Speaking at the AIOFP Annual Conference in Adelaide last week, MLC Asset Management portfolio specialist Sinead Rafferty explained that like many asset managers in the market, MLC has had a growth bias for the last couple of years.
“We have reduced our allocation to growth and taken money away from some of the growth managers that we’ve got in our global equity portfolio and increased the allocation to value managers,” she explained.
“It’s not that we think necessarily that value is about to storm out of the traps and do really well. We want to have a style neutral perspective in or global equity portfolios.”
Ms Rafferty said MLC is constantly appraising whether they have the right managers in their portfolios to achieve what they need to at any point in the market cycle.
One of the long-term managers of MLC’s global equities portfolio’s is Walter Scott. But when BNY Mellon acquired the Scottish fund manager in 2006, MLC took a deep dive into the deal.
“Walter Scott himself was an 80 per cent shareholder in that business. His secretary owned 10 per cent and the other 10 per cent of the business was owned by other senior members of the investment team,” Ms Rafferty said.
“When he heard that this offer had been made, the MLC team flew to Edinburgh. One of the things we were concerned about was that with Walter Scott leaving the business, would the rest of the investment team be looking to stick around. Obviously without that investment team we would no longer be interested in investing with them.
“We met each and every member of the team to work out how happy they were with the takeover. We got a level of comfort that things would be business as usual and they saw some positives and future potential for the business going forward. One of the things BNY made clear was that they were not looking to make major changes to the business. They just wanted to have the equity.
We then went to New York to meet with BNY. After those meetings we got a level of comfort that Walter Scott was business as usual.
“But we kept an eye on them for a long time. They are still a manager in many of our portfolios and you wouldn’t even know that BNY was the owner of that business.”