London 9 June 2022: Fulcrum Asset Management announces the launch of two new Cayman-based strategies, the Fulcrum Inflation Protection Strategy (FIPS) and the Fulcrum Discretionary Macro Strategy (FDM).
Both are managed by Fulcrum’s CIO, Suhail Shaikh, and supported by a team of around 40 investment specialists covering all major asset classes. FIPS launched with $400m and FDM with $50m.
Fulcrum Inflation Protection Strategy (FIPS)
The investment objective of FIPS is to provide strong positive returns in the event of significantly higher than expected global inflation that results in low returns to traditional assets. This is particularly relevant given the current economic conditions, with inflation in the UK looking set to hit double digits in 2022.
The Strategy uses dynamic asset allocation based on a combination of fundamental and behavioural inputs to seek returns from a diversified portfolio. The asset allocation includes cash, listed securities and derivatives, typically across equities, fixed income, commodities (including emission allowances), currencies, volatility and cross-asset exposures. Investments in derivatives will include exchange listed and over-the-counter (OTC) derivatives.
Investment ideas come through a combination of quantitative models and discretionary judgment. The strategy holds a strategic allocation to diversified commodity futures, as well as dynamic allocations (both long and short) to global government bond futures, global equity futures, commodity futures, and currencies. Finally, there is an explicit focus on identifying and implementing ideas expected to provide asymmetry and positively skewed expected outcomes during inflationary shocks – referred to as “convexity”.
Fulcrum Discretionary Macro Fund (FDM)
The Fulcrum Discretionary Macro Fund ‘mirrors’ the £700m segregated mandate that Fulcrum won last year, and its objective and approach are completely aligned with Fulcrum’s core expertise in macroeconomics. The investment objective of the Strategy is to provide consistent long-term appreciation of assets, with a volatility target of 8% and low sensitivity to broad equity and bond markets.
The Portfolio seeks returns from a diversified portfolio of liquid investments in equities, fixed income, commodities, currencies, cash, listed securities, and derivatives. It features structured risk allocations across a variety of uncorrelated strategies that cover all major asset classes and a range of time horizons.
Commenting, Suhail Shaikh, CIO at Fulcrum Asset Management, said:
“We are strong believers in portable alpha and have created bespoke solutions for clients that better suit their portfolio needs with respect to target volatility, strategic factor exposures and implementation vehicle. Due to our long-term investment in technology and infrastructure, providing these solutions is scalable from the perspective of our investment team, who remain focused entirely on portfolio management.”