Fund Managers We Invest With
Third Link seeks to harness the brightest and best fund managers it can find, based on Chris Cuffe's own extensive knowledge of the industry and feedback from the advisors assisting him with the Third Link Growth Fund. When selecting fund managers, their method of managing money, experience, correlation issues and past performance under different conditions are key drivers in deciding which fund managers to use.
You should also note the following:
We are not obliged to using any particular investment managers and it is possible that we may change managers at any time.
The process of identifying suitable managers will always be continuous, particularly as new managers are formed or we uncover previously unknown managers.
Although we undertake continuous monitoring of the managers/funds that the Third Link Growth Fund invests in, in the absence of changes in key personnel, management methodology or our overall asset allocation, we are likely to remain invested with a particular manager/fund over the medium to long term.
The amount of money invested with each individual manager is not the same and will depend on many factors including the overall size of the Third Link Growth Fund, asset allocation, style of manager, similarity with other managers, liquidity issues, etc.
In addition to the managers/funds listed below, we may also from time to time be invested in listed invested companies.
Listed below are the fund managers and their particular unlisted managed investment funds that Third Link Growth Fund is invested in. The description about each fund manager has been obtained from the relevant fund managers and/or is publicly available from that fund manager’s website.
Fund Managers we invest with include the following:
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Aberdeen Asset Management
www.aberdeenasset.com.au
Aberdeen Asset Management PLC (Aberdeen) is an international investment management group founded in 1983, managing assets for both institutional and retail clients from offices around the world, including Sydney. Aberdeen manages a diverse range of asset classes in which they believe they have a sustainable competitive edge. As at 30 June 2009, Aberdeen managed over A$263 billion in assets.
Third Link Growth Fund invests with Aberdeen for its emerging markets expertise via the Aberdeen Emerging Opportunities Fund. The fund invests in shares listed on various emerging market stock exchanges and may also seek exposure to the asset class by investing in companies with significant activities in emerging markets. Stock selection is managed by the equity teams based in London, Sao Paulo, Singapore, Hong Kong, Kuala Lumpur and Bangkok, consisting of 36 investment professionals (as at 30 June 2009). Aberdeen believes the advantage of its emerging markets equity process lies in the consistency of its approach, irrespective of market conditions. It employs a bottom-up investment style, emphasising company fundamentals. From the company visits and analysis carried out regionally, through to portfolio construction decisions, Aberdeen adopts a team approach and avoids cultivating 'star' managers. Portfolio turnover is low, as Aberdeen buys stocks and holds them for the long term.
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Arkx Investment Management
www.arkx.com.au
Established in 2007, Arkx Investment Management (Arkx) is an Australian investment manager whose objective is to deliver attractive long term returns from investing in companies that benefit from the opportunities created by the transition to a low carbon global economy. The management team of Arkx have a combined market experience of more than 57 years, managing proprietary equity trading books for institutional investment banks, equity portfolios for hedge funds and conducting fundamental equities analysis. They have in-depth knowledge of equity and derivatives markets and a strong background in risk management. The majority of Arkx is owned by its staff with 30 per cent owned by Westpac Banking Corporation through its wholly owned subsidiary, Ascalon Capital Managers.
The Arkx group employs a top-down approach to portfolio construction and all investments are vetted for their clean energy constribution as a percentage of revenue. Although Arkx invests in companies with a strong technology bias, they only invest in global leaders with a proven track record of profitable growth and sensible financial structures.
Third Link Growth Fund invests with Arkx to access its global renewables expertise via the Arkx Clean Energy Fund. Subsequent to Third Link Growth Fund’s decision to invest with Arkx, the company gifted Social Ventures Australia a five per cent equity interest due to the alignment of social and environmental values of the two organisations. Chris Cuffe is Chairman of Arkx.
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Colonial First State Global Asset Management
www.cfsgam.com.au
Colonial First State Global Asset Management (Colonial) is the consolidated asset management division of the Commonwealth Bank of Australia. It is one of Australia’s leading asset managers, with investment professionals situated in Australia, Asia, the UK and USA, and more than $150 billion in funds under management across a range of sectors including domestic and global equities, fixed interest and credit, short term investments, direct property and infrastructure.
Third Link Growth Fund invests with Colonial to access its cash management expertise (via the Colonial First State Wholesale Premium Cash Enhanced Fund).
The Colonial First State Global Asset Management Short Term Investments team (www.cfsgam.com.au/Cash) aims to provide wholesale investors with a regular income stream from investments in money market securities with a very low risk of capital loss. Based in Australia, the experienced team has a long track record of outperformance and provides access to attractive wholesale interest rates and duration management expertise.
