Hyperion wrests mantle from Schroders

Hyperion Asset Management was last night crowned this year's Money Management/Lonsec Fund Manager of the Year — one of the very few boutiques to have ever been selected as a finalist for the prestigious title.

Hyperin's win comes after a four-year reign by Schroder Investment Management, which ended up in the finals yet again, alongside Perpetual Limited. Managing director of Hyperion, Tim Samway, attributed the firm's success to a long-standing investment philosophy and its commitment to differentiate itself from traditional styles of funds management.

The boutique has a singular focus on long-term investment in high-calibre Australian equities, servicing both institutional and retail clients.

"We run quality-focused, concentrated, benchmark-insensitive portfolios that focus on long-term outcomes for clients," Samway said.

"In the last year markets have recognised this style of investing - that solid stocks can provide solid growth in a low-growth environment," he added.

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"But we've had this philosophy for 17 years."

Samway established Hyperion in 1996 as a subsidiary of Wilson HTM and later became involved in almost every part of running the firm, from fund manager recruitment to sales, before becoming managing director.

The firm, which currently manages a little over $4 billion, is mostly owned by its investment team and partly backed by Pinnacle Investment Management.

Hyperion was an award winner in both Australian equities-related categories, with both of its retail offerings having received Lonsec's strongest rating of highly recommended.

"As a finalist and award winner in both the Australia Equities (Broad Cap) and Australian Equities (Small Cap) categories, it was always going to be difficult to stop Hyperion from winning the coveted 2013 Fund Manager of the Year award," Lonsec commented.

"As noted, the Manager adopts a concentrated - often contrarian - high conviction, benchmark-unaware approach to portfolio construction, which Lonsec believes are favourable elements of active equities management when harnessed by individuals of above-average investment insight."

The other two finalists - Schroders and Perpetual - are two significantly larger firms which have also had very successful years.

For Schroders, it was about ignoring the short-term noise.

"Much like the last five or six years, we've had enormous amounts of volatility, so for us it's been about making sure we know where we're positioned for the medium- to -longer term and just trying to ride through some of that volatility that's inherent in markets," said Schroders chief executive officer Greg Cooper.

"That short-term noise has been exacerbated over the last five or six years - so sticking to your long-term philosophy and your understanding of why you're doing what you're doing is pretty critical in deeply volatile times."

Head of equities at Perpetual, Matthew Williams, attributed the firm's success to the consistency of the team's investment process, but also to the team itself.

"I put most of it to the team and the individuals," Williams said.

"The process that has been running here and the culture that's been instigated and run here consistently for the last 20 years has played a part, but it's mostly about the people," he said.

"Perpetual Investments has been successful in regenerating the team, keeping the team fresh whilst also having a good longevity of members as well."

Cautious outlook

With respect to the markets, all three managers maintain a cautious outlook.

Last year was better than expected, but whether this year will bring the same returns remains a question, Williams said.

Cooper agrees.

"Right at this point in time (April) we'd be getting somewhat concerned - just the sheer weight of money the central banks are throwing at the markets just generally is creating a lot of distortions in the system," he said.

Samway, who focuses on Australian equities, said the challenge for all fund managers in the year ahead will be finding businesses which can return double-digit earnings per share growth.