“On a short-term basis, it looks a more attractive strategy to see us through the triggering of Article 50 in the first quarter of 2017,” he says.
“Buy the dollar against sterling as a put, then if sterling falls further you’re protected. If, however, sterling rallies from here, you’ve lost the cost of your option premium but that’s it. Thereafter you will have all the benefit of sterling rallying against the dollar.”
Capital Generation Partners also favours investing in property and private equity, both directly and indirectly though funds. The belief is that the illiquidity premium is still intact.
“We do say to clients that feel comfortable owning long-dated assets that on a relative basis they look more attractive than traded assets,” says Barnard.
“Despite what we read about prices for all assets rising, relatively speaking there seems to be an illiquidity premium and so we are encouraging clients to selectively keep getting exposure to private markets.”
With fees a huge concern for investors across the retail market, Barnard says his company is “laser like” in making sure it knows exactly what clients are going to be charged. The days of “two and 20” hedge funds certainly look numbered.
With this Barnard sounds a note of optimism, despite increased scrutiny and pressures on the industry, both on asset and wealth managers.
“We are very fortunate that, as asset allocators and buyside investors, the competition within the industry is leading to entrepreneurs exploiting all the opportunities technology provides to deliver yet more and more useful and low-cost products. Ultimately, this is good news for the client.”
