Zurich won first place in the property and infrastructure category of this year's Money Management/Lonsec Fund Manager of the Year awards off the longevity of its investment team, according to senior investment specialist Patrick Noble.
Zurich has had a relationship with its strategic investment partner Renaissance Property Securities for the majority of the 13 years of the fund’s existence.
The two investment principals, Carlos Cocaro and Damien Barrack, have been together for that whole period, Noble said.
Even during the financial crisis, when a large part of the sector got shaken out, the investment team remained true to its philosophy, style and asset class, Noble said.
The team had the wherewithal to keep their cool, find where to best allocate capital, and identify depressed assets – and that had put them in good stead throughout the entire cycle, he said.
The fund is outperforming in all meaningful time periods, Noble said.
More interest is coming back into the market for real estate investment trusts (REITS), but investors have missed a lot of the strong returns that the property sector had seen over the last year, according to Noble.
However, there are still attractive yield and REITS have lower costs of debt on their balance sheets – and investors can eke out single high-digit returns on a property portfolio, he said.
Finalist Lazard was nominated because of the depth of its investment experience, research, and valuable support from its parent company, according to Lazard chief executive Susan Roberts.
The team has over 60 years investment experience and 40 years infrastructure-specific analysis, she said.
It also has access to more than 230 investment professionals in the worldwide group of Lazard companies. Valuable infrastructure support was provided by the parent company, she said.
The fund’s appraisal of companies’ value is unaffected by the equity market’s emotional reaction to events and news, Roberts said.
There are significant opportunities in infrastructure, and it takes a disciplined and skilled manager to navigate it, Roberts said.
A benchmark-unaware approach was one of the primary reasons Cromwell Phoenix Property Securities fund was nominated as a finalist.
Cromwell Phoenix doesn’t own stocks just because they’re a large part of the benchmark, said Phoenix Portfolios managing director Stuart Cartledge.
“We only own stocks that we consider to be best ideas,” he said.
The fund can also draw on experience from both Phoenix and Cromwell when building its portfolio, Cartledge said.
Cromwell decided to restrain the size of the fund to less than $500 million to allow it to continue to add value, which it said dovetails nicely into its benchmark-unaware process.
“In order to be truly active, you can’t do it with more than half a percent of the market cap of the sector,” he said.
