STANLIB Listed Property Franchise Brochure

Transcription

1 STANLIB Listed Property Franchise Brochure

2

3 01 Our belief Our franchise model 02 Overview The team Investment philosophy 03 Investment process and portfolio construction Franchise research overlay 04 Investment risk management 05 Broader risk management Environmental, social and governance factors Capabilities Contact details 06 Appendix Team profiles

4 STANLIB Focused Investing

5 STANLIB is a leading asset management company in Africa, with assets under management and administration of R584 billion * (USD39.5 billion) for over retail and institutional clients across the African continent. We have a physical presence in ten African countries and are able to leverage from a wider Standard Bank Group Africa footprint. STANLIB Focused Investing Our belief There is no one size fits all investment solution for clients. Diverse clients need diverse investment outcomes. We therefore look at investments through many lenses and from many angles to give us an in-depth understanding of an ever changing investment landscape. Our investment model thus houses multiple focused units with unique philosophies, which cater for diverse client needs. These specialist investment teams handle market changes with agility and speed, as they are supported by dedicated research, trade, implementation, risk management and compliance teams. Our multi-specialist franchise model truly reflects the complex investment world we operate in and echoes our desire to deliver tailored solutions for diverse clients. The result is a broad investment offering designed to deliver our investment promise to clients. Our franchise model The STANLIB investment team consists of franchises made up of specialist teams of investment professionals. They manage clients assets in their area of expertise, namely: fixed interest, property, equities, multi-asset allocation, multi-management and alternatives. The power of focus and the strength of diversity STANLIB - built to meet the ever-evolving needs of our clients *As at 30 June

6 Overview As an asset class, listed property offers attractive investment opportunities and diversification for investors. It has established itself as a distinct asset class, resulting in increased demand by local institutions and international investors, attracted by relatively higher yields and income growth in comparison to other emerging markets as well as global markets. It has a fairly low correlation with equities and listed property companies are also compelled by law to pay the majority of their profits as a distribution to investors. A further benefit is that the income stream from listed property is not static relative to that of bonds and has the potential to grow. STANLIB s Listed Property Franchise has a good track record as one of the leading listed property managers in the country with a unique offering across all property markets in the world. The size of our property book and our strong ties to STANLIB Direct Property Investments (the asset manager of Liberty Properties) is a clear competitive advantage, while our affiliation with Standard Bank Properties further strengthens our influence when it comes to voting, private placements and liquidity. In addition to doing our own analysis and research, the property team leverages off the greater STANLIB Asset Management team, including the Fixed Income Team, in-house economists, and the Equity Research Team, for trends in the retail, construction and financial sectors. The team In addition to dedicated research on specific companies and themes, Keillen Ndlovu, Head of the Listed Property Franchise takes ultimate responsibility for portfolio management functions - domestic, Africa and global (emerging and developed). Riaan Gerber focuses on developed and emerging markets, while Chloe Ma focuses on the local, Africa and Asian markets. Lawrence Koikoi covers South Africa and the rest of Africa. Keillen Ndlovu Head of Listed Property Franchise / Portfolio Manager BCom(Hons), CAIB, PDP Riaan Gerber Portfolio Manager/ Property Analyst BCompt(Hons), CA(SA), PDP 2 Chloe Wing See Ma Property Analyst BArch, BSc (Hons), PGDEM Lawrence Koikoi Property Analyst CA(SA), PDP

