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Investment Philosophy
Fortem Capital's team of independent and experienced market professionals offer innovative investment solutions and services that both ease the burden of investing whilst helping our clients stand out from the crowd.
As a liquid alternatives house, our investment philosophy is governed by risk and the effective management of that risk.
All strategies have exposures bucketed by risk; income, beta, diversifier, protection. The allocations of risk to each bucket will govern the risk and return profile of any strategy and its correlation to traditional asset classes.
This philosophy and process have already shown themselves to be both reliable and robust, particularly in the face of the record volatility and correlation seen during the first quarter of 2020, when all of Fortem’s strategies behave as expected. Many alternatives look impressive whilst traditional asset classes experience benign environments, it is those that look most impressive in the eye of a storm that truly add value.
Alternative Investment Management
Our Funds
Our investment philosophy underpins our investment process and is expressed in our suite of investments funds.
PROGRESSIVE GROWTH
Progressive Growth Fund
The Fund aims to provide positive returns of 6-7% p.a. along with reduced equity market beta over the medium to long term, even if global equity markets have been range-bound. It will invest in a core portfolio comprised of defined return equity strategies that aim to provide capital growth over the medium to longer term, in all but extreme negative market scenarios which are not recovered from.
The Fund will also make an allocation to diversifier and protection investments in order to provide some protection during periods of extreme volatility and smooth the journey of travel.
ALTERNATIVE GROWTH
Alternative Growth Fund
The Fund aims to be a diversifier in the truest sense of the word. It seeks to provide positive returns of 4-5% p.a. over the medium to long term, whilst maintaining negligible equity market beta and providing convexity during a market crisis. It invests in a core portfolio comprised of diversifier strategies sourced from across the asset class spectrum that provide capital growth, independent of equity market cycles and macroeconomics. The Fund will make a smaller allocation to opportunistic investments that also meet strict capital preservation and investment return criteria as well as have a defined protection bucket to provide positive convexity during a crisis.
US EQUITY INCOME
US Equity Income Fund
The Fund aims to generate quarterly income of 4% p.a., whilst providing for capital growth such that the Fund’s total return tracks the S&P 500 Net Total Return Index, with the opportunity for some outperformance.
DYNAMIC GROWTH
Dynamic Growth Fund
The Fund aims to be a diversifier with some allocation to a beta portfolio. It seeks to provide positive returns of 10% pa over the medium to long term, whilst maintaining a maximum equity market beta of 0.4. It invests in a portfolio comprised of an allocation to equity beta that is limited by the Fund’s correlation limit, a larger and dominant allocation to diversifier strategies sourced from across the asset class spectrum that provide capital growth, independent of equity market cycles and macroeconomics. The Fund will make a smaller allocation to opportunistic investments that also meet strict capital preservation and investment return criteria as well as have a defined protection bucket to provide positive convexity during a crisis.
ABSOLUTE RETURN FUND
Absolute Return Fund
The Fund aims to provide positive returns of SONIA plus 2-4% over the medium to long term whilst maintaining low and stable market beta. It will provide capital growth through investments linked to a factor-optimised index linked to equity, whilst maintaining a low and stable beta through a short leg to the parent equity index.
Investors may also access Fortem’s industry leading alternative and derivative expertise through the construction and execution of bespoke investment solutions. To date Fortem have structured billions of dollars in bespoke solutions for institutions.
For more information on the investment philosophy or any of Fortem’s investment offerings, please do not hesitate to contact the team, we would be delighted to hear from you
