Geneva Forum – Risk, Absolute Return, Asian bonds and Latin America
Delegates to the Geneva Forum heard in depth views on opportunities and challenges around Risk, Absolute Return, Asian bonds and Latin America.
InvestmentEurope’s Geneva Forum was backed by Newton, part of BNY Mellon Asset Management, Henderson Global Investors, Legg Mason Global Asset Management, MFS Investment Management and RWC Partners.
Suzanne Hutchins is the co-manager of the Newton Global Real return fund, a multi-asset absolute return strategy, structured as a Ucits III fund, which is proving resilient in uncertain markets. Against what Hutchins calls the “conceptual wallpaper” of Newton’s ongoing global investment themes, the fund invests in a single portfolio of individual securities.
Capital preservation is a key objective. “Our attitude to risk is that it is not a mathematical concept, it means real loss of wealth,” she explained. “Our first question with any opportunity is ‘What is the risk I will lose money?’ and the next is ‘Will it generate Libor plus 4% per annum?’. The fund has produced positive returns in every year since inception in 2004.”
Following the collapse of interest rates in the last two decades, the world is experiencing the start of “the great moderation”, a return to the patterns of the 1920s and 1930s. “Investors will have to modify their expectations about what they are likely to be able to achieve,” she said. She prefers simple, repeatable strategies that follow a clear process.
RWC Partners’ Priya Kodeeswaran believes change offers investors great opportunities via long short equity strategies. His $15m Ucits absolute return fund focuses on the perceptions regarding rapidly changing and innovating companies. “The best alpha opportunities are to be found where there is technological, competitive or demographic change, and the market is inefficient in understanding what is happening,” he notes.
With more than 15 years experience with Cheyne Capital, Avocet Capital and Morgan Grenfell, he models the disparities between analysts’ views of certain companies and then does his own research to identify what they might have missed, and why.
RWC has a record of backing specialist managers. With its independent structure, where most of the firm’s equity is held by portfolio managers, (alongside a 30% holding by Schroders), there is a strong risk management culture.