Equilibrium funds grow by £500 AUM in six months

Posted by Damian Leonard Jun 5, 2018 4:30:28 PM

Topics: News,

Equilibrium Asset Management is celebrating another milestone, with the investment funds launched via their sister company (Equilibrium Investment Management) hitting over £500m in assets in their first six months.

The three funds, the IFSL Equilibrium Cautious Portfolio, IFSL Equilibrium Balanced Portfolio and IFSL Equilibrium Adventurous Portfolio, had combined assets under management of £516m as of 18 May 2018.

[Equilibrium Investment Management] Partner & Investment Manager Mike Deverell said: “We’re delighted with the rate of growth and with the take up rate from our clients which has been 100%.”

Equilibrium partnered with Investment Fund Services Limited (IFSL), part of the Marlborough group, who act as ACD* and administrator for the funds.

Simon Chalkley, Associate Director – Relationship Management, at IFSL said: “We’ve worked very closely with Equilibrium to ensure the smooth launch and subsequent operation of their funds and it’s very pleasing to see their success.

“From the outset we’ve been impressed with Equilibrium’s commitment to providing a first-class service for their clients. It’s gratifying to see those clients, and the business, benefiting from the efficiencies associated with using a fund structure.”

Deverell added: “We felt there would be many benefits to running our investment portfolios via a fund structure so we spent a lot of time and effort explaining that to clients.”

Some of the benefits Equilibrium expected include speed of reaction and access to a wider selection of investments. Deverell believes the volatility in stock markets in early 2018 was the perfect test of these benefits.

“When the FTSE 100 fell to 7,200 we switched 3% of the portfolio from low risk assets into a FTSE 100 ETF. This was something we had always planned to do and we were able to act immediately our trigger point was reached.”

Whilst performance can never be guaranteed, the funds have performed well since launch in the Mixed Investment 20%-60% Shares sector in which they sit, with the Balanced and Adventurous funds in the top decile.**

Naturally, Deverell is delighted: “Capital is at risk when investing as returns can rise and fall, so we went into this period relatively cautiously positioned. Pleasingly, this meant the funds generally fell by less than the sector when stock markets were falling earlier this year. We were then able to outperform when the market rebounded partly because of the trades we made in the market dip.”

Equilibrium also purchased a structured product within the funds which they had created especially for their clients by investment bank Morgan Stanley. “Just like with the ETF trade we had always intended to do this should the FTSE drop to 7,100 and the fund structure meant we could do so without delay.”

Deverell says both trades prove that the perceived benefits of the fund structure are not just theoretical, but can potentially enhance client returns. In fact Equilibrium has since sold the ETF, banking the gains and reducing risk within the funds.


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