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EQUITY

Investment Philosophy

We believe that share prices often rise and fall to a greater extent than is rationally justified, largely due to shifts in investors’ expectations with regard to risk and return. Expectations are driven by investors’ behavioural biases, which often push share prices to extremes. As such, true underlying value is not always reflected in share prices. We believe such behavioural biases are systemic and best exploited by disciplined, long-term investors.


Process

The Equity team adopts a four-step approach to investing.

  • Step 1

    Idea generation

    The idea generation phase of the process is a systematic starting point to identify potential investment candidates from the greatest valuation outliers. A number of proprietary valuation screens are used to allow the team to cover a large universe of companies and assist in identifying the best potential value opportunities. This approach also facilitates the efficient allocation of the team’s resources and thus enables the team to concentrate only on what matters most.

  • Step 2

    Fundamental analysis

    We perform rigorous fundamental analysis and intensive research of our investment candidates to identify behavioral sources of mispricing and the drivers of sustainable earnings. In essence, we analyse a company’s history of delivered earnings versus its competitors and the potential for a structural change in its competitive position. Our focus on a company’s sustainable earnings differentiates us from a market that obsesses over the most recent earnings. The market’s short term focus ultimately contributes to the kind of herding behavior which drives prices to extremes. This offers significant opportunities for our price sensitive but patient approach.

  • Step 3

    Portfolio construction

    The strongest stock ideas from the above research process become candidates for inclusion in a portfolio. Portfolio construction is structured to ensure that we take on active risk in a diversified manner, which reinforces our ability to take long-term positions without being forced to close positions in response to excessive volatility. The “margin of safety” concept is key; portfolio positions are initiated and monitored by assessing current or proposed positions against the potential return and relative valuations.

  • Step 4

    Risk control and review

    Portfolios are actively reviewed by the focus teams in weekly reviews to ensure risk budgets are met. The monitoring of positions relative to valuation and risk contribution aids review and ensures the integrity of the investment process.


EQUITY Strategies

Our equity strategies include core regional and single country portfolios, as well as various dynamic and thematic portfolios that cater to different investor needs.

In Asia, our coverage of developed markets includes Japan, Australia, New Zealand, Hong Kong, Singapore, South Korea and Taiwan; and in emerging markets we cover China, India, Indonesia, Malaysia, the Philippines and Thailand. In recent years, we have also expanded our coverage to include global emerging markets.

All our strategies seek to exploit behavioural biases inherent in markets and to benefit from pricing episodes that move stock prices away from our assessment of companies’ fundamental value.


The strategy aims to generate long-term capital appreciation through our bottom-up valuation-driven investment approach in regional Asian markets excluding Japan. The portfolio is relatively concentrated but benchmark aware. The portfolio's positioning is driven primarily by the individual companies in which it invests while maintaining diversified exposure to countries and sectors across the region.

The strategy aims to generate long-term capital appreciation through our bottom-up valuation-driven investment approach in regional Asia Pacific markets excluding Japan. The portfolio is relatively concentrated but benchmark aware. The portfolio's positioning is driven primarily by the individual companies in which it invests while maintaining diversified exposure to countries and sectors across the region.

The strategy is a highly concentrated best ideas portfolio of 30-40 attractively valued Asia ex Japan stocks. We put only our very best investment ideas to create a portfolio that is agnostic to the benchmark as confirmed by its high active share.

The strategy is a true-to-label regional equity income product. It invests in a portfolio of dividend-paying companies with attractive relative valuations diversified across geographies and industries. The strategy applies stock-level research with a focus on cash flow, dividend growth and dividend sustainability across the Asia Pacific ex Japan region. The strategy adopts a total return approach to investing, taking into account both dividends and the opportunity for price appreciation of a company.

Asia Pacific property markets are in the sweet spot of urbanisation, rising workforce participation and real wage growth. The strategy aims to achieve a combination of capital growth from property developer stocks and income distribution from real estate investment trusts (REITs) in a total return approach. The portfolios include companies in both developed and emerging Asia Pacific markets and are diversified across the various real estate sub-sectors: retail, office, hotel, industrial, residential, and diversified property companies. In addition to valuation, robust income generation, management quality, balance sheet quality and country macro fundamentals are assessed to pick the most attractive stocks in the property sector.

