Asset classes and manager selection

Stanhope Capital’s research team devotes significant time and resources to sourcing and applying its due diligence to active managers across all relevant markets, and ensuring that we monitor them closely and build open, constructive relationships with them.

When it comes to selecting active long-only equity managers, we tend to avoid ‘index huggers’. Stanhope prefers managers who have convictions, a demonstrated ability to outperform markets over time and a robust replicable process. 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 usually buy government bonds directly. For investment grade and high-yield bonds, Stanhope invests 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 see hedge funds as a complementary way of gaining exposure to traditional asset classes rather than as a distinct asset class. This means Stanhope is careful to avoid funds in which liquidity terms are not consistent with the stated investment strategy. Managers are selected both for their ability to generate good returns, after the deduction of their fees, and their skills at managing volatility and protecting capital in difficult markets.

Private equity
Stanhope has long experience in private equity fund investment. We have a dedicated team focusing on this area, supported by the firm’s operational and legal due diligence resources and our private equity advisory board. We aim to select the top managers in their class across the spectrum of buyout, growth, special situations and venture capital, as well as in the less well-known areas of secondary interests and co-investments. Commitments are typically made over a period of several years and portfolios are diversified by style, sector, region, vintage and fund size / focus. Clients are able to invest either directly into each fund, or alternatively through diversified programmes which facilitate access for those who would not otherwise meet the funds’ minimum size requirements, or for those who prefer the administrative efficiency of such an approach. Stanhope has an in-depth knowledge of private equity and broad industry relationships worldwide, and is often able to provide access to leading managers whose funds are not generally available to new investors.
For further information, please see Private Investments.

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.
For further information on direct property investments, please see Private Investments.

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