London & Capital Investment Advisors, the US investment arm of UK-based wealth manager London & Capital, has launched six new absolute return investment vehicles, the Loncap range of European Alternative Investment Strategies, to meet demand from sophisticated US investors.
The Loncap strategies are designed to provide competitive returns irrespective of changing market cycles, recognising that low volatility and capital preservation remain paramount. To ensure maximum transparency, the strategies are benchmarked against cash, the most stable of all investment benchmarks.
'These strategies have been launched in response to US investors looking for something that goes beyond just stock and bond traditional investments,' says Daniel Freedman, co-founder of London & Capital Group. 'The market turmoil and volatility we are currently witnessing could not be better timed for this launch, as it has intensified the search for more sophisticated risk management and absolute returns.'
Since its launch in 2005, London & Capital Investment Advisors has been overseen by director and head of US operations Tony McLoughlin, who joined London & Capital in 1995 and has 25 years of financial services experience working in partnership with private clients, institutional investors and their advisers.
'The idea of these strategies is to replicate what we have successfully developed in Europe over the past 16 years but make it accessible to domestic US investors,' McLoughlin says. 'We have launched six strategies, three of which are based on our global multi-asset class portfolios, one based on our total fixed-income return portfolio. The final two - probably the most exciting from a US perspective - will offer access to the UK and European commercial real estate markets.'
Initially, the Loncap strategies will invest in established underlying funds managed by London & Capital Asset Management, all of which have generated significant positive returns. For example, the Loncap European Commercial Real Estate Strategy has produced back-tested annualised returns of 15 per cent over three and a half years.
The Conservative, Balanced and Growth funds are absolute return limited partnerships that invest on a global multi-asset class basis. Each strategy typically invests in at least three asset classes with low correlations in order to maximise diversification and help reduce risk. The benchmarks are USD Libor plus 1 per cent for the conservative strategy, USD Libor plus 2 per cent for the balanced strategy and USD Libor plus 3 per cent for the growth strategy.
The Global Balanced Fixed Income Bond Fund is an absolute total return strategy that combines direct investment in short, medium and longer dated securities with access to emerging markets through a fund structure. It also has a mandate to invest in UK government-let property opportunities, and has a benchmark of USD Libor plus 2 per cent.
The UK Commercial Real Estate Fund enables onshore US clients to gain access to high alpha property funds that invest directly in the UK and have a strong performance track record. The benchmark is 6 per cent.
The European Commercial Real Estate Fund enables onshore US clients to gain access to high alpha property funds that have a strong track record and invest directly in EU markets, including the rapidly-recovering German economy, also with a benchmark of 6 per cent.
London & Capital Investment Advisors says it differentiates itself from US competitors through its drive and determination to deliver innovative solutions to its clients. By identifying opportunities in under-exploited marketplaces, the Loncap strategies aim to offer clients capital protection and superior risk-adjusted returns.
Established in 1986, London & Capital is an independent firm of investment advisers and asset managers with an international client base. It provides private individuals, trusts, banks and institutional investors with expert advice on offshore and onshore investment strategies, with a strong focus on absolute returns and capital preservation.
The firm started to offer a discretionary management service in 1991, and has established an investment management style characterised by absolute returns benchmarked against cash for clients that require steady growth with clearly defined risk parameters.