Platinum looks outside the box for hidden opportunities

Andrew Clifford

Identifying the stocks others don’t want is a great place to start when searching for investment opportunities, according to Platinum Asset Management director and deputy chief investment officer Andrew Clifford.

Despite being a little left-field, it’s an investment approach that works for Platinum, with the fund manager taking out first place in the Asia category of the Money Management /IMCA Fund Manager of the Year Awards 2007.

The Platinum Asia Fund follows the same investment philosophy as the entire Platinum fund range, which is to seek out neglected companies in industries and countries where the fund manager believes the best value can be found.

“What we are always trying to do is find those things that others don’t want to hold and although it’s not as simple as just establishing that, we believe this is the best place to search out opportunities,” Clifford said.

“[For example] everyone knows today that India is a great market and there are great opportunities there and as a result you’d find many funds have weightings in that market.

“But on the other side of the ledger, there is very little interest in Thailand at the moment; the economy is doing badly on top of the fact it has a care-taker Government as it waits for a new constitution as a result of the coup last year.

“Yet fundamentally, we think Thailand is a very sound economy which is just going through a bad patch and ultimately the value of the stocks we are buying there will be realised in good time.”

This approach is underpinned by the investment team’s lengthy track record in this sector and by a thorough company analysis process.

“In this region we have quite a lot of experience to start with. I have been working on these markets for 19 years and our managing director for longer than that,” Clifford said.

“But beyond that, I think the thing is that too often you will hear about why Asia is special or different, [but] in fact the business principles that apply elsewhere apply [in Asia] as well.

“In observing how companies behave, if what they are doing would be irrational in the US then it is irrational [in Asia]. It’s just understanding that the basic laws of business apply here just as much as anywhere.”

This year’s Asia award category includes some developed Asian markets such as Japan, Singapore and Hong Kong.

Finalists in this category are AberdeenAsset Management and Maple-BrownAbbott.

Aberdeen associate director of business development Stuart James said the Aberdeen Asian Opportunities Fund had performed very well, recently reaching $300 million funds under management locally.

“We have been managing [funds] in Asia for 20 years across different markets and have a lot of experience in up and down markets,” James said.

Maple-Brown Abbott attributes its success in this space to its long-term value-based investment process and large, experienced and stable investment team.

“Direct ownership of the business by investment personnel strongly aligns our interests with investors’ interests,” Maple-Brown Abbott head of client services Tim Hordern added.