As mentioned in a note at the end of last month, today marks the last trading date for Sanlam’s High Income Real Return Fund with the fund due to officially close at the end of the business day. The fund has sold down all assets to cash and is in the process of returning this cash to unitholders. With orders having been placed to reinvest your monies, we are now able to disclose, as promised, the replacement strategy which we have selected for you.
New Fund Selection –
The fund we have identified as a replacement remains under Sanlam’s umbrella with their award winning Multi-Strategy offering run by experienced fund manager Mike Pingerra and dedicated risk manager Jaden Badenhorst.
Fund Objective: CPI + 4% whilst limiting drawdowns in the short term
The fund combines thematic and systematic investment strategies aimed at generating long-term positive returns with a target of CPI + 4%. The goal of the strategy in the short term is to achieve positive returns whilst limiting drawdowns.
Investment Philosophy: “Participate when you can and defend when you need to”
The fund employs a diverse range of strategies to help the fund unearth attractive opportunities and spread risk. Aiming to deliver a smoother path to “equity like” performance. Defensively positioned whilst able to participate in periods of positive trends.
Investment Approach:Multi asset approach; bonds, equity, real assets
As the name of the fund suggests, the manager takes a Multi asset approach with three broad strategies: Bonds, Equities, and Real Assets. As an absolute return fund, the manager focuses on short, medium and long-term challenges.
Short Term – Volatility: Short duration corporate bonds, equity momentum, option overlays
Medium Term – Liquidity: Equity Synthetic, Relative pairs (Alpha), Benchmark government bonds
Long Term – Inflation: Infrastructure, Renewable Energy, Housing
Portfolio Fit:
We believe the Multi Strategy Fund ticks many boxes for inclusion in Tideway’s portfolio offering representing a best-in-class strategy which fits in exceptionally well alongside existing managers and with the characteristics we are looking for in our alternatives bucket, both from an asset class and return profile perspective:
– Alternatives allocation: Large percentage of the portfolio in Real Assets making it a natural fit in the alternatives bucket of Tideway portfolios.
– Different Return Profile: Stands out in an absolute return sector which has had significant negative press with its systematic approach to risk management. Should provide additional security in a market sell off with a different return profile from other funds in our portfolios. The fund is designed to work across various market environments. The greatest relative performance is expected in periods of market weakness where the fund will move to a defensive position with best absolute returns are expected after a period of weakness where the fund can reinvest quickly and fully.
– Equity like Returns: Aiming for equity like returns despite not being a pure equity strategy
– Strong Track Record:Camradata Awards Winner 2020 for Diversified Growth Funds category. Five-year track record versus benchmark and peer group shown below:
Manager Biographies:
Mike Pingerra: Multi-asset specialist with 12 years sourcing Real asset opportunities
Mike joined Sanlam in January 2013 to develop a multi-strategy proposition. Previously, he headed up the multi-asset group at Insight Investments. Before this, Mike spent 20 years at Credit Suisse in senior positions including head of special mandates and head of trusts & charities in the asset management and private banking divisions. As head of multi-asset solutions there, Mike managed a team of 14 with responsibility for £5bn. of assets.
Johan Badenhorst: Brings dedicated risk management expertise to the team; key to the strategy
Before joining Sanlam in November 2012 Johan was at J O Hambro Investment Management for 11 years in various roles including operations manager, performance and risk analyst and project manager where he was responsible for building the derivative infrastructure, as well as oversight on market risk and global derivative risk monitoring. He holds the IAQ, CISI Diploma in Financial Derivatives and has passed Level 1 of the CFA Program.
Sanlam Fund Range:
Finally, to ease fears of concentration within Sanlam strategies we would point out the following: Within Sanlam Investments there is no central house view or investment process with each team having the freedom to focus on the distinct investment ideas within their area of expertise. Although bearing the same brand name as the Credit and Hybrid strategies (which have separate managers in their own right) which we are currently invested in, there is no crossover of management or strategy, except for that each of the funds leverage off Sanlam’s wider operational infrastructure and risk management systems. Under this model, Sanlam currently run a combined £7bn. of assets in the UK, across 18 funds run by nine independent teams.
Should you have any questions or if you would like more information regarding any of the above then please do not hesitate to get in contact with your Wealth Manager.
