As part of our process we look at comparative values across asset classes, recognising that valuation at the time of purchase is the key determinant of future success. Investment can never be an exact science, given the unpredictability of the future, so we favour investments with an attractive ‘margin of safety’ as one of means of limiting risk. Moreover, we constantly strive to identify the major risks in the prevailing market environment and aim to find investments that guard against them.
We are unashamedly ‘Active Managers’. We invest into actively-managed funds believing that, over the long term, good active managers are able to outperform the markets in which they are invested. However, many actively-managed funds fail to do well for their investors, so the success of Hawksmoor Fund Managers depends on good fund selection. Once we have identified our favoured investment areas and themes, we carefully research the fund universe to establish the best funds to provide the required exposure. This is a highly labour-intensive process, with frequent and regular engagement with fund managers and analysts, involving many hundreds of meetings over the course of each year. In addition, the members of Hawksmoor Fund Managers have proven experience in the closed ended fund arena, including investment trusts. This is an area frequently ignored by other fund-of-funds managers, but it has been a source of significant value in the past for both the Vanbrugh and Distribution Funds. Closed ended funds not only provide exposure to specialist assets that can be hard to access via open ended funds, but they also frequently give the opportunity to invest in the shares of funds at a discounted price to the market value of the investments in the funds’ portfolios (normally referred to as ‘standing at a discount to net asset value’).