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Cooper Investors
www.cooperinvestors.com
Cooper Investors (CI) is a specialist Australian and global equity fund manager owned and funded 100 per cent by staff. As of the end of 2009 it managed about $4 billion. CI started operating in 2001 and uses its ‘VoF’ investment process (Value; Operational, industry, strategic trend analysis; Focused industry and management behaviour) to identify market opportunities.
CI focuses on factual evidence of the companies it invests in while being attentive to current trends. Its managers regularly review their positions based on the fact things are constantly changing and that what people say and do are often different. CI places equal emphasis on qualitative and quantitative features, given that beliefs and values drive customers, boards of directors and management teams. Its managers seek to invest in industries, assets and companies that have good value propositions, with positive operational, industry and strategic trends and run by management and industry leaders with passion, energy and clarity.
Third Link Growth Fund invests with CI for its Australian equity expertise via the CI Australian Equities Fund.
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Eley Griffiths Group
www.eleygriffiths.com.au
Eley Griffiths Group (EGG) is a boutique investment manager established in 2003 that specialises in investing in Australian small companies. It is jointly owned by Brian Eley and Ben Griffiths. As of the end of May 2008 it managed about $800 million.
EGG’s philosophy involves a belief in stock-picking, the need for a disciplined stock selection process, the value of market experience and intelligence to identify information inefficiencies, rigorous risk control measures and an extensive company visitation program. The investment process focuses on value for money (where all companies’ earnings growth profiles and price earnings ratios are compared against each other) and in assessing the quality of a company’s management and the industry structure in which it operates.
Third Link Growth Fund invests with EGG to access its smaller companies Australian equity expertise via the Eley Griffiths Group Small Companies Fund.
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Goldman Sachs JBWere
www.gsjbw.com
Goldman Sachs JBWere is a pre-eminent financial services organisation that provides a wide range of investment, advisory, financing, securities, execution, asset and wealth management services to a substantial and diversified client base including corporations, financial institutions, governments and high net worth individuals. It seeks to be the adviser of choice for its clients throughout Australia and New Zealand and, as part of the Goldman Sachs network, provides leading capabilities that extend to financial markets globally.
Third Link Growth Fund invests with Goldman Sachs JBWere to access the Australian equity stock picking expertise of Frank Macindoe, a Director of its Private Wealth Management division, via an individually managed account. Frank’s preference is to invest in companies with strong finances, shareholder-friendly management and enduring competitive advantages at a cost below intrinsic value. Typically the businesses will have highly certain income streams and low capital intensity. Frank’s investment process draws on Goldman Sachs JBWere’s research and makes use of a range of quantitative filters. Frank holds a core belief that the market can be highly inefficient in the short term and create opportunities for buyers, but that in the long term good businesses will be correctly priced and provide attractive returns to their owners.
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Intrinsic Value Investments
www.eqt.com.au/manfunds
Intrinsic Value Investments (IVI) was established in 2002 as a specialist boutique international funds management company.
IVI, which has an investment database that dates back to 1973, uses a proprietary measurement known as 'Instrinsic Value' to determine the relative attractiveness of investing in one country over another. In deciding which countries to invest in and by what percent/amount, the Intrinsic Value measurement ignores benchmark market capitalisation and traditional price/earnings ratios. Instead, the country/weighting selection is based on comparable measurements of future income expressed as a compound average annual real rate of return. Each country exposure is then optimally achieved by holding a concentrated 'basket of stocks' that replicate each countries' index. IVI then systematically assesses the potential currency risk associated with each country exposure and will choose not to hedge, partly or fully hedge each currency exposure within the portfolio.
Intrinsic Value provides an objective and unemotional comparative measure which is impervious to bullish or bearish market sentiment that adjusts for local market environments.
Third Link Growth Fund invests with IVI to access its global equity expertise via the Intrinsic Value Investments Global Equity Fund.
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Magellan Financial Group
www.magellangroup.com.au
Magellan Financial Group (Magellan) is an Australian-based boutique fund manager established in 2006 by respected former investment bankers and corporate advisers Chris Mackay and Hamish Douglass. As of the end of December 2008 it managed about $400 million.
Third Link Growth Fund invests with Magellan for its global equity expertise via the Magellan Global Fund. The Magellan Global Fund seeks to minimise the risk of permanent capital loss, whilst achieving superior risk adjusted investment returns over the medium to long-term. The fund aims to find outstanding companies at attractive prices and construct a concentrated, long-only portfolio, focussed primarily on businesses in global financial services, consumer and retail and infrastructure.
