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Colonial First State has pushed the furore surrounding its former chief
executive's payout to one side, focusing instead on its new alliance with Peter
Morgan and his 452 Capital boutique fund manager.
Colonial's new chief executive, John Pearce, told financial planners at
presentations this week that the group was as strong as ever and its investment
strategy was intact.
With Mr Morgan, former head of equities at Perpetual, now looking after
retail clients' money through his fund, 452, planners were keen to hear his
thoughts on the market and what was worth investing in.
More importantly, from the Colonial perspective, was the need for Mr Morgan
to retrieve some of the confidence lost after Greg Perry and Barry Henderson
left the Colonial investment team.
The first thing Mr Morgan did was stress the independence of 452. The
boutique group may have an alliance with Colonial, but it would in no way be
influenced by the fund manager or its owner, Commonwealth Bank.
``The staff, myself and my partner, Warwick Negus, are the owners of 452,"
he told planners at a presentation in Sydney's Exhibition and Convention Centre.
``There is no outside ownership in 452. We sink and swim by our own efforts
with no complications of a third party."
And the product on offer was just as straightforward. ``We'll offer only one
product to the market place and that product will be a pure vanilla, equity
product investing in big and small companies.
``At the end of the day we will be trying to identify quality companies that
are undervalued." he said. ``We will look at a company first and assess the
quality and then determine whether it is undervalued. We will have no bias with
regards to size of that particular company. The company is either big or small
and if the quality of the company is undervalued we will assess it and, most
likely, if it's undervalued enough, we will put it in our portfolio."
With a $3 billion cap on funds, 452 will be active rather than an index
tracker. In other words, Mr Morgan and his four-strong investment team will use
their nous to work out where to put clients' money rather than simply following
index movements.
The number of stocks held will average around 45. Last month, favourites
included Seven Network, pipe manufacturer GE Crane, Australia Pharmaceuticals
Industries, Westpac,and PBL.
Mr Morgan is confident the sharemarket will improve in the next three years.
As for how 452 will perform, he is philosophical.
``We will be judged by our merit and that is all I can offer you. All we can
do is our very best with regard to investing money ."
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