This strategy takes a bottom-up relative valuation-driven approach that seeks to identify outliers in stocks within the Greater China region that are attractively valued versus their long-term fundamentals. The region consists of China, Hong Kong and Taiwan and together, these markets offer diversification benefits for investors. There are also a number of stronger synergies between these markets, especially with initiatives such as the Hong Kong-Shanghai Stock Connect and potential similar tie-ups between Taiwan and the Mainland.

This strategy takes a bottom-up, valuation-driven approach that seeks to identify and invest in Indian stocks that are attractively valued versus their long-term fundamentals. It is a diversified portfolio of companies poised to benefit from India’s growth potential.

Riding on the growth potential of two of Asia's fastest expanding economies, this unique China-India strategy combines Chinese and Indian equity investments in a single portfolio. Picking stocks from complementary industries in China and India allows us to shift allocations between the two countries where valuation gaps lie. The country-agnostic allocation (two countries-one portfolio approach) ensures that only the best stock ideas are picked. The strategy has the ability to significantly over/under-weight between China and India depending on where opportunities exist.

The various country and regional ASEAN strategies take a bottom-up, valuation-driven approach that seeks to identify and invest in stocks that are attractively valued versus their long-term fundamentals. Respective diversified portfolios are likely to benefit from attractive valuations of companies with high returns potential over medium to long term.

The strategy aims to generate long-term capital appreciation through a valuation-based investment approach in Japanese equities. The strategy consists of only the highest conviction investment ideas from across the market capitalisation spectrum and is managed in a concentrated manner, unconstrained by a benchmark.

The strategy aims to generate long-term capital appreciation through a valuation-based investment approach in Japanese equities. The strategy consists of only the highest conviction investment ideas from predominantly smaller companies and is managed in a concentrated manner, unconstrained by a benchmark.

The strategy aims to generate long-term capital appreciation through a valuation-based investment approach in Japanese equities. This is an index aware strategy that may take larger active positions against the benchmark in high conviction investment ideas across the market capitalisation spectrum.

The strategy aims to generate long-term capital appreciation through a valuation-based investment approach in Japanese equities. This is an index aware strategy with a narrow tracking error range that may take smaller relative positions against the benchmark. The investment universe focuses on large companies.

The strategy aims to generate long-term capital growth through investing in a concentrated portfolio of equities from emerging markets worldwide. The investment approach is bottom up and based on absolute and relative value, and focuses on the highest conviction ideas from a wide universe.


Equity Team

Eastspring has a long history of investing across all of Asia. Apart from managing funds for the Prudential Group, we also serve a wide range of institutional and retail clients. In recent years, our equity capabilities have expanded to include global emerging markets.

The equity team comprises sub-groups of small, highly cohesive focus teams that reinforce intellectual rigour and streamline the investment decision process.

We operate under a culture of debate and challenge – maximising a creative team dynamic, intensely questioning assumptions and distilling our best ideas from the bottom-up.

  • Assets under management

    USD 35 billion

    (as at 31 December 2016)

  • Industry experience

    17 years

    (on average)

    Specialist teams

  • Japan
  • Global Emerging Market (GEM)
  • Asia Equity

 

Our specialist teams include:


  • Kevin Gibson
    Chief Investment Officer
    Kevin Gibson

    Kevin Gibson joined Eastspring Investments, the Asian asset management business of Prudential plc, as Chief Investment Officer, in November 2004.
     
    He is responsible for eight Equity focus teams. He also co-manages Japan ‘Conservative Value’ strategies.
     
    Before joining Eastspring Investments, Kevin was the CIO of HSBC Asset Management (Japan). He also worked for Edinburgh Fund Managers Plc as the Head of Japanese Equities, and UBS Asset Management (formerly Phillips & Drew Fund Management) as a UK Fund Manager.
     
    Kevin holds a MA from University of Aberdeen, UK.

