Gian Pandit on the Ausbil 130/30 Focus Fund

Funds Management

by Clive Tompkins

Transcription of Finance News Network Interview with Ausbil Investment Management Deputy Head of Equities, Gian Pandit.

Clive Tompkins: Hello I’m Clive Tompkins from the Finance News Network, joining me from Ausbil Investment Management to talk about its long/short fund is Deputy Head of Equities Gian Pandit.
Gian, welcome to FNN.

Gian Pandit:Thank you.

Clive Tompkins: Gian, you recently joined Ausbil, what is your experience and what are your responsibilities here at Ausbil?

Gian Pandit:Thanks Clive, my experience has been 25 years in the Australian equities market, I’ve managed long/short and concentrated funds for over 25 years. My role at Ausbil is two-fold. I’ll be sole portfolio manager for the 130/30 fund to generate alpha and secondly and more importantly I’ll be working with the portfolio construction team with Paul Xiradis and John Grace with regards to building all the portfolios and helping generate alpha for all the portfolios.

Clive Tompkins: So can you give us an introduction to the 130/30 focus fund, its philosophy and its approach tostock selection?

Gian Pandit:The 130/30 fund is a beta one fund so we are invested in the Australian equity market it’s benchmarked against the ASX 200, the parameters are we can be 80 per cent long and 20 per cent cash, out to 150 long and 50 short. So it’s taking advantage of all the opportunities both long and short to drive Alpha and to preserve capital.  Now it’s based on the Ausbil philosophy, which is earnings drive share prices and what we try and do is get earnings right and early ahead of the curve to generate alpha. The process is very simple, it’s top down and bottom up and the style is unconstrained so we do rotate between value and growth stocks to drive our performance.
Clive Tompkins: Thanks, so how is the fund positioned?

Gian Pandit:We’re cautiously optimistic now and going forward to 2016. The key driver will be earnings certainty and we’re happy to be in companies where we can see strong earnings growth going forward in 2016. I think the real risk is that we’ve had a 7 year bull market here, the Australian ASX 200 is up over 100 per cent and we’re entering into another period of volatility going forward so earnings certainty is paramount. We are quite happy to be in boring companies that deliver on their earnings line.

Clive Tompkins: And Gian, which sectors have the potential to surprise over the next six months and why?

Gian Pandit:We’re overweight on quality, sustainable yield stocks at the moment so on a sector basis we are overweight banks and telcos. We believe in the sustainable yield in these companies and also they are at the right price for investment. We’re also overweight for the healthcare sector as because we do believe we are going to see further earnings growth in companies like Ramsay and also Fisher Paykel.  It’s not only the stocks that are long that will add outperformance; it’s the sectors we’re avoiding that will add outperformance.  We are massively underweight on resources and energy at this time of the cycle and we have avoided utilities.

Clive Tompkins: Last question Gian, where would you like to see the fund in 12 months’ time?

Gian Pandit:  I would like to see the fund achieve its two main goals, which are alpha generation and capital preservation.  But I’d also like to see the fund being embraced by the retail network and hopefully they will enjoy the alpha generation in this fund and more importantly the capital preservation, because if you can’t preserve your capital you can’t generate alpha.

Clive Tompkins: GianPandit thank you for the update on the Ausbil 130/30 focus fund.

Gian Pandit: It was a pleasure, thank you very much.