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Orion Asset Management
www.orionfunds.com.au
Orion Asset Management (Orion) provides high quality asset management funds to the Australian marketplace including large and small company products. Established in 2002, it is a small, efficient and flexible operation with a strong investment culture. As of the end of May 2008 Orion managed about $6 billion of funds for various large Australian and international institutional and retail clients. Orion is 58 per cent owned by its staff and 42 per cent owned by the listed Treasury Group.
Orion uses quantitative and qualitative measures to identify companies that display real long term potential to grow earnings and sustain profitability. Orion managers believe that markets are inefficient and that the true value of individual stocks is often not reflected in the market on any particular day. They also believe that companies' earnings growth prospects are often mis-priced by the market. They use a strong, disciplined, bottom-up research process in an effort to identify these anomalies.
Third Link Growth Fund invests with Orion to access its Australian equity expertise via the Orion Australian Share Fund.
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Paradice Investment Management
www.pinvest.com.au
Paradice Investment Management (Paradice) was established in 1999 and at the time was Australia’s first specialist smaller companies investment firm. Since then Paradice has expanded its capabilities to encompass both Mid Cap (in 2006) and Large Cap (in 2007) investment strategies and now manages close to $4 billion. The company is 100 per cent staff owned.
Paradice has an uncompromising objective of delivering solid investment performance over the mid to long term. It favours well-managed, good value companies that have significant opportunities for growth through their comparative advantage. This comparative advantage can be through a combination of a better product or service, a more efficient organisational model, a favourable niche or a commanding leadership position within their industry.
Third Link Growth Fund invests with Paradice to access its Australian equity expertise via the Paradice Mid Cap Fund.
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Pengana Capital
www.pengana.com
Established in 2003, Pengana Capital (Pengana) is an Australian-based diversified funds management business which is focused on delivering high quality funds management products utilising niche investment strategies to its clients. As of the end of May 2008 it managed approximately $2 billion. Pengana is predominantly owned by its staff and directors. National Australia Bank is a significant minority shareholder in Pengana.
Third Link Growth Fund invests with Pengana for its smaller companies Australian equity expertise via the Pengana Emerging Companies Fund. The joint fund managers – Steve Black (former fund manager of the GSJBW Emerging Leaders Fund until 2004) and Ed Prendergast (formerly with Citigroup until 2004) – each have around 13 years of experience researching and investing in small industrial companies. The Fund’s investment process revolves around conducting in-depth, bottom-up fundamental research on small industrial companies to identify mispriced securities.
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Perennial Investment Partners
www.perennial.net.au
Established in Australia in 1999, Perennial Investment Partners (Perennial) operates as a suite of specialist investment management firms managing investments in Australian equities, global equities, property and fixed interest. As of the end of May 2008 it managed about $20 billion.
Third Link Growth Fund invests with Perennial to access its global property expertise via the Perennial Global Property Securities Trust. Through this actively managed global fund, Perennial invests in listed, or soon to be listed, property securities which it believes can offer superior capital growth and income characteristics. Perennial places great emphasis on bottom-up property securities research (which looks at company-related issues rather than the broader markets they operate in).
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Platypus Asset Management
www.platypusassetmanagement.com.au
Platypus Asset Management (Platypus), a company jointly owned by Australian Unity and the Platypus staff, is a specialist boutique Australian equities manager founded in 1998. As of the end of May 2008 it managed about $1.7 billion.
Platypus primarily invests in companies and trusts listed or soon to be listed on the Australian Securities Exchange, aiming to deliver strong returns over the medium to long term (two years or more) regardless of the performance of the broader Australian share market. It believes that consistent earnings growth drives share-price performance in the medium to long term. Its managers also believe that individual companies, market sectors and markets generally trade in well-defined valuation ranges. Platypus is recognised for its high conviction approach to stock selection, investing in fewer companies than many other Australian equity managers.
Third Link Growth Fund invests with Platypus to access its Australian equity expertise via the Australian Unity Investments Platypus Australian Equities Trust - Wholesale Units.
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RARE Infrastructure
www.RAREinfrastructure.com.au
RARE Infrastructure (RARE) is a boutique Australian-based fund manager specialising in investing in global infrastructure. Established in 2006, RARE manage money for large corporate, industry and government pension funds as well as for retail investors in Australia, Canada and the United Kingdom.
