While the firm is macro aware in terms of investment philosophy, it takes a bottom-up approach when selecting managers.
Says Wainer: “A top-down asset allocation model makes for very elegant presentations and great marketing material but I don’t think it works terribly well. In a flat, globalised world, given the law of large numbers, there is a strong probability that the macro logic will take you down the wrong path.”
That is not to say he will invest somewhere there is an obviously bad macro situation but rather that he looks at combining managers similiar to how a fund manager considers stocks.
Headhunting and streamlining
In the same way a fund manager seeks companies that will outperform irrespective of macro conditions, Wainer’s team aims to put together a portfolio of 12-15 managers, either active or passive, that are expected to outperform, but with the awareness of how the portfolio looks in relation to the benchmark.
These managers, and the strategy that underpins it, are put in place by an investment committee of five that is chaired by Wainer. This is one of the changes he made after joining the firm, in an effort to streamline the investment decision-making process.
The other members of the committee are John Veale, Ahmet Feridun, Peter McLean and Kirsten Boldarin.
The other major change in the decision-making process was to put all six members of the selection team under the charge of Feridun, where previously there were individual teams looking at different asset classes.
Says Wainer: “If everyone thinks one way or the other it is quite easy to decide but if it is divided then I make the final call. What you don’t want is some kind of voting matrix because that will take you to the benchmark quite quickly.”
