Our investment philosophy consists of 4 core essential components
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We have an obsession with risk. Our goal is not only superior investment performance but also superior risk-adjusted returns. Higher-than-average gains in a bull market may not be a good indicator of an investor’s skill. We believe that superior performance throughout different market cycles proves that returns were generated through skill and not simply the acceptance of higher-than-average risk.
Instead of merely seeking out potential profits, our utmost priority is limiting losses and protecting our portfolios. We believe tremendous upside potential will naturally follow if we are prudent in downside protection.
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Although we subscribe to traditional and discretionary investing frameworks to identify opportunities to capitalize on, we reinforce our investment processes and decisions with quantitative and scientific methodologies.
We believe that a strong culture of curious inquiry and rigorous scientific research is crucial to succeeding in today’s investment environment. Through our rigorous scientific research and advanced computational methodologies, we seek to identify market inefficiencies for us to exploit and generate sustainable superior risk-adjusted returns.
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We do not believe that the market, where participants are rational and have equal access to information, is “efficient”. While market efficiency does make sense conceptually, it rarely holds up in practice.
Our experiences throughout different market cycles have informed us that markets often rotate between irrational exuberance and pessimism. We feel that through skill and intelligence, we can identify solutions that exploit these efficiencies, capitalizing on them and generating superior investment results.
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Our experience through the years tells us that the macro environment dictates the investment environment. As the market oscillates between phases of the market cycle, we expect to see different asset classes outperform.
We believe consistent excellence can only be achieved through understanding the economy and the market cycles we are in. Merely investing through a “bottom-up” investment process is not enough. By understanding the macro environment, we will be able to proactively take actions to protect our investments and exploit any potential market dislocations and perception gaps.
Portfolio Construction
Our portfolios are designed with a thorough understanding of client objectives, as well as their desire and comfort for taking risks. For our bespoke services, client portfolios include and reflect their underlying preferences. We work with our clients based on the following four investment elements: (1) Performance Benchmark, (2) Geographical Preferences, (3) Investment Execution & Style, and (4) Alpha Selection.
Performance Benchmarks
How should we measure your portfolio’s performance? Are you gunning for relative returns that outperform the market with a specific benchmark target in mind? Or do you seek consistent risk-adjusted absolute returns? By establishing your performance benchmarks, we can cater to and design a portfolio seeking to achieve your ideal way of measuring performance.
Geographical Preference
Do you have a preferred geography for the underlying assets of your portfolio? Are you already heavily concentrated in a specific region, and do you want to diversify away from your current exposure? Do you have specific geographies that you would like to avoid to express your long-term investment beliefs?
Investment Execution & Style
What type of investment management style and execution suits you most? Do you prefer a passive investment strategy? Or do you have a penchant for active managers that consistently rebalance your investment portfolio to actively capitalize on market opportunities?
Alpha Selection
We offer multiple solutions to generate more alpha in your portfolio, allowing the addition of specific discretionary or quantitative strategies to generate superior risk-adjusted returns. There are also other alternatives that further enhance portfolio returns.
When we discover discrepancies between our view (through our discretionary investment processes and quantitative systems) and the market, we investigate deeper. This process allows us to identify potential irrational exuberance or pessimism in the market. Once we ascertain perception gaps, we employ quantitative methods to derive optimal position sizing and entry points. These securities and their relevant information will be submitted to our proprietary portfolio management system’s trade monitor for real-time monitoring, providing portfolio managers across the firm with real-time signals to act on promptly.
