Robust investment lifts Rising Star
This year’s Money Management/Lonsec Fund Manager of the Year awards Rising Star is Itau Unibanco SA - a fund manager which has been operating in its Brazil home market since the 1950s.
Itau opened its Latin America Equity Fund to the Australian market in November 2011, with Equity Trustees serving as its responsible entity. The Fund is designed to give investors in Australia exposure to the secular long-term trends driving growth in the Latin American region
It was Itau’s robust investment process which won it the award, according to Lonsec.
“Refreshingly, with Australian investor interest firmly focused on Asia, the Fund offers actively managed direct access to another one of the world’s more promising growth regions as well as increased portfolio construction choice,” Lonsec commented.
Latin America Equity Fund’s lead portfolio manager, Scott Piper, also said the fund’s investment process was key to its success.
“[Our] investment process...utilises a highly disciplined approach with a strong sell discipline and accompanying risk management, despite the considerable noise and volatility in the markets,” Piper said.
“The quality of the team, which is the largest buy-side team in Latin America with the broadest and deepest coverage of companies in the region, also significantly aided in the successful execution of the investment process.”
Scott Piper has been a Latin American portfolio manager for over 15 years, and prior to joining Itau Asset Management in March 2011 he worked with Morgan Stanley Investment Management for eight years. There he was a member of the Emerging Markets Group and co-portfolio manager of US$4 billion in Latin American-dedicated assets.
The fund, Piper said, seeks growing companies but maintains a “disciplined approach through the consistent implementation of a discounted cash flow valuation framework”.
“Visiting companies onsite is a key part of the research process, and from a potential universe that exceeds 1000 stocks in Brazil, Mexico, Chile, Peru and Columbia we eventually select 45 to 65 for the portfolio,” Piper said.
This year’s runners-up in this particular category are Partners Group - for its Global Value Fund, and Paradice Investment Management - for its Global Small Mid Cap Fund.
“The recent financial crisis provided an opportunity to buy high quality private equity portfolios at a fraction of their actual value, as distressed sellers sought to repair broken balance sheets,” said Partners Group managing director Martin Scott.
“Partners Group was able to selectively acquire high quality assets which, in an improved economic environment, are producing strong returns for investors.”
Paradice had a similar strategy, according to portfolio manager and analyst David Paradice.
“We’ve just been going out and picking a lot of these cheap companies,” he said. “We’ve been focusing on things we could benefit from, such as technology restructuring within those businesses.”
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