FUND STRATEGY
Our outcome-oriented funds combine and optimize a broad number of asset classes along clear themes such as yield, low volatility, and absolute growth.
MS ARM Ltd., builds client portfolios using a “manager of managers” approach, either through our own multi-manager funds, or through custom portfolios made up of third-party managers selected to meet the client’s needs. Our methodology for building funds follows a four step structured process through which we have developed a very unique, carefully structured group of funds that that provide a solid framework for implementing asset allocations for our clients. Importantly, our anlaysis considers net of fee performance; as a "manager-of-managers" we do not double dip on fees and are fully transparent in our cost structure.
“A business has to be involving, it has to be fun, and it has to exercise your creative instincts..”
Richard Branson
Step 1: Assss Opportunities
Our outcome-oriented investment philosophy makes style a secondary consideration in selecting managers, but analyzing style periodically helps assess whether the manager invests as he claims and helps us predict the types of markets in which the manager is likely to perform relatively well or poorly. We use both holdings-based style and returns-based style analysis techniques to assess the style of the manager.
We analyze manager style and portfolio risk using historical performance, but we do not limit ourselves to a performance-based analysis. We feel that it is very important to analyze how money is being invested in order to fully explore both the investment manager’s style and the potential risk exposures.
Step 2: Determine Optimal Strategy
Our investable universe spans all asset classes, styles and geographies. The broader opportunity set allows us to gain the maximum diversification benefits and take advantage of opportunities that will benefit each of our funds.
We have a number of quantiative propietary risk measures we use to screen potential asset classes to understand how they may impact the risk and return profile of our funds. All of them relate to the desired outcomes for the particular fund in question.
Step 3: Select Managers
Having conducted a broad range of searches across the alternative asset universe, we can capitalize on its unique relationships with specialized, best-in-class managers. We have developed a scoring system that provides a comprehensive and structured approach to assessing asset managers. In our scoring, we follow a comprehensive and structured approach to assessing each asset manager. Our quantiative analysis is always complemented by the face-to-face meetings and due diligence we perform on each of our prospective underlying managers.
Step 4: Monitor
After we have folded a manager into our product we will continuously monitor the performance of the fund and the underlying managers against our specific risk metrics. We closely monitor that the underlying managers continue to deliver on the mandates for which they were retained and they are not experiencing any organizational, personnel or performance issues that would raise “red flags”. As importantly, we methodically review that our investment thesis for combining underlying managers remains intact and performance is not being diluted through over diversification or, as importantly, the fund does not have unanticipated concentration risks in certain sectors or holdings when managers are combined.