03 March 2005
Macquarie Adviser Services today launched the Macquarie Morgan Stanley Global Franchise Fund, the first global equity fund available through its new managed funds distribution business, the Macquarie Professional Series.
Macquarie also announced it had entered into an exclusive relationship with Edinburgh-based boutique fund manager, Walter Scott & Partners Ltd, to offer the Macquarie Walter Scott Global Equity Fund - the second international fund manager available through the Macquarie Professional Series.
Macquarie Adviser Services’ Division Director, Peter Shepherd, said the Macquarie Professional Series was a new business initiative that combines Macquarie Adviser Services renowned expertise in fund administration, distribution, marketing and service with the specialist investment skills of a very select number of global and domestic fund managers.
The Macquarie Professional Series will provide financial advisers and their clients with access to specialist investment funds not previously available to retail investors.
He said the investment management styles of Morgan Stanley and Walter Scott were differentiated with Morgan Stanley having a strong value bias and Walter Scott being a growth style manager.
Morgan Stanley’s Global Franchise investment strategy employs a long-only investment philosophy of seeking companies that have enduring qualities through intangible assets as well as business activities that generate high returns on capital, high free cashflow and are quality and reliable businesses.
The strategy focuses on companies that do not require a lot of capital to support their business model, have stable revenues and a long history of superior performance through different market cycles. Portfolio stock turnover is notably lower than that of most active international funds.
From inception on 31 March 1996 to 31 December 2004, the Global Franchise strategy compounded shareholder wealth through almost all market and economic conditions, having returned cumulative gains of 356 per cent, compared with the MSCI index of just over 73 per cent for the same period. During the same period the strategy delivered an annualised return of 18.95% (in $US and before the deduction of fees and expenses).1
The strategy focuses on delivering compelling returns at significantly lower than the market volatility.
Morgan Stanley’s process has been reviewed by both van Eyk and Zenith Investment Partners and achieved a high rating from van Eyk, as part of its December 2004 international equities sector review, and a Highly Recommended rating from Zenith, their highest investment grade rating. van Eyk says its rating means it has high confidence in Morgan Stanley adding value, relative to competitors over a full investment cycle.
Damien Green, Vice-President of Morgan Stanley Investment Management Australia said he was excited to bring the Global Franchise strategy to investors in Australia through the Macquarie Professional Series.
“This will be a strong relationship with Macquarie who have created an excellent and innovative Australian distribution platform for our successful Global Franchise strategy. Macquarie understood the advantages the strategy could bring to Australian investors,” Damien Green said.
The Macquarie Morgan Stanley Global Franchise Fund is now available on administration platforms including Macquarie Wrap Solutions and BT Wrap.
Mr Shepherd said the Macquarie Walter Scott Global Equity Fund was another exciting inclusion in the Macquarie Professional Series. The Macquarie Walter Scott Global Equity Fund is a growth-style fund that will offer a concentrated portfolio of approximately 40-60 companies.
Walter Scott & Partners Ltd was established in 1983 in Edinburgh by Cambridge nuclear physics graduate, Dr Walter Scott along with John Clark and Marilyn Harrison, all of whom are still with the firm which now manages $US15.3 billion. Walter Scott’s global equities investment strategy received a high rating by van Eyk in their December 2004 international equities sector review
During the 10 year period from 1 January 1995 to 31 December 2004, Walter Scott’s global equity investment strategy (as represented by its Global Equity Composite) delivered an annualised return of 12.3 per cent per annum (in $A and before fees and taxes), compared to about 8 per cent per annum for the MSCI World Index.2
Walter Scott applies a buy and hold strategy to allow time for a company’s earnings growth to translate into strong share price performance for investors. It employs a bottom-up investment approach driven by a fundamental and proprietorial research process that aims to identify companies capable of high earnings growth.
