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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Arkx Investment Managementwww.arkx.com.au
Established in 2007, Arkx Investment Management (Arkx) is Australia's first dedicated carbon fund manager. Its major objective is to deliver long term shareholder returns whilst contributing to a low carbon global economy. The management team of Arkx have a combined market experience of more than 35 years, managing proprietary equity trading books for institutional investment banks and equity portfolios for family offices and hedge funds. They have in-depth knowledge of equity and derivatives markets and a strong background in risk management. The Arkx group employs a top-down approach to portfolio construction and all investments are vetted for their positive contribution to reducing global carbon emissions. The majority of Arkx is owned by its staff.
Third Link Growth Fund invests with Arkx to access its global carbon expertise via the Arkx Carbon 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 a director 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 both its global resources expertise (via the Colonial First State Wholesale Global Resources Fund) and cash management expertise (via the Colonial First State Wholesale Premium Cash Enhanced Fund).
The Colonial First State Global Asset Management Global Resources team (www.cfsgam.com.au/GEGlobalResources ) invests in resource opportunities around the world and has experienced team members in Australia and overseas. As a specialist asset class within a larger organisation, the Global Resources team has access to high-quality research, strong corporate governance and effective risk management.
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 May 2008 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 both its Australian equity expertise (via the CI Australian Equities Fund) and its global equity expertise (via the CI Global 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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Ellerston Capital Limited
www.ellerstoncapital.com
Ellerston Capital Limited (Ellerston) is a specialist fund manager, offering investors access to a range of absolute return style investments. As of the end of September 2008, Ellerston's assets under management totalled $3.3 billion. Ellerston was established in 2004 to coordinate and manage the direct public equity market and managed fund investment of the Packer family. The family remain a key investor in the Ellerston funds.
Ellerston's equity investment team use fundamental bottom-up company analysis to identify long-term investment opportunities and construct a global portfolio diversified by stock, sector and geographic region. Hedging is actively employed to manage portfolio risk.
Third Link Growth Fund invests with Ellerston to access its global equity long short capabilities and special situation investments via the Ellerston GEMS Fund. The investment objective of this fund is to generate consistent positive performance with a focus on capital preservation.os are compared against each other) and in assessing the quality of a company’s management and the industry structure in which it operates.
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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 Limited
www.eqt.com.au/manfunds
Intrinsic Value Investments Limited (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 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 May 2008 it managed about $400 million.
Third Link Growth Fund invests with Magellan for its global infrastructure expertise via the Magellan Infrastructure Fund. Infrastructure assets like roads, airports, energy distribution and water distribution are a basic requirement for communities. They face minimal competitive pressure and generate revenues that are generally linked to inflation. As a result, infrastructure assets should generate reliable, robust earnings over the long term. Magellan seeks to invest in infrastructure companies at attractive prices and to provide investors with returns in excess of the risk-adjusted returns expected of the infrastructure asset class.
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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 Pty Limited (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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Select Asset Management
www.selectfunds.com.au
Established in 2002, Select Asset Management (Select) is one of Australia’s premier investment groups with an absolute return focus. The management team has extensive experience in investment research and funds management with an emphasis on absolute return strategies (by aiming to preserve wealth in down markets and enhance wealth in up markets). As of the end of May 2008 Select managed approximately $850 million.
Third Link Growth Fund invests with Select to access its listed investment company expertise via the Select Listed Investments Fund. Through the management of this fund, Select uses an active approach to access a range of opportunities in closed-end investment funds listed on the Australian Securities Exchange and across major world stock markets.
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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. 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 spanning several years, despite having only recently established the new funds management business. Solaris analysts are empowered as the portfolio managers for their sectors and engage in pure, bottom-up stock picking using fundamental analysis. Detailed analysis of the securities and key global financial markets supports all investment decisions. Solaris’ research 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 LLP
www.thspartners.com
Taube Hodson Stonex Partners LLP (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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Treasury Asia Asset Management
www.treasuryasia.com.au
Treasury Asia Asset Management (TAAM) is a Sydney-based boutique Asian equity funds management business which was launched in July 2005. TAAM is 60 per cent owned by management and 40 per cent owned by the listed Treasury Group (the parent company of Treasury Group Investment Services Limited). As of the end of May 2008 it managed about $800 million.
TAAM specialises in Asia Pacific securities and uses a bottom-up stock selection approach. It selects stocks with a bias towards mid to large capitalisation securities that are liquid. The managers describe themselves as ’investors’ not ’traders’ and manage relatively concentrated portfolios.
Third Link Growth Fund invests with TAAM to access its Asian equity expertise via the TAAM New Asia 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.
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