GQG Partners, the US-based global equities and emerging markets manager, has raced away with strong support from Australia and New Zealand investors since its launch in 2016.
On a visit to Australia last week, founder Rajiv Jain put the early successes down to the firm’s staff ownership and client alignment, as well as the “calibre of people we have hired”. Of its A$13.7 billion under management, circa A$1.6 billion is from Australia and New Zealand, with three mandate clients and 10 other investors in its two unit trusts launched mid-way through last year.
Stephen Bramley, the head of distribution for Asia Pacific at global multi-affiliate, Pacific Current Group, which represents GQG in the region, says over half of the early investors are based in New Zealand. Pacific Current, formerly known as Treasury Group, partnered with the US firm at its inception, including providing some working capital.
Australia and NZ now represented more than 10 per cent of the “total book” of business for GQG and, with unfunded commitments, the assets from Australasia would surpass A$2 billion within the next few months, he said. There was support from each of the major asset consultants.
Jain started GQG, based in Fort Lauderdale, Florida, after a heralded career in 1994 running global investments at Vontobel Asset Management . He had worked at the firm for 22 years and, at the time of departure, ran about US$48 billion in international money across developed and emerging markets. Vontobel’s share price dropped on his departure.
The two core strategies and funds on offer are for global equities and emerging markets. Both of the Australian-domiciled trusts are ex-tobacco.
Jain said that the funds management industry was not exactly “booming” and that his company had gained traction primarily because of the track record of its people, their calibre, and the client alignment from staff ownership. The senior executives, including chairman Jain and chief executive Tim Carver, have a big swag of their personal money invested in the GQG products.
Another attraction is that Jain believes fees should be “reasonable”, putting GQG at the less-expensive part of the range for active stock-pickers on the international scene.
“Our fees are also consistent across markets,” Bramley says. “For instance, the fees for our Australian unit trusts are the same as those charged in other markets.”
On the outlook for markets, Jain believes “the glass is still half full”. Earnings are robust and the deviations from the top to the bottom around the world is generally low. “Value is still OK,” he says.
Technology stocks and financials remain a core part of the GQG portfolio, which was significantly restructured in mid-2016 due to the fundamental deterioration of staple companies. Consumer packaged goods companies remain out of favour.
GQG believes financial should be beneficiaries of technological disruption due to the potential to reduce costs. Blockchain should be good for them in the short term, at least, but perhaps not in the longer term.
GQG does a lot of secondary research on the stocks in which it invests, such as talking to the companies’ suppliers and big customers. To this end, it has recruited journalists to assist, the most recent being Carolyn Cui from the ‘Wall Street Journal’.
Greg Bright is publisher of Investor Strategy News (Australia)