> Future Directions Funds

Transcription

1 Investors Limited ABN AFSL > Future Directions Funds Manager Profiles NOVEMBER 2014

2 Australian Bonds Ardea Investment Management... 3 International Bonds Sovereign Debt Colchester Global Investors... 3 Kapstream Capital... 3 International Bonds Credit... 4 BlackRock Investment Management... 4 Morgan Stanley Investment Management... 4 International Bonds Diversified... 4 Putnam Investments... 4 Wellington Management... 4 Australian Shares Bennelong Funds Management... 5 JCP Investment Partners... 5 Vinva Investment Management... 6 Australian Shares Enhanced Index Vinva Investment Management... 6 Australian Shares Small Companies... 6 Eley Griffiths Group... 6 Fairview Equity Partners... 6 Kinetic Investment Partners... 7 Perennial Value Management... 7 International Shares... 7 American Century Investments... 7 Arrowstreet Capital... 7 Magellan Financial Group... 7 Orbis... 7 Schroders Investment Management... 8 International Shares Enhanced Index... 8 AQR Capital Management... 8 Enhanced Investment Technologies... 8 Henderson Fund Management... 8 International Shares Asia (ex Japan)... 8 Future Directions Funds - Manager Profiles // 1

3 Investec Asset Management... 8 Lazard Asset Management... 9 International Shares Emerging Markets... 9 Investec Asset Management... 9 Lazard Asset Management... 9 Schroders Investment Management... 9 Global Property Securities State Street Global Advisors Direct Property Brookfield Multiplex GPT Group Lend Lease Real Estate Investments Principal Global Investors Retirement Villages Group Rockspring Property Investment Managers Alternative Assets Absolute Return AQR Capital Management SouthPeak Investment Management High Yield Credit Investors Brigade Capital Loomis, Sayles & Company TCW Asset Management Future Directions Funds - Manager Profiles // 2

4 Australian Bonds Style/focus Government bonds s Government bond portfolio invests across the Australian government and semi-government sectors, and is mandated to employ relative value strategies in order to capitalise on attractive market conditions, but overlay defensiveness to guard against market downturns. The portfolio is designed to add value from a variety of sources, including interest rate strategies such as duration and yield curve, and foreign exchange. Interest rate strategies are predominantly driven by fundamental macroeconomic insights - combining quantitative and qualitative approaches covering sentiment, momentum, macro and valuation factors. was selected on the basis of its broad array of investment strategies, applied by an experienced team of sector specialists. employs a rigorous risk budgeting framework via a dedicated quantitative support team to ensure all risks are appropriately accounted for. Ardea Investment Management Style/focus Inflation linked Ardea oversees an Australian inflation-linked bond portfolio. The exposure to inflation-linked fixed income provides very defensive characteristics and includes an important hedge against inflation. The Ardea strategy invests mainly in inflation linked bonds, but can also invest in nominal government and semi-government bonds, inflation derivatives, interest rate derivatives, and bank bills. Ardea is a longer term, fundamentally driven, value investor with a focused approach across three main strategies inflation, interest rates and arbitrage. The highly experienced team has worked together for a number of years, previously at Credit Suisse Asset Management before forming Ardea in Ardea is majority owned by its investment team. International Bonds Sovereign Debt Style/focus Core s fixed income investment approach combines a diverse and experienced investment team with a disciplined, risk controlled investment process to deliver active returns. The proposed structure will utilise the team s macro fixed income capabilities to manage a core portfolio of global sovereign bonds, providing investors with additional diversification benefits. Colchester Global Investors Style/focus Real yield Colchester Global Investors was appointed to invest in global government securities. Colchester is an independent firm majority owned and controlled by its principals with a supportive minority (49.9%) shareholder, Silchester International Investors Limited. The firm was founded by Ian Sims in 1999 to focus solely on fixed income asset management. Colchester is a value-orientated global fixed income manager that invests primarily in high quality sovereign bond markets that offer attractive real yields and sound finances. This strategy is known as a prospective real yield strategy. The strategy is balanced between country, duration and currency. Colchester expects to generate half to two thirds of returns from its bond selection and one third to half from its currency management. Our decision to appoint Colchester was largely based on their effective currency management, strong inflation modelling, in-depth on-site country research and performance track record. Kapstream Capital Style/focus Core Kapstream Capital is a global fixed income fund manager providing traditional and alternative investment strategies. Kapstream was founded by Kumar Palghat and Nick Maroutsos in 2007 with a 25% equity stake held by Challenger. The Absolute Return strategy remains the firm s flagship fund but the firm also offers benchmark orientated strategies including Global Sovereign and Asian Fixed Income. Kapstream was appointed to invest in global government securities. Future Directions Funds - Manager Profiles // 3

