we consider the team’s due diligence and understanding of investment opportunities to be detailed and thorough.

“Furthermore, Zenith holds a positive view on the arrangement between MSIM and SGH, believing that it pairs a highly successful global investment manager with a domestic distribution partner that has a solid footprint in the domestic market.”

Zenith also commented on MSIM’s ESG approach, with a dedicated ESG resource within the investment team.

“Zenith believes that this qualitative analysis of a company’s operations is crucial on a forward basis, given that a company’s performance with regards to ESG considerations is increasingly being reflected in the company’s share price.”

Stephen Hiscock, CEO of SG Hiscock & Company, said both funds have performed very strongly particularly through the recent market volatility.

“The recent market downturn has highlighted the importance of actively managed, high conviction investment strategies that capture the upside of market movements but minimise the impact of a downturn.

“The funds provide Australian investors with access to the MSIM team’s very successful global equities capability which has a strong focus on quality and sustainability.

“The Global Sustain Fund invests in high quality companies at reasonable valuations that can sustain their high returns on operating capital over the long term, offering a superior approach to ESG investing with a clearly defined process.  It provides attractive long-term returns with less long-term volatility than the broader market.

“The Global Quality Fund focuses on high-quality, resilient, well managed companies with the aim of compounding shareholder wealth at attractive rates over the long term.

“The team believes there are two key principles to investing: firstly, the best route to long-term returns is through compounding and providing a measure of relative downside protection; and secondly, high quality businesses can generate strong returns over the long term.

“Both funds are offered in a hedged and unhedged version, allowing investors to select the option that best suits their own situation,” Mr Hiscock said.

Morgan Stanley Investment Management Australia managing director, Daniel Vanden Boom, said SG Hiscock & Company has strong existing relationships among dealer groups and independent financial advisers which the Partnership Program will build upon.

“MSIM has been serving institutional investors in Australia for 25 years and currently manages in excess of A$11 billion. This includes an established client base in our Global Quality and Global Sustain strategies which we’ve been eager to offer to retail investors for some time.”

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In the role, Mr Cochran will be responsible for the distribution of SGH funds across Australia, and managing relationships with key business partners nationally.

Mr Hiscock said Mr Cochran has a strong performance track record of client management and business development.

“Anthony is an experienced manager of high performance sales teams and has an in-depth knowledge of the asset management industry.

“He also has a strong understanding of international and domestic markets as well as the value of active investing through time, complementing the broader team in our overall business objectives,” said Mr Hiscock.

Mr Cochran joins SGH after 14 years at Macquarie Bank, where he was responsible for distribution of the Macquarie Professional Series suite of global equity funds and hedge funds. During Mr Cochran’s time at Macquarie he held positions as the national distribution manager and business development manager.

Prior to joining Macquarie, Mr Cochran held business development positions for Ventura Investment Management for two years and Advance Asset Management for five years in Sydney, Melbourne and Perth.

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Stephen Hiscock

SG Hiscock & Company (SGH) and DMP Asset Management (DMPAM) have agreed to a merger of the two businesses, forming an investment management organisation with substantial experience and strength of personnel, based in Melbourne.

The merger, which will be finalised by the end of March 2019, brings together two long-standing, quality businesses with shared cultures and complementary strengths in investment management, research capabilities and private client portfolios.

Both businesses will retain their separate Australian Financial Services Licences and brands following the merger to ensure a clear focus on the two pillars of business within the merged entity, namely Institutional mandates and retail unit trusts (SGH) and wholesale tailored portfolio services (DMPAM).

Angus Graham, CEO of DMP Asset Management, says that the merger combines two complementary businesses with a shared focus on client service.

“Most importantly, the merger of SGH and DMPAM makes sense for our clients. The depth and breadth of knowledge and experience of the two teams increases the bench strength significantly. The merged entity combines the strength of SGH’s & DMPAM’s investment performance and research capability, with DMPAM’s long history in managing bespoke private client portfolios – including some clients that have been with the firm for over 28 years.

“The business will retain its focus on providing funds management, asset allocation and portfolio construction solutions to wholesale clients.”

SGH chair, Stephen Hiscock, said the merger will further strengthen the investment capabilities of both businesses, to the benefit of clients.

“We believe it is timely to strengthen both businesses through a merger to form a larger entity, whilst maintaining the strength of independence from outside financial institutions” he said.

“Both DMPAM and SGH have a long track record and culture of client focus.  From our clients’ point of view, it is business as usual.

Following the merger, Mr Hiscock will join the DMPAM board while Mr Harry Cator and Mrs Brenda Shanahan PhD from DMPAM will join the SGH board.

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Martin Smith

Multi award-winning boutique fund manager SG Hiscock & Company has appointed FundBPO as the new fund administrator and unit registry provider of its Australian equities and property securities funds.

Under the arrangement FundBPO will provide fund administration and registry services to 16 SG Hiscock funds and more than 2,900 investors. The funds all follow the manager’s high-conviction active management approach and include their highly regarded Australian and global REITS (Real Estate Investment Trusts).

SG Hiscock Chairman and Managing Director, Stephen Hiscock, said the decision followed a comprehensive review of the $2.8 billion manager’s fund administration services and marketing.

“We were looking for an administration specialist with market leading capabilities that will further invest in developing future proficiencies for our investor services. We assessed FundBPO as the ‘best fit’ administrator for the current and future needs of our funds.” Mr Hiscock said.

FundBPO will support SG Hiscock’s funds by packaging its registry service, which went live this week, with unit pricing and fund accounting to provide a holistic back office solution. FundBPO is also providing the boutique investment manager with its own branded retail and institutional unit registry investor site as well as an integrated service for mFunds, XPLAN reporting and Calastone.

“FundBPO’s recent experience with large-scale complex transitions gave us confidence in their ability to grow with our funds. We expect their support, alongside our new revamped website which also went live this week, to enhance the service we can offer our investors.” said Mr Hiscock.

Martin Smith, Chief Executive Officer of FundBPO, added “FundBPO is pleased to welcome SG Hiscock as a client. Being selected by such a high calibre manager confirms our strong positioning in the fund administration and unit registry market. We work hard to understand market needs and develop tailor-made solutions for our clients.”

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