The firm backs both established and up-and-coming managers who it expects to deliver returns with a targeted level of risk over the long-term.
Looking specifically at the firm’s European and UK equity models, SEI’s Nick Samuels says the team has been favouring a value management style of late, and the underlying managers the models are tipped in favour of reflect this style-bias.
"We look at value, quality and momentum and blend together managers with those styles," he said.
"We’ve been leaning more heavily on value managers over the last six months because the gap between expensive and cheap is just too big."
Samuels, senior analyst on SEI’s equities team, highlights three managers the firm is backing in current markets.
Ben Whitmore – Jupiter UK Special Situations
Samuels says SEI has handed part of its UK mandate to Jupiter’s Ben Whitmore to run in the style of his five crown-rated Jupiter UK Special Situations fund, one of the industry’s most popular value portfolios.
"He doesn’t buy the junk of the market," said Samuels. "Instead he looks for quality companies that he believes will get back to more normal valuations. He’s able to give us exposure to value but does it while lowering the risk."
Samuels points out the manager has limited exposure to banks, but is not afraid of better quality financials such as insurers.
The £1bn Jupiter fund is a top-quartile performer over one, three, five and 10 years.
Whitmore has been running the portfolio since October 2006. Since he took over, it has gained 66.22 per cent, while the FTSE All Share and IMA UK All Companies sector are up 37.39 per cent and 32.16 per cent respectively.
Performance of fund vs sector and index since Oct 2006
Source: FE Analytics
The fund is yielding 1.7 per cent.
As Samuels mentioned, Whitmore is not a fan of banks, but does hold Royal Bank of Scotland (RBS) in his top-10 holdings, as well as UK blue chips such as GlaxoSmithKline, Vodafone and British American Tobacco.
The fund requires a minimum investment of £500 and has an ongoing charges fee (OCF) of 1.76 per cent.
Metropole Selection
A value-management group SEI favours in its European equity offering is Paris-based Metropole.
The firm runs a mandate for SEI modelled on its €498.4m Metropole Selection fund, which invests in undervalued companies in Europe.
"These guys stick to their knitting really. They’ve been doing it a long time and with the team based in Paris, they are able to focus on areas of the market they believe are cheap," Samuels said.
"They also look for a catalyst to unlock that value. They find good companies that are in a tough spot and identify a catalyst that will then unlock the potential value."
Samuels says the fund invests primarily in undervalued companies in core Europe, but has taken a strong bet on Italy, where it believes many quality companies are unfairly tarnished by the Italian brush.
The fund, managed by Isabel Levy, has gained 179.39 per cent over the last decade, compared with 169.46 per cent from the FTSE Europe ex UK index.
Metropole Selection has also beaten the FTSE index over five years, but has trailed it over one and three.
Among the fund’s top holdings are French pharma giant Sanofi and alcoholic beverage giant Heineken.
Dirk Enderlein – Wellington Strategic European Equity
For a manager with a quality bias, Samuels likes the "up and coming" Dirk Enderlein at Wellington Management International.
He says Enderlein’s quality bias makes him the "Nick Train of Europe" and that it is the perfect strategy to blend with the Metropole style in its European equity mandates.
Enderlein, who was previously at Allianz Global Investors, heads up the Wellington Strategic European Equity fund.
SEI has so much faith in the manager that it hired him to run a portion of its mandate before his fund was even launched at Wellington.
Since launch in December 2011, the fund has gained 44.45 per cent compared with 32.69 per cent from the FTSE Europe ex UK index.
Performance of fund vs index since launch
Source: FE Analytics
"Dirk is similar to Nick Train," Samuels said. "They are focused on buying great-quality companies that will continue to do well."
The largest weighting in the fund is to industrial stocks, at 37.96 per cent, followed by consumer defensives.
SEI portfolios
The £364.9 SEI European ex UK Equity and £312.7m SEI UK Equity Wealth funds have both performed broadly in line with their indices over one and three years.
Over the last 12 months, the UK Equity portfolio returned 20.67 per cent, beating the FTSE All Share by 5 percentage points.
However, its returns of 19 per cent over five years lag the index's 30.66 per cent.
The European portfolio has also kept in line with the MSCI Europe ex UK index, beating it over one and three years, but trailing it over five.
Both funds have three FE Crowns to their name and are available via platforms in the UK.
They each have a total expense ratio (TER) of 1.8 per cent.