Choosing the right process
EQUITIES (Long Short)
Grant Samuel Tribeca Alpha Plus Fund
Ellerston Australian Market Neutral Fund
Platinum International Healthcare Fund
Being early in identifying large shifts in the macro environment was what Tribeca Alpha Plus Fund portfolio manager, Sean Fenton, said could make the difference. Indeed it did, with the Grant Samuel Fund Management (GSFM) fund taking out the Equities (Long Short) category at the 2016 Money Management/Lonsec Fund Manager of the Year Awards.
The fund, which uses a combination of quantitative and fundamental investment processes, was a challenging one for GSFM, with Fenton acknowledging challenges in the process, including "holding out nerve on many resource and mining services short positions" due to their known volatility.
"The quantitative process provides a lot of breadth and objectivity to the portfolio while the fundamental process delivers more detailed high conviction insights," Fenton said.
"Being early to identify some large shifts in the macro environment such as weaker Chinese growth and falling commodity prices and a large rally in the US dollar provided an investment edge."
For finalist Ellerston Capital, the process behind the Ellerston Australian Neutral Market Fund revolved around educating potential investors. The volatility of markets was also identified as a challenge, with Ellerston now set to focus on expanding its global equities capabilities and the launch of a Venture Capital Fund.
Portfolio manager, Paul Drzewucki. said: "Following a systematic and repeatable process, the fund is well diversified with a portfolio that is both market and sectors neutral".
"The process is unique and focused on capital preservation."
The investment process for Ellerston was a strong focus on qualitative analysis paired with traditional fundamental analysis, which was used to identify value pair trades. The unique process of the fund was a key indicator of its success, with the team working on a strong investment strategy with a 19-year history.
Platinum Asset Management’s International Healthcare Fund was the final nominee, with fund manager, Bianca Ogden’s wide-ranging professional experience leading the team to a strong and successful fund.
For Platinum, understanding the context of a company’s operating circles is a key ingredient for creating a fund that consistently delivers.