by Greg Bright
For the past few months, Martin Currie Investments, the big Edinburgh-based equities manager, has been revamping its flagship global equities strategy. The results were unveiled in a series of meetings in Australia last week. Plus, the firm has flagged the formation of a new long-term research institute.
Willie Watt, the chief executive of Martin Currie – and a frequent visitor to Australia – introduced to local investors the man charged with building and implementing the new global equities strategy: Zehrid Osmani. Osmani has been at Martin Currie since May, has 21 years’ experience in equity markets and previously worked at BlackRock for 10 years, running its acclaimed European equities strategy and, most recently, as ‘global head of investment process’.
What Osmani seems to do better than most is organise investment research to be both efficient and effective. The research platform he built for European equities at BlackRock, for instance, has subsequently been globally rolled out across all of that firm’s fundamental equities strategies.
Before BlackRock, Osmani, a Frenchman, had worked at Scottish Widows, another Edinburgh-based investment shop. He says, half joking, he went to Scotland so he could learn better English. He has an unusual half-French, half-Scottish accent. Coincidentally, Scottish Widows is where Martin Currie acquired its successful emerging markets team under Kim Catechis.
Watt says that the revamped global equities strategy – ‘Global Long-Term Unconstrained’ – has developed new proprietary fundamental data analytics which can give better insights into the firm’s market exposures. The new platform also points its research pipeline into new and attractive areas to capture long-term trends.
With respect to the proposed ‘Long-Term Investment Institute’ which Martin Currie is developing in a working-title format, he says the aim is to focus on and develop the expertise that the firm generates from its research insights and analyses in its assessment of the global portfolio and to have open discussions with investors.
“It’s early days but we envisage inviting investors to attend virtual or physical meetings from time to time, whereby the institute can deliver the intellectual capital generated from our investment engine. It’s about putting our key thought leaders into a forum which is more readily shared with clients. Clients are wanting more and more of what you know,” he says.
The eight-person global equities team has been set “more demanding” targets, Osmani says. “We have busted some bottlenecks… We have also developed some ‘smart data’ insights and processes which we think are more relevant to the fundamental analyses.” The strategy has between 25-40 stocks, with an aim to move to the lower end of the range.
He says that some quant managers look to gain exposure to an investment theme but they may be doing only ‘correlation analysis’ (meaning they haven’t studied the causes of the linkages). “We try to understand whether they are fundamentally linked,” he says. “That’s why smart data is vastly superior to big data.”
The new-look Martin Currie Global Long-Term Unconstrained strategy and fund is a low-turnover, highly concentrated, high-conviction, long-term vehicle or strategy, which is designed to set itself apart from the global equities pack but at the same time adhering to the firm’s DNA as an active investor.
Since inception – officially in December 2015 – the strategy has comfortably outperformed its benchmark of the MSCI ACWI, returning 15.0 per cent a year versus 13.6 per cent for the index. In the past year the outperformance has grown with an annual return of 24.6 per cent (19.8 per cent for the index) and a year-to-date return of 17.4 per cent (12.9 per cent).
Kimon Kouryialas, the Melbourne-based head of ‘Pan Asia Distribution’ for Martin Currie, says that big super funds and other institutional investors want to have fewer-but-deeper relationships with their managers. The proposed institute was in the early days of its development, he said. “But what we want to do is have a better dialogue with investors so that our ideas and research can get a better hearing, as well as getting the ideas and views from the investors. We’re genuinely trying to improve the discussion.”