We have met the team from Alquity several times. Where they have had good performance in the past, this has drifted in recent years. Over the last 12 months the business has made changes both in terms of investment into the company, and within the investment strategies.
The Future World strategy has added Marnie Uy as the Co-Manager and Head of Quantitative Risk. The aim is that Marnie provides an additional oversight, looking at what works well and what does not. It is early days, however, the team are starting to see performance improve.
The strategy follows a four-stage process.
Stage 1 – looks at the total universe and filters this down to the core universe. This process involves ESG red flags and thematics
Stage 2 – involves deep fundamental analysis and modelling with a long-term perspective. There is also a qualitive ESG assessment and rating between A and C. Below C is an automatic fail
Stage 3 – is portfolio construction centred around quantitative analytics, risk framework, macro analysis and investment convictions. This provides a concentrated portfolio of between 50 to 75 names. They have a hard limit of 20 to 25% invested in small cap companies
Stage 4 – portfolio management considers ongoing risk control. This is a mix of impact measurement, active engagement, transforming lives insight, risk management and investment case review