Takatsukasa Alliance | Strategy

Strategy

Multi-manager strategies

Takatsukasa Alliance’s multi-manager strategic solutions integrate independent sources of alpha from our range of investment approaches through the use of proprietary risk management techniques. Our internal surveillance of investment strategies depends to a major extent on the portfolio managers.

Our Sectors

Investment process

The portfolio managers focus on convincing approaches and divergent philosophies. Security maintenance and risk allocation depend on the correlation between strategies from different perspectives (philosophy, alpha and risk) and the power of conviction.

Build an integrated risk framework – The managers analyze the investment strategies and establish a risk framework in order to manage capital allocation and risk levels.

The investment process is represented through the following four principles:

Risk-factor diversification – We advance an approach that stabilizes the exposure of risk factors and make sure that security selection for the long term positively influences portfolio performance.

High active-share strategies – We noticed that high active-share managers have often outperformed low active-share managers in the case of several equity categories and helps avoiding the phenomenon of closet indexing.

Less focus on historical returns – Flexibility should be a central feature when handling multi-manager portfolios to allocate to new strategies or to those that meet conviction, risk-factor and active-share criteria.

More focus on performance in market tails – Traditional systems of measurement such may not efficiently anticipate performance or identify the levels of performance within market extremes. We outline how much alpha is produced and in what time frames.

Qualitative and quantitative assessments – The managers along with other team members are focusing on strategies with differentiated investment philosophies and high active share. We support our managers to manifest their main competency. Strategies are also evaluated through a quantitative perspective. The objective is to depict individual alpha sources and mix them in order to minimize most systematic risk biases in the portfolio. The managers are using diverse analytical tools such as overlap analysis, alpha correlation, market conditions and scenario analysis.

Portfolio construction – Research, investment knowledge and risk management approach are key points within portfolio construction processes. We support diversified strategic solutions that have a similar profile to the benchmark and the potential for high alpha generation.

 

Addressing client needs

Strategic solutions develop several primary equity-based approaches, including the following:

 

Client need

Solution

Complement core equity allocation

  • Alpha

Increase exposure to global equities

  • Global Equities

Increase exposure to international equities

  • International Equities

Increase exposure to Japanese equity markets

  • Japan Alpha Opportunities