Best Investment Manager

In today’s investment world, it’s not just the bottom line that matters. A company’s behaviour, in light of higher community expectations, also has to be taken into account.

Pendal, Best Investment Manager for 2021, dedicates itself to looking beyond the bottom line of companies it invests in. More than ever a company’s non-financial make-up determines its future performance.

Richard Brandweiner, chief executive of Pendal Australia, says the element of active management that is so critical is stewardship. “A big part of how investors are going to perform is the way businesses are managed and boards behave,” he says.

Never have non-financial factors played as large a role as now. “Black swan” events are now not only possible, but expected.

“It’s a unique time for active management because of the amount of uncertainty that exists, with stressed valuations, with political and economic uncertainty and with the fact that the behaviours of companies and management are often falling short of consumer expectations,” says Brandweiner.

This makes active management even more important. You have health uncertainty, followed by economic uncertainty, followed by policy uncertainty and then, ultimately, the way businesses and consumers respond is also unclear.

Pendal, which manages more than $100 billion, makes a point of not getting caught up in company bottom lines and has a sharp focus on the nonfinancial factors shaping the performance of its investments. “We’re mindful of our role as stewards of our capital in holding businesses and their management to account,” says Brandweiner.

The fund manager prides itself on the independence of its investment teams, who have the flexibility to analyse and choose assets as they see fit. They invest across the full spectrum, including Australian equities, global equities, listed property, responsible investing, income and multi-asset options.

“We don’t have a chief investment officer. Our investment teams are highly accountable for the outcomes they generate. They’re all very curious, and as a business we try and support them and allow them the flexibility to do what they do best – make investment decisions,” says Brandweiner.

However, independent doesn’t mean they’re insulated from one another.

Brandweiner says investment strategies are developed together, as well as the risk oversight, “but the investment teams themselves have a lot of autonomy to implement the strategies the way they feel is appropriate”.

Looking to the future, Pendal will remain committed to a wide-eyed approach to investing.

“We still think there is value in the Australian market, but we’re focused on making sure our portfolios are balanced to a range of potential outcomes in the current uncertainty,” says Brandweiner.

In Money’s 2021 Best of the Best awards, Pendal won Best Australian Listed Property Funds, placed third in the Best Australian Share ESG Funds and placed fourth in the Best Australian Small Companies Funds.