Newton Investment Management - voted equities manager of the year in Global Investor/ISF's annual awards -  is a committed and successful active asset manager, with a consistent long-term track record of outperformance over time.

Its Global Income Fund, one of its flagship products, has delivered annualised relative outperformance of +2.7% from its inception to 31 December 2015 (including outright returns of 6.6% during 2015).

Likewise, its high-conviction active equity strategies – including its Global Equity Fund, Global Opportunities Fund and UK Opportunities Fund – all delivered outperformance.

That it achieved consistency across its £34bn AuM in equity strategies is perhaps unsurprising given its ‘we are one investment team’ philosophy.

Based on a single floor of its London office, analysts and portfolio managers work collaboratively and the sharing of ideas and analysis plays a crucial role. It marries company analysis with long term investment themes including ESG considerations.

“Our USP is the emphasis on ‘perspective’, building teams with cognitive diversity. It’s always been a hallmark that we do not have a star manager culture – no one has the monopoly on great ideas,” says Newton CEO Helena Morrissey CBE, who has been with the firm 20 years. 

“Strong conviction investment decisions are best reached when you have healthy arguments with people you respect and trust. The team works well because it has multiple perspectives.”

She says she is “not afraid to be out of fashion” and “sticks to what we can do well”. It means the firm has not been tempted to venture into hedge fund type funds or beta replication.

“I am proud that we have an inner compass – it’s often tempting to jump on a bandwagon.”

Newton’s response to the general heightened focus on fees market trend towards passive investment was to tighten its high conviction approach.

“Our global equity funds range from thirty to sixty stocks – that is pretty small in a universe of several thousand. Value for money is absolutely imperative today and in the future. We compete on almost passive pricing plus a performance fee – to show courage in our conviction.”

Morrissey, a champion for women in asset management and renowned for combining the responsibilities of a sizable family with a leading City role, is also on a mission to “make investment better”.

“We have always believed – but it has become easier to prove – that responsibly-managed companies tend to have a higher probability of having a sustained competitive advantage. It also helps you avoid the ‘banana skins’.”

Newton certainly takes governance seriously. In its history, dating back to 1978, it has voted in every proxy company resolution and during 2015 it exercised its clients’ voting rights at 579 separate meetings and instructed votes against one or more resolutions at 36% of these meetings.

“But things have moved on,” she says. “We embed ESG considerations in all of our investments. We do not think there is such a thing as a ‘non-financial consideration’. Everything can have an impact on a company’s value – we see it as essential in protecting against reputational and financial loss – and responsible companies tend to win out over the longer term.”

Morrissey is also the founder of the 30% Club, campaigning for increased female representation on company boards. While stock picking strictly in line with this aim would leave a depressingly limited investment universe “the diversity issue is often a leading indicator of whether a company is thinking in a forward-looking way about lots of other aspects of its business – such as whether it’s making good use of technology,” she says.

Indeed, if Newton rates a company’s governance as ‘low’ it may represent an opportunity for it to be improved through engagement: “Companies do listen to asset managers with minority stakes so you could end up with a company with stronger returns. To make returns we have got to look at what is currently discounted and what may improve in the future.”

It is less a case of clients asking it to divest, which could cause a massive crowding-out of responsible investment opportunities: “But they do want us to manage the associated financial risks”.