“Selectors are always looking for uncorrelated assets and ways of reducing volatility. Some fund selectors need education around how the underlying strategies work and also in proving the lack of correlation with other things they are buying.
“Particularly with the central fund selectors, as opposed to the individual private bankers, it is really about going through the whole makeup of the fund.”
Quite a few fund selectors Barker has spoken to manage funds of multi-asset funds – so they not only understand the fund but tend to be immediately keen. However, there are others who see Gars as a competitor to their own way of managing assets.
Investor types
Another trend Barker has noticed is that the differences between institutional investors and the centralised portfolio construction/fund selection functions of wholesale investors is becoming less and less marked.
“There are a lot more similarities than differences,” he says. “More and more, institutional and wholesale investors are overlapping, not just in terms of investment rigour but also in terms of servicing.
“When it comes to the end seller – the institution or private bank – it starts to differentiate, but at the research process end, it’s hard to see the difference between the two.”
Regional changes
Where there are big differences is between regions. Barker covers Europe, Asia and North America. “In Asia, we see demand for real estate leading the way, more than in America or Europe. It is not completely black and white but that’s the trend.”
In Europe, one big move is towards socially responsible investing. “SRI has always been important in the Netherlands, for example, but we are now seeing demand from the wholesale market, especially through the fiduciary side of consultants. Not southern Europe, but elsewhere, especially the Netherlands, the Nordics and Switzerland.”
In North America, the big flavour of the month is ‘liquid alternatives’. SLI is well placed to take advantage of that since its most popular funds fall under that category.
It is famously tricky for non-US companies to do business in the US. The way SLI has done it, is in partnership with the US-based John Hancock. “Hancock has its 40-Act funds and we have several of our strategies working inside the Hancock family.”
SLI also has a range of Cayman funds for some of its strategies, mostly for the use of institutional investors.
