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Breaking barriers: Empowering women in investment management
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Downing launches new actively managed liquid alternatives fund aiming to deliver 7% to 10%+ per annum and positive returns in most markets. The new MGTS Downing Active Defined Return Assets Fund (‘Active Defined Returns’, the ‘Fund’), is the first fund from its new Liquid Alternatives team.
The Fund is aimed at institutional investors, Discretionary Fund Managers, IFAs and advised sophisticated individual investors, and will primarily consist of UK Government bonds and large-cap equity index options, which provide significant scalability and strong liquidity. It aims to deliver 7% to 10%+ per annum and positive returns in all markets except for a sustained equity market fall (generally more than 35%), over a period of at least six years.
The Fund is the first to be launched by the new Liquid Alternatives Team established by Downing. Collectively, the team has over 125 years of experience and sector knowledge, and includes Tony Stenning, who held senior roles at BlackRock and most recently was CEO of Atlantic House Group; Russell Catley, founder and also a former CEO of Atlantic House Group; Huw Price, a former Executive Director at Santander Asset Management, and Paul Adams, former Head of Cash Equities and Derivatives Sales, Royal Bank of Canada.
The Fund offers investors a compelling building block for multi-asset portfolios, aiming to add consistent and predictable returns, typically secured with a portfolio of UK Government bonds. The unique proposition includes a hybrid approach of using systematic derivative strategies and active management, combining liquid investments with predictable returns, and an equity like risk profile.
Investment strategy: Maximising the probability of delivering predictable defined returns across the economic cycle.
Systematic Liquid Derivatives: Systematic, derivative strategies optimise the equity risk-return profile. The Fund uses rules-based derivative strategies linked to the most liquid, large-cap global equity indices (i.e. FTSE100, S&P500) with the aim of harvesting well-proven consistent returns across a wide corridor of market conditions.
Strong security: The Fund will hold a high-quality portfolio of assets as secure collateral – typically UK Government bonds.
Active benefits: At times, rules-based, passive derivative strategies can underperform when markets move strongly – this is when specialist active management can add incremental gains by monitoring and monetising positions and applying active risk management.
Key benefits
Increased consistency and predictability of returns: Positive returns in all markets except for a sustained equity market fall of more than 35% over at least six years.
Diversification of risk: The Fund’s risk components are diversified across large, liquid equity indices, observation levels and counterparties. Secured with high-quality assets – typically UK Government bonds.
Active management: Our experienced team will actively manage the Fund and its investments to optimise risk and reward for investors.
Russell Catley, Head of Retail, Liquid Alternatives at Downing, said: “Put simply, we focus your investment risk on the probability of receiving the returns you need, not those you don’t. We target the highest probability of delivering 7% to 10%+ per annum with active management adding material incremental gains. We believe that we are building the next evolution of the proven success of Defined Returns funds
The Downing team isseeing strong demand from clients looking for alternatives to large-cap equity funds which are becoming concentrated in technology stocks, or alternatives to UK equity income funds and illiquid alternatives.”
Tony Stenning, Head of Liquid Alternatives at Downing, said: “The launch of our Active Defined Return Assets Fund is a significant milestone in the ambitious build-out of our new Liquid Alternatives strategies. It is a solution-focused fund that should deliver stable high single or low double-digit returns across a wide spectrum of equity market conditions, except for a persistent multi-year bear market. The Fund is designed to enhance balanced portfolios by providing consistent, predictable returns and is suitable for accumulation or drawdown.
“We aim to deliver a unique combination of proven systematic derivative strategies and specialist active management, and we are doing so at a very compelling fee level, below our closest competitors and in line with active ETFs.”
How the Fund is expected to perform in different markets
In bullish markets: UK Government bonds secure the capital, and the equity index options deliver a predictable 7-10%+ return per annum – giving up some less likely upside.
In neutral markets and normal market corrections: UK Government bonds secure the capital, and the index options deliver a predictable 7-10%+ return per annum.
In a sustained sell-off: if markets fall more than the cover to capital loss and do not recover for six years. Then capital is eroded 1:1 in line with the worst performing index.
The average Cover to Capital Loss is targeted at 35%: the average cover to capital loss represents the average level the Global indices within the Fund could fall before capital is at risk.
Fund key risks
Performance: Capital is at risk. Investors may not get back the full amount invested.
Liquidity: Access to capital is always subject to liquidity.
Counterparty risk: Other parties could default on the contractual obligations.
Fund Structure
UK regulated OEIC fund structure, fully UCITS compliant
Daily dealing, at published NAV
Minimum investment: £100,000
SRRI: 6 out of 7
Depositary: Bank of New York
Authorised corporate Director (‘ACD’): Margetts Fund Management Ltd.
I share-class: SEDOL: BM8J604 / ISIN: GB00BM8J6044
F share-class: SEDOL: BM8J615 / ISIN: GB00BM8J6150
Risk warning: Opinions expressed represent the views of the fund manager at the time of publication, are subject to change, and should not be interpreted as investment advice. Please refer to the latest full Prospectus and KIID before investing; your attention is drawn to the risk, fees and taxation factors contained therein. Please note that past performance is not a reliable indicator of future results. Capital is at risk. Investments and the income derived from them can fall as well as rise and investors may not get back the full amount invested. Investments in this fund should be held for the long term.
