Chris Brookman, Macquarie. Photo: Matt Fatches
Category: International equities – global
Winner: Macquarie Professional Series / Independent Franchise Partners
Analyst: Quan Nguyen
Sector overview:
The global equity sector remains one of Zenith’s largest categories and is highly competitive, comprising many different strategies. After three consecutive years of strong returns, global equities experienced a period of muted performance over the last 12 months. Macroeconomic events and central bank intervention were once again the key obstacles for active managers in their endeavour to produce excess returns. With the Australian dollar declining slightly, unhedged global equities products have marginally outperformed their hedged peers.
Zenith says …
Independent Franchise Partners (IFP) employs an approach that focuses on buying high quality companies, whose competitive advantage is supported by dominant intangible assets, at compelling absolute value. Zenith believes the key attractions of the fund include the quality of the investment team, successful application of the investment process over a long time horizon, and a differentiated approach versus mainstream international shares funds.
Interview
Chris Brookman
Division director
Macquarie Professional Series / Independent Franchise Partners
IFP has a very specialised approach to investing internationally in equities. They are buying strong businesses with high free cash flow, recurring revenue, who have a dominant intangible asset – that may be a brand, a patent or a licence. It’s this “franchise” approach to investing that sets them apart from other managers. Because it’s such a clearly defined approach and process, and they spend a great deal of time incubating the talent within the team to keep on delivering that outcome for investors. It’s a very rigorous adherence to a disciplined process. IFP is an independently owned partnership … based in London. They’ve been running since 2009 and Macquarie was a cornerstone client. We were there when they broke out from Morgan Stanley. They’d been running the same strategy at Morgan Stanley. We have an extremely rigorous due diligence program we go through in partnering with any manager. In the history of the Professional Series we’ve had more than 500 meetings to find the right fit in terms of something that’s going to work in the Australian market, where the partnership is going to work, and where we have confidence in the business. We have a whole team dedicated to that process.
