Succession beats wealth preservation as top priority for families
New research by Stonehage Fleming said 69% of respondents spotlighted succession planning as one of their top three concerns for future financial organisation, followed by capital preservation (62%) and tax planning (48%).
The shift in focus to quality succession planning meant a more sophisticated, better structured and increasingly democratic approach to family leadership. The shift prompted a greater emphasis on training and development of young people, better communication and renewed importance on long-term planning.
“Perhaps most important of all, families are concerned about having leaders in place who will see the family through the uncertainties of a changing environment,” the multi family office’s report Practical Wisdom and Leadership for Changing Times said, the third publication in its Four Pillars of Capital series.
Should segmentation be used in cross-border wealth planning?
Johan van Niekerk, partner – head of family office, Neuchâtel – Stonehage Fleming, said:
“Some form of client segmentation is necessary when considering cross-border wealth planning. However, it is not as simple as you would think. We have several fixed offerings, but the way we combine them is tailored to meet the specific needs of the clients.
“Our services have two clear objectives: the successful protection of family wealth and the successful management of family assets. The needs of a professional athlete, who accumulates wealth during a career (which might be shorter than that of an entrepreneur) differs from the needs of an entrepreneur who might have one or several significant liquidity events during her/his lifetime. Because the needs of our families are so diverse, segmentation becomes challenging but not impossible. As an example, we have a dedicated team that look after professional athletes.”
Mega-Family Office Strike Transatlantic Alliance to Woo Wealthy
Two of the world’s biggest multifamily offices are forming an alliance.
Glenmede, based in Philadelphia, and London-based Stonehage Fleming struck a deal to offer investment, trust and family office services to each other’s clients on their respective sides of the Atlantic. The tie-up will allow them to better cater to customers outside of their home markets by sharing tax, investment and trust company services, the companies said in a statement.
Stonehage Fleming and Glenmede Enter into Strategic Alliance
Stonehage Fleming, one of the world’s leading international family offices, and the Glenmede Trust Company, N.A. (“Glenmede”), a private wealth and institutional investment management firm in the United States, today announced they have entered into a strategic alliance, effective immediately. Through this agreement, Stonehage Fleming and Glenmede, the second and third largest independent multi-family offices in the world will expand their respective client offerings and geographical capabilities. Both firms will remain independently managed and privately held.
The relationship will allow Stonehage Fleming to deliver international family office, trust, and investment services to clients of Glenmede in Europe, the Middle East and Africa, and Glenmede to offer investment and corporate trust services to clients of Stonehage Fleming in the United States.
“This agreement enables us to meet the evolving needs of clients across both firms and enhance the services we provide to wealthy families with complex needs,” said Giuseppe Ciucci, Group CEO of Stonehage Fleming. “Our two firms are a strong strategic fit not only due to our complementary capabilities and geographic footprints, but also because we share the fiduciary heritage and values that place the client at the forefront of everything we do. We look forward to a long and successful alliance.”
“Through the formation of this alliance, we will be better positioned to assist our clients with their multi-jurisdictional needs by partnering with a proven and like-minded organisation,” said Gordon Fowler, President and Chief Executive Officer of Glenmede. “Our firms are aligned culturally and philosophically, and our clients will experience an expanded service offering in a seamless manner.”
Mark McMullen, CEO for the Family Office of Stonehage Fleming added, “We have a long history of successful overseas alliances, including Jardine Fleming and T Rowe Price Fleming and believe this will represent an equally fruitful relationship. Compatibility is a key factor behind this agreement, demonstrated already through the engagement of mutual clients to date”.
Susan Mucciarone, Executive Director of Private Wealth at Glenmede, commented, “Since our founding, we have been guided by a singular focus to provide clients with tailored investment and wealth management services, without distraction or conflict of interest. Stonehage Fleming is an ideal firm for us to align ourselves with, as they share an equally determined approach to fulfilling their fiduciary responsibilities for multi-jurisdictional families.” Stonehage Fleming and Glenmede each possess a rich history and a culture of continuous innovation and adaptation, and this agreement formalises a strong existing relationship between the two firms. This alliance is a testament of both firms’ growing need to better serve clients on a global basis.
Succession beats wealth preservation as top priority for families
New research by Stonehage Fleming said 69% of respondents spotlighted succession planning as one of their top three concerns for future financial organisation, followed by capital preservation (62%) and tax planning (48%).
