We set out in 1999 to challenge the status quo in asset management and launched a long/short fund focusing on the shipping industry.
Having been around the block for some 30 years, we believe we’ve gained some investment-related wisdom, business acumen and perspective that is valuable for our investors, investment teams and all the people we reach with our business. Since launch, we have experienced both ups and downs and learned to distinguish between the true skills of an investment manager and the performance that is just coming from a favourable market environment. Things are not always what they seem and patience is one of the main virtues of successful portfolio management.
As business partners, our quest - finding ways of fundamentally improving existing investment practices - remains steadfast. Such improvements are not about algorithms, optimizations or Sharpe ratios. We believe capital markets are complex mechanisms that should not be approached with complex investment strategies seeking optimal outcomes. It is unwise to focus on the outcomes of complex systems as it is only the investment process that we can control. Although we do believe in using the most powerful investment tools, we view investing as a fundamentally human pursuit, albeit assisted by the power of the machine.
The industry’s hard-line partition between asset owners and asset managers has always left us perplexed. We are naturally not oblivious to the ‘agency problem’ and investors’ peculiar situations but - at the very core - it’s clear we are investors too: we have the same range of goals as our fellow investors, the same potential investment universe and tools, we face the same challenges, day-in-day-out. We are about building long-term partnerships with our independent investment teams, which enables us to build mutually rewarding relationships with our fellow investors.
Improving investment practices comes from being open-minded about new methods, while retaining the old ones that have been tested over time by gyrating markets. It takes building processes and relationships that are off the beaten path. It takes challenging the status quo. Above all, it takes a relentless commitment to always doing what is best for our investors.
In our pursuit of finding better ways to invest, we have evolved into a multi-boutique asset manager. At the core of our approach are two beliefs. Firstly, excess returns necessitate focus, be it by geography, industrial sector or investment approach and process. Secondly, successful asset management requires investment managers to have real ‘skin in the game’. This goes beyond simply being invested in the funds they manage: true alignment comes from holding a significant equity stake in their management company, so that losses in their portfolio have a potentially bigger impact on their personal wealth.
Having been friends since we first met in the kindergarten more than 50 years ago, we enjoy the strength coming from mutual respect, and because we control ‘our house’, we have the freedom and privilege to stick to our approach. This guarantees our investment partners the freedom to pursue their strategic investment approach, regardless of trends, fads or short-term pressure. Consequently, we have identified, attracted and partnered with a number of highly talented investment managers who share our long-term vision and had been searching for a house where they could express their convictions and build performance for the long run. All this, to the benefit of all investors, inside and outside Sector.