e-fundresearch: Which benchmark do you adhere to?
Meany: The infrastructure sector is difficult to benchmark given the wide array of definitions. The UBS Global Infrastructure & Utilities 50-50 Index is a reasonable representation of how we invest given its balance between growth and defensive infrastructure stocks.
e-fundresearch: Are you also responsible for other funds at the moment?
Meany: We manage four funds under the one strategy, denominated in GBP/EUR, USD, JPY and AUD.
e-fundresearch: What is the total volume that you manage in all your funds?
Meany: FUM for the strategy is approximately € 130 million. We have significant capacity given the market cap of the universe is close to €900 billion.
e-fundresearch: How content are you with your own performance in the last years and this year?
Meany: In the context of extremely challenging equity markets we are pleased with the performance of the funds. For the 12 months to April 2009, the return on GLIS is -17.8% compared to -20.6% for the benchmark and -34.9% for the Euro Stoxx 50.
e-fundresearch: How are you able to deliver added value for your investors with your performance?
Meany: By specialising in the sector we are able to gain a deeper understanding of infrastructure companies and their stock drivers. We spend a lot of time on the road, meeting with companies, competitors, regulators etc to get behind the numbers to the quality of the business. Our mandate allows us to establish global best practice in diverse operations from retail spend at airports and crane lifts at container ports to water distribution leakage and carbon intensity of power generation. We use our experience to define the universe and deliver more stable returns to investors. High risk sectors and countries are eliminated while differentiated opportunities like oil storage capacity and contracted satellites are added. The scale and culture of our organisation provides significant resources and unwavering support to develop our business plans when times are tough.
e-fundresearch: How long have you been a fund manager?
Meany: We have managed an Australian version of the fund since June 2007. Prior to joining CFS GAM I spent over 12 years analysing the sector, including 5 years as Head of Infrastructure & Utilities Research at Credit Suisse.
e-fundresearch: What were your biggest successes and your biggest disappointments in your career as fund manager?
Meany: I think our biggest success has been our steady approach to investing. We didn’t get caught up in the excitement of leveraged buyouts, emerging markets and renewable energy at the top of the cycle and we didn’t panic when good companies were caught up in recent market volatility. We simply identified relative value and quality through a consistent process and moved into top quartile positions over time. Perhaps our biggest disappointment was not taking some direct exposure to emerging markets when stocks traded down to book value.
e-fundresearch: What kind of capital market situation do we have at the moment? How do you act in this environment?
Meany: Over the last few quarters we have been taking advantage of a market overpaying for defensive positions and underpaying for growth. We have moved around 10% of the fund from regulated utilities and energy pipelines to toll roads, rail and airports where the market was pricing in very bearish scenarios.
e-fundresearch: What are the special challenges in this environment?
Meany: Speculation on the timing and extent of an economic recovery will continue to drive equity market volatility for some time. Lower quality companies have performed on early signs of improving credit markets and consumer confidence, but this rebound has not been supported by earnings upgrades. Our challenge is to look through the noise and focus on quality companies that will deliver the best risk-adjusted returns over time.
e-fundresearch: What objectives do you have till the end of the year and in the mid term for the upcoming 3 to 5 years?
Meany: We have been broadening our stock coverage to include the rail sector and utilities in HK/China. We plan to spend more time on improving our understanding of political and regulatory risks given the greater call on government capital in the years ahead. Over the next few years we will continue to add resources with growth in funds under management and we may consider complementary fund offerings based on demand from our clients.
e-fundresearch: Do you model yourself on someone? Any ideals?
Meany: The danger in modelling yourself on any one person is that it limits your ability to evolve with changing circumstances. I have been fortunate to work with many great people throughout my career and each added a new layer of knowledge and perspective.
e-fundresearch: What motivates you in your job?
Meany: Motivation comes from building a business in a sustainable growth sector, working with smarter people and being challenged by their different perspectives, and meeting interesting people around the world with companies and clients.
e-fundresearch: What else do you want to achieve or do you have any further aims as a fund manager?
Meany: My focus is on this fund for the foreseeable future.
e-fundresearch: What other profession would you have taken interest in, apart from becoming a fund manager?
Meany: I was investing in stocks at age 15 and never really considered another career. Perhaps my son’s ability with crayons and the fees on a recent home renovation suggest I should have been an architect!
e-fundresearch: Thank you for the interview!
