MGP, which currently provides customised managed account services to over 25 Australian Financial Services Licence holders, announced record net inflows of $107 million for the December quarter, lifting funds under administration to $1.31 billion as at 31st December 2014.

In the group’s December Quarter Update, the Board also declared a quarterly dividend of $0.002 per share, set to be paid on 27th February 2015. Managed Accounts Holdings Limited chief executive officer David Heather said the group had a strong new business pipeline with regulatory reform and changing investor and adviser needs pushing advisers to seek more efficient and cost-effective investment administration solutions. “Advisers are increasingly interested in alternative investment structures like managed accounts because they want an efficient, scalable solution that will help boost productivity and match their long-term business model,” he said.

“We expect interest in MGP’s solution to continue growing. We are in talks with a further 11 firms to develop and implement a managed account solution, after recently signing deals to develop and implement a managed account solution for two new licensees.”

Mr Heather said he expected continued strong organic growth in funds under administration from existing clients as well as growth through existing advisory firms using MGP to acquire firms and integrate the acquisition into their offering.

“Several of our existing clients are looking to acquire other advisory firms in the future which we expect will further boost funds under administration,” he said. Managed Accounts Holdings Limited also announced plans to release new services and functionality later in 2015. This follows the recent appointment of Trevor Fisher in the newly-created position of head of product.

Mr Fisher was formerly head of Macquarie Private Portfolio Management.

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Through initiating coverage of the separately managed account (SMA) portfolios with these positive ratings, Lonsec is indicating its “strong conviction the products can generate risk-adjusted returns in-line with relevant objectives”.

Head of MPPM, Trevor Fisher, said the ratings reflect the experience, capabilities and robust investment process MPPM has built since it began offering managed accounts in 1999.

“During the past few years, we have seen a marked increase in interest from dealer groups and financial advisers as they recognise how managed accounts can deliver direct equities in a risk-managed and scaleable fashion,” Mr Fisher said.

“Managed account products can provide investors with a sense of control over their financial outcomes and offer transparency over their investments, performance and fee models.

“In step with the increased interest in managed accounts is the rising desire from investors for actively managed portfolios that generate consistent risk-adjusted performance.”

For example, the MPPM Growth portfolio outperformed the benchmark S&P/ASX200 accumulation index by 5.7% per annum, over the five years to June 2013, ahead of its expected 3% per annum outperformance target. In addition to the strong returns, Lonsec noted “its standard deviation was in-line with, or lower than, the benchmark’s over these periods. Further information and performance data on all three MPPM models, is contained within the Lonsec product reviews.

In its report, Lonsec said it has initiated coverage of these model portfolios with ‘Recommended^SMA’ ratings as it believes the highly experienced manager offers a very disciplined and tax-aware approach to Australian equities investment.

It noted that, “Pleasingly, the manager displays many of the attributes Lonsec looks for in boutique managers, including a performance-driven culture and a good alignment of interests between staff, investors and the firm.

“Lonsec believes this approach [manager’s stock research process] provides a disciplined and highly repeatable process which allows the manager to efficiently score companies based on various metrics.

“The manager has a good appreciation of the specific risks of running an SMA model portfolio. By offering an in-house solution, the manager reduces some of the risks faced by competitors who must communicate portfolio changes to third party SMA platforms.”

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