The Hanseatic Group is genuinely different from many of its competitors in the asset management industry. This difference exists for a purpose – the generation of real positive returns on invested capital. We invest, in effect, as principal which differs significantly from most asset management organisations for whom the establishment and building of fee based business is their primary rationale.
The key differences are:
- A willingness to address the broadest asset allocation mandates. We consider whether to invest, where to invest and when to invest. Currency exposure and asset allocation between categories of equities, bonds and cash are all considered. Principal investors cannot ignore these issues.
- A willingness to sub-contract within asset allocation choices to specialist managers. We do not maintain a full range of top rated expertise in every category of asset management. No organisation does. We do however have a considerable degree of professional experience to draw on in identifying and monitoring “best of breed” managers within individual disciplines. We also subscribe to what we consider to be the best of the independent research available.
- We earn no fees from distribution on corporate advisory work. We earn fees only on invested assets and performance fees only arise from positive performance.
Our objective is to protect and grow your capital over the long term. We believe the best way to achieve real returns is by creating portfolios that are diversified across asset classes and geographies. Free from the complexities often associated with large organisations, we are guided by the following qualities:
We invest for the long term, which means we avoid reacting to short - term market noise. This approach enables us to invest in less liquid asset classes, such as private equity, which can outperform public markets over longer periods.
We move between the different asset classes to reflect changing conditions in the global economy and the investment environment, and respond to changes in financial market valuations.
We invest in our own strategies, and seek out third - party managers who, preferably, are sizable investors in their own funds. This approach ensures interests are aligned and encourages investment success over asset gathering.
We express our investment views using exceptional managers, who we identify through an experienced research team and an extensive global network of contacts. Typically, many of these funds are not available to individual investors.
Where many managers are constrained by benchmarks and complex internal procedures and committees, we seek to invest in a flexible manner, by making and implementing decisions swiftly.
The Hanseatic group is different because of deeply held convictions about the nature of asset management founded over many years. These include:
- Diseconomies of scale. Successful managers become unsuccessful when their success attracts greater volume of funds under management than their style or approach can reasonably accommodate. For investors, successful managers suffer diseconomies of scale which destroy returns. Consequently we are prepared to consider smaller specialised managers and even start ups managed by experienced professionals.
- Asymmetry of risk. Conventional asset managers fear the risk of peer group underperformance. Hanseatic fears the loss of its own and its clients’ money. A conventional manager is incentivised not to stray too far from the competition. Hanseatic is not.
- Rewards for unconventional decisions. Investors as principal can take advantage of the anomalies created by commercial pressures on conventional asset managers by taking unconventional decisions.
Our investment process involves a rigorous assessment of the macroeconomic environment and outlook for investment returns. We seek to identify opportunities and risks, which guide our investment thinking and inform our decisions.
Asset allocation lies at the heart of our process for building and managing discretionary portfolios - blending asset classes and strategies based on their expected returns and the way in which they interact with each other. We have a consistent framework to identify changes and developments in the global economy and financial markets. This provides us with the information we require to move between asset classes to reflect valuations and the position within the business cycle.
Portfolio construction and manager selection
We construct portfolios that are appropriate for your needs and objectives, and implement out investment views through the most effective structures, often combining both active and passive third - party funds. Leveraging the power of our network, we have access to high - quality managers who are not typically available to individual investors. In turn, these funds appreciate our long - term approach.
We also have the flexibility to invest in funds at an early stage and capture an opportunity when we identify a clear investment edge. This versatility contrasts with larger investment managers, which are often restricted by the size of the assets they manage and their internal risk policies.
Measuring and monitoring risk performance
Although we are free from a traditional corporate hierarchy, we have high standards of intellectual rigour, governance and attention to detail. This includes monitoring and measuring performance and risk at both a portfolio and individual manager level. We combine our rigorous due diligence processes with the application of experience and common sense.