Neuberger Berman Australia has launched its first Australian-domiciled unit trust, the Neuberger Berman Emerging Markets Equity Trust, aimed at institutional investors.
Intrust Super and Energy Super are cornerstone investors in the Trust, which opens with around $100 million in funds under management.
Mr Paul O’Halloran, senior vice president of Neuberger Berman Australia, said that the firm’s emerging markets capability was chosen for the first Australian-domiciled fund because of Australian investors’ high level of interest in emerging market opportunities.
“Introducing an Australian-domiciled trust will make it easier for local investors to take advantage of our well-performing emerging markets strategy, particularly those who prefer the administrative convenience of a unit trust solution.
“As a firm, we have been investing in emerging markets since 1997, while the portfolio manager, Conrad Saldanha, has over 18 years experience in this area, and the team a strong track record of delivering good returns for investors over a market cycle.
“The Neuberger Berman emerging markets equity team’s philosophy is that emerging markets are less efficient than developed ones, thus creating mis-pricing opportunities, especially with small capitalisation companies. The team believes that future growth in the emerging markets will come from domestic consumption.
“They take a bottom-up, research-driven securities selection approach, focusing on high return but undervalued companies that display characteristics such as industry leadership, management track record and cash flow growth potential.
“By choosing high-quality emerging market securities from both within and outside the index, the team seeks to outperform the index over the cycle,” he said.
Mr O’Halloran said that the Trust’s aim is to generate good returns for investors relative to the MSCI Emerging Markets Index by selecting companies that stand out both in terms of the quality of their prospective earnings growth and their current price.
“The Neuberger Berman emerging markets equity team invests in a much wider universe of smaller cap stock than many other fund managers.
“For instance, they can choose to invest in over 1,000 companies in the emerging markets with a market cap between US$1 billion and US$10 billion, but the index only includes 424 companies in this market cap.
“Similarly, at the small cap level – less than US$1 billion – there are over 3000 listed companies while the MSCI Index only includes 3 companies.
“Our approach of constructing portfolios with high quality, growing companies that are trading at attractive valuations is proving a particularly attractive fit with Australian institutions’ current investment strategies,” he said.
Neuberger Berman has chosen local trustee company Equity Trustees Limited as the Trust’s responsible entity.
Neuberger Berman was established in 1939 and is a US-based asset management company with approximately US$198 billion in funds under management throughout the world (as at 30 June 2011) and more than 400 investment professionals. It is one of the world’s largest independent, employee-controlled asset management firm.
The company offers a number of funds in a range of asset classes including global and emerging market equities, bonds, and alternatives such as hedge funds and private equity. Neuberger Berman Australia gained a licence to operate in Australia in April 2011.
Energy Super is a platinum-rated* $3.8 billion industry super fund providing complete retirement planning solutions to its 45,000 members across Australia. The fund offers superannuation and income stream products and access to financial advice and was awarded a 5 star rating from Canstar Cannex^ for Outstanding Value.
Intrust Super was established in Brisbane in 1988. It is a platinum-rated, 100 per cent industry fund and manages about $1.3 billion in investments on behalf of approximately 150,000 members.
For further information please contact:
Paul O’Halloran – 03 9607 8452
Lucas Rooney – 03 9607 8456
* Rating provided by SuperRatings Pty Ltd (ABN 95100192283, AFSL 311880) – an independent superannuation assessment and superannuation ratings research organisation.
^ Rating provided by CANSTAR CANNEX Pty Limited (ABN 21 053 646 165 AFSL 312804) – a researcher of retail finance information for over 300 institutions.
26 September 2011