5 The Kapstream strategy is a core strategy which is benchmark orientated focusing on capital preservation, risk management and relative value insights. The strategy is a combination of secularly orientated beta management, relative value alpha strategies and offensive risk management trades. The rationale for appointing Kapstream was its risk orientation and performance track record. International Bonds Credit BlackRock Investment Management Style/focus Model-based global credit BlackRock is the world s largest investment manager. Founded in 1988, BlackRock acquired Merrill Lynch Investment Managers) in 2006 and Barclays Global Investors ( BGI ) in The model based fixed income team is legacy BGI and is discrete from the fundamental BlackRock credit research team. Blackrock was appointed to invest in global credit securities. The BlackRock Model Based strategy is a relative value strategy utilising both cash bond and credit default swaps ( CDS ). The strategy is well diversified and aims to deliver basis points relative to benchmark. BlackRock's investment approach combines the insights of its people with a quantitative research platform to generate returns. BlackRock believes that a systematic approach to idea generation and portfolio construction is the most efficient way to build portfolios and generate attractive risk adjusted returns. BlackRock s appointment was largely based on the depth and breadth of its research team, its sophisticated portfolio construction techniques and its strong performance track record. Morgan Stanley Investment Management Style/focus Value global credit Morgan Stanley Investment Management (MSIM) is a wholly owned subsidiary of Morgan Stanley. With over three decades of asset management experience its investment strategies span the risk/return spectrum across geographies, investment styles and asset classes, including equity, fixed income, alternatives and private markets. MSIM was appointed to invest in global credit securities. The MSIM strategy employs a value orientated strategy investing in the broader global investment grade corporate debt market, but also has the flexibility to invest in non-benchmark credit sectors. Our decision to appoint MSIM was largely due to the highly experienced investment team, robust analytical tools which allow the manager to screen a larger number of issuers than its peers, and its effective risk management skills. International Bonds Diversified Putnam Investments Style/focus Global aggregate Putnam, a Boston-based manager, adopts a sector specialist team approach to fixed income investing. The investment teams are of a high calibre, each responsible for generating ideas within their own area of expertise. This, combined with the manager s strong risk control culture, adds a sound base of diverse, high conviction investment ideas. Putnam was selected with the aim of more evenly balancing the risk contributions within the portfolio. Putnam s ability to efficiently implement sector rotation also serves to enhance the degree of diversification across the Fund s investments. Wellington Management Style/focus Global securitised Wellington is an independent investment management firm that emphasises diversification, combining both top-down and bottom-up inputs in seeking to produce excess return over different market environments. The firm leverages a strong information sharing philosophy between its credit and equity teams, and utilises sophisticated risk management tools to monitor its portfolios. Wellington was appointed for its strong track record built on a conservative approach. This mandate invests in the global securitised sector, investing in residential mortgage-backed securities (both agency and non-agency), asset backed securities and commercial mortgage backed securities. The manager is very well-resourced and has invested extensively in its world-leading, proprietary systems. Future Directions Funds - Manager Profiles // 4

