Private Investment Office

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MANAGING CLIENT PORTFOLIOS

At Lockhart Capital Management we believe that investment portfolios should be managed on an evidence-based approach appropriate for the prevailing market conditions. During the 1990’s this approach would have allowed you to benefit from the burgeoning theory of Behavioural Finance, and from the Millennium onwards to benefit from the use of Risk Targeted Investing.

When looking to select a Wealth Manager, a client should consider appointing one that has experience in managing capital through both positive and negative business cycles. A manager who can navigate safely through turbulent waters is every bit as essential as those who thrive during the boom times. Markets have been increasingly unsettled over the past two decades and you should look to employ a team that has successfully managed portfolios through the 1997/98 Asian Currency Crisis, the Technology boom and bust of 1999/2000, 9/11 and the subsequent financial fallout, and most notably the global Financial Crisis of 2008/9.

Our Private Investment Office has this experience and exists to manage the portfolios of our clients and ensure that their financial planning goals and aspirations can be achieved.

THE TEAM

Before co-founding Lockhart Capital Management, Andrew Wilson our Chief Investment Officer led and managed a hugely successful discretionary investment service for a large national wealth management firm. Upon his departure he and his team were responsible for the day-to-day management and oversight of some £6bn of client assets. Andrew, who has been managing funds for over 20 years has also built award-winning analyst and support teams, members of which will be working alongside him again at Lockhart Capital Management. Andrew is a Chartered Alternative Investment Analyst and regularly appears at conferences and in the media.

Caroline Lyons is Head of Fund Research and has been one of the best known and most highly-regarded fund analysts in the City for the last 15 years, many of which she spent working closely with Andrew. She has strong relationships with, and knowledge of, leading global equity managers.

Robert Seachoy is the Portfolio Manager and a Chartered Financial Analyst. He has specialised within Investment Operations, Portfolio Construction & Risk and more recently, in fund analysis. Robert has also worked closely with Caroline and Andrew for a number of years and now brings his analytical and process-driven approach to portfolio construction.

 

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THE FINANCIAL MARKETS

It is likely that the tailwind which has assisted assets prices for the last 35 years will dissipate or potentially become a headwind. Investors will have to work considerably harder in the future to preserve and grow their wealth post inflation, taxes and currency fluctuations. An investment process built today needs to be forward-looking and acknowledge this likelihood.

Given the robust valuations of many financial assets, the low level of interest rates and inflation, and the central banks somewhat “maxed out” positions, future investment returns for traditional investors and processes may well prove to be below par.

Modern markets are seemingly ever more liable to trends, be it up, down or sideways given the dominance of valuation-insensitive algorithmic traders. Furthermore, the marginal investor is now mainly a passively-invested one. To this end, one has to accept that upside volatility, or the exposure to market risk, is not necessarily bad and that it may have to be embraced if sufficient future investment returns are to be captured.

 

PHILOSOPHY & PROCESS

Our investment process acknowledges that financial markets are complex, adaptive systems which are driven by earnings and liquidity in the long term and by sentiment in the shorter term.

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PHILOSOPHY & PROCESS

Our investment process acknowledges that financial markets are complex, adaptive systems which are driven by earnings and liquidity in the long term and by sentiment in the shorter term.

Our Private Investment Office will employ a five signal process, which will embrace the momentum in financial markets, as well as the role of investor psychology. It doesn’t claim to predict the future, rather that we have confidence in the average outcome in specific conditions. This process crucially does manage risk effectively.

We invest across multiple asset classes and currencies and seek to have exposure to the best institutional fund managers available. We also employ both active and passive investment management techniques.

Warren Buffett suggests that the most important skill in finance is ‘temperament’ and a process based on extreme objectivity increases the possibility of meeting that requirement. We also firmly believe that it is a necessity not to make today’s good portfolio the enemy of tomorrow’s perfect portfolio.

A good portfolio can often perform in a wider variety of circumstances than a scenario-dependent portfolio, which carries greater risk and requires higher levels of turnover and cost. A process should be clear, robust and repeatable. It should make intuitive sense and, most importantly, for any process you should be able to stick with it. Finally, it should of course work in practice and reality.