Arter said the team was strengthened by the recent expansion of its strategy unit – a team of four led by Peter Osborne, a former chief economist with Merrill Lynch Australia – which is tasked with providing analysis and guidance to the manager’s asset class specialists. While VFMC consults a specialist hedge fund advisor, it did not retain an asset consultant to help develop its investment strategy and views, making the strategy unit an integral part of the team. This enabled the team to implement investment decisions in a matter of weeks, not months, as there was no recourse to an external consultant.
At present, the strategists are warning their colleagues to be increasingly careful when investing: they should be ready for anything. “The tenor of their analysis has become more and more cautious in the last six weeks,” Arter said. They don’t see many obvious opportunities across asset classes, but recommended carefully buying assets at the relatively cheap valuations recently on offer. Rather than make a decisive strategic call amid chronic European debt problems and weak economic data from the US, “we’re happy to let things develop over the back half of the year,” Arter said. “We think some strong signals will emerge.” Or markets may just “churn” along – neither falling precipitously or rallying – in response to the entrenched problems originating from deleveraging in the West.