Neil Beaton is CIO at LJ Partnership’s Investment Management business which focuses on researching, constructing and advising on portfolios primarily for clients’ liquid investment strategies. They are proud to have an investment philosophy centring around ‘real return investing’, explains Beaton, who has over 35 years of industry experience, having trained at J Henry Schroder Wagg & Co, followed by senior roles at SG Warburg which became Mercury Asset Management (MAM), and Merrill Lynch among others.
‘Together with my fellow partners, Charlie Hamilton and Stuart Davies, since we started working together fourteen years ago we have advised on a successful investment approach primarily focused on equity biased strategies,’ he explains. ‘Most recently, we have actively advised clients on the fixed interest portion of their strategy, in many cases by considering switching from sovereign fixed interest to inflation protected fixed interest securities in the form of Index Linked gilts and United States TIPS.’
LJ Partnership advises on more defensive equities in ‘some circumstances’ in the past, but monetary assets continue to dominate the recommended investment strategies for clients. Since the business was founded in 2002, its investment philosophy has been built around real returns, with a typical UK based client investment focused on between ‘2 and 4 per cent per annum over and above the UK Retail Price Index net of all fees over rolling 5-year periods of time’.
‘For many of the families that we advise, their strategic investment objectives are multi-generational,’ he observes. ‘We do need to be very sensitive to shorter term performance but our clients have genuinely long-term investment objectives with a strong real return philosophy, which leads our business to spend a great deal of time and effort on researching ideas and identifying superior investment managers (funds and segregated third party managers) in global equity markets, bond markets, commodities, hedge funds, cash and gold.’
The firm’s investment approach has been primarily focused on equity biased strategies. Most recently, they have actively advised clients on the fixed interest portion of their strategy, in many cases by considering switching from sovereign fixed interest to inflation protected fixed interest securities in the form of Index Linked gilts and United States TIPS.
‘In summary, we are fortunate to have done well through good performance from our carefully chosen investment managers, good quality team members and our investment process continues to remain very research focused,’ says Beaton.
Clients come to come to LJ Partnership looking for strategies to achieve real return investment objectives. For many of the families that we advise, their strategic investment objectives are multi-generational. We do, of course, need to be very sensitive to shorter term performance but our clients have genuinely long-term investment objectives with a strong real return philosophy.
Three big investment opportunities driving returns for LJ Partnership over the past ten years have been loose global monetary policy, the growth of the Asian consumer (both India and South East Asia) and major ten-year domestic policy decisions from the National People’s Congress (NPC) within China.
‘In some circumstances we have advised on more defensive equity strategies than we have in the past although real, rather than monetary, assets continue to dominate our clients’ recommended investment strategies,’ he says. ‘Global monetary conditions are currently being tightened, but they are arguably still stimulating both global economic growth and asset price inflation. There is a myriad of opportunities that we can see from companies around the world that are benefiting from the rapid growth of the Asian middle class.’
LJ Partnership will rebrand to Alvarium Investments in 2019.