As investors navigate persistent inflation and heightened market volatility, demand for strategies that can diversify risk and deliver more predictable outcomes continues to grow.
The search for diversification beyond traditional equity and bond allocations is creating fresh interest in defined-outcome and liquid alternatives strategies, according to newly launched asset manager Capel Asset Management.
The boutique firm, which has been created following a management buyout from Downing LLP, believes investors are increasingly seeking solutions that can improve portfolio resilience while remaining liquid and accessible.
Capel enters the market with two multi-asset strategies already in operation: the MGTS Capel Active Defined Return Assets Fund and the MGTS Capel Diversified Opportunities Fund.
Together, the funds aim to offer investors differentiated sources of return through a mix of derivatives, alternatives and traditional assets.
The launch comes at a time when many investors are reassessing how portfolios are positioned against a backdrop of inflation, market volatility and changing interest rate expectations.
Paul Adams, Capel’s chief investment officer, said: “Against an economic backdrop characterised by persistent inflation and higher volatility, there is clear investor appetite for solutions that target defined outcomes, improve a portfolio’s risk/return profile and that are liquid by design.”
One strategy focuses on delivering more predictable returns through a diversified portfolio of gilts and global equity autocallables, while the other is positioned as a defensive core holding with low correlation to traditional equity and bond markets.
The approach reflects a broader trend within multi-asset investing, where managers are looking beyond conventional asset allocation to provide diversification and manage downside risk.
Commenting on the firm’s launch, chief executive Russell Catley said: “Our focus is squarely on continuing to deliver excellence in terms of market-leading investment performance and cost, to help clients achieve their objectives.”
The development highlights the growing range of multi-asset solutions available to advisers seeking alternative sources of return and diversification.
As market conditions remain uncertain, defined-outcome strategies and liquid alternatives are likely to remain an area of interest for investors looking to balance growth opportunities with risk management.
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