The shift in focus to quality succession planning meant a more sophisticated, better structured and increasingly democratic approach to family leadership. The shift prompted a greater emphasis on training and development of young people, better communication and renewed importance on long-term planning.
“Perhaps most important of all, families are concerned about having leaders in place who will see the family through the uncertainties of a changing environment,” the multi family office’s report Practical Wisdom and Leadership for Changing Times said, the third publication in its Four Pillars of Capital series.
Should segmentation be used in cross-border wealth planning?
Johan van Niekerk, partner – head of family office, Neuchâtel – Stonehage Fleming, said:
“Some form of client segmentation is necessary when considering cross-border wealth planning. However, it is not as simple as you would think. We have several fixed offerings, but the way we combine them is tailored to meet the specific needs of the clients.
“Our services have two clear objectives: the successful protection of family wealth and the successful management of family assets. The needs of a professional athlete, who accumulates wealth during a career (which might be shorter than that of an entrepreneur) differs from the needs of an entrepreneur who might have one or several significant liquidity events during her/his lifetime. Because the needs of our families are so diverse, segmentation becomes challenging but not impossible. As an example, we have a dedicated team that look after professional athletes.”
Mega-Family Office Strike Transatlantic Alliance to Woo Wealthy
Two of the world’s biggest multifamily offices are forming an alliance.
Glenmede, based in Philadelphia, and London-based Stonehage Fleming struck a deal to offer investment, trust and family office services to each other’s clients on their respective sides of the Atlantic. The tie-up will allow them to better cater to customers outside of their home markets by sharing tax, investment and trust company services, the companies said in a statement.
Stonehage Fleming and Glenmede Enter into Strategic Alliance
Stonehage Fleming, one of the world’s leading international family offices, and the Glenmede Trust Company, N.A. (“Glenmede”), a private wealth and institutional investment management firm in the United States, today announced they have entered into a strategic alliance, effective immediately. Through this agreement, Stonehage Fleming and Glenmede, the second and third largest independent multi-family offices in the world will expand their respective client offerings and geographical capabilities. Both firms will remain independently managed and privately held.
The relationship will allow Stonehage Fleming to deliver international family office, trust, and investment services to clients of Glenmede in Europe, the Middle East and Africa, and Glenmede to offer investment and corporate trust services to clients of Stonehage Fleming in the United States.
“This agreement enables us to meet the evolving needs of clients across both firms and enhance the services we provide to wealthy families with complex needs,” said Giuseppe Ciucci, Group CEO of Stonehage Fleming. “Our two firms are a strong strategic fit not only due to our complementary capabilities and geographic footprints, but also because we share the fiduciary heritage and values that place the client at the forefront of everything we do. We look forward to a long and successful alliance.”
“Through the formation of this alliance, we will be better positioned to assist our clients with their multi-jurisdictional needs by partnering with a proven and like-minded organisation,” said Gordon Fowler, President and Chief Executive Officer of Glenmede. “Our firms are aligned culturally and philosophically, and our clients will experience an expanded service offering in a seamless manner.”
Mark McMullen, CEO for the Family Office of Stonehage Fleming added, “We have a long history of successful overseas alliances, including Jardine Fleming and T Rowe Price Fleming and believe this will represent an equally fruitful relationship. Compatibility is a key factor behind this agreement, demonstrated already through the engagement of mutual clients to date”.
Susan Mucciarone, Executive Director of Private Wealth at Glenmede, commented, “Since our founding, we have been guided by a singular focus to provide clients with tailored investment and wealth management services, without distraction or conflict of interest. Stonehage Fleming is an ideal firm for us to align ourselves with, as they share an equally determined approach to fulfilling their fiduciary responsibilities for multi-jurisdictional families.” Stonehage Fleming and Glenmede each possess a rich history and a culture of continuous innovation and adaptation, and this agreement formalises a strong existing relationship between the two firms. This alliance is a testament of both firms’ growing need to better serve clients on a global basis.
GBI 5th Anniversary
The Stonehage Fleming Global Best Ideas Equity Fund passed the five year anniversary of its launch in August 2018. We conducted interviews with colleagues from around the business to provide an overview of the fund, the investment strategy which underpins it, and its success to date. Please note that this video is for informational and educational purposes only and is not intended to be a financial promotion or investment advice.
