The asset management industry is evolving fast. Globalisation, technological advances, ever tighter regulations, changing wealth patterns, and investors with more sophisticated expectations put increasing pressure on asset managers. And that’s even before the challenges posed by financial markets are addressed.
To stand out in such a competitive landscape requires intelligence, imagination and a willingness to adapt to investors’ needs. As such, it is gratifying for Managing Partners Group (MPG) to receive recognition of this by receiving “Alternative Investment Firm Of The Year – Europe” in this magazine’s Global Banking & Finance Awards 2018.
Today’s investors are looking for investment products that go beyond those focused on equities and bonds. These asset classes currently face challenging times. Headwinds are gathering against them, with interest rates set to continue rising as monetary policies tighten and quantitative easing tapers in developed markets.
Investors increasingly seek alternative asset classes
Investors have been seeking alternatives to the main asset classes since they sank in unison during the global financial crisis. But the need to do so seems even more pressing now than 10 years ago because of the gathering headwinds.
Investors are looking even harder for solutions that provide innovative alternatives to traditional asset classes. They are willing to stay invested for longer, if that enhances returns and risk controls.
Investors are mostly risk-averse but low interest rates have meant many of them are turning to low-risk products that still generate inflation-beating income – a specialist area for MPG.
Low volatility with regular income and capital growth
MPG is a multi-faceted investment house that specialises in managing alternative asset classes for institutions and sophisticated investors. We are a market leader in structuring and managing mutual funds, securitisation vehicles and asset-backed securities, and manage a wide range of financial products that principally invest in property, life settlements, absolute return and hedge fund asset classes. Our investment solutions offer low volatility with the potential for regular income or steady capital growth.
MPG is rapidly becoming a global company, with locations in the Cayman Islands, Malta, Spain, Switzerland and the United Kingdom. A core asset class for MPG is life settlements, also known as traded life policies. This is a sector in which we are a global leader. Life settlements are US-issued life insurance policies that have been sold by the original owner at a discount to their future maturity value and are institutionally traded through a highly regulated secondary market.
A key attraction is that they have a very low correlation with equities and bonds, because returns are largely driven by life expectancy estimates and other demand/supply factors unrelated to financial markets. Life settlements are currently more attractively priced than at any other time in the last 10 years. However, it is essential to have the necessary skills to select the right policies. At MPG, we have extensive experience and have invested over $500m in policies over the past 10 years.
High Protection Fund
Our award-winning High Protection Fund is the flagship in MPG’s range of life settlement investment vehicles. It is an absolute return fund that aims to deliver long-term capital growth of 8-9% by investing in a portfolio of life settlements, and has achieved 10.70% annualised return since its launch in 2009. The volatility of the High Protection Fund has been extremely low, especially compared with other funds in its sector.
A key factor in this low volatility is the quality and diversification of the assets held in its portfolio. The credit ratings of the underlying insurers that have issued the policies are strong: the average A M Best rating is very high at A+ (S&P equivalent of AA), and the spread of issuers is also broad, across as many investment grade counterparties as achievable.
The management team has been adept at sourcing good buying opportunities through its extensive network, ensuring a spread of maturities to optimise investment returns while maintaining longer-term liquidity and cash reserves.
Vita Nova Hedge Fund
Launched in 2014, the Vita Nova Hedge Fund aims to achieve long-term capital growth by identifying short- to medium-term investment opportunities with inherent pricing weaknesses and the potential to improve over time.
The investment management team may rely on economic forecasts and analysis in respect of interest rate trends, macroeconomic developments, global imbalances, business cycles, and other broad systemic factors that may lead to arbitrage and alpha opportunities. The fund has achieved annualised returns of 23.98% since its launch in 2014, and is one of the top-performing funds in its sector.
Regular high income with security
A sector with great growth potential for MPG is securitisations, which it offers through its European Capital Markets team. Securitisations can be listed on a bourse to become transferable securities. They are particularly suitable for generating regular income to a target date, typically five years ahead. They provide security of capital by virtue of the fact that bondholders are ranked ahead of shareholders in having first call on the underlying assets, affording huge protection to bond holders.
Further innovation to come
For MPG, enhancing its proposition through innovation is a welcome challenge. To this end, two more
products will be added to our range in
the near future.
The first will be a fund that will aim to achieve absolute, long-term capital growth by investing in a diversified portfolio of short-term fixed income debt securities. The second is a fund that will leverage a foreign exchange-based algorithm deployed by a management team with an impressive track record. Investors will be able to use it as a cash fund offering a high rate of interest. At the core of our proposition is a shrewd and rigorous approach to managing money.
The senior management team at MPG has over 100 years of collective experience. This strength in depth has enabled MPG to deliver successful performance even through periods of global uncertainty. MPG’s performance during challenging times is the strongest possible endorsement of our unique investment approach.
Institutional and private investors around the world are increasingly turning to MPG to provide an alternative to traditional asset management. Investing is MPG’s passion and it shows in our results.