Evans and Partners Australian Flagship Fund: Q&A with the Portfolio Consultants
Industry Moves catches up with Adam Alexander (L) and Ben Chan (R), the two portfolio consultants for Evans and Partners recently-launched Australian Flagship Fund, who give us some insight into the reason behind the launch and the criteria they use for picking the organisations they invest in. They also share what excites them about investment management and what they think will be the next big thing.
Industry Moves catches up with Adam Alexander (L) and Ben Chan (R), the two portfolio consultants for Evans and Partners recently-launched Australian Flagship Fund, who give us some insight into the reason behind the launch and the criteria they use for picking the organisations they invest in. They also share what excites them about investment management and what they think will be the next big thing.
Why did you decide to launch this Fund?
Evans and Partners decided to launch this fund as we believe there are undervalued opportunities in the Australian market with strong corporate governance standards and quality management. This is also an untouched space by Evans and Partners, and something in which we could see significant growth.
You have a high conviction approach to investing; do you think investors have an appropriate exposure to high-conviction investments?
We have a high conviction approach to investing as we believe our investment committee's insight, knowledge and experience can offer greater potential for higher risk-adjusted returns. Our approach is conservative and measured. We will actively manage the risk profile of the fund and invest in a portfolio of stocks that we believe will provide unit holders with an appropriate level of downside protection, while positioning for upside gain.
Why did you decide to list the fund on the ASX?
We decided to list this fund on the ASX to give ease of accessibility to SMSF trustees and retail investors. We also wanted to create a liquid fund for our investors.
How did you decide on your investment committee?
The investment committee is comprised of a highly experienced group of industry professionals in the Australian business market. The majority of our investment committee are seasoned directors and chairs of notable Australian organisations and as such give great scope to the Australian equities market. The investment committee will draw on their expertise when evaluating investments and will recommend suitable investments to the investment manager for approval, execution and management.
The fund will target companies with 'quality management and strong corporate governance standards, sound business models with a sustainable competitive advantage', how do you assess these qualities?
There are several criteria that will be considered when assessing investment opportunities. A few of the key criteria are below:
* Strong industry thematic
* A sustainable competitive advantage
* Attractive risk adjusted returns
* Growing dividends
* Quality board and management
Will you look outside of the S&P/ASX 200 for investment opportunities?
Yes we will if the opportunity is compelling.
Who is your main competition in this space?
Whilst there is a suite of products focused on Australian equities, Evans and Partners strive to individualise their offerings and deliver investment solutions that leverage our organisation's strengths.
What excites you about investment management?
The variety. Being able to assess a huge range of businesses across the market - from healthcare companies to supermarkets to mining - and distill them down to a common set of investment criteria and values. Our process is very much about analysing a company from the ground up, embedding ourselves in an industry to fully understand the supply chain and competitive landscape. We endeavour to identify pockets of opportunity where value exists, that the market has yet to fully price. It is exciting to watch an investment thesis play out over time and create value, both for the company we invest alongside, and our clients.
What's the next big thing?
We are still at the very early stages on disruptive technology across a range of industries. Good businesses that can simplify day to day tasks, lower costs and provide a more optimal outcome for the consumer will likely see increased adoption over time. We expect to see significant developments in medical technology. The use of technology in healthcare, such as robotic surgery and genetic sequencing for earlier stage detection of diseases, could have profound effects on treatments. From improving timeliness, effectiveness and lowering costs for patients. It will be an exciting area to watch over the next five to ten years.
