Real Return Investment Manager of the Year -2015 – UK

Săl´tus (sal-) n. (L) a leap, step, jump – In 2004 Simon Armstrong and Jon Macintosh took a leap – to set up their own investment management company and to rethink some of the norms of the time resulting in these principles:

• To bring investment management services to private clients that were then only available to very wealthy families and institutions
  To work within pre-determined risk limits so that more clients’ money can be returned over timethan they originally invested, whatever the market conditions
•  To invest globally, across many assets classes, unconstrained by industry benchmarks. And as importantly, to choose not to invest in an asset class or investment strategy, if analysis demonstrates there is no merit
• To search the world to find whom they believe to be the best investment specialists to invest/work with, many of whom are not accessible to UK investors
•  To use plain English

 

Today, Saltus is an independently owned investment management company, currently managing assets of over £550m.

Our clients are private clients and family groups investing their pensions, trusts, investments and NISAs. Our clients come to us direct, typically through referrals from other clients or are introduced to us through financial advisers, solicitors, accountants and trustees.

We have a team of 30 people based in our offices in London, Manchester and Chichester.

Our investment objective is to preserve and grow wealth for our clients over time, irrespective of investing conditions. We do this through risk based, multi-asset class investing which is described in our investment approach below.

All portfolios are managed by the investment team.

Our investment approach

•  As risk based, multi-asset investment managers we believe:
•  
  Investing should be unconstrained with no built-in bias to any asset class. We
  do not copy or track a fixed benchmark and we are free to choose any investments

The best talent is not all in one company, so we source and invest with specialists who are ‘best in class’.

• Controlling risk is at the heart of generating consistent returns. We use explicit rather than subjective measures of risk in portfolios.

 

Our investment process

Risk

We measure investment risk principally (but not exclusively) by the volatility of portfolio returns over a rolling 36 month period. All our portfolios are managed with a choice of distinct “risk budgets”, set with reference to the UK equity market. For example the Saltus 33 portfolio targets to 33% of UK equity market volatility, the Saltus 50 targets 50% of UK equity market volatility and the Saltus 67 targets 67% of UK equity market volatility. Although identifying and controlling risk is at the heart of what we do, it is necessary to take some risk to capital to generate returns in excess of cash over time. It is important for clients to assess the level of risk they are comfortable with us taking, in order to achieve the returns they seek.

Once this level of risk has been identified and agreed we will construct and manage an investment portfolio in accordance with this level of risk. We invest in broad variety of asset classes to generate returns.

 Asset Allocation

At Saltus we do not believe we should be limited to investing solely in traditional markets such as equities and bonds which can result in volatile returns and loss of capital over prolonged periods. The experience we
have within Saltus allows us to construct and manage an investment portfolio for you, based on your risk profile and your investment goals across the whole spectrum of asset classes as shown above.

Portfolio construction

Once the Investment Committee has decided the asset allocation we select who we believe are the best managers in
each asset class, as identified by our research process. This process uses both quantitative and qualitative analysis in order to identify real ‘skill’. We are able to access exceptional managers across the globe, which are frequently unavailable to retail investors, due to our personal contacts and experience. If we cannot identify exceptional managers we will use passive funds (sometimes known as index-trackers).

We use several Saltus managed funds, as “building blocks” to construct portfolios which consist of the
underlying investments which we have selected as described above. The reason we do it this way – rather than owning the underlying investments directly in clients’ names – is because it is more tax-efficient and it avoids the need for unnecessary dealing charges. It also allows us access to institutional funds in certain cases which we otherwise cannot invest in.