Inside the winner’s circle

Establishing its Australian operation in 1985 as an institutional fixed-interest manager, UBS Global Asset Management Australia (UBS) has been steadily widening its business to incorporate the management of retail funds, culminating earlier this month when it took out the prestigiousMoneyManagement/Assirt Fund Manager of the Year award.

The award was recognition for stellar performance across a range of asset classes, with the win in the overall Fund Manager of the Year category of the awards coming on top of wins in the sector categories of Australian fixed interest, multi-sector and property securities, and a finalist nomination in the Australian equities class.

John Larum, the chief executive officer of UBS, not surprisingly says that he is delighted that in a period of less than two years, “UBS has been able to move from a position of being continually confronted with ‘UBS who?’ to fund manager of the year”.

“It’s the culmination of a lot of years of hard work and careful planning and investment that we are now starting to receive recognition for,” he says.

That hard work has seen the company grow organically from being an institutional fund manager to one that now manages retail money as well.

The majority of UBS’s business in managing retail funds comes from master trusts and wraps, as most of the group’s products are wholesale based.

Its first move to diversify from its traditional fixed interest mandates came in 1995 when it started managing Australian equities, a move that preceded its push into the retail sector in 1999. This later move incorporated the appointment of business development manager executive director Colin Woods.

The biggest battle for Woods, who now directs a team of six, was the process of first convincing the research houses and then master trust and wrap providers that UBS was serious about the retail market and not just an institutional manager having a dabble in retail on the side.

“Research houses want to see three years’ worth of performance before they will even consider looking at what the business is doing,” Woods says.

“You really have to achieve the results before you can start to market yourself.”

Larum says the role of the marketing team was, and still is, crucial to UBS’s success. “You just have to get on the master trust and wrap provider lists,” he says.

Further to this, it is not simply a process of getting the positive ratings from the research houses and then being allocated a space.

“You show them your results and then [the master trust and wrap providers] say ‘well, that’s great, but who are you going to knock off the list?’. They also want to see a serious commitment on your part for the longer term,” Larum says.

Speaking of longer term, it is UBS’s strict adherence to a longer term view that played such a strong role in helping the group achieve the type of performance that propelled it towards the Fund Manager of the Year award.

“We have always adopted a genuine longer term approach to investing in securities — equities or bonds. We don’t get side tracked by short-term considerations. For equities, this means we are a style-neutral manager — we don’t limit our investments based on an artificial ‘growth’ or ‘value’ labels,” Larum says.

Asked whether the hard yards were now behind the group, Woods says “it’s not so much that the hard yards are behind us but that there is a new type of hard yards in front of us”.

Those new hard yards primarily relate to the weight of expectation that confront any company in receipt of the laureates that have been bestowed on UBS in recent weeks. However, Woods is not prepared to rest on his laurels. “The last thing that I would want to hear now is that [UBS] doesn’t return people’s phone calls or is unavailable.”

Larum adds that UBS has a strategy in place to cope with any increase in demand, so that the levels of service its clients receive remains the same as it has always been.

Larum says UBS now wants to focus market attention on its international equities capabilities, which have been built on a global research network.

“We have access to some 100 research colleagues globally, which gives our local team every chance of enjoying the success of the other winning sectors in the business.”

“By using the same strategies of leveraging our global capacity, we are able to deliver locally,” he says.