The key objective of our ‘Active Alpha’ approach is to seek long-term returns above those of the relevant benchmark, while seeking to maintain a similar or lower level of volatility.¹
Our active approach combines multiple ‘Alpha Levers’ that seek to generate returns across a market cycle. These elements include:
- Active Allocation
Building portfolios that seek to take strategic and tactical advantage of potential market dislocations across market capitalization, stylistic, country and regional, thematic, and special situations.
- Security Selection
Identification of specific holdings based upon internal research and external information.
- Discount Volatility/Behavioral Finance
A distinguishing feature of our strategy is the use of closed-end funds, which may offer sources of return different from those of traditional stock-only portfolios.² We believe that trading discount volatility may provide a differentiated source of return that may exhibit different return characteristics from traditional equities, in addition to opportunities arising from what we believe are pricing inefficiencies. Discount volatility can also detract from returns, and correlations may change over time.³ We may also invest in index-tracking ETFs, actively managed ETFs, holding companies, ordinary securities, and other instruments, as appropriate to each strategy and client guidelines.
- Corporate Action/Board Engagement
Where appropriate, we engage with boards regarding governance, liquidity, structural discounts, and management oversight.⁴
- Global Insight
Our research and trading teams in Singapore, London, and West Chester, PA provide multiple points of engagement with trading markets and managers, and support the evaluation of market sentiment across a global opportunity set, across major time zones.
A defining feature of our firm and our Active Alpha approach is an investment process applied and refined across multiple market cycles, including periods of volatility and structural change, and intended to support a disciplined and consistent approach to opportunity identification and risk management.⁵
We implement this process through a collaborative, team-based structure supported by a global footprint across London; West Chester, PA; and Singapore, which supports diverse perspectives and coordination across regions.
¹ Objectives are not guarantees. There can be no assurance that any strategy will achieve its objective, outperform its benchmark, or maintain a similar or lower level of volatility. Benchmarks differ by strategy. Investing involves risk, including possible loss of principal.
² Closed-end fund shares may trade at a discount or premium to net asset value, and discounts may widen. Closed-end funds may use leverage and carry their own fees and expenses, which can increase risk and reduce returns.
³ Discount volatility strategies may not produce positive returns. Correlation characteristics vary over time and may increase in stressed markets.
⁴ Engagement with boards does not guarantee any outcome. There is no assurance that a board will act on, or agree with, CLIM’s views.
⁵ Risk management does not eliminate risk. Past experience applying this process does not guarantee future results.