Morgan Stanley on location
Working together since 1997, the Morgan Stanley Investment Management team has achieved strong performance throughout a complete market cycle.
As if that’s not already grounds enough for celebration, it has also just been crowned winner in the property securities category of the Fund Manager of the Year awards.
How does it produce such successful results? Morgan Stanley vice-president Damien Green says the team employed a clear philosophy that property securities would ultimately reflect the value of their underlying assets.
“Our valuation recognises that there are three elements to valuation; the price of the security relative to its current net asset value; the future change in the net asset value of the assets; and the yield,” he says.
“This is a true property valuation approach rather than an earnings or pure yield-based analysis and helps us to identify robust opportunities for our clients.”
He adds that at the end of March the team preferred Asia to other regions and liked US hotels, apartments and self-storage. It also favoured London’s city and west-end offices, as well as those in Japan and Singapore, with a bias towards real estate investment trusts over real estate operating companies.
Last year’s winner, Principal Global Investors, is again in the top three of the category as a finalist. Principal’s portfolio manager Chris Lepherd says the Principal Property Securities Fund outperformed the index by 385 basis points last year, despite it being a “difficult year” for property securities because of several earnings downgrades.
“We are a relatively small fund, which allows us to take advantage of mispricing opportunities more rapidly than some of our peers,” he says.
“We are largely opportunistic and we try to avoid having a certain style dictate our stock selection.”
The other finalist in this category, SG Hiscock & Company, cited a wealth of experience as one of the reasons for its success.
Director and portfolio manager Grant Berry says this was partly due to Stephen Hiscock, the managing director and joint portfolio manager for listed property securities and his long track record in the listed property trust sector.
Property securities
Winner: Morgan Stanley Investment Management
Finalist: Principal Global Investors
Finalist: SG Hiscock & Company
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