Evergreen’s objective is to use fund managers who we expect will outperform over a reasonable period.  

All fund managers used by Evergreen have been visited regularly by Evergreen staff, so that a deep understanding of the manager has been developed. We will never use a manager we do not know well.

While we do not believe that our competitive edge is the rating of all fund managers in the market (good information on most fund managers is available at a reasonable price), we will undertake extensive, primary due diligence on managers who we believe are outstanding and are not rated by the major research houses. Examples include high-quality boutiques and smaller managers who are overlooked by others.

Further, we do believe that many managers deliver their best outperformance during their early years or when Funds Under Management is low, and research does corroborate this view (papers on this topic can be provided). 

Manager Research

The Evergreen manager research process is forward looking and has been developed based on the extensive experience of the founders.

The process is systematic and qualitatively based, drawing on qualitative analysis of quantitative research at the process review level.

Evergreen’s objective is to identify fund managers who we expect will outperform over an investment cycle. Evergreen has a different business model to many investment research houses in the Australian market.

Evergreen is driven by a belief that we work for the end investor (as opposed to the fund manager). Evergreen does not accept payment for ratings from fund managers.

Although we will utilise the information provided in research reports written by any other source, we will always undertake our own independent, primary research as well. Although we are cognisant that we do not wish to ‘reinvent the wheel’, we do know that the nuances and specificities of each manager can be lost through the passing of information through many hands. Hence, we will not invest with the manager who we do not see regularly, and rate highly.

Evergreen believes there are three key organisational areas that need to be assessed when considering any fund manager:

The investment process

  • An investment process is a means of making decisions in a consistent manner.
  • Processes govern the style of management and the level of risk the people are allowed to take on when making investment decisions. 
  • A review of investment processes often highlights whether a fund manager has a structured decision-making procedure, which either works - or doesn't.

The people who drive it

  • A sound investment process needs to be driven by good people.
  • Successful investment management requires good decision-making ability.
  • People make decisions, and some make them better than others.
  • We assess their individual ability as well as their effectiveness as a team.

Whether it is a well-run business

  • The investment management business is just like any other business. It needs to be well managed and involves the successful co-ordination of sales activity, marketing and effective client service.
  • Parentage or ownership is also important if the business is to be a successful ongoing concern.  Parentage must also fit with the fund manager’s investment philosophy, so that goals for the business are both realistic and consistent with expectations.

Evergreen will also undertake extensive due diligence on managers opportunistically and where it sees a gap in available research. This is particularly the case with new or small managers.