Bernstein is a highly regarded value manager which is also used by New Zealand Funds Management.
Tower Asset Management managing director Paul Bevin says Bernstein will manage the TAM International Trust North American portfolio, as well as the US equity portfolio of TAM's Sydney-based operation.
"This replacement follows the recent merger of Tower Asset Management's New Zealand and Australian businesses and the desire to co-ordinate outsourced managers to the greatest possible extent."
TAM says the first review of Brinson in 1998 against alternative value managers and leading growth managers concluded the firm was a superior manager and it also showed a preference for the value style.
A more recent evaluation of value-only managers concluded Bernstein was the best choice to manage US assets.
The main reason for replacing Brinson relates to management changes at its parent company UBS.
"These changes have resulted in a significant reorganisation of responsibilities throughout the combined investment management group."
Tower says these changes have resulted in "less confidence in the ongoing stability of investment process and personnel."
While value managers have under-performed the market over the past three years, Tower believes a turnaround may be taking place.
It holds the view that the prolonged, concentrated and unprecedented out-performance of growth, in particular technology stocks, has not been supported by investment fundamentals and it will not persist.
"TAM believes that since the end of March this process may be reversing, but that it still has further to run."
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