Highly commended: Best investor relations

Winner 2010
Best investor relations

Martin Currie has been managing equity long/short funds for over 10 years. Over that period the company’s commitment to timely, detailed and consistent reporting has been a large part of its success, along with transparency of its funds, processes and operations.

Attribution and risk reports, for example, were first made widely available to clients in 2005. This meant that when the industry began demanding more transparency in this area, the fund was already there. Additional features have since been added such as VaR analysis, stress-test results, liquidity profiles and market-cap analysis.

Martin Currie has a belief, both long held and practised, in being open with its clients and transparent about its funds, processes and operations.

The fund manager launched its first equity long/short fund in 2000 and now has $1.2 billion in assets under management across a wide range of strategies. An active equity specialist, the company has developed products characterised by their focus on stock selection to drive returns. They have a high degree of latitude to back both positive and negative convictions and thereby maximise the ability to generate returns.

Such highly active management requires focused investor relations and in particular regular and effective communication.

“We are always looking to improve our offering, to keep ahead of industry trends and take on board any client feedback that we receive. One of our largest clients tells us that it is one of the best reports in the entire industry,” says Andy Sowerby, managing director responsible for sales, marketing and client service.

Alternative Investment Management Association (Aima) due diligence questionnaires are available to clients. For clients’ due diligence meetings, the company has created a presentation pack covering operational processes for the hedge fund range. This is sent to clients in advance of due diligence meetings, allowing them to tailor their agenda and meet the appropriate teams.

Martin Currie first signed the Hedge Funds Standards Board (HFSB) best practices in 2009. The company conformed to the ‘kite mark’ again in 2010.

The company believes in being open and transparent with its clients and recognises that clients want access to data to do their own analysis. The company offers access to portfolio holdings. All clients are required to sign a confidentiality agreement to get these. To protect the funds and current investors, the holdings are provided with a 30-day lag.

Investors and prospective shareholders can access a wealth of information directly or from a password-protected website.

“Our communication aims to be open and honest and we share good and bad news alike. Due diligence takes time and effort from all parties,” says Alastair Barrie, global head of hedge fund sales.

“There is no point being deep into a selection process and springing a surprise on the client, or worse clients finding something they don’t like or didn’t know about. This is a waste of commitment and expensive for all involved,” he says.
 
In 2010 Martin Currie also made some additions to its product offering. On July 1, 2010 the company acquired Sofaer Capital’s long/short European-equity business and recruited the portfolio-management team of Michael Browne and Steve Frost. The team has worked together on European equities for over 20 years. Acquiring the European hedge fund strengthened expertise on European equities and filled a gap in its long/short business.

“One of our clients suggested that the investment skills of Michael and Steve together with the Martin Currie operational infrastructure would create some real synergies. Our institutional structure and experienced platform personnel were an attraction to the European Hedge team. The support systems we have provided in Edinburgh allows them to focus on managing client money,” explains Barrie.

In September 2010 the company also launched three of its existing strategies with a Ucits III-compliant wrapper. These funds – investing in Japan, Europe and global resources – now have $158 million in assets.

“Meeting the needs of our client base, along with the greater focus on regulation, spurred us to translate our successful equity long/short range into products compliant with Ucits III regulation,” confirms Sowerby.

“We took our messaging from our existing hedge fund range and created Ucits-compliant materials and reporting for clients who were interested in these funds,” Sowerby concludes.

Company facts
Name of investment/management company: Martin Currie Investment Management
Contact information: www.martincurrie.com
Assets under management: $1.2 billion (at March 31, 2011)
Strategies: equity long/shorts funds investing in Japan, Europe, China, resources and financials and others
Administrator: State Street Fund Services (Ireland)
Auditors: Ernst & Young and Deloitte & Touche
Custodians: UBS, Morgan Stanley and Credit Suisse
Prime brokers: UBS, Morgan Stanley and Credit Suisse
Legal counsel: Hogan Lovells, Ropes & Gray, Conyers Dill & Pearman, Appleby, Maples and Calder
Domicile: Bermuda and Cayman Islands (offshore); Ucits-compliant onshore
Listing: Irish Stock Exchange
Management fee: 1.50%
Performance fee: 20% (subject to high water mark)
Minimum investment: $250,000
Lock-in: none
Redemption/liquidity terms: generally monthly with 30 days’ notice (90 days’ notice for China fund)