Book Review: The Wealth Elite
The Wealth Elite: A Groundbreaking Study of the Psychology of the Super Rich by Rainer Zitelmann. Published by LID Publishing
Rainer Zitelmann’s study of the psychology of the super rich is an ambitious project. Few could be better qualified for it than Dr Zitelmann – an historian, sociologist, journalist, businessman and investor.
There has been no comparable study and it is a compelling read for all who need to understand the characteristics and motivations of rich entrepreneurs. These people drive economic growth, back innovation, create jobs and finance philanthropic projects.
A day in the life of a PE investor
This week, we spoke to Richard Clarke-Jervoise (pictured), head of private capital at London-based Stonehage Fleming.
The firm is one of the world’s largest family offices and manages more than $55 billion of assets.
What does a typical day look like for you?
A typical day starts pretty early; it probably involves about an hour’s emailing. Most of our investments involve Asia or the US and so there tends to be quite a heavy traffic of emails overnight. When I get into the office, one of the first things that often happens is preparing for a client meeting with one of my colleagues.
A typical day will involve one or two meetings or calls with private equity managers. This could be an update call with an existing manager to see how their portfolio is getting on, or it could be [with] a manager who is preparing for a fundraise in as much as two or three years’ time. If we are in due diligence on an opportunity, there will typically be meetings or video conferences with that manager or reference calls to other investors and portfolio company CEOs.
There is normally a client call or meeting where we update clients on the investments that we manage for them. The final category, I suppose, is the totally ad-hoc stuff that happens every day. Particularly with ever-increasing regulation, that takes up an increasing part of the day.
Stonehage Fleming Appoints Mona Shah Director of Investment Strategy & Research
Stonehage Fleming, one of the world’s leading independently owned family offices, announces the appointment of Mona Shah as Director, Investment Strategy and Research in London.
Mona will report into John Veale the Deputy Head of Investments and will be a member of the Investment Committee. She will be responsible for the selection and review of managers for use in multi-asset client portfolios.
With eleven years’ investment and research experience Mona joins Stonehage Fleming from Rathbone Brothers plc, where she was appointed Head of Collectives Research in January 2017. At Rathbones she was responsible for the firm’s long-only and alternatives investment process. Mona led a team of analysts and also contributed to the management of multi-asset collectives.
Commenting on the appointment, John Veale said: “We are very pleased to have Mona join us as a Director in the Investment Strategy and Research team. Mona has had an impressive career and at Stonehage Fleming she will be able to build on her knowledge of investment research, development, and management. Mona understands our integrated approach and we have created this new role in our investment team to match with her skills and experience. She will be a great asset to the Group.”
Mona Shah said: “I am delighted to join Stonehage Fleming in September and work alongside such a talented team. I have been impressed by the firm’s commitment to excellence and strong values. I look forward to contributing to their ongoing success. ”
Mona will join Stonehage Fleming during September 2018.
GBI 5th Anniversary
The Stonehage Fleming Global Best Ideas Equity Fund passed the five year anniversary of its launch in August 2018. We conducted interviews with colleagues from around the business to provide an overview of the fund, the investment strategy which underpins it, and its success to date. Please note that this video is for informational and educational purposes only and is not intended to be a financial promotion or investment advice.
Book Review: The Wealth Elite
The Wealth Elite: A Groundbreaking Study of the Psychology of the Super Rich by Rainer Zitelmann. Published by LID Publishing
Rainer Zitelmann’s study of the psychology of the super rich is an ambitious project. Few could be better qualified for it than Dr Zitelmann – an historian, sociologist, journalist, businessman and investor.
There has been no comparable study and it is a compelling read for all who need to understand the characteristics and motivations of rich entrepreneurs. These people drive economic growth, back innovation, create jobs and finance philanthropic projects.
A day in the life of a PE investor
This week, we spoke to Richard Clarke-Jervoise (pictured), head of private capital at London-based Stonehage Fleming.
The firm is one of the world’s largest family offices and manages more than $55 billion of assets.
What does a typical day look like for you?
A typical day starts pretty early; it probably involves about an hour’s emailing. Most of our investments involve Asia or the US and so there tends to be quite a heavy traffic of emails overnight. When I get into the office, one of the first things that often happens is preparing for a client meeting with one of my colleagues.
