At 27four Investment Managers, we believe in the concept of not putting all your eggs in one basket.
Superior investment performance can be delivered to our clients by focussing on an investment process that identifies sources of return as well as sources of risk of each asset class, to ensure that we build portfolios that not only deliver on their return expectations but have the highest probability of doing so.
The objective of a multi-managed portfolio essentially is to obtain an optimal mix of assets classes, asset managers and investment styles that would utlimatley deliver a client’s risk and return objectives. The idea is for the ‘Fund of Fund’ approach to meet these investment objectives with less volatility than a single manager.
So what are the key benefits of a multi-manager approach:
- A multi-managed investment portfolio offers the client diversification benefits and improves overall risk and return efficiency. Investing in a single manager fund exposes the investor to risks associated with a single investment house. Similarly, investing in one asset class exposes the investor to the market risks associated with that specific asset class. Investing across different asset classes, fund managers and investment strategies provides a more stable long-term investment return. Optimal diversification leads to risk reduction and the opportunity to enhance potential returns per unit of risk adopted.
- A multi-manager approach also gives an investor access to a broad range of asset manager expertise and specialist portfolio manager skills that is most capable of meeting the investment objectives. The multi-manager is able to research and analyse funds offered by various asset managers, both active and passive, to construct a portfolio that is aligned with a specific investment objective and selects the most talented investment managers, following an in-depth review of their investment and operational processes. Our team then applies their expert skills in portfolio construction to optimally blend the individual funds to create fund of funds portfolios designed to outperform their respective benchmarks. Portfolio risk and return characteristics are continuously monitored, at both the fund of funds and individual fund level, where manager and asset allocation changes are made when necessary to ensure that stated investment objectives are continuously met.
- Multi-managers have the ability to be a lot more nimble when moving in and out of postions in order to adjust the underlying investment strategy based on their asset class views when there are changes in the local and global landscape. This may help reducing downside risk and mitigate losses when markets are down. Market cycles makes it almost impossible for any single manager to time the market and outperform any single asset class or sector consistantly; therefore, a multi-managed approach continues to be one of the most consistently successful ways to provide long-term returns.
- Costs are an important consideration for investors over the longterm. While multi-managed funds do have a layering of fees due to the multi-layers of management, it is important to note that multi-managers do have buying power when negotiating fees with the underlying managers, passing those cost savings onto investors. At 27four Investment Managers, we pride ourselves in offering high quality Fund of Fund portfolios at very competive costs. Our consistent application of our investment approach is designed to deliver superior risk-adjusted performance over the long term.
