Morningstar has announced the nominees for its 2012 European Fund Manager of the Year Awards. These awards are intended to point investors towards managers who truly stand apart from the crowd.
Morningstar will bestow two awards to recognise the best fund managers in all of Europe: there will be the European Equity Manager of the Year and the Global Equity Manager of the Year.
The managers are nominated by Morningstar’s European analyst staff and the winners will be announced at Morningstar’s Investment Conference Europe in Vienna on March 15, 2012.
Nominees for the European Equity Manager of the Year
Charles Montanaro
Montanaro European Smaller Companies
Charles Montanaro boasts many of the qualities that Morningstar analysts like to see in a manager. His experience in European small-caps dates back nearly three decades and he has put this to excellent use through setting-up the specialist European small-cap asset manager, Montanaro. He has built a strong team of experienced analysts and managers and developed a sound and diligent investment process which is applied firmwide. He has also managed to alleviate much of the conflicts of interests in being a fund manager and firm owner. For example, he is a major investor in his funds which reflects conviction in his approach. Also, we think the funds’ performance fee structure better aligns the manager's interests with those of fund shareholders.
The manager’s long-term approach has been clearly in evidence over the last few years. In 2008 the fund experienced a significant decline, losing EUR 52% of investors’ money. Importantly though, Montanaro maintained his approach, and did not significantly alter the portfolio. Investors in the fund consequently benefited from a very strong recovery in both 2009 and 2010. The fund returned 51% and 43% respectively in these years, thereby recovering the losses sustained in 2008 and significantly outperforming peers in his Morningstar Europe Small-Cap Equity category. Although the fund then lost 13.3%% in the difficult markets of 2011, the manager protected investors’ capital much better than his rivals, which were down 3.2 percentage points more on average.
Laurent Dobler and Arnaud Cosserat
Renaissance Europe
Laurent Dobler and Arnaud Cosserat are highly experienced European equity fund managers. The two head Comgest’s team of eight European equity fund managers, where stability has been a hallmark. They have built an excellent track record at French-domiciled flagship fund Renaissance Europe, and are also responsible for the firm’s offshore European equity vehicles, which are all managed collectively. Their strong long-term results epitomise Comgest’s proven and highly distinctive approach to asset management, best summarised as “quality” and growth” in that order. As such, they will not invest in highly cyclical names, and they avoided financials well before the 2007-2008 meltdown. While their approach does lead to periods of underperformance, it has more importantly protected investor capital during severe market downturns.
Fabio Di Giansante
Pioneer Funds Euroland Equity
Fabio Di Giansante took over the management of Pioneer Funds Euroland Equity in August 2006 and since then he has delivered impressively for investors in the fund across very different market conditions—an exceptional feat given market volatility in the period. He has accomplished this by focusing on bottom-up stock selection, seeking out quality growth companies whose potential he believes has not been fully recognised by the market.
While market conditions have led to a slight loss here over the past five years, the fund fell less than 90% of it its Eurozone Large-Cap Equity peers in the period and ranks in the category’s top quintile over the past one, three, and five years. It has achieved this with slightly less volatility than the norm. The fund has also been relatively easy for investors to stick with: It has performed in the category’s top quartile in every calendar year under Di Giansante save 2008, when it was in line with the peer group median.
Nominees for the Global Equity Manager of the Year
Kristoffer Stensrud, Knut Harald Nilsson, Cathrine Gether and Ross Porter
SKAGEN Kon-Tiki
Veteran manager Kristoffer Stensrud is one of the grizzled veterans of the fund world—a rarity in an industry characterised by high manager turnover. He co-founded SKAGEN in 1993, has managed this emerging-markets fund since its 2002 inception and has also managed other offerings including SKAGEN Vekst and SKAGEN Global along the way. Remarkably, at this fund he has been able to beat his benchmark index every calendar year since 1993, a rare accomplishment.
The SKAGEN team’s process can best be described as a contrarian style, where the managers look for bargains, hunting among the unloved and the forgotten for portfolio candidates. This approach has paid off. The fund delivered an annualised return of EUR 17.8% per year from 1 May 2002 through 31 December 2011, more than double the EUR 7.1.% annualised return of the average Global Emerging Markets fund in the period.
Andrew Headley; Charles Richardson
Veritas Global Equity Income, Veritas Global Focus
Charles Richardson and Andrew Headley are a highly experienced management pairing who have successfully managed both Veritas Global Focus and Veritas Global Equity Income, delivering strong records of consistent outperformance.
Over five years to the end of 2011, Veritas Global Equity Income has outperformed its Morningstar Global Large-Cap Value Category by EUR 7.9% per annum and Veritas Global Focus, residing in the same category, has outperformed its peers by 8.0% each year.
Rajiv Jain
Vontobel Global Value Equity, Vontobel Emerging Markets Equity
Rajiv Jain covers a large investment universe, including both developed and emerging global equities. To succeed in this large arena, there is a clear need to adopt a rigorous, replicable investment process and Jain’s approach fits these criteria well. He looks for high-quality businesses that show strong and sustainable growth, where he can form a high degree of confidence predicting their earnings over the next five years. To find such opportunities, he has the backing of eight analysts based with him in New York, organised according to sector specializations.
The strategy can often lag when lower-quality stocks rally, as was the case at both of these funds in 2009. However, the long-term benefits are clear: First and foremost, downside risk is notably dampened relative to peers. In 2011, for example, Jain’s Vontobel Global Value gained 7.4% EUR, compared to a loss of 7.7% EUR for its average Global Large-Cap Growth peer. Similarly, Vontobel Emerging Markets gained 0.05% EUR in 2011. That admittedly does not sound enticing, but it is jaw-droppingly good in the context of an 18.3% loss for the fund’s average Global Emerging Markets Equity peer.
These awards are based on the forward-looking insights of Morningstar’s team of more than 30 fund analysts across Europe. While nominees should have produced strong performance for investors in the last calendar year, in keeping with our approach to qualitative research, Morningstar places a great deal of emphasis on the overall merit of the offering using our five-pillars assessment. In addition to performance, we weigh the quality of management, the strength of the process used to run the fund, the quality of the parent organisation--including how it treats investors in its funds--and costs.
The read more in-depth descriptions about the performance of each of the above listed fund managers, read "The Nominations are Out! - Part II".
To find out who won the Morningstar UK Fund Awards for 2012, read “Are You Invested in These Award-Winning Funds?”
