Portfolio Construction & Risk Management

• We look to optimise returns by using the skills of our chosen fund managers, aiming to invest with those whose skills and strategies complement one another.
• We take notice of the drivers of the global macro-economic environment. This allows us at times to allocate more capital to the regions that we believe will benefit from stronger economic and market conditions. The global macro-economic picture does not drive our asset allocation; rather it is used as a tool to fine-tune it.
• Once capital is placed with a fund manager, their performance is constantly monitored against a range of benchmarks that may include market indices, their peers, and most importantly cash especially when markets are negative.
• We conduct regular and frequent trips to meet with fund managers in their own premises, regardless of where they might be. This is crucial to build up a knowledge base and relationship with key personnel, so that any changes within the operating parameters of the fund can be recognised and assessed.
• Fund managers’ gross and net positions are monitored frequently, in order to assess the overall exposure to markets of the Fund.
• Termination of managers occurs infrequently as we take long term views on allocating capital - we do not actively trade managers. We do strive to ensure that the actions of our managers remain within parameters that we are comfortable with – so deviations from this can be grounds for reconsidering the relationship. Aside from this and substandard performance, termination can also occur for other reasons; including an excessive growth in funds under management, as well as health and personal issues.