A typical day will involve one or two meetings or calls with private equity managers. This could be an update call with an existing manager to see how their portfolio is getting on, or it could be [with] a manager who is preparing for a fundraise in as much as two or three years’ time. If we are in due diligence on an opportunity, there will typically be meetings or video conferences with that manager or reference calls to other investors and portfolio company CEOs.
There is normally a client call or meeting where we update clients on the investments that we manage for them. The final category, I suppose, is the totally ad-hoc stuff that happens every day. Particularly with ever-increasing regulation, that takes up an increasing part of the day.
Stonehage Fleming Appoints Mona Shah Director of Investment Strategy & Research
Stonehage Fleming, one of the world’s leading independently owned family offices, announces the appointment of Mona Shah as Director, Investment Strategy and Research in London.
Mona will report into John Veale the Deputy Head of Investments and will be a member of the Investment Committee. She will be responsible for the selection and review of managers for use in multi-asset client portfolios.
With eleven years’ investment and research experience Mona joins Stonehage Fleming from Rathbone Brothers plc, where she was appointed Head of Collectives Research in January 2017. At Rathbones she was responsible for the firm’s long-only and alternatives investment process. Mona led a team of analysts and also contributed to the management of multi-asset collectives.
Commenting on the appointment, John Veale said: “We are very pleased to have Mona join us as a Director in the Investment Strategy and Research team. Mona has had an impressive career and at Stonehage Fleming she will be able to build on her knowledge of investment research, development, and management. Mona understands our integrated approach and we have created this new role in our investment team to match with her skills and experience. She will be a great asset to the Group.”
Mona Shah said: “I am delighted to join Stonehage Fleming in September and work alongside such a talented team. I have been impressed by the firm’s commitment to excellence and strong values. I look forward to contributing to their ongoing success. ”
Mona will join Stonehage Fleming during September 2018.
Endorsing timeless art from South Africa and beyond
Stroll around the exhibitions at the Norval Foundation in Cape Town and you’ll discover not only a thrilling array of sculptures, paintings, craft-based art pieces and compelling digital video, but also what makes good art great: vitality.
The Norval Foundation building itself is architecturally inspiring and competes with the very best international museum buildings. Located adjacent to Table Mountain National Park, the Foundation further combines the experience of art with an appreciation for nature.
Sharing great art from private collections in this public space is the gift of the Norval Family through the Norval Foundation and embodies a true collaboration of art, education and cultural programmes. There is a growing trend amongst philanthropic families to agree the ‘purpose’ of their wealth and, increasingly, this includes leaving a legacy that benefits the wider community. A world-class art collection and cultural destination that the public can enjoy is one such avenue. The Foundation also hopes to serve as a platform for other families looking to realise their own families’ philanthropic objectives.
Stonehage Fleming’s own philanthropic strategy includes promoting excellence in the arts and supporting innovative, educational programmes designed to create a community of like-minded art enthusiasts. Accordingly, Stonehage Fleming is proud to be a Founding Partner of the Norval Foundation.
“Our association with the Foundation reflects our desire to support a sustainable centre for art and cultural expression from South Africa and beyond, and is a natural extension of our clients’ interests,” says Steven Kettle, Partner responsible for Art at Stonehage Fleming in the firm’s London office. Kettle is also an independent trustee of the Norval Foundation in his personal capacity.
Elana Brundyn, the Museum’s Director says, “Stonehage Fleming’s contribution to the museum is invaluable and not only financial. Steven Kettle’s 20 years of experience in advising international families and his passion and understanding of the complexities of building, managing and the strategic planning surrounding an art collection adds tremendous value to the management and promotion of the Norval Foundation.”
“The Norval Foundation is evidence that a passionate, yet disciplined approach to building a collection over many decades yields a collection of real importance. We are very proud to be associated with one of the first museums of international quality in South Africa,” Kettle concludes.
Managing an important art collection and its succession from one generation to another requires a number of skills. Skills that International Multi Family Office Stonehage Fleming has embedded in its offering. The firm has a dedicated team of six art professionals in London and Zurich to assist its international clients with the management of over twenty significant international art collections acquired over the past one hundred years.
Global investing: No such thing as bad timing
Recent studies have revealed that when a disciplined approach to the regular investment of funds offshore is followed, the timing of these transactions is less important than many investors perceive it to be.
Reyneke Van Wyk, Head of Investment Management at Stonehage Fleming in South Africa, confirmed this in an exercise that looked at three international portfolios, each following a different phasing-in approach over a period of 20 years, with all proceeds invested into the MSCI World Equity Index.
