The 2014 All-Asia Research Team: Quantitative Research, No. 3: Burke Lau & team
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The 2014 All-Asia Research Team: Quantitative Research, No. 3: Burke Lau & team

Burke Lau & team

Macquarie Capital Securities

First-place appearances: 0

Total appearances: 8

Team debut: 2006

After a one-year absence, Macquarie Capital Securities returns to this roster in third place, the position it earned in 2012 and 2011. Newcomer Burke Lau and his five associates, who work out of Hong Kong, deliver sophisticated analyses and approach quantitative investing from a unique perspective, clients say. For example, “by identifying complicated value factors and momentum factors, they helped us construct an investment strategy in a so-called value environment,” one backer says. Significant thematic work the team has undertaken includes measuring the impact on Asia, and emerging markets generally, of the U.S. Federal Reserve’s winding down of its asset-purchase scheme. Tapering has been the main cause of accelerated equity outflows from Asia, Lau reports. Whereas defensive, flight-to-quality strategies tend to underperform during times of rising interest rates, like the current period, while fundamental valuation investing outperforms, the Macquarie team finds that the Fed’s scaling back of its quantitative easing program so far has had exactly the opposite effect in Asia, owing to the impact of those short-term equity fund flows from the region. “Our role over the last year has been to help institutional investors navigate these confusing times, when top-down economic, macro and governmental policies have collided with bottom-up fundamental stock picking since the global financial crisis,” Lau says. As short-term outflows subside, he adds, so will the outperformance of defensive strategies, which the analysts predict will result in a return to fundamental valuation investing this year.

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