Premier Asset Management’s David Hambidge is taking more interest in alternative investments in his multi-manager range in order to access returns uncorrelated to traditional markets.
Hambidge has taken exposure to catastrophe insurance, reinsurance and litigation finance across his range of funds, which includes the £223.6m Premier Multi Asset Distribution and £102.8m Premier Multi Asset Income and Growth funds.
Reinsurance is a theme common to all of Premier’s multi-asset funds and Hambidge has accessed this space through the London-listed £248.5m CatCo Reinsurance Opportunities fund. According to FE Analytics, the fund has risen 18 per cent over the past year.
Hambidge says: “This fund is made up of diversified portfolio of reinsurance contracts and insurance-based investments and not only has produced excellent returns for our investors but has done so with very little correlation to equities and bonds.
“Alternative investments play an important role in our multi-asset funds, helping to provide a diverse source of income for our higher yielding mandates and smoothing returns for our more conservatively managed funds.”
The manager notes that exposure to alternatives was especially useful during the summer months, when equities and bonds fell in tandem but these assets were able to make a positive return.
In addition, Hambidge has recently been adding to contingent convertible bonds, zero dividend preference shares, specialist bonds such as asset-backed credit and alternative credit to gain further diversification.
Hargreaves Lansdown senior investment manager Adrian Lowcock says: “This seems a natural reaction given where markets are with equities close to all-time highs. It makes sense to diversify away from those areas but it does depend on your outlook for traditional asset classes going forward.”