OUR INVESTMENT PHILOSOPHY
Risk management is at the heart of our investment process and so protecting the downside is key. To do this we use comprehensive risk analysis and management via the IPS Analysis, Risk and Trading (ART) system. When seeking a proprietary risk management tool we were unable to find a system that provided a sufficiently comprehensive solution to fulfil our requirements. So we created our own. IPS ART was designed and built and now provides what we believe to be an industry-leading, institutional level, risk management system. IPS ART is the backbone of our business.
Our risk management system IPS ART is an integral part of our investment process. It works alongside our Investment Committee to continually track and monitor portfolios and perform stress tests. It is constantly being developed to provide additional functionality for both us and our clients and is able to deal with sensitive tax arrangements, currency risk and also advanced investment risk.
Stress Testing provides a useful indication of the portfolio’s performance during periods of market stress. Using IPS ART we can help clients understand their true attitude to risk and potential losses by running various scenarios and showing the likely outcome for a portfolio. This clear identification of a client’s capacity for loss is a focus of the Financial Conduct Authority as the key determinant in terms of suitability of risk for a private client.
Tax Risk Mitigation
IPS ART has been developed in conjunction with tax advisers to help minimise the problems that arise for clients with complicated tax positions. The implication of mistakes can be severe for Trustees, Settlors or Beneficiaries. We use IPS ART to minimise human input to the trading process and so significantly improve the probability of compliance of the mandate’s tax requirements.
Currency Risk Mitigation
For our clients living outside of the UK with non-Sterling based currency portfolios or global families with multi-currency requirements, IPS ART can help mitigate currency risk. It provides an accurate look-through to all underlying positions and aggregates currencies. This allows us to be able to hedge excessive currency risk and to deliver a more consistent return across all currencies for the same level of risk.