Setting RARE apart from its competitors is a rigorous approach to stock selection and portfolio construction as well as the exceptional skillset of their small and dynamic team which combined has 70+ years of experience in global infrastructure and 40+ years in funds management across both Australian and international markets. RARE invests in securities which offer positive absolute returns rather than selecting securities because they are included in a particular industry standard index.
Third Link Growth Fund invests with RARE to access the RARE Series Emerging Markets Fund. This fund comprises 25-60 listed emerging market infrastructure securities, diversified across a range of sub-sectors such as gas, electricity and water utilities, toll-roads, airports, rail and communication infrastructure.
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Schroders Group
www.schroders.com/australia
Schroders Group (Schroders) is a publicly listed UK company and one of the world's largest independent fund managers. It offers an extensive range of domestic and international, specialist and diversified investment products to institutions, superannuation funds and master trust providers around the world. As at 31 December 2008, it managed over AUD$227 billion.
Third Link Growth Fund invests with Schroders to access the Schroder Global Emerging Markets Fund. This investment provides exposure to a range of developing countries around the world characterised by a stronger growth potential than mature economies. These emerging countries provide the opportunity for premium returns although with higher risks relative to developed countries. Schroder's global emerging markets investment team is large and highly experienced, comprising 32 investment professionals as at 31 December 2008 each with an average of 13 years investment experience.
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Solaris Investment Management
www.solariswealth.com.au
Established in January 2008, Solaris Investment Management (Solaris) is a boutique, Australian equities fund manager. As of the end of December 2009, it managed about $3.5 billion. Solaris employees are majority equity partners in the business, with the remainder owned by experienced boutique incubator, Pinnacle Investment Management (part of the listed Wilson HTM Investment Group).
The Solaris team has a successful, demonstrated investment management and performance history. Unlike most fund managers, Solaris' analysts are empowered and rewarded as portfolio managers so they are fully accountable for their ideas and decisions. Detailed analysis of the securities and key global financial markets support all investment decisions. Solaris engages in pure, bottom-up stock picking and aims to identify the true value of each stock, based on qualitative and quantitative company fundamentals. Solaris managers do not have a bias towards value or growth stocks, and as such classify themselves as style-neutral.
Third Link Growth Fund invests with Solaris to access its Australian equity expertise via the Solaris High Alpha Fund.
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Taube Hodson Stonex Partners
www.thspartners.com
Taube Hodson Stonex Partners (THS) is a UK-based independent fund management partnership specialising in global, European and UK equities. As of the end of March 2008 it managed about £11 billion (AUD23 billion).
THS uses a bottom-up style which considers variables directly related to individual companies rather than the state of the markets in which they operate and aims to achieve real returns rather than returns relative to an index. Stock selection is at the core of its approach, with most of the managers’ time spent meeting company management and researching existing or potential investments. They compare global valuations of investment opportunities and through this research they develop investment themes that focus their portfolios.
Third Link Growth Fund invests with THS to access its global equity expertise via the Donaldson Burston International Series - THS Partners Global Equity Fund.
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Technical Investing
www.technicalinvesting.com.au
Established in 2005, Technical Investing (TI) is an independent funds manager, majority owned by staff, that specialises in using a combination of fundamental information and technical analysis to capitalise on major themes and trends.
TI believe that the market moves in trends and cycles, that human behaviour repeats over time, and that you can track and measure this through good technical analysis. As such, TI seeks to add value in all types of market conditions, focusing on both short term and long term opportunities both domestically and internationally. They measure their performance in 'absolute' terms and not against any particular index, meaning their performance may deviate substantially from broader stock indices.
In addition to managing client funds, TI provides technical analysis consulting services to several institutional investment managers. Those managers find that their technical research on the market and individual stocks are a valuable addition to their deliberations, especially at times when fundamental analysis does not seem to provide the whole picture.Third Link Growth Fund invests with TI for its thematic investment approach via the Technical Investing Absolute Return Fund.
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Disclaimer: While this information has been prepared with all reasonable care, neither Third Link Investment Managers Pty Limited (Third Link) nor Treasury Group Investment Services Limited (TIS) accepts any responsibility or liability for any errors, omissions or misstatements however caused. This information is not personal advice. This information has been prepared without taking account of your objectives, financial situation or needs. It is recommended that potential or existing investors should not act in reliance on this information but should verify the information.
Treasury Group Investment Services Limited (ABN 38 099 932 920 AFSL 227326) is the responsible entity of the Fund and does not guarantee the performance of the Fund, repayment of capital or any particular rate of capital or income return. Investors should obtain independent investment and/or tax advice from a licenced adviser as to the suitability of the Fund to their investment needs. Please click here for further information.