  • Hugh Maxwell-Davis
    Portfolio Manager
    Hugh Maxwell-Davis

    Hugh Maxwell-Davis joined Eastspring Investments (Singapore) Limited, the Asian asset management business of Prudential plc, as Portfolio Manager, in 2007.
     
    Hugh is part of the Equity team and is the Team Leader of the Regional Asia focus team. He also has responsibilities for managing regional Asia Equity portfolios.
     
    Prior to joining Eastspring, Hugh was an Australian Banking Analyst for Morgan Stanley and Credit Suisse for 12 years. Prior to that, Hugh also worked for KPMG where he qualified as a Chartered Accountant.
     
    Hugh holds a Bachelor’s degree in Commerce from Melbourne University.

  • Dean Cashman
    Portfolio Manager
    Dean Cashman

    Dean Cashman joined Eastspring Investments (Singapore) Limited, the Asian asset management business of Prudential plc, as a Portfolio Manager, in 2004.
     
    He is part of the Equity team and is the Team Leader for the Japan Equity focus team and is the Lead Portfolio Manager for Japan ‘Focused Value’ strategies. He is also jointly responsible for Japan ‘Value’ strategies.
     
    Prior to joining Eastspring Investments, Dean worked for BT Fund Managers (Sydney) as the Head of Japanese equities.
     
    Dean holds a Bachelor of Economics from University of Queensland, Australia (1987).

  • Margaret Weir
    Portfolio Manager
    Margaret Weir

    Margaret Weir joined Eastspring Investments (Singapore) Limited, the Asian asset management business of Prudential plc, as Portfolio Manager, in November 2013.
     
    She leads the Equity Income team and is the Lead Portfolio Manager for the Equity Income strategy.
     
    Prior to joining Eastspring Investments, Margaret began her investment career at Scottish Equitable in 1984 and became Fund Manager for the Far East Unit Trust launched in 1986. Margaret’s role subsequently expanded to encompass all Asia Pacific Equity products, including some of the largest pension funds in the UK market. Promoted to Head of Pacific Equities, she led a team managing Asia Pacific Equity portfolios there for 21 years. Scottish Equitable was acquired by Aegon NV in the early 1990’s and Margaret continued to perform her role as Head of Pacific Equities up until early 2007. She relocated to Singapore to join Eastspring Investments in August 2007, and was Portfolio Manager for the Equity Income strategies for 3 years. She left the team in 2010 for family reasons, and rejoined in 2013.
     
    Margaret graduated from Strathclyde University in Glasgow with a Bachelor of Science in Technology and Business Studies.

  • Andrew Cormie, CFA
    Portfolio Manager
    Andrew Cormie, CFA

    Andrew Cormie joined Eastspring Investments, the Asian asset management business of Prudential plc, as Portfolio Manager, in 2008.
     
    Andrew is part of the Equity team and is the Team Leader for the Global Emerging Markets (GEM) focus team. He is also a member of the Regional Asia focus team and the Lead Portfolio Manager for Asia Pacific Equity strategy.

    Andrew began his investment career in 1982 with National Mutual Life Association. He then worked at JP Morgan Investment Management, Melbourne in 1984 and became their Director, responsible for Australian Equity and Balanced business three years later. In 1997, Andrew became the Head of Global Equity Team of JP Morgan Investment Management, London. Andrew was the Founding Partner and Director of Voyager Funds Management Pty Limited between 2006/07. In all, Andrew has over 35 years of investment experience.

    Andrew is a CFA charterholder and holds a Bachelor degree in Business Administration from Griffith University, Brisbane and a diploma from Securities Institute of Australia.

  • Sang Hoon Lee, CFA, MBA
    Portfolio Manager
    Sang Hoon Lee, CFA, MBA

    Sang Hoon Lee joined Eastspring Investments, the Asian asset management business of Prudential plc, as Portfolio Manager, in January 2005.
     
    Sang Hoon is part of the Equity team and is a member of the Global Emerging Markets (GEM) focus team. He is also Lead Manager of the Emerging Asia Equity strategy.
     
