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ipac multi-manager portfolios are built from the core. ipac establishes a solid base and then adds more specialist managers that are less benchmark aware where appropriate. These specialised approaches have the potential to enhance the return while still managing risk.
At the asset class level we want to avoid persistent and unintended style and other structural biases. The key drivers are to:
- Improve risk through diversification.
- Reduce reliance on single manager selection.
- Add complementary skill sets.
- Reduce unintended ‘bets’.
Key inputs into the portfolio construction process include performance objectives, the acceptable level of risk, competitor considerations and the cost structure. ipac overlays investment strategy inputs such as asset class returns, contribution from active management and ipac’s preferred manager list. The investment policy outcomes include the strategic asset allocation, optimal manager combinations, performance targets and portfolio rebalancing guidelines.
ipac uses analytical tools to model different asset allocations and combinations of fund managers. ipac also models sensitivity of the risk and return of the aggregate portfolio (and its individual parts) to changes in key investment assumptions. | 
