He suggests a similarity in the roles is the need to look at “real assets” – things that exist physically, such as bricks and mortar property.
“It is all about trying to see how you can actively mange assets and deliver returns for clients and so deliver performance,” he explains. “This is the same in real estate and in managing multi-asset portfolios. The real challenge is to take on board all the different asset classes, all the different investment strategies, and combine that in a single portfolio to deliver the smooth returns we’re all seeking.”
At school, Mr Waddington’s dream job was not fund management, but rather chartered surveying. This led to a career at Savills straight out of university, in which capacity he bought, sold and redeveloped shopping centres. But after five years, a career change beckoned, and he enrolled on an MBA course at the Australian Graduate School of Management.
“While I was there, I met the chief executive of Rothschild Australia, and he asked me to join the company. It then became BT Financial Group in Australia, and I stayed down there for six years. That was my first move into multi-asset portfolios. I joined Insight in 2008 and I have been running multi-asset portfolios since then.”
The manager says part of the lure of joining Insight was the “emphasis on an investment-led organisation”, while multi-asset investing continued to attract him on the basis that it involves continually learning and understanding what is happening around the world and how it affects different economies and markets.
I like the fact that we have the ability to look across all asset classes, all geographies and all investment strategies“So, the ability to have a role where you can look at that every day and understand the implications for investments was very attractive, and still is. It’s one of the fortunate things about being in the role I’m in.”
That said, he acknowledges the very thing that fascinates him is also a constant challenge.
“Every day, you see what is challenging around the world, so it is [about] being able to comprehend what is happening, making an assessment of that and translating it into what needs to be done in the portfolios. It is a continuing challenge, but it is one of the opportunities and one of the things we relish here. Obviously, going through the stressed, turbulent times of 2008 and the European sovereign debt crisis of 2011-12 are challenges, just like you see at the moment with what is happening in Ukraine.”
While the multi-asset strategy team tend to take investment views of between one and six months, Mr Waddington says they are clear with clients that the team will reflect what is happening around the world in the portfolio on a daily basis.
“This comes back to the point of it being very liquid. We have no capacity concerns at the moment, and it needs to be liquid to implement those views. Regarding Ukraine, we increased our duration exposure as we saw some heightened concerns, but we haven’t needed to change anything else in the portfolio. We have very low exposure to emerging market debt, and we have a position where we are favouring developed markets over emerging markets, which is helping in the more turbulent environment.”
At Insight, the team runs one core strategy and one core capability, but this can be applied to a few funds. These include the retail-focused Insight Global Absolute Return fund and the Insight Global Multi-Strategy fund, which are available through the BNY Mellon platform, while the two institutional offerings are the Insight Broad Opportunities and the Absolute Insight Dynamic Opportunities funds.
“The plan is to take this capability to other clients. We have a very strong client base in the UK, especially in the pensions markets, but we are seeing increasing interest throughout Europe. As it is a global capability, with no home bias, we are also seeing interest from further afield, including Australia, Asia and the US,” explains Mr Waddington.
“So, the next growth for us is to continue offering the capability in Europe, but also in the new markets of Australia and the US in particular. It might mean a little more travelling, but we don’t do much travelling on the team. We have great client support, which means we can focus on managing the money.”
At the moment, he suggests the four fund offerings deliver to the different client bases of the company. However, he says that should the capability and strategy be extended to Australia and the US, it would probably lead to new funds domiciled in those jurisdictions – although the manager has no intention of moving back to Australia, in spite of having spent a “good six years” there.
It is clear that while Mr Waddington enjoys his job, he can still switch off. The sport-mad manager is a keen cyclist, and the daily commute by bike allows him to switch off. At the same time, he says he is always interested in what is happening around the world. “I certainly switch off, but it is a very mixed lifestyle in that it is an intense role in the office,” he says. “You’re always attuned to what is happening, and always interested, but you need to have a good balance.”
In such turbulent markets, multi-asset certainly seems to be the sector most people are talking about, as Mr Waddington points out. “I like the fact that we have the ability to look across all asset classes, all geographies and all investment strategies, and from those select what we want to be invested in, rather than being focused on just one area,” he says.
Given the current low-growth economic environment, some managers would be cautious on where to find opportunities. However, the global approach of the manager’s strategy means he has the ability to move across the investment spectrum. “It is a fragile growth environment – and a divergent growth environment,” he notes. “The US is starting to recover, and there is more confidence in the economic recovery there than in other areas. Emerging markets are also still growing, but less strongly than in the past.
“Also if you look at the inflationary environment, it is quite benign in the short term, but the long-term impact of quantitative easing could be significant. Meanwhile, the continued political stresses around the world mean it is a very volatile environment, so there are lots of opportunities to capture returns in the portfolios.”
At the moment, he notes the team is positioned to try to capture growth through equities, rather than credit exposures, although the strategy also contains a number of non-directional positions.
“We try to mix elements of market-based returns and the active management of those with components of the portfolio that are less, or not at all, reliant on the direction of markets to deliver positive returns. So, relative value positions are a good example of that, and in an environment that can be quite turbulent, this can create some good opportunities.”
Being in the multi-asset space means Mr Waddington has seen many of the new investing opportunities that come to market, although the multi-asset team invest in very few of them.
One area of interest is loans, but the team do not currently invest in them, as they are not a transferable security and so are not eligible for Ucits. “While they are of interest as an area, it has to be in the right vehicle for our client base.”
In such a constantly changing environment, it is clear Mr Waddington enjoys both his role and the challenges it brings on a daily basis. “This is firmly the job I enjoy, and I am in a very fortunate position to be able to do what I love doing every day. I can still see myself here in 20 years time, doing the same thing.”
