7IM makes major allocation changes

Seven Investment Management (7IM) has initiated sweeping asset allocation changes on its discretionary portfolios.

The discretionary manager has overhauled its geographical weightings in equities and has financed a large move into private equity by selling down its exposure to fixed income.

The management team has moved to a “significant” overweight position in private equity in all but its most cautious portfolios.

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“Private equity, whilst illiquid, currently offers an attractive entry point – technology sectors are developing all the time, and are somewhat uncorrelated to global macroeconomics,” the team said in an update to investors.

The managers have also increased their overweight position in hedge funds and other alternative strategies because they believe the “diverging investment environment” that is appearing in the third quarter of 2013 will benefit “strategies that seek to exploit new and unconventional risk premiums”.

The moves have been financed by a further reduction in the portfolio’s fixed income exposure, particularly reducing investment grade and high yield bonds.

The equity portion of the firm’s discretionary portfolios has undergone several switches, removing a tactical overweight position in European equities and increasing holdings in Japanese equities.