Our primary objective is to create wealth for our clients by investing in ways that minimise risk of capital loss. It is important for clients to understand how we decide to invest their money.
We believe in the power of diversification. Every portfolio we build includes funds with differing investment styles and approaches. Our focus is on selecting the correct balance of asset managers, to ensure that they have low correlations. How we combine managers is as important as finding good managers in the first place. A well-constructed portfolio is a team of managers that performs well together as conditions change, not a disjointed collection of star performers. We combine managers so their unique styles and approaches to investing complement one another.
As in any enterprise, some investment managers are better than others. It is easy to find managers who have performed well in the past. It is far more difficult to identify those that are likely to perform well in the future. The key is distinguishing those who are truly talented from those who have merely been lucky. Our skill at making these distinctions is one of our core competencies.
We believe a focus on an asset manager’s investment process; helps us identify an approach that offers a sustainable advantage over the long-term. The key is to focus on the source of good returns rather than the returns themselves – that is a repeatable investment process across all market cycles.
Our Asset Manager selection process:
- We search for asset managers with a unique investment philosophy. In order to earn above average returns you must do something that is different from consensus.
- Alignment of interest. We prefer managers that are co-investors in their funds and are incentivized based on fund performance and not the size of fund.
- Who are the people responsible for portfolios? When you buy investment products you are ultimately investing in the capabilities of the people who will manage your money. As part of our due diligence we place a huge emphasis in knowing the people who will manage our clients’ money.
- Understand the role of time. We measure manager performance over a full market cycle and across multiple business cycles to remove any act of randomness.