To re-tender for the management of a large Sovereign Reserve Fund, whose objective is to deliver an absolute return as measured against a cash plus benchmark.
In developing an investment strategy for a mandate we undertook a detailed analysis to derive the optimum strategic asset allocation that could be expected to achieve the mandated return with the lowest risk. From this we calculated the expected return profile for the portfolio to understand the mean, maximum and minimum return expectations.
Following an extensive tender process, we were awarded a significant increase in our existing investment mandate. An additional five well known investment houses were also appointed.
Our absolute return investment process has proved itself through the dot com collapse, the recent near collapse of the banking system and the severest global recession for 60 years. It has achieved the expected portfolio returns and controlled the volatility risk. Indeed, the performance characteristics have been almost precisely as we projected in our original tender.