We believe that success in equity investing requires a high degree of specialism, with investment approaches honed to reflect the distinctive nuances of diverse stock markets. Consistent with this belief, we have created an environment in which talented investment teams can thrive, taking true accountability for their performance, while being unencumbered by an imposed ‘house view’ or investment style. Over time, we have built and nurtured capabilities across global, UK, European, Asian and emerging market equities, offering a multitude of long-only and long/short capabilities, and covering different parts of the market capitalisation spectrum.
The managers believe that markets are not fully efficient and that stock prices often diverge from their fundamental value due to investors’ behavioral biases.
The investment process seeks to exploit these biases in a dynamic and efficient way, resulting in outperformance driven principally by bottom-up stock selection.
The team also believes that a performance-oriented investment strategy should also be flexible, so that the prevailing conditions and outlook can be incorporated, thus ensuring the greatest scope for sustained outperformance.
The team has three portfolio managers. Ian Heslop, has a PhD in medical chemistry and over 18 years’ investment experience. Amadeo Alentorn has a PhD in computational finance and Mike Servent holds a BA in physics from the University of Oxford. The portfolio managers are supported by two analysts, Yuangao Liu and Matus Mrazik, and strategist Justin Wells.
Long-only global equity income
The strategy aims to offer diversification benefits by looking beyond the more traditional sources of income-generating sectors – healthcare, telecommunications and utilities – to capture income. By adopting an unconstrained, total return approach the team seeks out what it believes are the most compelling investment opportunities. At the heart of the strategy is the global equity team’s demonstrably repeatable, dispassionate investment process.
Long-only North American/US equities
The strategy is characterised by a highly distinctive, flexible approach with no style bias. At the heart of the process is a powerful, 5-factor proprietary stock selection model. The result is a portfolio with the potential to offer excellent diversification from more traditional global equity strategies. The strategy offers access to an opportunity set of approximately 1,400 stocks, underscored by the global equity team’s demonstrably repeatable, dispassionate investment process.
The fund is designed to deliver a total return by targeting dividend yield and capital growth through investment in a highly diversified portfolio of US equities. The team follows a dynamic investment process, focused on stock selection through analysis of fundamental company data, as well as taking account of the macro-economic environment and investor sentiment. The team strongly believes this unique approach will result in significant diversification from concentrated, style-biased funds.
Long-only Asia ex-Japan equities
The fund is designed to capture and enhance the opportunity set afforded by Asian equities, by harnessing a unique, but highly diversified investment process. Adopting both top-down and bottom-up characteristics, the team focuses on stock selection across sectors by employing a combination of fundamental investment techniques, based on company-level data, with an evaluation of the prevailing market environment and levels of investor risk appetite across the investable universe. The team has strong conviction that this unique approach can deliver significant diversification from conventional concentrated, style-embedded funds.
Long-only Asia ex-Japan equity income
The fund is designed to capture and enhance the opportunity set afforded by Asian equities, by harnessing a unique, but highly diversified investment process. Adopting both top-down and bottom-up characteristics, the team focuses on stock selection across sectors by employing a combination of fundamental investment techniques, based on company-level data, with an evaluation of the prevailing market environment and levels of investor risk appetite across the investable universe. The team has strong conviction that this unique approach can deliver significant diversification from conventional concentrated, style-embedded funds. Unusually for an Asian equity income fund, the portfolio managers run the fund to achieve monthly distributions.
Long/short, market-neutral global equities
Systematically driven, highly diversified, long/short global equity market neutral strategy, employing a flexible approach with no style bias. The strategy benefits from a powerful, five-factor proprietary stock selection model resulting in portfolios with the potential to be genuinely uncorrelated with peers. The approach offers access to a large opportunity set, underscored by a demonstrably repeatable, dispassionate process.
Long-only, large-cap pan-European equities
The strategy invests in European companies offering a blended investment style covering growth, value and quality. The manager believes that inefficiencies increase lower down the market capitalisation scale so the portfolio is unconstrained by capitalisation and also by country and sector. Stocks are equally weighted with a view to enjoying diversification benefits and managing risk.