6 Australian Shares Style/focus Concentrated equity s Australian Equity Concentrated strategy primarily invests in Australian securities listed, or about to be listed, on the ASX which we believe will outperform the market. Whilst the strategy is not restricted in the sectors in which it invests, the portfolio is concentrated, that is, the portfolio invests in only a small number of securities and typically holds between 25 and 35 positions, with the aim of gaining from outperformance or an increase in share price. implements a research-driven process which, combined with active management, enables the investment team to build a concentrated portfolio that takes advantage of market opportunities as they arise. Style/focus Core long/short 130/30 s Equity Opportunities Australian Share capability is managed by s Fundamental Equities Team, a well-resourced team headed by Ella Brown. Equity Opportunities is a 130/30 long/short equities fund. Differing from traditional equity funds which generally take only long positions, the Fund s investment strategy simultaneously holds both long and short positions, thus increasing the breadth of stock decisions. Long only managers are constrained by how much they can underweight the ex-top 20 stocks due to the concentration of the market in the mega caps. Long short are unconstrained hence they can spread their bets more evenly. This investment strategy enables the investment team to maintain a risk-adjusted portfolio, with the aim of delivering positive returns relative to the Fund s benchmark, regardless of market conditions. Style/focus Value plus s Value Plus Australian Share capability is managed by s Multi-Strategy Quant Funds Team, a stable and well-resourced team headed by Mark McClatchey. The Quant Value Team operates a proprietary process that combines quant and fundamental methodologies. Value Plus was selected for its solid investment approach, which overlays the quantitative aspect with a judgmental element. The characteristics of the portfolio complement those of the other underlying managers in the Fund, providing additional diversification benefits. The performance of the portfolio has been stable since inception. Bennelong Funds Management Style/focus Core/thematic Bennelong operates an intuitive but disciplined investment process, overlaid with a core/thematic style. The investment team places an emphasis on understanding the sources of risk and portfolio rotation across different themes. Bennelong seeks to invest in companies that are experiencing a positive change in their business, in addition to sustainable improvement in earnings and cash flows. Bennelong was appointed for its disciplined portfolio construction process, evident in the long and stable track record of its investment team, which originally began working together at ING Investment Management. This team operates under a robust governance framework that aligns their interests with those of their clients. Bennelong has manageable funds under management and the investment team is backed by a stable parent, Bennelong Group. JCP Investment Partners Style/focus Core/long-short JCP s 150/50 long-short strategy is constructed with reference to the benchmark. The strategy can use up to 50% of its capital in short positions. The net portfolio s exposure is 100% of the benchmark. JCP is a calculated risk buyer with biases to growth and the smaller cap segment of the market. It exploits extreme growth and value opportunities which may be perceived by other managers as overly risky but which JCP expects to perform well in the medium to longer term. It seeks to skew the outcomes in the portfolio s favour by subjecting prospective investment ideas to rigorous scenario testing, assigning each scenario a notional probability of occurring. Future Directions Funds - Manager Profiles // 5

7 Vinva Investment Management Style/focus Quantitative long/short 130/30 Vinva Investment Management run a quantitative long/short (130/30) strategy. This means the manager can short sell stocks it expects to underperform, and use the proceeds to buy stocks it expects to outperform. This is complementary to the styles of the FD Australian Share Fund s incumbent managers, and we expect this strategy to cope well with volatile market conditions. Furthermore, shorting creates an additional source of excess return, and thus provides good diversification benefits to the portfolio. Despite being a quantitative approach, there is a strong judgemental element to Vinva s investment process, which is an attractive differentiator. We have confidence in Vinva s capable and wellresourced team, which has a long track record of working together. The team operates within a performance-driven culture with robust alignment arrangements. Australian Shares Enhanced Index Style/focus Enhanced index s Enhanced Index Share Fund provides investors with access to a portfolio of shares listed on the Australian Securities Exchange, with diversification achieved primarily through investment across a range of industries and issuers. In identifying share opportunities for the fund takes an enhanced index approach to investment. This enhanced index approach is tailored to the Australian market and provides greater potential for enhanced, risk-adjusted returns than would be achieved through investment in a pure index fund. Vinva Investment Management Style/focus Enhanced Index Vinva Investment Management runs its portfolio in an enhanced style, though with some exposure to value factors, using a quantitative process. Vinva s provides access to multiple and diversified sources of alpha. The manager s proprietary portfolio construction model and process, which considers numerous factors including volatility and tax impact, is a notable strength. The core members of Vinva s investment team worked together previously at Barclays Global Investors managing a quant Australian shares strategy and have a strong track record as a unit. This contributes to the manager s strong, performance-driven culture, supported by a robust alignment framework. Australian Shares Small Companies Eley Griffiths Group Style/focus Core Eley Griffiths believes that markets do not always price small companies efficiently and that these inefficiencies can be exploited using market experience, intelligence and disciplined research and stock selection processes. Eley Griffiths' strong investment philosophy and disciplined investment process are focused on capturing macro and market dynamics without compromising the quality of stock selection. The manager follows a more dynamic approach to investing with a shorter horizon, which complements the longer-term outlook of the Fund s other small company specialists. Eley Griffiths is a high quality, boutique Australian small company specialist. It has a proven investment track record, delivered by a highly experienced and talented investment team. Fairview Equity Partners Style/focus Growth Fairview Equity Partners is a thematically-aware, growth stock-picker that aims to exploit market inefficiencies with clear catalysts and within a defined time horizon. Fairview s highly regarded investment team has a long track record of working together and is strongly aligned to the success of the business, both factors which were important to the Multi- Manager team in selecting the manager. Future Directions Funds - Manager Profiles // 6

