Investing from Cash

Following an influx of capital there are many areas that require focus.

In many cases clients will be provided with a lot of information about investment options. A clear policy including specific detail about ongoing requirements for income and capital is important.

Understanding risk and capacity for it is essential as this will often change. Involving stakeholders such as spouses or children can also be important at this time.

We work with clients to understand these objectives and tailor an investment policy, stating clear objectives and requirements, which can then form the basis for future strategic planning.

Setting Investment Policy

Having a clear set of goals which all stakeholders are bought into is vital. We work collaboratively with clients, their advisors and investment managers to establish investment policy. As well as setting clear, realistic and measurable objectives, a modern investment policy typically includes details of any restrictions, preferences, and approach to environmental, social and governance considerations.

Once established, we document this in a comprehensive Investment Policy Statement, to act as a ‘blueprint’ for decision making and to communicate the policy to all relevant stakeholders, including the investment managers.

Portfolio Review

There can be concerns about existing arrangements, whether these are investments that are self managed, delegated to discretionary investment managers, or both.

There is a whole spectrum of reasons why investments are reviewed – from clients wishing to satisfy themselves that they are obtaining the best service for beneficiaries or other stakeholders; through clients with a nagging feeling that something just isn’t right; to those dealing with poor investment performance. The scope of the review is tailored to each client’s requirements to ensure that it directly addresses their concerns and provides them with answers to their questions.

It is important to meet with clients, their advisers and often managers, face to face, to gather their views and identify any particular successes and issues that have arisen in relation to the portfolio. The review is then undertaken covering all aspects of the current investment arrangements, providing detailed commentary and specific recommendations as to how improvements could be made.

Following this we can assist with implementing change to the strategy, ranging from minor tweaks through to wholesale strategic re-evaluation.

Manager Search

Following a review or a significant influx of capital new managers may need to be appointed.

At the outset of any search it is important to ensure that any investment arrangement is appropriate and transparent and that the investment managers and clients understand each other’s needs, opinions and limitations clearly.

Once objectives are clear then the search process itself has a number of stages, from desktop research, through to discussions with managers, review and analysis and ending in face to face meetings with the client and managers.

Manager search exercises can be complex logistical affairs, particularly when you are dealing with charities or family groups with many stakeholders. Tailored scorecards, separate meetings, clear structure, experience and context are important in managing this process.

It is important to come out of the process with a clear decision. We are directly authorised and regulated by the FCA and so are able to make clear recommendations.

Ongoing Monitoring

The selection of the right managers and investment strategy are key steps, but in the initial phases of deployment and indeed on an ongoing basis any small divergence can become exaggerated over time, or “mission creep” can appear as team members change and market conditions alter.

Investment managers undertake the day to day running of portfolios and provide comprehensive reports but often there should be independent oversight. In many cases managers should not be “marking their own homework”.

We have developed Jellyfish®, a data visualisation tool which complements our proprietary reporting package. This is designed to sit alongside manager reports and gives a comprehensive overview at both an individual and consolidated manager level. Report content is tailored to individual client need.

Private Markets

Investors such as charities, family offices and those with intergenerational private wealth have the ability to take a long term view on investing and this enables them to access different markets such as private equity, private debt and real estate.

We approach the private markets in very much the same way as the public markets completing research across the sector and helping clients understand the routes to market and the risks involved.

Sustainable Investment

There is a global drive towards greater sustainability and companies that do not address this may be left behind. In our view, understanding this area is an important risk management consideration for long term investors.

We have worked on a number of mandates with specific sustainability, environmental and social impact objectives. A recent example is building out a portfolio of these assets alongside the more traditional investment portfolios already in place for a client.

This is an area where one size really does not fit all. Clients will have their own interests and abilities to access different markets. A comprehensive approach, which complements the rest of a client’s wealth, is important.

Investment Committee

A strong investment committee with a clear role is an essential part of investment management for large charities and family offices. It becomes increasingly important as the number of stakeholders rises and can be an effective tool in improving portfolio implementation and management. It is important that these committees remain focussed on their role and objectives.

We work with clients and their advisers on the set up, management and ongoing operation of investment committees.

We also sit on a number of investment committees, in some cases combining this role with ongoing monitoring.

Bespoke Projects

While the above points represent some of the issues that often arise we recognise that each set of circumstances is different.

Over time one off bespoke projects do arise and we undertake these where we believe that we can add value to the client and stakeholders.

Recent examples of these type of projects include:

• the one-off facilitation of family meetings where difficult investment decisions need to be made;
• the creation of fund structures such as Open Ended Investment Companies (OEICs);
• the outsourcing of the investment function of a single family office;
• currency issues, such as investment from, or into, multiple currencies; and
  cashflow planning to deal with unexpected requirements.

Charity Review and Monitoring Service

Charity trustees face many of the same issues as other investors, such as setting an appropriate investment policy, reviewing portfolio performance, and monitoring investment managers. They also have to consider other distinct elements such as their tax regime, governance framework, regulatory environment and often a large number of (perhaps unidentified) stakeholders.

For this reason, we offer an investment consulting service which is tailored to each charity’s circumstances.