Founded in 2004, Fulcrum Asset Management is a multi-asset fund manager with assets under management of USD6.1 billion and a team of over 70 people that includes economists, asset class specialists and systematic researchers.
Paul Seaton, director, North America, has been with the firm since inception and took up his role in expanding the firm into North America in 2016. There is now a team of four in the US with three in New York and one in Chicago.
Seaton says: “The mission was to grow our US client base as what we do across our range of discretionary and systematic strategies is relevant here.”
The firm launched a 40 Act vehicle three years ago in 2015 representing the Diversified Absolute Return strategy in which two thirds of the firm’s assets reside and which began in 2008. “It contains elements of everything we do, combining fundamental and behavioural research,” Seaton says.
“Multi-asset is less developed in the US than in the UK and Europe, but it has increasing relevance, particularly when you have had a roaring equity market. It has been slightly tough to gain traction but during periods of equity volatility, as we are experiencing now, and when fixed income is also not looking as rosy, people want to reduce their dependency and see this as something they could use.”
So far, the firm has raised USD200 million in the US, mainly from institutional, endowment and not for profit type investors who are using this strategy as a diversifier and funding from their fixed income allocation.
“We have the tools to manage and produce returns in all environments and make money when equities and bonds are both down, as happened in the first quarter of this year.”
The performance objective is inflation plus 3-5 per cent on a rolling five-year basis and the fund is up 5 per cent on a 12-month basis: “We are on the runway,” Seaton says. “We are not going to hit it every year as there are periods when opportunities aren’t so fruitful.”
The strategy is fundamental macro using behavioural and systematic elements to better understand tactical drivers in markets.
“We have been doing this a long time,” Seaton says. “We have a very broad canvas and it’s a collaborative team effort. It’s very much about the path of returns for investors.”
Seaton has observed that traction is growing with more RFPs coming through and more invitations to join beauty parades. The fund was recently listed on the UBS Wealth Platform. Fees stand at 90 bps.
“As we get ahead of diminishing returns we are seeing the wealth market come to us as they are looking for something diversified, liquid, transparent, fairly priced and institutional in quality,” Seaton says.
Seaton also says there is increasing interest from US investors in its range of systematic strategies, which are not only an important part of the Diversified Absolute return toolkit, but which are also available for investors to directly access. The firm has USD1.7bn in these systematic strategies including trend-following and multi-asset alternative risk premia.