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Equity Manager of the Year
Hermes Investment Management
Hermes has seen its equity assets grow by over 115% during the three years to the end of March 2016 from £3.9 billion to £10.5 billion, during which period it has added 100 new clients across both institutional and wholesale sectors. And performance over the 12-month period to the end of March 2016 has demonstrated why investors are keen to trust Hermes with their money. Its £2.7 billion Sourcecap European Alpha strategy has outperformed its FTSE All World Europe benchmark by 4.75% over the period and has also outperformed by 0.78% and 3.02% over three and five years respectively. Furthermore, its £1.8 billion Emerging Markets Asia strategy has also beaten its MSCI AC Asia ex-Japan benchmark by 13.19% over the 12 months, as well as 13.98% and 13.01% over three and five years. But it is not just about performance. Hermes says it takes into account environmental, social and governance issues across all of its strategies. Highlighting this, it became a signatory to the Portfolio Decarbonisation Coalition last year.
JO Hambro Capital Management
Although performance across some of its equity funds has been mixed over the past year JO Hambro, which manages £21.7 billion in assets and is a champion of high-conviction investing, has still had some stand-out performers. Its £1.7 billion UK Opportunities Fund, managed by John Wood, returned 8.84% over the year to June 30, compared with its FTSE All-Share TR Index benchmark making a loss of 0.60%. Over three years and five years the fund is up 29.65% and 62.71% cumulatively compared to 15.89% and 34.06%. Meanwhile, its £2.1 billion European Select Values Fund, managed by Robrecht Wouters, has also enjoyed a strong 12-month period, returning 13.44% and comfortably beating its MSCI Europe NR index which produced 1.57%. Again, performance remains equally strong over three and five years with cumulative returns of 34.71% and 54.84%. Out of its 13 UK and Ireland-domiciled funds, 11 are ranked in the top 25% of their industry peer groups.
MFS Investment Management
Since entering the European institutional space in 2000, MFS has established itself as one of the go-to equity managers for consultants. The US firm takes pride in its collaborative, idea-sharing approach between analysts and fund managers which helps to ensure the best investment ideas end up finding their way into client portfolios. This approach continued to bear fruit over the 12 months ended May 31 with its core global equity strategies outperforming their benchmarks. Its £26.8 billion global equity composite returned 3.4% over the period compared with its MSCI World Index benchmark producing 0.7%. Performance for its £12.1 billion global concentrated equity composite was even stronger, returning 6.8% compared with 0.7%, while its £5.1 billion global value equity composite produced 7.8%, significantly up compared with a loss of -0.7% for its benchmark. Performance incentives at the firm are aligned with longer timeframes with analysts and fund managers rewarded for investment performance on a three-year basis.
Newton Investment Management
Performance across Newton Investment Management’s core equity strategies surpassed all their benchmarks for the 12 months to May 31. Its £6.4 billion Newton Global Income Fund, managed by Nick Clay, returned 12.7% over the period, significantly up on the 0.6% produced by its FTSE World benchmark. The fund is also up 9.8% and 11.3% over three and five years respectively. Its £6 billion Newton Global Equity Fund also returned 3.8% over the 12 months to the end of May compared with its benchmark which produced a loss of -0.8%. The firm places a lot of emphasis on idea sharing as opposed to keeping investment teams separate. Newton’s responsible investment division, headed by Sandra Carlisle, also feeds into the equity team with the firm saying that responsible investment is better investment. The firm also takes its duties as a shareholder seriously. During 2015 Newton, which manages around £23 billion in equities, exercised its clients’ voting rights at 579 separate meetings and instructed votes against one or more resolutions at 36% of them.
Germany’s third-largest asset manager, Union Investment, has seen its equity assets steadily grow in recent years, ticking up from £20.2 billion in 2011 to £27.7 billion as of May 2016. The firm, which set up its London base in 2015, has been looking to establish itself outside its domestic market – a move which is already paying dividends with Union last year beating about 60 fund managers in a tender process to manage a sustainable equity mandate for the UK’s Environment Agency. Its £1.1 billion institutional global equity fund, UniFavorit Aktien, which has quadrupled in size over the past five years, has returned 14.52% annualised over the past three years, compared with its MSCI World Benchmark which produced 11.99%. And over the the past year the fund returned 1.77% compared with a benchmark loss of -5.42%. The firm’s equity platform is based in Frankfurt and consists of 35 specialists, boasting an average investment experience of 18 years.