Our philosophy unites four key investment cornerstones to provide improvement and consistency to your insurer or risk pool’s investment program.
Investment Process
- Asset allocation drives the great majority of returns based on historical studies
- Accountability & Transparency is key within the overall process
Active Management for Fixed Income Mandates
- The less efficient nature of the asset class due to its over the counter structure
- The necessary customization involved in managing fixed income portfolios for insurers or risk pools
Passive Management for Developed Market Equity Mandates
- In general, passive management makes more sense for developed market equity mandates (Large Cap, Mid Cap, Small Cap) due to:
- The greater level of efficiency in these markets
- The higher fees associated w/ managing active equity mandates
- The difficulty in outperforming benchmarks given the fee drag
Generally, Alternatives Not for Insurers or Risk Pools
- In general, we do not believe alternatives such as hedge funds, private equity, etc. make sense for insurers or risk pools due to:
- The high level of fees
- Potential lack of liquidity
- Agency problems
- Impact to capital ratios
