The firm runs its multi-manager funds using a core and satellite approach. Third-party investment funds are used for longer-term strategic asset allocation while satellite investments in direct equities, derivatives, exchange traded funds and reverse convertibles are used for shorter-term tactical plays.
Investing directly is costeffective as there are no ann-ual management charges to pay. This enables OPM to buy and sell quickly without upsetting fund mana-gers who do not want their portfolios disrupted by a series of investments and redemptions.
Fund manager Tony Yousefian says full knowledge of equity markets also acts as a further check on the underlying managers in OPM’s portfolios. Yousefian and his team can look at the underlying stocks and use their knowledge of direct equities to assess when and how the fund should be performing.
Yousefian says: “With our direct investments, we are looking at anomalies in the market. We make tactical plays because we can buy today and sell tomorrow without losing goodwill. If we want to redeem units in a fund, we have to wait for forward pricing and there may be a lot of other redemptions at the same time.”