Our Approach

Amongst other issues, the review considers and details:

• the size and structure of the current investment portfolio
• any existing investment guidelines and objectives
• the size and timing of expected inflows and outflows
• the client’s tolerance and understanding of risk
• profiles of the main beneficiaries and/or stakeholders
• any ESG, ethical perspective and/or desired sustainable impact
• the client’s own investment expertise and/or desire to be involved
• how decisions are to be made and discretion delegated between the fund manager(s), the client or their trustees
• the effects of any tax guidelines on investments held
• the structure’s total expense ratio

Risk Control is critical - conventional risk analysis concentrates on market volatility and liquidity.  We consider a further eight key risks.

AMps, our proprietary approach, enables us to model outcomes under different risk guidelines.

Risk Guidelines are explicit covering all aspects of exposure whilst still maintaining the flexibility and dynamism necessary to achieve the optimum risk adjusted investment returns.

Investment Objectives are set that are realistic and demanding given the range of opportunities available.

AMps, uniquely, allows multiple, and mutually achievable investment objectives to be set, that can be subsequently, accurately monitored. Typically, these will include an absolute real rate of return target (to preserve real capital) and an above median performance versus the range of market returns available under the investment guidelines. This should be contrasted with the standard approaches to investment objectives being relative to a market benchmark or a peer group, which can restrict potential returns.

Sustainable investment objectives will be set for the portfolio where these have been agreed and the client’s ethical and sustainability goals written into client guidelines.

Successful investment structures

This is an area that is little understood and rarely addressed. It is how the risk budget for the total portfolio is delegated down to the managers or funds.

A successful investment structure:

• contains risk within the profile established by the investment guidelines
• maintains dynamism, diversification and access to specialist skills
• meets the investment and sustainability objectives in a cost-effective manner
• flexibly determines the asset allocation through the way managers and funds interface
• complements client assets held outside the investment portfolio
• critically diversifies key decision-making to specialists within the structure.

A comprehensive search for appropriate discretionary managers, funds or investment products to fill identified slots in the investment structure. A review of existing fund managers that are retained. IAM’s independence ensures a completely objective selection process.

The process involves both detailed quantitative analysis and qualitative review and culminates in clear recommendations with a full information file and rationale for any recommendation. We draw on a database of over 36,000 conventional funds and fund managers and 26,000 alternative funds. All portfolios are checked for ESG ratings via sustainable rating agencies. Managers' approach to ESG and sustainability are incorporated into this search from the outset as determined by client preferences.

As well as internally generated ideas, we will also consider investment suggestions from clients and other sources and will undertake a full research review and make recommendations where appropriate.

Once approved we provide full assistance through the implementation process, which will include drafting guidelines, assisting with the negotiation of fees, reviewing investment management agreements insofar as they relate to our investment advice, and advising on cost effective transitions between different managers or funds and the tactics of reinvestment.

We control risk with AMps, our unique proprietary software, which enables us to assess managers directly against their mandates rather than comparisons against benchmarks or peer groups that might or might not be appropriate and are performance rather than risk driven.

The monitoring process is intuitive in so far as it ‘grades’ managers’ performance on a score of 1-100, over a range of statistical measures so that failure or success is quickly and effectively identified. Returns that are outside expectations either poor or indeed too good are possible indications of a breach of risk guidelines

Cost control is an important part of returns. IAM negotiate and control all costs associated with the management of client portfolios. Returns are always measured net of fees.

The Monthly Report

Our service includes a monthly report. The level of detail contained within the report is tailored to clients’ individual needs and includes sections on:

• the market background
• key investment issues
• outstanding action
• strategy implementation
• allocation and movement of assets
• risk exposure
• relevant ESG reporting and impact statements
• absolute and relative performance figures
• factsheets on individual investments etc

We have found that our clients often come to regard our reports as the authoritative single source for understanding and managing their affairs from an investment perspective.

Internal Review

Each account’s monthly report is reviewed internally by the client team with action points raised through the report and relayed directly to the client.

Manager Review

Our standard procedures also include a pro forma programme to review managers or funds in regular meetings, often attended by the client. Our relationships with managers are proactive and dialogue-based rather than a mere assessment of performance statistics. The objective is to improve the manager's performance and/or identify issues of concern and address these at an early stage.

Client Review

Regular meetings are also held with the client to ensure that they are kept informed of developments on the portfolio and we are kept up to date on any changes in their circumstances or risk profile. This includes updates on inflows or withdrawals, etc., which will have investment implications.

We have access to market-leading research and we collate this and adapt it for each portfolio to deliver thought-provoking presentations at a level appropriate to each client. These presentations are often regarded as a highlight of the service. We regard knowledge transfer to be an important part of our service.