Our Investment ApproachWe manage an investor’s assets to match (or beat) liability cash flows. Our process manages the risks present in liabilities so that they are either:
- Hedged out (those “unrewarded” risks that do not offer sustainable risk premia over the long term), or
- Managed through fundamental research and analysis (“rewarded” risks that offer sustainable risk premia over the long term).
We regard interest rate risk and inflation risk as unrewarded risks and believe that they cannot be sustainable sources of alpha over the long term. It is therefore our philosophy to hedge out this risk. This is achieved via a quantitative risk-managed approach to hedging, such that changes in assets match changes in liabilities in the presence of yield curve changes. This provides a defensive return profile relative to our clients’ liabilities in extreme market scenarios.
We have a range of mandates, the parameters of which are based on the client’s requirements. Our clients include retirement funds, life insurers, corporates and government entities.
Our Competitive Edge
Experience through the cycles. In 2001, we developed a new investment approach that recognised the importance of liabilities to investors. We consequently introduced a liability based strategy that actively managed the risks associated with meeting that defined liability benchmark.
Consistent outperformance. Our diverse team manage a wide range of bespoke portfolios that have shown stable and consistent outperformance over long time periods, and within tight tracking errors. We have successfully managed LDI portfolios through different market cycles and credit events over these periods.
Investment innovation. We have developed hedging technology that allows us to track liabilities with minimal tracking error, liability benchmark portfolios that provide insight into performance attribution and a yield enhancement framework that allows us to include credit to provide additional alpha in line with each investor's risk appetite.
Extensive credit capability. Our specialised credit investment capabilities span the full investment banking spectrum. Our Credit team’s proprietary research, and the benefit of our large scale, give us access to investment opportunities beyond the reach of smaller asset management companies. Our credit capability has contributed to superior returns for our clients.
Responsible investing. Our proprietary ESG analysis identifies issues that currently, or in the future, may impact the long-term value of an investment. We score companies on their ESG rating and their ability to grow sustainably.