Martin Currie resolute on emerging market equities despite €3bn loss
EUROPE - Fund manager Martin Currie will rely on its tight focus on emerging market equities and its ability to win new mandates to make up for a third-quarter loss of $3.7bn (€2.7bn).
The losses were the result of equity volatility, underperformance and the departure of China fund manager Chris Ruffle earlier this year following his suspension involving a potential conflict of interest over a convertible trade.
The combination brought the company's assets under management down to $9.9bn between June and the end of September.
Although head of sales and marketing Andy Sowerby acknowledged that 40% of the loss was down to Ruffle's departure, he also pointed to an 18% fall in global equities in the third quarter.
"In emerging markets, it was even bigger than that," he said. "This has been a significant market correction. Markets fall and markets rise - that's always an issue for managers."
Following Ruffle's departure, the company signed a joint venture agreement with APS that will make Martin Currie a distributor of the China specialist's products.
Sowerby declined to put a figure on the expected short-term re-gains, pointing out that there was no target except "to generate returns for shareholders".
This contradicts a recent Bloomberg report claiming Martin Currie planned to build up its assets to $15bn by 2015.
Asked whether the firm would struggle to pull in new assets following a difficult year, Sowerby pointed to two unspecified new mandates in recent months.
"More will come to us, but we have to be careful not to take on too many assets," he said.
The fund manager has focused almost exclusively on global - especially emerging market - equities after pulling out of UK stocks two years ago.
After reviewing its current focus in recent months, Sowerby said the company was committed to remaining a specialist global equities manager.
"From a P&L perspective, it would be tempting to expand outside equities," he said. "But we're all agreed we want to be globally competitive - and specialist."
According to IPE's Top 400 Asset Managers survey, Martin Currie has more than €11.7bn in assets under management (AUM) worldwide.
The bulk of its external institutional business is based in North America (€4.5bn), followed by Asia (€846m) and Europe (€614m).
For pension funds, it has approximately €133m in AUM.