Boutique Australian Equities manager beats market

Wednesday, February 02 2011

Boutique asset manager Dalton Nicol Reid announced today that its Australian Equities High Conviction portfolio has outperformed the S&P / ASX 200 Accumulation Index by 4.9 per cent over the 12 months to 31st January.

“We’re delighted with our 12 month return, which adds to our long-term outperformance above the benchmark of 4.5 per cent over three years and 4.5 per cent over five years and reaffirms our position within the top quartile of Australian equities fund managers,” said Jamie Nicol, chief investment officer at Dalton Nicol Reid.

Mr Nicol said one of the key drivers of the portfolio’s performance over the last 12 months was Dalton Nicol Reid’s identification of the opportunity for stronger companies to become stronger via merger and acquisition activity in the post-GFC environment.

“We have seen a continued widening of the disparity between those companies with strong balance sheets and those in some distress as improving debt markets and improving confidence has seen a pick up in strategic M&A activity,” said Mr Nicol.

“We had the portfolio positioned in a range of investments that have been involved in a number of attractive transactions. These include: the likely Henderson acquisition of Gartmore; Lend Lease acquisition of Valemus; Brambles acquisition of IFCO; Invocare acquisition of Bledislo; and, Tower Australia being taken over by Dai-Chi,” said Mr Nicol.

“We expect the next year to be characterised by further corporate activity as confidence continues to improve and companies seek to deploy capital. Investing in those companies with strong management and good capital discipline remains a critical aspect to any investment strategy,” said Mr Nicol.

Mr Nicol said that whilst outperformance across all of Dalton Nicol Reid’s products remains strong the stand-out performance of the flagship High Conviction strategy was pleasing as the firm had recently won institutional mandates into the portfolio.

Mr Nicol said the firm was seeing heightened interest in its portfolios from both asset consultants and directly from institutions.


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IMPORTANT NOTE: This information has been prepared by DNR AFSL Pty Ltd ABN 39 118 946 400, an Australian Financial Services Licensee, Licence Number 301658. Whilst, Dalton Nicol Reid has used its best endeavours to ensure the information within this document is accurate it cannot be relied upon in any way and recipients must make their own enquiries concerning the accuracy of the information within. This document is not intended to provide you with personal advice and in providing this information, Dalton Nicol Reid has not taken into account your particular investment objectives, financial situation or needs. You should assess whether this information is appropriate for your particular needs, either by yourself or with your adviser. Dalton Nicol Reid expressly disclaims any responsibility or liability to anyone who acts or relies upon anything contained in, or omitted from, this document. Past performance is not indicative of future performance. Total returns shown are based on Dalton Nicol Reid’s model portfolio and have been calculated before taking Dalton Nicol Reid’s fees into account. No allowance has been made for taxation.
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