Convertible bonds provide a hybrid solution for investors looking to have a balanced exposure to financial markets and deliver returns that compound with low volatility over time. Our team has developed unique models and systems over the last decade, enabling us to identify the best investments within the asset class for our investors. We provide a range of actively managed solutions designed to exploit the attractive asymmetric return profile of convertible bonds with varying degrees of risk tolerance.
Emerging and Frontier Market Equity
Emerging and frontier markets represent the fastest growing countries in the world. We believe the continued growth in these markets presents opportunities across a range of industries. Our index agnostic, opportunistic approach has been honed for over two decades, and the depth of experience garnered within our team allows us to participate in different opportunities that are usually off the beaten track.
We are long-term intrinsic value investors who believe that short term sentiment amongst many market participants causes them to overreact to news which has little or no impact on the long run value of a company. This overreaction causes share prices to diverge from the intrinsic value of the underlying business and provides an opportunity for long term investors to purchase shares at less than their true value. Buying shares at a discount to intrinsic value is a defensive strategy which builds in a margin of safety but also offers attractive total return potential through both dividend income and capital appreciation.
European Active Ownership
We invest in a small number of European listed, high quality companies, that have a significant opportunity to create additional value by addressing a number of company-specific issues, and where we can act as a catalyst for change by constructively working together with the company and other shareholders.
In 2017 the RWC European Equity team joined RWC Partners from Pensato, which was founded by Graham Clapp in 2008. The team manages both long-only and long\/short strategies at RWC, with the Pensato absolute return funds now joined by additional RWC long-only offerings. We take positions in companies where we believe the economic potential of the business is different to that implied by the share price. Our investment team follows a proven philosophy developed over the last 30 years to manage portfolios which aim to produce consistent outperformance for our investors, with lower volatility versus the wider market.
Global Horizon Equity
We seek out investment opportunities from around the world with little regard for the benchmark. Our focus on the supply side of industries, or capital cycle, highlights areas where there are likely to be companies whose share price is trading at a fraction of its intrinsic value. Superior alignment of interests runs throughout this strategy. We not only aim to align ourselves with our end clients by having a fee structure which shares performance risk, but also an investment approach which emphasises whether investee company management are incentivised to be effective capital allocators.
Japan Active Engagement
Japan is the world’s third largest economy and its corporate landscape is undergoing dramatic change. Through our joint venture with Tokyo-based Nissay Asset Management (NAM) we invest in a small number of selected Japanese companies that are not valued to their full potential due to factors we see as reparable. We then act as the catalyst for the change required to unlock value.
We have a core mantra: “Contrarian at Birth, Momentum during Life”. This is a philosophy which we have cultivated and deployed to manage our investors’ money for over 15 years. Our approach is biased towards investing in companies in less favoured areas of the market, but where we deem fundamental dynamics are improving.
The US equity market provides a wealth of diverse and interesting investment opportunities. The team has invested long-short in US equities for over 16 years and as fundamental stock pickers we look for investments that come from understanding changing company or industry dynamics. Our approach is based on a philosophy of protecting our client's investment and patiently waiting for opportunities. Taking a long-short approach allows us to deliver a risk and return profile that is complementary to other assets including long-only US equity exposure.