8 Kinetic Investment Partners Style/focus Growth at a reasonable price (GARP) Kinetic is a thematically aware, growth-oriented manager. Kinetic s portfolio structuring methodology takes account of prevailing market conditions and sector influences. Its stock selection methodology is solid, with a bias towards reasonably valued companies with superior growth prospects. This growth-oriented manager has manageable funds under management, is largely benchmark-unaware and has a strong alignment framework that rewards for investment performance. Perennial Value Management Style/focus Value Perennial identifies well managed, transparent and financially sound companies that trade at a discount to their fundamental valuations. Companies that are selected for inclusion in Perennial s portfolio must also demonstrate sound risk monitoring and management. The Perennial team is well-resourced, supported by the broader Value Team, with backgrounds in funds management, auditing, broking and dealing. The team is more sensitive to market sentiment than other value managers typically tend to be, hence reducing the risk of exposure to 'falling knives' (where managers buy cheap companies that continue to fall in value). Perennial s alignment arrangements are solid and the manager has manageable funds under management. International Shares American Century Investments Style/focus Bottom-up/growth American Century is a fundamental growth manager, seeking out companies with accelerating earnings growth whose earnings potential is underappreciated by the market. This manager tends to do well in strong markets but can be expected to underperform when the market corrects. The team is well resourced and is highly experienced. Arrowstreet Capital Style/focus Quantitative Arrowstreet Capital is a core quantitative manager that seeks to exploit both behavioural and informational inefficiencies in the market with a focus on delivering consistent, risk adjusted returns. Similar to most of its peers, this manager may underperform during sharp market corrections. Arrowstreet s investment team is well resourced and is comprised of experienced and talented investors. Magellan Financial Group Style/focus Quality/sustainable growth Magellan Financial Group employs a fundamental strategy that seeks to invest in companies with a sustainable competitive advantage trading below their intrinsic value whilst managing risk based on their proprietary macroeconomics assessment. The manager plays a defensive role in the portfolio. Orbis Style/focus Value Orbis is a fundamental contrarian thematic value manager. It seeks to identify segments of the market which are suppressed due to poor market sentiment, and from those market segments select companies that have clearly identifiable catalysts for improvement. Orbis tends to do particularly well during those periods when markets are experiencing expansion in multiples. We see this team as one of the strongest value teams in the market. Future Directions Funds - Manager Profiles // 7

