Investment Management

Is it for you?

Do you need income from the portfolio? Or can the income be reinvested to enable compounded growth in capital? How much fluctuation in capital value can you afford? And, just as importantly, how much can you tolerate emotionally? Volatility in value doesn’t necessarily equate to capital losses in the longer term but it can do, especially if assets are liquidated at times of market weakness.

Our risk profiling process has been developed with academics who specialise in behavioural finance. A part of what it’s about is to establish your ‘risk budget’ - the extent to which financial risks might impact the way that you choose to live your life. But no less important is your appetite for risk: this is very personal to you - no right or wrong answers but shades, nuances and personal preferences.

We believe that it’s possible to build portfolios of assets that deliver the best return for a given level of risk. Or put another way, to minimise the risk to your capital for a targeted return, whatever this may be.

Asset Allocation

Building A Portfolio

Building a portfolio to match a client’s risk and return appetite follows on seamlessly from the wealth and financial planning done by our client partners and wealth planners. Empirical research, and experience, shows that that the correct mix of bonds, equities and alternatives is the main determinant of returns over both the short and medium term. We generate expected returns for all asset classes using a process developed by our CIO over 20 years in the industry. Building on his experience in one of the best strategy teams in London, this is complemented by the collegiate wisdom investment team at Artorius.

One of the principles is to invest globally. This is because of the global opportunity set and diversifies a client’s exposure away from any particular country. Historically, most investors have a domestic bias which has led to lower overall returns, for example, UK investors have tended have too much exposure to UK equities, rather than holding US and Emerging Market equities. Thus, by holding global equity exposure, when the UK has an economic or political shock, we tend to find that our clients have benefited from higher returns than our competitors. We strive to avoid unnecessary complexity, so avoid hedge funds unless there are specific economic or timely investment reasons.

We test each solution designed against a range of scenarios to understand the behaviour of the portfolio to arrive at robust and resilient portfolios aimed to meet clients’ risk and return requirements.


Client Involvement

If you want to be more involved in the investment of your assets, Investment Advisory is for you.

Unless you’re a professional client we’re obliged to assess the suitability of your overall portfolio when tested against your risk profile. But beyond this we can be entirely flexible, building a portfolio in discussion with you.

In an advisory portfolio nothing changes without your agreement. We’ll have ideas and recommendations, but then we expect you will too. We will work collaboratively to create a proposal exactly as you’d want it to be.


Discretionary Investment Management

Discretionary Investment Management is what the name suggests: once you’re comfortable with our process and once we’ve together established your objectives and your appropriate risk profile, when it comes to investment we get on and do it. You don’t want to be involved in the nitty-gritty of day to day investment, but you trust us - at our discretion - to do what needs to be done. Of course we review this with you regularly - quarterly at a minimum, but in practice we’ll update you whenever you like. In tougher times you’ll probably hear from us more often, so no news is probably good news.

In the background our investment team, led by our CIO Gerard Lane, has built a series of optimal combinations of assets based on their expected returns and their predicted volatility. This core represents a ‘strategic’ view, that forms the bedrock of our process. But we constantly test this strategic view. The team gets together at least once a week to consider shorter-term risks and opportunities. They’re always considering how our clients’ current portfolios look in the light of what’s going on, in terms of both new information and shifting asset prices. We don’t want to be tinkering constantly - we’re very much investors as opposed to traders- but we do want to be on top of things in case we need to act. And when we need to act, we act decisively.

Our record is relatively short but - for what it’s worth - so far we’re among the best in the business. We’re sure that challenges lie ahead - especially over shorter time horizons - but when we err it won’t be through shoddy process or through lack of vigilance. And when we do fail we hope that it will be through excessive caution and conservatism. We’d rather forgo some upside participation if it buys us superior capital preservation over time.