Our Capabilities

This page summarises our investment process in the three major areas that any investor needs to address:

• Asset Allocation: Strategic Asset Allocation has become more important as markets have become more complex and the number of accessible investment vehicles has grown. Establishing sensible allocations to not only equities and bonds, but also to real estate, hedge funds, or commodities, significantly impacts the risk and return expectations of a portfolio.
• Adapting the portfolio’s asset allocation, flexibly and timely, to a changing macro- and market climate is the purpose of Tactical Asset Allocation. An effective combination of tactical and strategic asset allocation is the essential success factor of any investment portfolio.
• Manager Selection and Monitoring: Most portfolio managers fail to do better than their market’s index; identifying those that do add value requires thorough research. At Altis, manager selection isn’t just about finding the next star manager. The ability to reject managers that start to deliver sub-standard results or start to take excessive risks is at least as important.
• Risk Management: A portfolio that combines a range of different managers and assets is difficult to oversee, creating a real need to integrate risk management in the investment process. Without risk management, flexibility in asset allocation is almost impossible to realise.

The illustration below shows how Manager Selection and Tactical Asset Allocation are interlinked. Just selecting the best specialist portfolio manager in each market is not enough. Finding the “best fit” between the manager and a particular investment opportunity is often far more important. Therefore, in a very real way it should be the market climate that dictates which portfolio managers should be selected. And vice versa, it is the availability of competent portfolio managers that allows suitable investments in particular markets. It’s a process that requires continuous monitoring and managing as markets are ever more dynamic and investment opportunities can be fragile.

The synergies between our capabilities (click image for a larger version)

The bridge that connects Manager Selection and Asset Allocation is Risk Management. An effective risk management system allows efficient implementation. Without such a system, “you own a map without a compass”: investment opportunities would thus get lost at the implementation stage.