Hawksmoor’s multi-manager team believes its focus on good quality funds and fund managers will see it through the harsher low-growth and low-returns market environment it expects.
Hawksmoor says that in the new, harsher market environment, stockpicking, balance sheets, cashflow and dividends are important. It says it has been difficult to form a view of markets and asset classes over the last year and thinks it would be foolish to bet on one outcome when managing its Vanbrugh fund.
The team ensures there are a couple of uncorrelated hedges in place as it is aware that setbacks can happen and it does not want Vanbrugh to have the volatility that comes with pure global equity holdings.
Fund manager Daniel Lockyer says the problems in Greece have not altered the team’s views, as it had been concerned about the country’s debt since last autumn, at around the same time as the setback in Dubai.
He says these concerns reminded Hawks-moor that equity markets do go up in a straight line, so the team started to reduce risk by cutting funds that had done well and reinvesting the proceeds into more defensive holdings.
For example, Vanbrugh’s holding in City natural resources was sold and the proceeds were reinvested into Investec enhanced natural resources, a long/short resources fund. Similarly, Vanbrugh’s corporate bond fund holdings were reinvested into strategic bond funds that have a broader and more flexible remit.
Reducing risk in the portfolio also led Hawksmoor to the Thames River’s real estate securities fund, which it bought for Vanbrugh last month.
Lockyer says: “We know the Thames River team very well. We think that it is the best property team in the UK. It also runs a hedge fund and as we were looking to de-risk our fund, we contacted them about this. But we found out that they were launching a Ucits III version, so we decided to buy that.
“It launched into the peak of the market and suffered but over the long term we think that it is the right fund to own in this environment.”