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Investment views

Special Focus: Strengthening 4Factor™

15 April 2019
Author: Rhynhardt RoodtCo-Head of 4Factor

Rhynhardt Roodt discusses how they are strengthening the 4Factor leadership team and highlight some planned additions to their portfolio management teams across the 4Factor™ product range.

Transcript

I’m Rhynhardt Roodt, Portfolio Manager for our Global Equity Strategy and Co-Head of the 4Factor investment capability.

The first quarter can often be an exciting time of the year, especially as it coincides with our review process, which gives us an opportunity to update you on the development of our talent. Twice a year, we perform a deep capability review which covers the entire team, the investment process and talent development and often what we discuss is how do we continue to future-proof the 4Factor capability.

Decisions on the team are usually a long time in the making and come after a considerable time spent assessing the best options to drive our business forward. At the core of our decision-making process is ultimately how do we ensure a positive long-term outcome for our clients.

In this quarter’s special focus, I will talk through how we are strengthening the 4Factor leadership team and highlight some planned additions to our portfolio management teams across the 4Factor range.

Starting with our leadership, I am delighted to inform you that Greg Kuhnert has joined myself and Mark Breedon as Co-Head of 4Factor from the beginning of April. For those less familiar with Greg, he has been with the firm for more than 20 years, specialising in Asian equities. Greg leads our regional 4Factor equity teams, including emerging markets, Asia-ex-Japan, Asia Pacific and China, which has grown to represent close to 30% of our 4Factor capability’s assets under management.

Greg has been a long-time proponent of the 4Factor investment process and pioneered its implementation in Asia and China. These regions are gaining greater confidence on the world stage and include companies asserting more and more global influence.

These attributes make Greg the natural choice to complement our 4Factor leadership team in our opinion. Importantly, Greg’s expanded role will not change his portfolio management responsibilities and he will continue to manage our Asia-ex-Japan, Asia Pacific and All China Equity strategies with extensive support from the wider team.

Planning further ahead, we are also going to add to the portfolio management teams for Global Core Equity and Global Dynamic Equity, with these changes taking effect from July of this year. Firstly, Christine Baalham will be added as a Co-Portfolio Manager on Global Core Equity alongside Jonathan Parker and myself.

Christine has been part of our 4Factor capability since joining with the original team back in 2000. She is an impressive addition to the Global Core team and has successfully managed global and UK equity strategies following the 4Factor process. We believe Christine adds complementary skills and experience to myself and Jonathan. Her strong background in global financials is an area that I really look forward to integrating into Global Core Equity.

As is the case across our strategies with Co-Portfolio Managers, a structure that we favour across the investment teams here at Investec Asset Management, each Portfolio Manager has the right to veto a trade idea. We believe the ability to veto encourages an environment of robust debate and challenge to ensure trade ideas are fully formed and portfolios are built with high conviction in stocks.

On the topic of Co-Portfolio Managers, I will be joining Ian Vose as Co-Portfolio Manager on Global Dynamic Equity. Both Ian and I have been working together in the 4Factor team for a number of years now and, with my background in high alpha, unconstrained equity strategies, we believe our pairing presents strong benefits for our clients.

There are a number of synergies to be gained with my involvement in both Global Core Equity and Global Dynamic Equity. Most notably, these strategies have a high commonality of stocks, ranging between 70-90% overlap over time, with Global Dynamic Equity being a more concentrated version, targeting a higher level of outperformance.

More recently, we have announced some changes that became effective earlier in Q1. We are very pleased that Varun Laijawalla has been appointed an Assistant Portfolio Manager for Emerging Markets Equity alongside Archie Hart, Portfolio Manager, and Adam Child, Assistant Portfolio Manager. Varun’s appointment is well-deserved, having added significantly to the process in his capacity as an analyst.

Wenchang Ma, who has been adding a considerable amount of insight to our China analysis, recently transitioned from an Assistant Portfolio Manager to Co-Portfolio Manager on All China Equity at the beginning of March.

We believe these changes underline 4Factor’s commitment to develop and promote talented investment professionals from within the team, which helps us to innovate and think longer term. We continue to invest and strengthen resources in both quantitative factor research and fundamental research capabilities. Alongside the recent additions in these areas, we have more planned for later this year and we look forward to keeping you updated.

Rhynhardt Roodt
Rhynhardt Roodt Co-Head of 4Factor

Important information

In Australia, this is provided for general information only to wholesale clients (as defined in the Corporations Act 2001).

All the information contained in this communication is believed to be reliable but may be inaccurate or incomplete. Any opinions stated are honestly held but are not guaranteed and should not be relied upon. This is not a buy, sell or hold recommendation for any particular security. Portfolio holdings may change significantly over a short period of time.

Any decision to invest in strategies described herein should be made after reviewing the offering document and conducting such investigation as an investor deems necessary and consulting its own legal, accounting and tax advisors in order to make an independent determination of suitability and consequences of such an investment. This material does not purport to be a complete summary of all the risks associated with this Strategy. A description of risks associated with this Strategy can be found in the offering or other disclosure document for the Strategy. Investec does not provide legal or tax advice. Prospective investors should consult their tax advisors before making tax-related investment decisions.

Issued by Investec Asset Management, July 2019.

The content of this page is intended for investment professionals only and should not be relied upon by anyone else

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