Protection and real growth
We reason in absolute not relative terms. Beating a benchmark is no consolation if you still lose money.

We regard the preservation of your capital as our overriding priority, but we believe that this should be compatible with long term growth. We aim to produce the highest possible risk-adjusted returns over the medium term.

Diversified asset allocation
In order to do this, we concentrate on asset allocation - both strategic and tactical - because it is the vital contributor to effective performance. Our key principle is to ensure diversification across asset classes, regions and currencies.

Selecting excellent managers
We spend time finding excellent managers in all relevant markets and building proper long-lasting relationships with them.

Equities

When it comes to selecting active long-only equity managers, we tend to avoid “index huggers”. Instead, we prefer managers who have convictions and a demonstrated ability to outperform markets over time. However, when our objective is to gain broad exposure to a given market and take advantage of tactical opportunities, we also buy indices directly (ETFs or futures).

Fixed income

We tend to buy government bonds directly. For investment grade and high-yield bonds, we invest through a mixture of actively managed funds and indices. The overall credit rating, duration and currency exposure of our clients’ fixed income portfolios is actively managed and monitored by Stanhope’s investment team.

Hedge funds

We regard hedge funds as a complementary way of gaining exposure to traditional asset classes (or decorrelating from public markets) rather than as a specific asset class. We are careful to avoid funds where liquidity terms are not consistent with the stated investment strategy. Managers, after the deduction of their fees, are selected both for their ability to generate good returns and their skills at managing volatility and protecting capital in difficult markets.

Private equity

We advise our clients to invest in private equity in a diversified manner rather than with only one or two managers.  Instead, we help them achieve the right mix between sectors (venture capital, development capital and buyouts), regions and vintages. We invest both in primary and secondary funds (buying existing LPs at a discount to net asset values). Commitments are typically made over a period of several years through funds and/or funds or funds.

Property

We gain exposure to this asset class through a variety of means depending on client needs, the market outlook and position in the cycle. This may include actively managed funds of listed property stocks, regional property indices and private equity style funds.

Our priority is to back managers whose long experience has enabled them to go through several property cycles and who are therefore well placed to avoid the herd mentality that tends to create “booms” and “busts” in the sector.

Commodities

We invest in energy, agriculture, precious and base metals through both actively managed funds and indices.


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