In an era where passive investing dominates and market momentum pushes share prices to extremes, one Perpetual portfolio manager is doubling down on a traditional investment approach rooted in fundamentals, discipline, and consistency.
- Market momentum, passive investing push share prices to extremes
- Current market dispersion creates opportunities
- Find out about Perpetual Equity Investment Company (ASX:PIC)
- Browse all Perpetual’s Australian share funds
Sean Roger, who is co-portfolio manager for Perpetual Equity Investment Company (ASX:PIC), started as a graduate accountant in 2013 before entering Perpetual’s Investment Analyst Program just 12 months later — an internal initiative designed to give rising employees visibility into how the equities team works and the discipline behind its long‑standing investment process.
“That really piqued my interest in stock‑picking and investing,” recalls Roger.
That early exposure was a turning point. Soon he moved to the trading desk as a dealer, then into an analyst role, working closely on Perpetual’s long‑short strategies.
This shift provided “a different lens on investing,” especially the discipline required when short‑selling enters the mix. By 2021 Roger had become deputy portfolio manager, stepping fully into a portfolio manager role last year.
His rise is emblematic of Perpetual’s philosophy: promote from within, invest in people early, and maintain process continuity across market cycles.
“Perpetual has a long track record of promoting from within and fostering young investors,” says Roger.
“That has helped the consistency of process over the long term which is crucial for sustained outperformance of the funds.”
A process built to outlast market fads
At the heart of that process lies Perpetual’s long‑standing quality filters:
- Balance sheet strength;
- Sound management;
- Recurring earnings; and
- Quality business model.
Only companies meeting these criteria become investable. In practice, this steers the team away from unproven, loss‑making names that may capture headlines but lack durability.
However, Roger cautions that value investing is not simply about buying cheap, old-school businesses.
“Value and growth are not mutually exclusive,” he says. “There are many situations where we prefer to pay a fair price for a company that has growth potential as opposed to pay what appears to be an optically very cheap price for a company that might have little or no growth forecast.”
Management quality is especially central. “Investing alongside a high‑quality founder or management team provides a real buffer through unexpected challenges,” notes Roger.
A market of extremes creates opportunity
Today’s environment — dominated by a handful of mega‑cap outperformers — presents unusual challenges for active managers.
Indexes appear expensive, but that masks “significant dispersion” below the surface.
Momentum investors have been willing to pay almost any price for companies with positive news flow, while punishing those facing short‑term uncertainty, even when their long‑term fundamentals remain strong.
“For fundamental investors, it’s been quite a challenging backdrop,” admits Roger.
“But it’s throwing up some really attractive opportunities in the companies that have been left behind.”
PIC has been actively allocating to:
- High‑quality cyclical companies experiencing short‑term earnings pressure;
- The Australian property sector, which is emerging from multi‑year headwinds; and
- Quality growth companies that have de-rated materially on market growth related concerns.
The coming rebound for active management?
Roger believes the shift toward passive investing – now a defining force in global markets – has contributed to the extreme price dispersion. As more capital flows mechanically into index leaders, fundamental mispricing becomes amplified.
But he sees this setting the stage for a reversal.
“Fundamentals over time drive share prices,” says Roger. “So our view is that staying true to our process that's worked over many decades will, ultimately, put us in a good position to outperform moving forward.”
About Sean Roger and Perpetual equities
Sean is the co-portfolio manager for the Perpetual SHARE-PLUS Long-Short Fund, the Perpetual Pure Equity Alpha Fund and the Perpetual Equity Investment Company (ASX:PIC).
Perpetual is a pioneer in Australian quality and value investing, with a heritage dating back to 1886.
We have a track record of contributing value through “active ownership” and deep research.
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