Our Approach

Altis manages ‘multi-manager, multi-asset’ portfolios for its clients.

• Multi-Asset: portfolios are diversified conventional portfolio assets (equity, fixed income) with suitable allocations to alternative assets (property, private equity, hedge funds, commodities)
• Multi-Manager: as an independent fiduciary, we delegate our investment management to a combination of external portfolio managers, who are each selected as ‘best of breed’ in their market segment or specialist area.
• Active-Passive: in contrast to conventional multi-managers, Altis makes extensive use of passive investments in market segments where active portfolio management (‘stock picking’) does not add value.

Conventional Portfolio vs. Multi-Asset Portfolio (click image for a larger version)

Altis fullfils its role on the basis of risk management. After establishing the overall investment strategy and the initial selection of portfolio managers, we are responsible for monitoring the individual portfolio managers and guarding the risk exposures of the overall portfolio of our clients.
The risk management platform is a core capability that distinguishes Altis from its peers. With this platform we monitor the individual positions of the selected managers. And with the same information we are able to aggregate the risk exposure of the client’s total portfolio.
Frequently portfolio risks are measured in relation to the liabilities or spending goals that the portfolio must cover. In this respect, Altis defines itself as a manager that implements Asset Liability Management – rather than focus solely on return ambitions.

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The Fiduciary Business Model

For both manager selection and the active/passive decision, our business model is of great importance. Altis is structured as a fiduciary, which in practical terms means that it cannot have a financial benefit in recommending any particular manager or investment. Our only revenue is the client fee.

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Performance, Risk and Cost Benefits

The ‘multi-asset, multi-manager’ fiduciary model has some clear benefits over the conventional ‘single manager’ model:

• Portfolio Quality:
  - the use of specialist portfolio managers maximises the expertise at work in the portfolio
  - Altis employs an experienced team dedicated to asset allocation and risk management
• Risk Reduction:
  - manager-specific risks are spread out across multiple portfolio managers
  - market risk is diversified by using a far broader mix of asset classes and
  markets than any ‘single manager’ could credibly cover
• Cost-effectiveness:
  The pragmatic use of passive investments and collective fee negotiations with specialist managers makes a fiduciary solution very cost efficient

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The Need for Transparancy

A portfolio that combines many different vehicles and assets is hard to oversee, creating very real issues in risk management. The purpose of using a diversified mix of managers and assets is to reduce risk, yet lack of transparency may lead to unmanaged exposure concentrations and consequently unpleasant surprises. To eliminate this problem, Altis has developed systems to integrate portfolio holdings from various sources to analyse the overall risk exposure on a regular basis.

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