People power delivers for BGI

Morry Waked

For Barclays Global Investors (BGI), standing ahead of the pack comes down to the three ‘Ps’ of business — people, process and performance. At least that’s what BGI chief executive, Morry Waked believes.

He could well be right, with BGI taking out this year’s Money Management / IMCA Fund Manager of the Year Awards.

The group has also won the Australian Shares (Broad Cap) category for its BGI Alpha fund, adding to its Hedge Funds (Multi-strategy) win of 2006.

“I think it would very much be across the three ‘Ps’ of people, process and performance. I think the group of people that we have across the business — not just the investment team but the whole business — gives a very high talent and diversified set of skills to work with,” Waked said.

“[Also] I think we’ve got an excellent record in delivering consistent investment performance across a range of different strategies,” he said.

Waked also believes BGI’s good track record is because the group has been a part of the Australian funds management landscape for 10 years.

He said the group has offered 42 funds in the Australian market and 41 of the 42 funds have outperformed since inception. And while he said the group’s performance in the past 12 months, ending March 2007, hasn’t been spectacular, it has been solid.

“I think the second half of 2006 was the more challenging half of the year compared to the first half for many of our strategies, not just for BGI but I think for a lot of other managers out there as well.

“The second half of last year wasn’t as good as the first one, with the exception of a couple of strategies all our active funds outperformed the benchmark for the past 12 months. And while some of our funds didn’t perform as well as what we would have liked they still outperformed; relative to competitors I think our performance has been really good,” he added.

In terms of how BGI sets itself apart from industry competitors, Waked said the group’s emphasis on “talent innovation”, portfolio construction and transaction costs were high on the list.

“I think our emphasis on portfolio construction, and in particular transaction costs, does set us apart a little bit from our competition. It does differentiate us. And certainly our scientific approach to investing — we’re a scientific manager, we have a very systematic approach to managing money and explore unit efficiencies in the market and I think the majority of fund managers don’t do that.”

Finalists in this category were BlackRock Investment Management and AXA/AllianceBernstein Australia.

BlackRock managing director Maurice O’Shannassy said the fund manager had capabilities in every asset class with a fundamental strategy to build the best teams possible.

He said this involved focusing on all aspects of investments, including the people and processes.

AXA/AllianceBernstein Australia attributes two principles to its strengths.

“We believe in the importance of global research on investing, even if we are only investing locally,” AXA chief investment officer Mark Dutton said.

“We also strongly believe in the importance of specialisation — we seek to apply that specialisation not only in asset classes but also to styles and approaches to investing within those asset classes.”