Sniffing out value and market behaviour

Glenn Feben, co-head of fixed interest at Janus Henderson Investors, has always been an active fund manager with the belief market inefficiencies created opportunities to add value.

This active-driven philosophy was backed by a belief market pricing doesn’t always reflect underlying fundamentals, which created exploitable opportunities.

“We’ve developed and refined an investment process over a long period of time that aspires to assess fundamental or fair value, and then look for situations where market pricing doesn’t reflect that,” Feben said.

“We’ve had a very clear understanding of the opportunities we’re trying to exploit, and we’re prepared to act on those opportunities with conviction and a willingness to allow strategies sufficient time to deliver the results we’re seeking to achieve, so we’re a long-term value driven investor.”

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Two key achievements stand-out in his career, the establishment of a cash-in-hand fund and the establishment of the tactical income fund.

“We established a cash in hand fund in the early 2000s, which we started from scratch and grew into $2 billion,” Feben said.

“More recently, was the establishment of the tactical income fund which has become the flagship defensive fund used very widely across Australia.”

“It started from basically an idea that came out of the global financial crisis, it was established in 2009 and today it has $3.5 billion funds under management.”

Feben said he’s a fundamental investor, who thinks in the long-run fundamentals would ultimately shape the value and behaviour of markets.

“There’s a whole range of factors that from time-to-time will cause market pricing to deviate from fair value or fundamental value,” Feben said.

“We’ve stayed true to that approach over a long period of time, but we have refined it.”

They had developed an approach they believed worked over time, while staying true to that approach.

“As much as anything we’ve probably had a level of resolve and conviction, it’s allowed our strategies to have sufficient time to deliver the results we want to achieve,” Feben said.

“That doesn’t mean we’ve always outperformed, but over the long-term our process and approach has stood the test of time.”

Feben had started in financial markets in 1983 and was recruited in 1987 to IOOF where he had been attached to the organisations in varying degrees, including a brief stint as chief investment officer.

“I worked in the internal investment team in IOOF from 1987 to 1999, mainly responsible for managing the fixed income portfolio,” Feben said.

“I worked in the internal investment division of IOOF for about 12 years, we’ve then privatised that, so that in a sense evolved into Perennial Investment Partners.”

Perennial started as a boutique investment management firm which was a joint venture with IOOF and a number of investment professionals.

“We were managing money primarily for IOOF, but we were able to build a solid diversified fixed income business over the ensuing 15 years,” Feben said.

“Then we’ve enjoyed four good years under the ownership of Henderson, which is now Janus Henderson.”