9 Schroders Investment Management Style/focus Quantitative/style blend Schroders Investment Management employs a quantitative global dynamic blend strategy that dynamically manages its allocation to Schroders Global Value portfolio and to its Quality portfolio, based on the prevailing market conditions. The manager s portfolio is well diversified by investing in a large number of companies and typically displays a small cap tilt. It tends to perform well under most market conditions. International Shares Enhanced Index AQR Capital Management Style/focus Mathematical enhanced index AQR Capital is a quantitative manager with that combines top-down and bottom-up processes, with some valuation and momentum features. AQR seeks to add value through stock, currency and country selection, with a dominant focus on stock selection of these three drivers. The Multi-Manager team is impressed by the extensive research that underpins AQR s investment process, supported by a significant focus on managing transaction costs and its intellectual capital resources. The manager has a well-regarded investment team with solid alignment arrangements. Enhanced Investment Technologies Style/focus Quantitative enhanced index Enhanced Investment Technologies has been appointed to oversee a customised version of its active diversity-focused strategy. EIT employs a differentiated stochastic process that combines stocks which exhibit some relative volatility, but are lowly correlated, in a more efficient configuration than the benchmark. EIT s research has shown that a portfolio that is optimised and rebalanced in this way will tend to outperform a passive index. EIT s investment process sees its portfolio continually evaluated to ensure its diversification and return characteristics are consistent with both investment objectives and the underlying mathematical theorem. The manager s investment team is well-regarded with a stable history, helped by a strong alignment framework including employee ownership. Henderson Fund Management Style/focus Multi-strategy enhanced index Henderson uses a combination of quantitative and qualitative techniques across four lowly correlated strategies (fundamental, event-driven, relative value and liquidity) to add value in its enhanced index portfolio. The portfolio is designed to be style- and beta-neutral. Henderson employs a portable alpha approach that allows the manager to increase alpha by investing in market neutral funds that are not correlated with the beta component of the portfolio. Broadly, the portable alpha portfolio is equally exposed to North American, Pan-European and Asia Pacific strategies. Hence, alpha generation is not constrained to proportionality with beta, but equally weighted across the regions. Henderson was selected for its unique approach to portfolio construction and alpha generation, strong portfolio management leadership and robust alignment structure that incentivises the team to generate alpha for clients. International Shares Asia (ex Japan) Investec Asset Management Style/focus Value Investec Asset Management manages a solid investment process that combines fundamental valuation with momentum, price strength and sentiment factors. The manager s investment philosophy drives it to seek high quality, attractively valued companies with improving operating performance, which are receiving increasing investor attention. Importantly, Investec follows a robust model of risk management that ensures knowledge and awareness of risk exposures. The Multi-Manager team was attracted to Investec s flexible investment approach to stock selection and portfolio construction, which is disciplined without being dogmatic, and takes into consideration market and macro factors. The alignment model is strong, and supported by a collegiate culture and long-term view on investment team retention. A solid track record underpins Investec s Asia ex Japan capability. Future Directions Funds - Manager Profiles // 8

10 Lazard Asset Management Style/focus Quantitative Lazard is a quantitative manager that focuses on identifying stocks which offer a combination of value, quality and momentum characteristics and demonstrate sustainable growth in earnings. The Multi-Manager team believes the appointment of Lazard increases the FD Asia ex Japan Share Fund's exposure to a more benchmark-aware strategy that is able to capture the value, momentum and sentiment factors that are demonstrated to tend to drive Asian markets. The Multi-Manager team is supportive of Lazard's proactive approach to risk management, which combines use of a quantitative risk model with elements of judgemental overlay. The manager s high quality investment team operates within a robust governance framework, and has a long track record of working together. International Shares Emerging Markets Investec Asset Management Style/focus Value/momentum Investec Asset Management operates a disciplined investment process that combines quantitative and qualitative elements at both the stock selection and portfolio constructions stages of the investment process. The manager is a riskand exposure-aware stock picker, with a focus on companies that demonstrate improving operational performance and sustained price strength. Typically, this produces a portfolio with strong value and momentum characteristics. Investec s investment team is high quality and well-resourced, with solid alignment arrangements in place. Lazard Asset Management Style/focus Quantitative Lazard Asset Management is a quantitative manager with a defensive focus, seeking quality, undervalued names with superior growth potential. A judgmental overlay is applied to Lazard s quantitative investment process, which considers market themes and risk in particular. The Multi-Manager team also likes Lazard s unique approach to risk management, which sees it adjust its model to make specific prevailing risks more directly controllable. The manager s high quality investment team operates within a robust governance framework, and has a long track record of working together. Schroders Investment Management Style/focus Thematic/core Schroders is a quantitative manager which considers top-down investment factors in its process of selecting its stocks. Its process is designed to capture its understanding of the prevailing themes in the market and to translate these themes into its portfolio in a quantitative way. The differentiating feature of its approach is that it tilts its portfolio between value and quality as the market cycle progresses. Schroders key competitive strengths lie in its resource base and people, which provide research coverage across the global investment universe, and have a strong track record of understanding the drivers in the market and translating that understanding into its assessment of stocks fundamentals and grant it a superior understanding of patterns of performance of different styles at different stages of the market cycle. From the portfolio construction perspective, Schroders delivers a thematically aware exposure to smaller-to-mid capitalisation stocks with attractive quality and value characteristics. Global Property Securities Style/focus Core/G-REITs The global property securities portfolio managed by combines a top-down approach to regional and country allocation with a stock specific selection process. The manager employs a regional stock selection approach based on local expertise in the four key regions of Europe, North America, Asia and Australia. The stock selection approach reflects the variant characteristics of the securities as well as the quality and quantity of information available in different property security markets around the world. Future Directions Funds - Manager Profiles // 9