In this simulation, the first investor was able to transfer R4 million per annum at the best possible exchange rate each year for 20 years, while the second investor transferred the same amount over the same time period at the worst possible exchange rate each year. The third investor paid no regard to currency fluctuations and transferred two tranches of R2 million each year, in the months of June and December.
When comparing the first two scenarios, the investor who transferred funds at the best possible exchange rate only outperformed the other by an accumulative 12.1% (0.6% per annum) over 20 years.
When comparing to the third investor who transferred R2 million twice a year in consistent months, the difference between this portfolio and the one invested at the best possible exchange rate each year was only an accumulative 4.9% higher (0.2% per annum) over 20 years.
“While the difference between annual performance percentages may be considered nominal,” said Van Wyk, “the effort and luck required to try and time such transactions year in and year out at the best exchange rate over an extended period should not be underestimated.”
Van Wyk adds that, there is also the potential opportunity cost by delaying investment, especially over long periods.
Equity market studies offer insights into the risks inherent in attempting to time equity markets. The best and worst days of performance are often clustered together and given the fact that markets go up over time, the risk of missing out on the best days is the greatest and can have a very negative effect on long-term investment success.
“We are not undermining the importance of being macro-aware,” says van Wyk. “However, at Stonehage Fleming we do not believe that market elements outside of our control should be the main drivers of any long-term investment decision. The focus should rather be on the appropriate long-term investment strategy for the investor.”
“Based on my practical experience advising clients on offshore investments over the past 18 years, the transfer of funds overseas should be carried out in a disciplined manner without yielding too great a concern over currency forecasts. We believe the most effective way to do this is to follow a structured process and it should be done in line with an agreed long-term investment strategy, which has defined any surplus assets available for offshore investment.”
He concluded:
“Investing on a global basis should be a crucial element of any investor’s overall strategy, as it reduces volatility and risk and improves risk adjusted performance in the long term. Stonehage Fleming has previously stated that South African tax residents should be investing 100% of surplus assets internationally, with surplus being defined as all capital not required to live comfortably and run your business within the next 10 years. Investing surplus capital offshore in a disciplined, structured way, is important to ensure positive long-term wealth preservation and growth, with reduced overall risk.”
Inside the investment minds of 14 wealth managers
Kirsten Boldarin
Partner investment strategy & research, Stonehage Fleming, London
Equities will continue to grind higher, but volatility will remain at more heightened levels.
While profits have supported market valuations to date, we do see evidence of stretched expectations, in particular within the technology sector. We therefore want to own long-only managers where valuations are a key criteria in their stock selection process, particularly in the US. In addition, we have allocated more capital to long/short equity managers.
These managers can tactically adjust their net exposure and potentially capture alpha from higher levels of stock dispersion as the more momentum driven QE rally starts to fade.
We have exited our dedicated high yield bond exposure as the return for risk taken is less favourable.
We naturally avoid more complex strategies and structures, but as we enter the later stages of the cycle, we think this will be an important differentiator.
Endorsing timeless art from South Africa and beyond
Stroll around the exhibitions at the Norval Foundation in Cape Town and you’ll discover not only a thrilling array of sculptures, paintings, craft-based art pieces and compelling digital video, but also what makes good art great: vitality.
The Norval Foundation building itself is architecturally inspiring and competes with the very best international museum buildings. Located adjacent to Table Mountain National Park, the Foundation further combines the experience of art with an appreciation for nature.
Sharing great art from private collections in this public space is the gift of the Norval Family through the Norval Foundation and embodies a true collaboration of art, education and cultural programmes. There is a growing trend amongst philanthropic families to agree the ‘purpose’ of their wealth and, increasingly, this includes leaving a legacy that benefits the wider community. A world-class art collection and cultural destination that the public can enjoy is one such avenue. The Foundation also hopes to serve as a platform for other families looking to realise their own families’ philanthropic objectives.
Stonehage Fleming’s own philanthropic strategy includes promoting excellence in the arts and supporting innovative, educational programmes designed to create a community of like-minded art enthusiasts. Accordingly, Stonehage Fleming is proud to be a Founding Partner of the Norval Foundation.
“Our association with the Foundation reflects our desire to support a sustainable centre for art and cultural expression from South Africa and beyond, and is a natural extension of our clients’ interests,” says Steven Kettle, Partner responsible for Art at Stonehage Fleming in the firm’s London office. Kettle is also an independent trustee of the Norval Foundation in his personal capacity.
