UK-based asset manager Threadneedle is in discussions with Australian institutional investors about mandates for its Global Equity High Alpha Strategy.
If successful, a mandate for the fund would be the first commitment to the firm's managed funds outside its Australian asset-backed security (ABS) business.
"We started with the ABS business in October of 2008, and that team has been very successful in winning institutional mandates," Threadneedle head of distribution Australia David Chinnery said.
"We've now got $1.5 billion in RMBS [residential mortgage-backed security] mandates today. Australia is the only place outside London where we are actually managing portfolios, so it's quite a contribution," he said.
Threadneedle executive director and lead portfolio manager of the global equities high alpha fund Jeremy Podger is in Australia this week to speak with investors.
The global equities team manages $2.3 billion in assets and has won ten new mandates in the last 18 months, including four mandates from pension fund clients totalling $250 million, a joint venture with Tokio Marine for the Japanese institutional market, one $47 million mandate from a sovereign wealth client and two model portfolio mandates run for clients in the United States and Canada.
The team consists of six dedicated analysts in the global equity team, but also leverages off the ideas generated by the firm's 60 equity analysts. The fund holds between 90 and 140 stocks.
Podger said although the outlook for equity growth is lower than it has been in the two decades before the global financial crisis, good growth can still be found when looking in the right places.
"People that talk about no growth are talking about Japan, and they talk about real growth rates. But as equity investors we look at 5-6 per cent global growth," Podger said. "But what we try to do as investors is spotlight those companies that can actually extract higher growth rates."
He said international companies are increasingly attracting higher revenue growth from emerging markets and this will help them produce above average growth.
"You've got the potential magic combination of international companies producing relatively high nominal growth rates of revenue growth, but being valued in the context of a very low interest rate environment," he said.
"What I think we have started to see in the last quarter is a real expansion of multiples - we may just be at the start of this process."
Podger has, therefore, been increasing the exposure of the fund to emerging markets.
"When it became apparent that the global situation had stabilised, we rebuilt our exposure to emerging markets, taking it from 6 per cent to nearly 16 per cent now," he said.
"But at the same time, particularly over the last 12 months, we have been focusing on companies, wherever we could find them, that particularly benefited from growth in emerging markets."
Podger said he has seen good opportunities in luxury goods companies, which are getting increasingly larger revenue shares from Chinese consumers.
Threadneedle established an office in Brisbane, where its ABS team is based, last year.
Chinnery said there are currently no plans to expand the presence to Sydney or Melbourne.
Threadneedle, a division of US-based asset manager Ameriprise Financial, manages about $89 billion in assets globally across its various strategies.
