The years 2000 to 2002 were not so nice, then we recovered very strongly. In 2008 things were happening fast, but there was nothing that made us doubt our model. What was encouraging was that when we got calls from clients, we were first dreading this. We told them the truth: we’re falling 8%, but then they said, that’s not bad at all, you look great compared to my other investments! We actually beat our benchmark very significantly even in 2008.
2015 wasn’t a good year, but it became a blip. It was within our tolerance. A one-year time frame is not that relevant for us. We run a long-term model. For example, China contributed to poor 2015 results, but we did not change our China exposure. Over the last few years, we have decreased our exposure to commodities a little bit. Oil has become a smaller percentage within commodities. If risk becomes less attractive, then you reduce exposure. Low correlation is the most attractive element for us. Diversification brings the risk down for the entire portfolio and allows leveraging the active return contributors more.
We were investor centric from the get-go. There are middlemen who take funds away from investors, with too little value added. Large banks, private banks, advisors, family offices etc. charge substantial fees. We did not want to charge our investors high fees only tp afford this distribution layer. That’s why we went direct and are still small, given our performance track record.
What is hard when we pitch is that people are so conditioned by the marketing speak of the distribution layer – those are large, long-time players with big marketing budgets. So the conditioned listener wants to stick us into any of their categories du jour, and we say: None of these describe us well. We get compared to lots of different strategies, but I have simply never found one that works better.