At launch in October 2012, BACIT, as the fund portfolio was then named, had an investment mandate to deliver attractive risk-adjusted returns by investing with fund managers on a gross return basis. Over time this investment target evolved into an ambition to capture at least 70% of the upswing in the FTSE All Share Index, and limit downdraughts to 40% of any market fall, over the cycle.
Our fund portfolio today seeks to deliver attractive risk-adjusted returns while providing liquidity and low volatility for the life sciences portfolio, as we transition to invest more in this space. Over time, the fund portfolio will absorb both capital outflows and inflows, and is structured to accommodate this evolved role.
The portfolio consists of funds investing in various asset classes such as listed, private equity and debt and fixed income. We seek to protect returns by identifying a group of managers with track records of doing so. We approach risk as a matrix, and select managers on a combination of factors including their ability to capture value and sentiment, side-step market issues, and to develop and build listed and unlisted businesses. If there is any single trait we look for, it is the ability to build a book of idiosyncratic trades, which are uncorrelated to each other, and to wider market sentiment.