The team believes that stock selection is the key to alpha generation and that opportunities for capital growth are best exploited by identifying catalysts for change at a stock level. The team believes it is possible, in a concentrated portfolio, to select stocks in quality businesses, at compelling valuations with strong growth prospects. Every stock is expected to add value and is given an equal weight in the portfolio.
Led by the highly experienced Ian Ormiston, the European equity team includes research analysts Nikisha Mistry and Ash Sony.
Long-only European (ex-UK) smaller companies
The strategy invests in European smaller companies and offers a blended investment style covering growth, value and quality. The manager believes that inefficiencies increase lower down the market capitalisation scale. Stocks are equally weighted with a view to enjoying diversification benefits and managing risk.
The cornerstones of the approach are twofold: fundamental research into the companies in which we invest and a patient, long-term time horizon.
Many investors focus on the immediate outlook for companies and share prices. Quarterly result statements and the vagaries of current trading, together with concerns about the immediate direction of macroeconomic indicators, tend to drive share prices in the short term.
By contrast, our investment approach focuses on opportunities over a three to five year time horizon. Fundamental research into companies and their prospects over the long term seek to identify both winning business models and significant turnaround situations.
Merian Global Investors’ UK large-cap equity team, headed by Richard Buxton, consists of four fund managers and four dedicated analysts. The broader UK equities team of 15 investment professionals offers capabilities in small and mid cap, large cap, equity income and equity absolute return investing.
Merian Global Investors’ UK small- and mid-cap equities team’s approach is based on the belief that its universe of companies is less well researched than large companies, which results in share price inefficiencies.
They believe that a flexible style encompassing, for example, a willingness to hold value and/or growth stocks, depending on the conditions and outlook, provides the greatest scope for sustained outperformance.
The team makes extensive use of external (top-down and bottom-up) input and overlays this with its own detailed analytical work to identify potential investment opportunities.
Our multi-award winning small- and mid-cap UK equity team includes four portfolio managers and two analysts.
Long/short, low net market exposure, smaller UK companies
The strategy takes long and short positions mainly in UK equities outside the FTSE 100 Index, and seeks to deliver absolute returns in all market conditions. The fund is managed with low net exposure to the UK equity market. This provides the potential to deliver positive returns in both rising and falling markets, and with less volatility than traditional equity funds.
The team’s philosophy is pragmatic, empirical, dynamic and flexible in nature. The key focus is on targeting areas of investment capable of delivering the best returns at appropriate points in the cycle. Our belief is that the best way to achieve the maximum total return is through allocations to multiple, relatively uncorrelated ‘buckets,’ our term for potential sources of alpha.
Josh Crabb joined the company in October 2014 as head of Asian equities. He has over 20 years’ investment experience. The other members of the team, all of whom are based in Hong Kong, are Rob Weatherston, portfolio manager, Kris Whitlock, assistant portfolio manager, and Taylor Connaughton, equity analyst.
The managers focus on predominantly Chinese companies that, they believe, display potential for earnings growth. This is based on his view that positive earnings surprises drive outperformance. Companies that have a strong brand or franchise are also attractive, particularly in an economic downturn when businesses are more resilient. The managers will consider investing in companies listed in Hong Kong and Taiwan.
The overriding aim of the team is to invest in companies displaying quality at a reasonable price, quality being defined as companies with a defensible competitive advantage or ‘economic moat’, strong management team and displaying robust corporate governance characteristics. These attributes are typically found in companies with a high return on invested capital.
The team’s investment process has a strong bottom-up focus and it models all potential candidates for inclusion in the portfolio using a bespoke discounted cashflow model to establish intrinsic values. These are then compared with the prevailing market price to ascertain whether or not a discount exists. A discount typically justifies a buy recommendation.
The highly experienced team, headed by Nick Payne, includes fellow fund managers, Salman Siddiqui and Liz Fernandes.
Merian Global Emerging Markets Fund
The strategy invests across emerging and frontier markets through a high conviction portfolio of 30-40 companies that, the managers believe, possess strong business models, healthy balance sheets and, as yet, unrecognised investment potential.