11 State Street Global Advisors Style/focus Full index replication State Street Global Advisors (SSgA) focuses on cost-effective index solutions utilising a full index replication approach. SSgA displays strong and consistent portfolio construction, benchmark replication, risk management, compliance and implementation systems. SSgA s full index replication strategy is used to gain broad index exposure to global property securities. Direct Property Style/focus Core Retail and Office/Australia manages the Shopping Centre Fund and the Wholesale Office Fund. The AMP Capital Shopping Centre Fund focusses on high quality fortress shopping centre assets dominant in their trade areas. The strategy provides diversification and scale and is managed by Shopping Centres one of the largest management platforms in Australia. The Wholesale Office Fund provides investors with exposure to a portfolio of prime office assets predominantly in the largest Australian markets of Sydney and Melbourne. The strategy is core and focuses on well-located assets with active asset management maximising the operating income and ultimately distributions to investors, while also capturing capital growth. Brookfield Multiplex Style/focus Core plus/new Zealand Brookfield Multiplex manages the Multiplex New Zealand Property Fund. The Fund invests in a portfolio of assets across New Zealand with a particular focus on the office sector. This fund is a closed ended vehicle, currently in the process of asset sale and wind up. GPT Group Style/focus Core Office/Australia GPT Group manages the GPT Wholesale Office Fund. This core-style fund is a large and geographically diversified portfolio of domestic office assets. The portfolio includes investments in a number of landmark Australian buildings, such as Darling Park, HSBC Centre and 530 Collins Street. The GPT Wholesale Office Fund invests in high quality assets and is managed by a strong, high calibre investment management team that conducts a detailed and rigorous investment process. Lend Lease Real Estate Investments Style/focus Core Retail and Industrial/Australia Lend Lease Real Estate Investments manages both the Lend Lease Retail and Industrial funds under the Australian Prime Property Fund Series (APPF). Both of these core-style funds are well diversified by geography and assets within their core markets in Australia. The investment strategy for the APPF Retail Fund is to focus predominantly on the ownership and expansion of major regional shopping centres across Australia. The APPF Industrial Fund s strategy is to maximise returns by holding, developing and repositioning quality prime direct industrial properties across Australia. Both of these funds invest in quality assets and are managed by a strong, high calibre investment management team. Principal Global Investors Style/focus Core plus/us Principal Global Investors manages the Principal Enhanced Property Fund. This core plus fund invests in a diversified portfolio of assets in the US, and also attains value through asset repositioning and development. Principal is a large, reputable real estate manager in the US. This allocation provides access to a diversified portfolio of North American office, retail and industrial assets. Future Directions Funds - Manager Profiles // 10