Elana Brundyn, the Museum’s Director says, “Stonehage Fleming’s contribution to the museum is invaluable and not only financial. Steven Kettle’s 20 years of experience in advising international families and his passion and understanding of the complexities of building, managing and the strategic planning surrounding an art collection adds tremendous value to the management and promotion of the Norval Foundation.”
“The Norval Foundation is evidence that a passionate, yet disciplined approach to building a collection over many decades yields a collection of real importance. We are very proud to be associated with one of the first museums of international quality in South Africa,” Kettle concludes.
Managing an important art collection and its succession from one generation to another requires a number of skills. Skills that International Multi Family Office Stonehage Fleming has embedded in its offering. The firm has a dedicated team of six art professionals in London and Zurich to assist its international clients with the management of over twenty significant international art collections acquired over the past one hundred years.
Global investing: No such thing as bad timing
Recent studies have revealed that when a disciplined approach to the regular investment of funds offshore is followed, the timing of these transactions is less important than many investors perceive it to be.
Reyneke Van Wyk, Head of Investment Management at Stonehage Fleming in South Africa, confirmed this in an exercise that looked at three international portfolios, each following a different phasing-in approach over a period of 20 years, with all proceeds invested into the MSCI World Equity Index.
In this simulation, the first investor was able to transfer R4 million per annum at the best possible exchange rate each year for 20 years, while the second investor transferred the same amount over the same time period at the worst possible exchange rate each year. The third investor paid no regard to currency fluctuations and transferred two tranches of R2 million each year, in the months of June and December.
When comparing the first two scenarios, the investor who transferred funds at the best possible exchange rate only outperformed the other by an accumulative 12.1% (0.6% per annum) over 20 years.
When comparing to the third investor who transferred R2 million twice a year in consistent months, the difference between this portfolio and the one invested at the best possible exchange rate each year was only an accumulative 4.9% higher (0.2% per annum) over 20 years.
“While the difference between annual performance percentages may be considered nominal,” said Van Wyk, “the effort and luck required to try and time such transactions year in and year out at the best exchange rate over an extended period should not be underestimated.”
Van Wyk adds that, there is also the potential opportunity cost by delaying investment, especially over long periods.
Equity market studies offer insights into the risks inherent in attempting to time equity markets. The best and worst days of performance are often clustered together and given the fact that markets go up over time, the risk of missing out on the best days is the greatest and can have a very negative effect on long-term investment success.
“We are not undermining the importance of being macro-aware,” says van Wyk. “However, at Stonehage Fleming we do not believe that market elements outside of our control should be the main drivers of any long-term investment decision. The focus should rather be on the appropriate long-term investment strategy for the investor.”
“Based on my practical experience advising clients on offshore investments over the past 18 years, the transfer of funds overseas should be carried out in a disciplined manner without yielding too great a concern over currency forecasts. We believe the most effective way to do this is to follow a structured process and it should be done in line with an agreed long-term investment strategy, which has defined any surplus assets available for offshore investment.”
He concluded:
“Investing on a global basis should be a crucial element of any investor’s overall strategy, as it reduces volatility and risk and improves risk adjusted performance in the long term. Stonehage Fleming has previously stated that South African tax residents should be investing 100% of surplus assets internationally, with surplus being defined as all capital not required to live comfortably and run your business within the next 10 years. Investing surplus capital offshore in a disciplined, structured way, is important to ensure positive long-term wealth preservation and growth, with reduced overall risk.”
Inside the investment minds of 14 wealth managers
Kirsten Boldarin
Partner investment strategy & research, Stonehage Fleming, London
Equities will continue to grind higher, but volatility will remain at more heightened levels.
While profits have supported market valuations to date, we do see evidence of stretched expectations, in particular within the technology sector. We therefore want to own long-only managers where valuations are a key criteria in their stock selection process, particularly in the US. In addition, we have allocated more capital to long/short equity managers.
These managers can tactically adjust their net exposure and potentially capture alpha from higher levels of stock dispersion as the more momentum driven QE rally starts to fade.
We have exited our dedicated high yield bond exposure as the return for risk taken is less favourable.
We naturally avoid more complex strategies and structures, but as we enter the later stages of the cycle, we think this will be an important differentiator.