The days when Australia “rode on the sheep’s back” may be long gone, but agriculture remains a critical component of the economy, generating valuable export income. While overseas investors understand its importance, for most local institutions it’s still a bridge too far.
For several years, investors, from institutional to retail, couldn’t get enough of the tech stocks with all their promises of future growth. But now the market has spoken and it’s saying precisely this – valuations matter again.
How journalists add value, everywhere they go
“If it ain’t broke, then break it” is not a bad way of thinking for active fund managers – not just contrarians and value managers; all active managers. And, it seems, journalists can help with that thought process.
According to Matthew Benkendorf, the CIO and managing director of global manager Vontobel Asset Management, his portfolio managers and researchers learn from the journalists the firm employs over time.
“They [journalists] force us to be aware of all the information that’s available. We go through a long process to select a stock. We are a classic buy-and-hold manager. And the journalists continue to make sure that we are uncomfortable from time to time.”
Vontobel has a policy of employing one or two journalists for the specific task of challenging the portfolio managers’ thinking, both on specific stocks and broader macro issues. The journalists look for both black and grey swans.
The US-based Benkendorf visited Australia last month with Ramiz Chelat, a director and portfolio manager for global equities based in Hong Kong. Vontobel has several big Australian client funds and an Australian office, run by Bobby Bostic.
Benkendorf has been at Vontoble for about 17 years and last year took over from his former boss, Rajiv Jain, who started his own firm. He is based in Fort Lauderdale, Florida, and runs a team of 15 investment professionals. He is looking to recruit three more, of whom one will be based in Hong Kong, one in New York and one in Fort Lauderdale.
Head office for investments is New York, while the parent company, which started in 1924 and employs more than 1,700 people, is based in Zurich. The firm has 21 offices, including Sydney, around the world.
There is something to be said, also, for fund managers being based away from the main centres of noise, such as New York or London. The managers based in Edinburgh, say, believe they have advantages over their southern, English counterparts. So it is for Benkendorf and his Fort Lauderdale team.
“We used to be in New Jersey but I like to be in what I think is ‘more normal’ America,” he says. “I like driving to work, I like going to grocery stores. I have a life.”
Chelat, who is Benkendorf’s deputy on the global equities strategy, is an Australian – formerly with Macquarie – who has been with Vontobel for nearly 10 years. His background as an analyst was covering media and consumer stocks. Vontobel has traditionally had a strong focus on consumer stocks, which are increasingly being challenged by internet distribution.
Note: the headline to this story is supposed to be a little sarcastic – but just a little.
