LIO

The LIO provides expert, strategic investment advice in Asset Management, Risk Management, Investment Banking, Insurance and Pensions to long-term institutional Asset Owners.

Recent clients include UK pension funds, UK & EU insurance companies and university endowments, with assets ranging from £80 million to £80 billion. If you would like to discuss a project of any size, or wish to have a discussion about any particular aspect of investing, please contact us.

Having recently completed an MSc in the Philosophy of the Social Sciences at the LSE, Paul is writing a lecture series on the Philosophy of Finance for colleges and universities, whilst exploring a PhD thesis that investigates and challenges the scientific basis of finance. If you are interested in any aspect of this, please get in touch.

Contact Us

London Investment Office,

47b Welbeck Street, London W1G 9XA

+44 20 3889 0838

info@lio.co.uk

Halsey Capital Partners Ltd: Company Number: 0515 6817

VAT Registration Number:  107 7750 11

www.halseycap.com

LIO

http://linkedin.com/

Find Us

47b Welbeck Street is on the corner of Bulstrode Street. The entrance is on Bulstrode Street.

Can you see the Wood for the Trees?

Endowments need long-term, secure assets that generate some cash, but most importantly, grow in perpetuity. Ideally they should add diversification from core financial markets.

LIO is looking at an interesting asset class that meets these objectives: Forestry.

LIO would not be the first to explore this, but in a world where 7.0% net per annum is barely attainable without significant risk in conventional markets, this looks interesting. Contact us for more information.

 

 

 

 

 

When is GBP currency risk not GBP risk?

Investors may have noticed an interesting relationship between the FTSE100 and the GBP/USD exchange rate. As the pound has plummeted, the FTSE100 has risen. This has nothing to do with ‘cheaper exports’ boosting profits; it is because the FTSE 100 is dominated by multinationals. Their profits are in a mixture of currencies, but many tied closely to the USD. So a $100 profit is now worth £80, not £75. And these companies’ share prices are now higher – in GBP.

Consider what this means for an equity portfolio in the FTSE100 – it is not really GBP risk, but a USD-weighted global basket of currencies.

 

 

 

When the Risk-Free rate is anything but

Endowments generally have little concern with the ‘risk-free’ rate of interest, as they are typically investing in perpetuity. It is very different for Insurance companies, with long-term fixed liabilities; whereas Pension Funds seem to live in both worlds at the same time.

It is also worth reflecting on how EUR Government Bond yields are now unwinding a decade of national convergence. So what defines the EUR risk-free rate?

As a benchmark, it is purely a mater of convenience, and the German Bund yield will do. As a measure of risk though, it is very different. If I  have a financial claim in France, I might consider the excess spread (over Bunds) tells me something about the probability of not getting back quite what I expected.