7 Investment philosophy Our objective is to generate superior long-term risk adjusted returns based on thorough fundamental research. We believe that markets are not efficient. These inefficiencies provide opportunities that can be actively exploited to generate enhanced returns by employing our extensive experience, resources and expertise. We aim to maximize returns by identifying diverse opportunities that are expected to drive outperformance. Our aim is to provide a source of income and capital growth over time. Disciplined top-down and bottom-up research, diversification and risk management processes enable us to take advantage of these inefficiencies and better positions us to outperform relative to our peers and benchmarks. Investment process and portfolio construction Our team is committed to generating superior long-term risk-adjusted returns based on thorough fundamental research. To achieve this, we invest with high conviction in companies or funds that: Display quality long-term earnings prospects, with defensive portfolios Have a portfolio of assets with the potential to generate above-average growth in their rental streams Have proactive management - acquisitions, disposals, extensions, refurbishments and developments Have good tenant, lease and debt profiles Have portfolios that are defensive to the market slowdown Are trading at reasonable values relative to the quality of their income growth prospects Our focus is on an extended investment horizon in order to smooth out the short-term fluctuations associated with interest rate cycles, where ultimately the companies with well-positioned portfolios and strong management teams will prevail. STANLIB s specialist asset class management approach allows the Property Team to make use of thorough research and portfolio construction processes. The focus and dedication of our team to only a single asset class enables the use of both a broad, top-down, as well as detailed, stock specific, bottom-up approach. As an example, our investment process in the South African listed property market can be summarised as follows: Top down economic analysis Analysis of property asset class trends Individual company research Stock modeling, ranking table and stock pick Constant review Portfolio construction The quantitative aspect of our research consolidates the selected universe of stocks into a ranking table. The total return projection, while of extreme importance, is not the only input into our stock selections. We take cognizance of risk through sector, strategy, and to a lesser extent, regional diversification. We also specifically take note of aspects such as financial gearing and asset quality relative to where we may be in a particular cycle. Once the portfolio has been constructed we continuously revisit the current holdings. The team is benchmark-cognisant, so favoured positions will be for example reflected as an overweight position relative to the SA Listed Property Index. 3

8 This approach is by no means a straight line process, because just as we believe that markets are ever changing, we must also be flexible enough to adapt to what the sector presents us. Franchise research overlay Top-down analysis We only consider company specifics after arriving at a thorough understanding of the prevailing economic environment. This top-down macro analysis is not only a starting point, it is also an on-going process. Macro variables such as interest rates and economic growth are crucial in decision-making across the board, from asset allocation calls to asset quality of the relevant stocks under consideration. Sector analysis Once we have property under the microscope, the next factor to consider is sector analysis and selection. Property is all too often viewed under one umbrella, while in fact the relevant underlying sectors (retail, office and industrial) react quite differently under various scenarios. Their respective cycles are not correlated which allows for diversification as well as opportunities for tactical positioning. Individual company research Individual company analysis involves a mix of tasks including the careful scrutinizing of company financial statements; developing models to forecast potential returns; visiting building sites; and checking on our purchases. Our models, regular interaction with management and consistent monitoring of key assets, assist in achieving a thorough company understanding and the necessary guidance on its appropriate valuation. 4

9 Investment risk management The approach to investment risk at STANLIB is proactive, which means being prepared for unlikely events and learning from market crises. This applies to both market and nonmarket risks such as counterparty, operational, leverage and liquidity. Risk is the responsibility of the portfolio manager and is integrated into the investment team s decision-making process. Each franchise is responsible for the monitoring and measuring of investment risks and the implementation of internal risk controls consistent with their risk appetite, investment philosophy and process. The oversight for investment risk is the responsibility of the Portfolio Analytics, Risk and Implementation Team and for operational risk, the responsibility of the STANLIB Compliance Team. These oversight functions ensure independence, clear accountability and enable portfolio managers to improve their investment process. The risk management framework is aligned with the investment objectives and investment horizon, and tackles multiple aspects of risk, as opposed to being limited to a single measure such as tracking error. Furthermore, an effective, integrated risk framework measures, monitors and manages exposures to economic and fundamental drivers of risk and return across asset classes in order to avoid the overexposure to any one risk factor. Portfolio Analytics, Risk and Implementation The Portfolio Analytics, Risk and Implementation Team (PARI) at STANLIB provides an oversight function via a consistent and unbiased process for evaluating investment risks for each franchise. The objective of the PARI Team is to verify that portfolio managers are investing in line with their investment philosophy and within risk limits. The team monitors and manages the following investments risks: Credit Liquidity Derivatives Market concentration; and 5