Walter Scott Managing Director, Alan McFarlane, said the Macquarie Walter Scott Global Equities Fund was based on Walter Scott’s classical, fundamental and long-term approach, which they are pleased to introduce to Australian investors through their association with Macquarie.
“At Walter Scott we aren’t interested in benchmarks, we are interested in real returns,” Mr McFarlane said.
“This type of fund represents a global first for us and we are very pleased to be able to offer it to the wholesale and retail investors of Australia,” Mr McFarlane said
Mr Shepherd said the number of funds in the Macquarie Professional Series would continue to grow throughout 2005 and Letters of Intent had recently been signed with two Australian boutique managers to join the Macquarie Professional Series. Macquarie has consulted with research house van Eyk in the selection of managers for the Macquarie Professional Series.
He said the Macquarie Financial Services Group, which incorporates the Macquarie Adviser Services business, was one of the largest financial product distributors in Australia and had been providing high quality service to financial advisers since it introduced the Cash Management Trust (CMT) to Australia in 1980.
Macquarie Financial Services Executive Director, Peter Maher, said the Macquarie Professional Series was a perfect example of Macquarie collaborating with outstanding global asset managers for the benefit of its clients.
“During the past 12 months Macquarie Bank has acquired 21 assets globally, 10 of these have been in association with another high quality manager,” Mr Maher said.
“This is the model that Macquarie Bank’s success is based on – its ability to globally draw on specialist skill sets that will add value to both its clients and its shareholders.”
Investors seeking access to the Macquarie Morgan Stanley Global Franchise Fund, the Macquarie Walter Scott Global Equity Fund or other funds to be offered through the Macquarie Professional Series should contact their financial adviser and consider whether the funds are appropriate for them.
1 Source: Morgan Stanley Investment Management Limited. Past performance is not a reliable indicator of future performance. The performance of the investment manager’s Global Franchise strategy is not the performance of the Fund, which is new and has no performance history.
2 Source: Walter Scott & Partners Limited. Past performance is not a reliable indicator of future performance. The performance of the investment manager’s Global Equity Composite is not the performance of the Fund, which is new and has no performance history
For further information, please contact:
Head of PR & Communication
Macquarie Financial Services Group
Macquarie Funds Management Group
Tel: (612) 8232 3241
Mobile: (61) 417 260 309
About Morgan Stanley Investment Management
Morgan Stanley Investment Management (MSIM) is the asset management division of Morgan Stanley, a global financial services firm and a market leader in securities, investment management and credit services. With offices in 19 countries and over 400 investment professionals around the world, MSIM manages assets in excess of A$500 billion (as at 30 Nov 2004) and offers wealth management services to a diverse client base which includes: governments, institutions, corporations, and individuals."
About Macquarie Adviser Services
Macquarie Adviser Services manages relationships with external financial intermediaries and provides sales service and product management of in-house and external products including retail superannuation. This includes the $A10 billion Macquarie Cash Management Trust, the leading cash management trust in the Australian market, and the Macquarie Wrap administration service which has over $A13 billion in funds under administration.
van Eyk rates investment management capabilities rather than individual products. Ratings can change or cease at anytime and should not be relied upon without referring to the meaning of the rating as well as the full manager report available to subscribers at www.iRate.vaneyk.com.au. van Eyk has not directed the publication of Morgan Stanley or Walter Scott's ratings. The ratings are not intended to influence your decision in relation to any products managed by Morgan Stanley, Walter Scott or Macquarie and does not take into account your individual needs or objectives. We recommend that you, not rely on these ratings in making an investment decision and instead you seek advice from your investment adviser before making any investment decision.
Investments in the Funds are not deposits with or other liabilities of Macquarie Investment Management Limited, Macqaurie Bank Limited or any other Macquarie Bank Group company and are subject to investment risk, including possible delays in repayment of income or principal invested. Neither Macquarie Bank Limited nor any other Macquarie Bank Group company guarantees the performance of the Funds or the repayment of capital from the Funds or any particular rates of return.