AXA/AllianceBernstein flexes its global muscles

Michael Bargholz

With more than three decades of experience in the funds management industry, it’s no surprise AllianceBernstein Australia has the strength to muscle out its competitors.

According to its chief executive officer Michael Bargholz, the firm has exceptional breadth and scope, which he said is evident through its management of US$700 billion for clients in four key investment services: Bernstein Value Equities, Alliance Growth Equities, AllianceBernstein Blend Strategies, and AllianceBernstein Fixed Income.

“We think the diversification allows for continuous investment across all areas of the firm and an unwavering commitment to discipline style investing,” Bargholz said.

Further proof the group is ahead of the pack in terms of global investments is the performance of its Bernstein Global Value fund.

In the five years ending March 2007 the fund has outperformed ahead of the benchmark by 7 per cent per annum.

“This has been during a period in which value investing has been favoured.

“The Bernstein Global Value fund draws on both fundamental and quantitative research. The research is organised globally, that means we draw on company and industry research across geographies,” Bargholz said.

“We think this gives us two competitive advantages. The first being it gives us insights into how companies may respond to changes in the competitive environment worldwide. While the second allows us to position portfolios more quickly to maximise returns and reduce risk that if we used a region by region or country by country approach.

“The investment objective is about 3 per cent above the benchmark. And we are conscious that at some point there will be a shift in style cycles which will make the global investment environment less favourable to the value-orientated approach. That said, we are investing in the continuous improvement of research skills and tools. This will be a mitigating influence,” he added.

In the 12 months ending March 2007, AllianceBernstein outperformed more than 6 per cent for its AXA/AllianceBernstein account.

Finalist in this category Deutsche Asset Management manages the Deutsche Global Equity Thematic Fund.

Bill Barbour, investment specialist at Deutsche, explained the backbone of the fund manager’s success in this space over the past decade:

“We invest in the whole world of opportunities, and are not limited to the 26 countries represented in the MSCI,” he said.

“We look to 10 to 12 investment ideas that we consider to be inevitable — we call these ideas ‘themes’, and have 10 to 12 themes in the portfolio at any one time.”

The other finalist in this category, AQR Capital Management, considers company, country and currency decisions independently, giving three ways to add value for clients.

“AQR’s quantitative investment approach allows each opportunity to be exploited more effectively, thanks to this more holistic approach,” AQR investment management specialist Jeff Dunn said.

“By innovatively and proactively managing the risk in country, currency and company with three separate strategies, it becomes a source of opportunity rather than something to be shied away from.”