Renowned for its global thematic approach to investing, Sarasin & Partners – a recently crowned Platinum winner at our 2016 Portfolio Adviser Wealth Manager Awards – is trying to unravel a number of big-picture economic uncertainties.
The St Paul’s-based specialist asset manager looks after £13.4bn on behalf of charities, private clients, institutions and intermediaries from the UK and around the world.
As head of third-party funds, Lucy Walker sits on Sarasin’s investment policy committee, which is chaired by chief investment officer Guy Monson. The committee is made up of a number of the firm’s portfolio managers and economists. It meets on a bi-monthly basis but can convene more often should markets or economic situations require it, according to Walker.
Walker says there is generally a number of key views at any one time and that the meeting will normally have a pre-set agenda where the asset allocation team talks about one or two topics in considerable depth.
“In our most recent meeting, we talked a lot about banks,” she says. “It could be anything from infrastructure to high-yield bonds and bank equities. Those topics are discussed with around six to eight key views being formed or reviewed.”
Adopting a position
The highest-conviction views are then replicated in Sarasin’s client portfolios. Walker says the team has heavily debated its ideal equity position in aggregate during recent policy meetings; that is to say whether it is positive, negative or neutral.
“Pre-August, we felt equities were quite expensive in absolute terms. But we did feel that, when compared to very expensive government bonds and also other quite expensive asset classes, on a relative basis they offered sufficient value to retain a neutral position, even given the fact that they were expensive in absolute terms.
“Throughout the various bouts of volatility we have had, we’ve wanted to make sure the market falls have not been indicative of anything more sinister – that is to say, that there is not a macroeconomic consequence from the markets falling. But our conclusions were that we couldn’t read anything further into them and so we retained our neutral positioning.”
It is worth mentioning, Walker adds, that the firm thought it was prudent to hold quite high levels of cash, for reasons going back to the argument about equity prices. She cites key macro concerns such as China’s recent troubles, the oil price, political tensions in the Middle East and Greece’s debt issues, which are still bubbling away.