10 Investment risk The objective of the team is to quantify, decompose, evaluate and communicate both benchmark and peerrelative risk and return. In order to achieve these objectives, the PARI Team: Makes all investment risks transparent to the franchises Identifies and communicates to senior management all risks that may lead to extreme performance; and Identifies each franchise s strengths and weaknesses via detailed performance and attribution analysis This function complements the STANLIB compliance function, which is responsible for ensuring that the franchises operate within client-specified guidelines and regulatory limits. There are three components to STANLIB s risk management framework: Risk measurement: the team does not only consider aggregate portfolio risk such as volatility or tracking error, which rely on individual volatilities and correlations of asset classes and managers. Volatility, tracking error and correlations capture the overall risk of the portfolio but do not distinguish between the sources of risk, which may include market risk, sector risk, credit risk and interest rate risk etc. Risk monitoring: enables the team to monitor changes in the sources of risk on a regular and timely basis. Portfolio decomposition plays an important role in stress testing. The sources of risk are stressed by the team to assess the impact on the portfolio. Risk is managed for normal times but the team are cognisant of and aim to be prepared for extreme events Risk-adjusted investment management: this function aligns the investment decision-making process with the risk management. It suggests ways in which portfolio managers can adjust their portfolios in response to expected changes in risk These three components of the robust risk management framework are essential. Risk measurement means having the right tools to measure risk accurately. Risk monitoring means observing the risk measures on a regular and timely basis. Risk-adjusted investment management means using the information from the measurement and monitoring of risks in order to ensure that the portfolio management process is aligned with expectations of risk and risk tolerance. Moreover, each component is interdependent and should be aligned with our clients investment objectives. This interconnectedness is essential for a robust risk management framework at STANLIB and for the investment process to be fully aligned and integrated. Broader risk management Compliance and investment risk management are the cornerstones of our business. To this end, we have robust risk management, compliance and governance structures. Our highly experienced Middle Office consists of Compliance, Legal, and Risk Management, which provide systems and processes to ensure that mandate compliance is monitored. In addition to the portfolio monitoring tools mentioned above, we use the STATPRO system to measure our performance relative to benchmarks and indices, where appropriate. STATPRO is also used for performance attribution. Risk management is effected through appropriate diversification across sectors and counters and ensuring that investment sizes are within limits. We have made provision for IT and business recovery facilities including office space. Our robust systems are designed to ensure that our organisation operates efficiently at all times. Insurance policies for professional indemnity as well as directors and officers liability are in place, through Standard Bank Insurance Brokers (Pty) Ltd. Environmental, social and governance factors STANLIB is committed to and is a signatory of the United Nations Principles for Responsible Investing (UNPRI). In addition, we manage assets in accordance with the Code for Responsible Investing in South Africa (CRISA). The work done with respect to the full implementation of these principles includes, but is not limited to, continuous monitoring of corporate governance and reputation risk, assessment of health and safety as well as environmental practices and shareholder activism. Capabilities The main propositions of the STANLIB Listed Property Franchise include: STANLIB Property Income Fund (SA) - inception 2002 STANLIB Africa Property Fund (including SA) - inception 2010 STANLIB Global Property Fund (developed market bias) - inception 2005, managed in-house from 2009 Standard Bank Global Emerging Market Property Fund - inception 2010 Bespoke mandates as per client specifications 6

11 Contact details Should you have any questions about the content of this document, or if you would like to meet the portfolio manager to discuss his management style in greater depth please contact us. Jerry Mnisi Head of Institutional Distribution +27 (0) Brendan Howie Senior Client Fund Manager +27 (0) Gareth Connellan Senior Client Fund Manager +27 (0) Letshego Rankin Senior Client Fund Manager +27 (0) Len Jordaan Client Fund Manager +27 (0) Bongiwe Khumalo Client Fund Manager +27 (0) Cindy Inacio Client Fund Manager +27 (0) Erdmuth Moremi Client Fund Manager +27 (0)

