Platypus Asset Management has awarded a grant of $150,000 to fund a three year academic study that will look at anomalies in the Australian stock market and the implementation of anomaly-based investment strategies.
Five academics from Melbourne, Monash and Newcastle Universities will make up the research group.
The research will examine factors that drive abnormal performance as well as the practical implementation of investment strategies based on these anomalies, with a focus on Australian equities in particular. Topics covered include investigating the accruals anomaly, looking at corporate governance, examining the effect of stock issuance on equity investors, studying the value premium over the stock market cycle, and whether particular investment styles have trending properties.
Mr Don Williams, chief investment officer of Platypus, said the business offered the grant in order to enhance its own research resources and capabilities.
“We looked at several ways of enhancing the resources we devote to research, and decided that offering a grant to academics would give us access to independent ideas and thinking that has been solely focussed on particular issues facing equity markets, looking at it in a completely different way to fund managers.
“In addition, the idea of bringing together academia and the investment community in a way that would develop research on Australian investment issues was very attractive.
“This approach has been used successfully in the US but is not common in Australia.
“We had over 20 applications for the grant and selected a consortium that elected to research different but related areas, with each of the academics having responsibility for one area. Platypus is particularly interested in topics such as corporate governance and the impact on company returns, and this is one of the areas to be covered by the research.
“The team also suggested holding an asset pricing symposium in the second and third years of the project, which will be the first of its kind in Australia,” Mr Williams said.
Professor Steve Easton from Newcastle University said that bringing an academic methodology to finding practical solutions to market issues should help highlight new approaches and strategies.
“In addition, working with Platypus will ensure the relevance of our research – in particular the ability to practically implement investment strategies,” he said.
As well as the grant, the group will also receive $5,000 a year from Platypus for conference attendance, and it is expected that papers produced on the research will be published in international peer-reviewed journals. Additional funding for the research will be provided by the University of Newcastle.
Platypus Asset Management is a boutique Australian equity management with a specialist approach focusing on long-term growth potential, formed through a joint venture with Australian Unity Investments. It has $1.5 billion in funds under management as at 31 July 2011.
Its investment approach focuses on companies that exhibit a track record of earnings and preferably dividend growth.
For more information please contact:
Don Williams – 02 8270 8201 or Steve Easton – 02 4921 5040
18 August 2011