Latest Blog: Fireside Reading - 12/15/2020
INVESTMENT MANAGEMENT: PORTFOLIO
- WHAT SETS US APARTINNOVATION, SKILL & EXPERIENCE PORTFOLIO MANAGEMENTOUR INVESTMENT PROCESS MISSION RELATED INVESTINGINCORPORATING CLIENT PREFERENCES PERFORMANCEMEASURING OUR SUCCESS
Our disciplined framework for managing complex, global customized portfolios monitored by robust risk management tools lies at the heart of what we do for clients.
Managing portfolios invested in dynamic and evolving markets is both an art and a science. It is important to define foundational tenets which underpin beliefs and sound decision-making. These tenets also provide a framework for the portfolio management process, thus increasing the repeatability of successful outcomes.
- We believe that an experienced and highly skilled team following a disciplined, rigorous investment process can identify and capture market opportunities.
- We believe market conditions are dynamic, requiring skilled managers to adapt to exploit opportunities.
- We believe that structuring portfolios with high conviction opportunities is necessary to capture long term excess returns.
- We believe that most attractive investment opportunities are not scalable and are capacity constrained.
Angeles has developed a proprietary portfolio management framework, refined over years of experience. This framework grounds our work with a sound disciplined process, yet provides latitude to reflect Angeles’s best ideas given market conditions. As a result, we believe there is a higher confidence in repeatable outcomes, durability to withstand market shocks, and meeting client goals over time.
DESIGN. IDENTIFY. CONSTRUCT. MANAGE.
DESIGN CUSTOM POLICY
For each client, we engage in a deep iterative process of discussion and analysis, resulting in a customized investment strategy which we believe will meet their objectives and constraints.
- Manager selection has a material impact on portfolio performance, as it is through managers that investors access global markets. Angeles has intentional views on the types of managers and strategies that best fit in our clients’ portfolios. We seek active managers for whom we have a high conviction in their ability to deliver alpha in inefficient market sectors.
- At Angeles, being "right-sized" is intentional and brings a competitive advantage in manager selection. We have scale to strengthen our negotiating position, meet higher minimums and maintain depth of research resources; yet, we remain agile and able to exploit niche high alpha, capacity-constrained strategies.
- Unique sourcing relies on a proprietary manager database and outreach, and ongoing manager cultivation by Angeles. Our founders are involved from the beginning of the research process. Once identified, Angeles invests an extraordinary amount of resources to evaluate and perform in-depth due diligence.
- Once approved, negotiations on terms and sizing allocations completes the selection process.
We turn the traditional portfolio construction process on its head and start by building a portfolio with what we believe are the most exceptional investment managers, regardless of asset class. Next, rather than reflexively completing each asset class allocation with mediocre active managers, we achieve our asset allocation goals with low-fee passive instruments. These passive instruments also bring valuable agility for rebalancing and transition.
Importantly, as the portfolios take shape we examine the exposures to three key factors:
- Momentum, which aids in timing.
- Valuation, which offers directional indicators.
- Sentiment, which offers current “feeling,” and often is a contrarian indicator.
The illustration below depicts the visual relationship between these three factors and describes how they influence our portfolio positioning.
This is a high-level illustration that helps guide our relative positioning among asset classes by identifying three key factors: momentum, valuation and sentiment. The triangle will be fully green when momentum is high, valuation is low and sentiment is poor. This is the best time for maximum exposure to that asset. The triangle will be blank (no green) under opposite conditions, signaling time to avoid that asset. Most of the time, however, signals are mixed, meaning marginal positioning toward/away from target weights may be appropriate, but big bets are to be avoided. That said, each factor tends to have impact over different time periods. Sentiment, for example, moves very quickly and, as such, is a short-term signal that is used to confirm the medium-term signal of momentum and the longer-term signal of valuation.
Positions are sized based on potential value added, market capacity, liquidity, fees, expected volatility, and correlations to other strategies.
Finally, we continuously strive to identify new investment ideas and are not afraid to be early adopters of emerging investment themes and opportunities based on our rigorous and disciplined research.
We believe risk can and must be managed in order to adapt to the dynamic global marketplace. Angeles’ risk framework utilizes sophisticated analytical tools and seasoned judgment to monitor and manage risk at the manager/fund, asset class, and total portfolio level.
LEVELS OF RISK
- Tracking Error
- Tracking Error
Geography, Currency, Sector, Credit Quality, Style, Duration, Maturity
We build portfolios of best-in-class investment managers across all asset classes. If you would like to be considered for our portfolios, please contact us using our manager inquiries form.
- MANAGER INQUIRIES
How Can We Help You?Institutional Investors
Fully resourced investment office built to manage sophisticated client investment programsPrivate Wealth
Personalized discretionary portfolio and wealth management services powered by institutional processInvestment Management
Rigorous process and a flexible platform designed to meet client needsArticles & Insights
Latest insights and perspectives from the Angeles teamContact Us
Get in touch