We regard ourselves as a fundamentally oriented, largely contrarian, investment manager whose decisions are supported by a comprehensive range of quantitative tools. Our investment process includes multiple levels of checks and balances in a team-based setting so that our individual areas of expertise can benefit further from the insights of others.
Our philosophy in relation to the investment process is derived from the following observations:
- Risk premia for bearing liquidity and default risk exist for patient investors in credit
- The demand for credit across different segments of the economy varies unevenly over time
- The flow of funds across credit segments is not fully efficient
- Liquidity imbalances occur from time to time which offer more patient investors with opportunity;
- Mean reversion is present in key drivers of credit risk prices as well as key drivers of government interest rates; and
- Risk characteristics of credit portfolios display a degree of persistence which makes statistical risk analysis viable.
Realm seeks to extract favourable risk adjusted gains from credit portfolios by:
- Developing sophisticated, flexible and intuitive tools to examine portfolio risk and applying investment judgment
- Identifying circumstances where there are adequate rewards for bearing liquidity and credit risk;
- Investing flexibly in a wide range of sectors and via a wide range of channels
- Maintaining liquidity within the portfolio holdings in order to be in a position to exploit imbalances;
- Acting in a broadly contrarian fashion in relation to credit exposures and in the utilisation of interest rate duration.