Treasury Asia flexes stock-picking muscles

Booming economies in emerging markets have spawned a plethora of Australian-based funds designed to reap the benefits.

However, as volatility in global credit markets continues, many are struggling to keep their proverbial heads above water.

It’s in times like these that a manager’s experience in managing similar crises and in-depth knowledge of its asset class really comes to the fore, enabling it to navigate a storm that obliterates others.

Although it’s relatively new on the emerging market equities block, boutique firm Treasury Asia Asset Management (TAAM) is leaving much larger and more established competitors in its wake.

It is the skills and experience of its investment team, particularly those of boss and former Credit Suisse Asset Management equities head Peter Satori, and unique investment strategies that have seen TAAM take out the Regional/ Emerging Market Equities category.

Founded in 2005 by Treasury Group, TAAM specialises in the Asia Pacific region, managing portfolios designed to achieve long-term capital growth for both retail and institutional investors.

The TAAM New Asia Fund has about $71.6 million in funds under management and aims to outperform the market in all cycles.

Lonsec judges were impressed by Satori’s consistently outstanding stock-selection skills and the fund’s unique benchmark-unaware investment approach.

They described Satori as a “seasoned investor” who “serves as the firm’s major competitive advantage and a key attraction of the fund”.

“[We were] impressed by TAAM’s progress and momentum since forming, which is evident in its increased investment resources and expanded regional presence following the recent opening of an office in Singapore.”

Although the fund employs a bottom-up approach to stock selection, it incorporates the macroeconomic ideas of influential economic commentator Dr Mark Faber, who has lauded Asia’s investment opportunities.

TAAM general manager Sheldon Rivers said the firm’s strong investment culture and alignment with client interests give it a distinct competitive advantage.

“We have ownership of our business and we invest alongside our clients. Our investment approach is ‘benchmark unaware’, where we only own a stock we view as attractive, not just because it is in an index.

“We are also style agnostic, as we aim to outperform through all market cycles (ie. we are not being boxed into any particular style such as value or growth). We run relatively focused portfolios of approximately 50 stocks. The key portfolio managers have extensive experience running Asian equity funds through many different types of investment cycles.”

Both finalists in this year’s category are firmly focused on China.

Sydney-based Premium China Funds Management’s Premium China Fund, which has about $347.17 million in funds under management, invests primarily in companies listed in the Greater China Region, including Hong Kong and Taiwan.

Premium China executive director Simon Wu believes the strong understanding of Asian (particularly Chinese) equity markets of its Hong Kong-based investment manager, Value Partners’, gives the fund its competitive advantage.

“Value Partners optimises the talent of experienced local fund managers who understand China’s unique corporate culture.

“This home-ground advantage not only enables Value Partners to source untapped value overlooked by larger fund managers and analysts, but also to interpret Chinese politics, which are a crucial decider of future earnings and business activity.”

Co-finalist Challenger also lauds the benefits of having a fund manager based in the region it invests in.

The Challenger China Share Fund, which has about $45.4 million in funds under management, employs the services of Hong Kong-based Halbis Capital Holdings — part of the HSBC group and one of the world’s largest Chinese equities teams with dedicated portfolios with a combined value of more than US$10 billion.

Challenger’s Melbourne-based general manager, investment alliances, Luke MacRedmond said Halbis’ investment strategies are based on the belief that Chinese equity markets are inefficient and can therefore generate superior returns via active management.

— Lorna Thornber