Cardea fund of funds model aims to protect client assets
Per-Olov Jansson founded Cardea International to provide investors with an alternative to long-only bond and equity investments.
Per-Olov Jansson (pictured), a Swedish national living in Vienna and founder of Luxembourg-domiciled Cardea International, established his asset management company in September 2010.
Jansson has a wealth of experience in banking, wealth management and asset management. His experience and contacts have enabled him to establish his own client base – mostly composed of high-net-worth individuals in central Europe and the Middle East.
Cardea’s flagship is the Mosaic Global Fund. Jansson named his company Cardea after the Roman goddess that protects households. He underlines the importance of protecting and growing clients’ wealth. “I would not be happy if the benchmark was down by 50% and we were down by 13%. The clients would not be happy either.”
Jansson wanted to challenge the wealth management industry’s traditional focus on long-only stocks and bonds. By setting up Cardea, he hoped to provide “a different type of solution for fluid high-net-worth distribution channels”.
This led him to conclude that multi-manager and multi-asset class investing was the best model for his client base.
The Mosaic Global Fund is a boutique multi-asset fund of funds that targets long-term capital growth through active and flexible asset allocation to minimise market volatility.
The fund invests in a selection of funds holding traditional stocks, bonds, commodities, real estate and alternative investments.
Jansson has overall responsibility for asset allocation, but his team includes a portfolio manager and a quantitative analyst.
Their work includes a lot of direct contact with Mosaic’s 25 underlying fund managers.
A significant proportion (38%) of the fund’s assets are allocated to alternative managers. These managers do not need to be a big name, Jansson says, but will need at least €100m under management and a three-year track record.
Jansson outsources due diligence on these managers to a third party because he believes this is a safer way of assessing them. “A third party will not be influenced by liking a manager,” he explains.
Jansson does not like to guess which strategies might best perform in the current market turbulence, noting that it “is very dangerous to forecast and take strong views”.
The key strategies represented in the absolute return allocations are global macro, equity long/short, event driven and managed futures.
Despite this, Jansson does have a “personal favourite”: managed futures. They have provided investors with diversified performance over the years and balance out the volatility in equities, Jansson argues.
To date, the strategy is down 0.46% on the Barclay CTA Index – significantly better than the HFRI Fund Weighted Composite Index negative return of 1.22% year to date.
According to Barclayhedge, managed futures’ correlation to the S&P 500 since 1980 is just 0.02.
Despite its diversified holdings and risk management processes, the fund’s performance will suffer in some months, he admits.
He was happy with its performance in August, despite the fact that all of its dollar, euro and sterling share classes were down by 4% to 6%.
“We never want to lose money. But in the framework of what we do, if markets fall you will lose some money,” he concedes.
Jansson copes with this volatility by having a stringent investment plan. Investors should focus on the process and not the outcome,” he argues.
“You need a framework for managing money. You can’t just randomly buy funds and hope they will make you money.”
His investment plan also includes mixing passive (via ETFs) and active (via manager selection) management.
Jansson predicts the Mosaic fund will generate positive returns of 1% to 2% by the end of the year.
Even if returns are flat, he will be satisfied because, he says, “protecting clients’ assets in very difficult times” is his top priority.