Close Close
ThinkAdvisor

2022 Envestnet Asset Manager Awards

Global, International, Emerging Market Equity Manager of 2022: Acadian Asset Management

X
Your article was successfully shared with the contacts you provided.

Acadian International ADR SMA invested in high-quality, attractively priced companies to produce strong results last year, earning it the Asset Manager of the Year Award in the International, Global, Emerging Markets category.

Employing both top-down and bottom-up approaches, the managers oversee a portfolio of 50 to 100 core large-cap developed market ADRs and a relatively modest — roughly 20% — emerging market exposure, according to Envestnet analysts.

In 2021, the portfolio returned 17.4%, outpacing the MSCI ACWI ex-US Index by 9.6 percentage points, the analysts noted.

The portfolio team’s background in quantitative analysis; its impressive model for capturing multiple alpha sources and its integration of fundamental research helps give the program a competitive edge, according to the Envestnet analysts. The managers rely on numerous aggregate factors, filtered through value, growth, quality and technical indicator categories, to develop stock performance forecasts.

“Acadian has been a pioneer in systematic investing for over 35 years, with a talented, 100-person investment team, and so we really embrace experience, discipline and cutting-edge research,” said Vladimir Kravets, Acadian vice president and relationship manager.

The team doesn’t time their entry points, especially not in today’s volatile market atmosphere, explained Kravets, a native of Ukraine. The firm’s process incorporates fundamental signals and has performed well in both value and growth environments. “So we’re able to do well both in the short and longer time periods,” he added.

Sean Geary, Acadian vice president and portfolio manager, noted that in 2021, “well-valued companies rallied while more growth-oriented firms struggled. Acadian’s multifactor process is designed to capture these dislocations in the markets. And so last year we delivered over 6% excess return in the markets.”

He added that “stock selection was a key component of this. So exposure to high-quality names, names that surprised on the upside for growth potential as well as names that are well-valued relative to their peers, all contributed to those excess returns. And this really happened across the board for our portfolios at Acadian, leading to a fantastic year for us.”

Well-diversified portfolios that have prudent risk controls are key to the firm’s investment process, he said. In 2018, long before Russia invaded Ukraine, Geary explained, Acadian placed more controls on Russia and Russian financials. “So our global international strategies were underweight Russia, and we held no Russian exposure in the ADR portfolios.”

CONTINUE READING BELOW ▼

The portfolio managers expect the current heightened volatility to persist for the rest of this year and into 2023. “Investors are going to be challenged with decisions around the implications of the Russian invasion of Ukraine, supply chain disruptions continuing from the implications of COVID, inflation and central bank policy,” Geary said.

The volatility and dislocations provide an excellent opportunity for stock-picking, he added.

In terms of domestic versus international investments, “one thing to consider is the U.S. markets have been a source of excess returns for several years now. And that persistent source of excess returns may be hard to sustain, especially in light of the very high profitability that we’re starting the year with,” Geary said.

“International markets may have the opportunity to outperform given both their more cyclical nature, as well as their relative advantage from a valuation standpoint, compared to U.S. securities,” he explained.

***

Vladimir Kravets (left)

Title: VP, Relationship Management; Years with present firm: 7; Years in financial services: 15

Sean Geary (right)

Title: Fund Manager;  Years with firm: 7; Years in financial services: 15

Investment/asset class: Global, International, Emerging Markets; Asset management firm: Acadian Asset Management; Year firm founded: 1986; Number of employees: 362; AUM as of April 30, 2022: $102B