    Prior to joining Eastspring Investments, Sang Hoon was an Investment Analyst at Fidelity Investment Management (Hong Kong) Ltd. He was also an Equity Analyst at Dresdner Kleinwort Benson and Seoul Securities, Korea. Sang Hoon has over 21 years of financial industry experience.
     
    Sang Hoon is a CFA charterholder and holds a Bachelor’s degree in Business Administration from Seoul National University and a Master degree of Business Administration from The Wharton School, University of Pennsylvania.

  • Steven Gray, CFA, MBA
    Portfolio Manager
    Steven Gray, CFA, MBA

    Steven Gray joined Eastspring Investments, the Asian asset management business of Prudential plc, as Portfolio Manager, in August 2012.
     
    Steven is part of the Equity team and a member of the Global Emerging Markets (GEM) focus team. He is also the Lead Manager for the Latin America Equity strategy.
     
    Prior to joining Eastspring Investments, Steven worked with GIC Asset Management in the Emerging Markets Non-Asia department as the Senior Vice President – Head of Equity Research managing a team of 7 sector focused analysts covering Non-Asian emerging markets. Earlier on, Steven had a very successful career as a fund manager in South Africa, managing one of the largest funds in the country. Steven has more than 29 years of financial industry experience.
     
    Steven is a CFA charterholder and holds a Bachelor of Business Science from the University of Cape Town, and a Masters of Business Administration from UCT Graduate School of Business in South Africa.

  • Krishna Kumar
    Portfolio Manager
    Krishna Kumar

    Krishna Kumar joined Eastspring Investments (Singapore) Limited, the Asian asset management business of Prudential plc, as Portfolio Manager, in January 2009.
     
    Krishna is part of the Equity team and is the Team Leader of the India focus team. He is also the Lead Portfolio Manager for the Indian Equity strategy and the China-India strategy.
     
    Prior to joining Eastspring Investments, Krishna was with Birla Sun Life AMC in India as well as the group’s asset management joint venture in India. He has also spent a few years on the sell-side as an Analyst and in Equity Sales.
     
    Krishna holds a Bachelor of Commerce degree from Calcutta University, and is a qualified Associated Chartered Accountant and Cost Accountant from India.

  • Wing Kin Chow
    Portfolio Manager
    Wing Kin Chow

    Wing Kin joined Eastspring Investments (Singapore) Limited, the Asian asset management business of Prudential plc, as Portfolio Manager, in August 1999.
     
    Wing Kin is the Team Leader of the ASEAN Equity focus team, and is the Lead Portfolio Manager for the ASEAN, Indonesia and Philippines Equity strategies.
     
    Prior to joining Eastspring Investments, Wing Kin was an Investment Analyst at The Insurance Corporation of Singapore.

    Wing Kin is a CFA charterholder and holds a Bachelor of Business degree from Nanyang Technological University, Singapore.

  • John Tsai
    Portfolio Manager
    John Tsai

    John Tsai joined Eastspring Investments, the Asian asset management business of Prudential plc, as Portfolio Manager, in October 2016.
     
    He is part of the Equity team and is the Team Leader of the Greater China Equity focus team. He is the Lead Portfolio Manager for the Hong Kong, Greater China, and China equity strategies.

    Prior to joining Eastspring, John was at MFS Investment Management for 15 years where he was a Portfolio Manager and Equity Research Analyst in the firm's Singapore, Tokyo, and Boston offices. John has also worked at Indosuez WI Carr Securities in Taiwan.

    John holds a Bachelor of Commerce degree from McGill University.  He also graduated from the University of Pennsylvania's Lauder Institute with a Master of Business Administration degree from the Wharton School and a Master of Arts degree from the School of Arts and Sciences.

Prudential plc, incorporated and with its principal place of business in England, and its affiliated companies constitute one of the world's leading financial services groups and has been in existence for over 166 years. It provides insurance and financial services directly and through its subsidiaries and affiliates throughout the world. Prudential plc is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America.

Eastspring Investments herein refers as Eastspring.

 

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