12 Retirement Villages Group Style/focus Alternatives/Australia and New Zealand Aveo manages the Retirement Villages Group (RVG). RVG invests in a retirement village portfolio in Australia. This retirement village investment provides an indirect exposure to the residential sector which is difficult to access by institutional investors. Rockspring Property Investment Managers Style/focus Core plus/europe Rockspring Property Investment Managers manages the Rockspring Pan European Property Funds. These core-plus style funds invest in a diversified portfolio of retail, office and industrial assets in continental Europe. The peripheral fund invests in a portfolio of diversified assets in Peripheral Europe. Alternative Assets Absolute Return AQR Capital Management Style/focus Hedge fund beta replication AQR s hedge fund replication strategy seeks to capture the diverse risk premia associated with classic hedge fund strategies. AQR aims to deliver these risk premia to investors in a transparent and liquid manner, with low correlation to traditional asset classes. AQR s research has identified risk premia embedded in nine broad strategy groups. The manager employs a bottom-up approach, which seeks to cost effectively recreate the trading strategies and beta that a diversified hedge fund program would carry, but with a more balanced profile and active risk management. The Multi- Manager Team believes AQR s approach is attractive compared to other hedge fund replication strategies, which tend to have a substantially higher degree of correlation with traditional equity markets. AQR s portfolio design and risk exposure management are attractive features of their process. SouthPeak Investment Management Style/focus Alternative risk premia SouthPeak s Real Diversification Fund is designed to provide stable, consistent returns by investing in a diversified mix of strategies to capture alternative returns sources that behave differently across a range of market conditions. This includes alternative risk premia across all of the major equity, fixed interest, currency, volatility and commodity markets. In constructing its portfolio, SouthPeak emphasises cost efficiency, liquidity and active risk management. The Real Diversification Fund is a source of liquid, low correlation, low cost alternative returns, and provides important diversification benefits. High Yield Credit Investors Style/focus Liquid credit strategies The Fund is an absolute return, long/short style fund that targets returns in excess of Bank Bills +300 bps. This is a truly global fund that expresses both long and short global credit views from macro themes, across industries and at an individual company perspective, as well as across the capital structure. Brigade Capital Style/focus Opportunistic credit Brigade Capital s opportunistic credit strategy follows a long-biased, opportunistic approach to investing in the debt portion of leveraged capital structures. The strategy seeks to produce consistent returns that outperform high yield indices, with an emphasis on capital preservation. High yield corporate bonds will typically represent the largest exposure within the strategy, with the potential for allocations to other debt positions including bank debt, first lien/rescue financing, high grade corporate bonds, convertible bonds, and distressed securities. The strategy may also employ index hedges, with the intent of managing portfolio exposures and dampening volatility. Future Directions Funds - Manager Profiles // 11

13 Loomis, Sayles & Company Style/focus Leveraged loans The leveraged loans strategy seeks to provide a high level of current income and such preservation of capital as is consistent with investment in a diversified portfolio of senior loans. The manager seeks to accomplish this by investing primarily a diversified portfolio of predominantly US Senior Loans high quality bank loans with an average rating of BB. The Fund may also invest in interest rate swaps, total return swaps, credit default swaps, currency futures, forwards or options, warrants and other equity interests and derivatives. TCW Asset Management Style/focus Securitised opportunities The Securitized Opportunities portfolio forms part of the allocation to growth alternative assets. The strategy is an opportunistic, enhanced total return fixed income portfolio strategy with a focus on residential mortgage, commercial mortgage and asset-backed securities. The portfolio seeks to add value through the application of experience and committed research to take advantage of market mispricings. Contact us If you would like to know more about how can help you, please visit or contact one of the following: Financial Planners 's Client Service Team on Personal Investors Adviser or Financial Planner Wholesale Investors 's Client Service Team on Important note: Funds Management Limited (ABN ) (AFSL ) (AMPCFM) is the responsible entity and issuer of units in the Future Directions funds (Funds). To invest in the Funds, investors will need to obtain the current Product Disclosure Statement (PDS) from Investors Limited (ABN ) (AFSL ) (). The PDS contains important information about investing in each Fund and it is important that investors read the PDS before making a decision about whether to acquire, or continue to hold or dispose of units in the Funds. Neither AMP Capital, AMPCFM nor any other company in the AMP Group guarantees the repayment of capital or the performance of any product or any particular rate of return referred to in this document. While every care has been taken in the preparation of this document, AMP Capital makes no representation or warranty as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This document has been prepared for the purpose of providing general information, without taking account of any particular investor s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this document, and seek professional advice, having regard to the investor s objectives, financial situation and needs. This document is solely for the use of the party to whom it is provided. Future Directions Funds - Manager Profiles // 12