12

13 Appendix Team profiles Keillen Ndlovu BCom(Hons), CAIB(SA), PDP Head of Listed Property Franchise/Portfolio Manager Industry experience - 9 years Keillen was appointed as Head of STANLIB s Listed Property funds in 2010 and currently manages funds for both institutional and retail clients. Thanks to a successful and consistent investment philosophy and process, the Listed Property Team has won numerous awards over the past decade, with Keillen himself becoming a regular media commentator, not only on STANLIB s funds but also on general listed property industry issues. After beginning his property career with Standard Bank Properties in 2004, Keillen transferred to STANLIB as a Listed Property Analyst the following year. Upon successfully assuming increased responsibilities and fund management exposure, he was appointed Co-Head of STANLIB s Listed Property funds and a full-time fund manager in Riaan Gerber BCompt(Hons), CA(SA), PDP Portfolio Manager/Property Analyst Industry experience - 8 years Riaan has been with the Listed Property Team since 2007, managing listed property portfolios and analyzing listed property securities in both developed and emerging markets, including South Africa. Chloe Wing See Ma - BArch, BSc(Hons), PGDEM Property Analyst Industry experience - 2 years Chloe joined the Listed Property Team as a Listed Property Analyst. She focuses mainly on research within the local and offshore listed property markets. She was previously at Rand Merchant Bank where she worked as a Credit Analyst within the Real Estate Investment Banking space. Her qualifications include a BArch, BSc Property Studies (cum laude, Deans Merit List), BSc (Hons) Property Studies (cum laude, Deans Merit List), a Postgraduate Diploma in Enterprise Management and recently passed CFA Level 1. Lawrence Koikoi - CA(SA), PDP Property Analyst Industry experience - 5 years Lawrence joined the Listed Property Team from the Standard Bank Real Estate Investment Team, where he gained four years experience in real estate financing. At STANLIB he focuses mainly on research of listed property markets within the South Africa and the rest of Africa. Lawrence is a qualified Chartered Accountant. He joined STANLIB in 2005 and gained experience in financial and management accounting, tax, internal audit and financial management at both STANLIB and Standard Bank. 9

14 Legal Notices Information and Content The information and content (collectively information ) provided herein are provided by STANLIB Asset Management ( STANLIBAM ) as general information for information purposes only. STANLIB does not guarantee the suitability or potential value of any information or particular investment source. Any information herein is not intended nor does it constitute financial, tax, legal, investment, or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified Financial Adviser. Nothing contained herein constitutes a solicitation, recommendation, endorsement or offer by STANLIBAM. Copyright The information provided herein is the possession of STANLIBAM and are protected by copyright and intellectual property laws. The information may not be reproduced or distributed without the explicit consent of STANLIBAM. Disclaimer STANLIB has taken care to ensure that all information provided herein is true and accurate. STANLIB will therefore not be held responsible for any inaccuracies in the information herein. STANLIBAM shall not be responsible and disclaims all loss, liability or expense of any nature whatsoever which may be attributable (directly, indirectly or consequentially) to the use of the information provided. STANLIB Asset Management Limited Registration No: 1969/002753/06. A Financial Services Provider licensed under the Financial Advisory and Intermediary Services Act, 37 of FSP license No: 719. Document relevant as of 31 March 2015 Compliance number: D0835R 10

15

16 17 Melrose Boulevard Melrose Arch 2196 PO Box 203 Melrose Arch 2076 T (SA only) T +27 (0) E contact@stanlib.com W stanlib.com GPS coordinates S , E W STANLIB Asset Management Limited Reg. No. 1969/002753/06 Authorised FSP in terms of the FAIS Act, 2002 (Licence No. 26/10/719)