Important notice: This document is intended for professional investors and has been approved as a financial promotion in line with Section 21 of the FSMA by Downing LLP (“Downing”). This document is for information only and does not form part of a direct offer or invitation to purchase, subscribe for or dispose of securities and no reliance should be placed on it. Downing does not offer investment or tax advice or make recommendations regarding investments. Downing is a trading name of Downing LLP. Downing LLP is authorised and regulated by the Financial Conduct Authority (Firm Reference No. 545025). Registered in England and Wales (No. OC341575). Registered Office: 10 Lower Thames Street, London EC3R 6AF.
As we celebrate International Women’s Day, we are proud to align with this year’s theme, #AccelerateAction, by highlighting the invaluable contributions of women in investment management. At Downing, we recognise the importance of gender diversity in finance and remain committed to fostering an industry where women thrive and lead.
In this spirit, we are delighted to feature exclusive interviews with Judith MacKenzie and Rosemary Banyard, two fund managers at Downing who, over the span of several decades, have built notable careers in the investment industry. They provide valuable insights on career progression and the evolving landscape of finance and share strategies to inspire the next generation of women in the industry.
1. Only 10% of portfolio managers are women. Is investment management a good career path for females?
Rosemary Banyard:
“I believe investment management is a great career for females as it is generally team-based, requiring collaborative skills, employs intellectual rather than physical capabilities, and can successfully accommodate hybrid or remote working practices. Most portfolio managers start as sector analysts, and this can be a fulfilling career in itself if the performance pressures associated with portfolio management are not desirable.”
Judith MacKenzie:
“I think it provides an excellent career path for anyone with an enquiring mind, an interest in business and a degree of resilience – whether male or female.
The job itself involves lots of reading and analysis, as well as time out seeing companies and investors. It therefore lends itself to flexible working which can suit both genders when it comes to family responsibilities. It also provides a clear career progression – from analyst to fund manager, and in some cases to Chief Investment Officer – and beyond.”
2. Are there specific skills or qualities you believe are crucial for success in this field? What do you consider as your biggest strength?
Rosemary:
“I believe that key attributes for success in equity fund management include a curiosity (even an obsession) about businesses, an analytical mind, good communication skills and a willingness to work hard. I consider my greatest strength to be my analytical capability.”
Judith:
“Resilience is key – typically a top quartile fund manager will be looking to get over 60% of their stock picks ‘correct’ – that means that there is always something that might not be going exactly to plan. That can be uncomfortable – having a company where a share price can fall dramatically overnight is a painful experience and leads to a rather cathartic inward- looking evaluation of what you got wrong… You need to have the ability to dust yourself off and get on with the day job.
I think I have resilience but also a down-to-earth reality check – remembering every day that I am investing money on behalf of investors who have worked hard through their lives with the aim of passing on wealth to the next generation. Sometimes fund managers can have a superiority syndrome (borne out of the need for resilience!) which detaches them from the simple fact, that we are the custodians of other folks hard earned money.”
3. Many women face unique challenges in balancing career and family. Do you think it's possible to 'have it all'?
Rosemary:
“I am a testament to the fact that it is possible to combine family and a successful fund management career. I would say that the single most important factor is having a very supportive partner.”
Judith:
“Like anything - it is about balance and priorities. It is a career that can dominate your life if you choose it to, but it also offers flexibility – a set of report and accounts can be read at 9pm at night just as well as between 9 – 5pm during the working day. I guess you must enjoy doing it - I’ve never found it a chore researching and finding out more about investments. That makes it much easier to balance family commitments. Perhaps some fund managers feel that the networking and social side of the job is important – I haven’t ever felt it is – and actively avoid broker lunches and dinners mainly because I don’t think they add anything to our investment process (albeit they are always good for industry gossip!). I don’t believe you need to be out three nights a week.”
4. In your experience, how has the workplace culture in finance evolved regarding gender diversity over the years, and what more needs to be done?
Rosemary:
“There is clearly much more awareness of the desirability of gender diversity in the City than thirty or forty years ago. However, I have noticed that during downturns, women tend to leave the workforce to start a family but generally don’t return. So, I think more needs to be done to avoid the permanent loss of this talent. I also still observe elements of unconscious bias. For example, a lot of City social events are targeted at stereotypically male interests.”
Judith:
“It has come a long way, but at the same time I have just presented to a group of 25 investors today and only one was female, so there is still a long way to go. The number of women entering the industry has improved but we are not keeping hold of them through the family life-cycle. It therefore feels like that should be the area of focus – and is something that Downing is trying to resolve in its own small way.”
5. How do we encourage and support the next generation of women in finance?
Rosemary:
“I think the encouragement of women (and men) into finance needs to start young, and I would like to see more in the education curriculum generally on the importance of saving, budgeting, key concepts such as the price of time (i.e. interest) as well as media awareness and celebration of entrepreneurship and the role of businesses in society. I would like to see more efforts to encourage women to join investment clubs at universities. At Clare College, Cambridge, where I studied, there is a women-only investment club, the Cutty Sark Society, which teaches about investing and actually manages a live portfolio on behalf of the college. I would like to see more of these, and role models amongst female portfolio managers being more visible to women at university, to raise awareness of this brilliant career option.”
Judith:
“Very simply – tell them about it. I feel a personal responsibility to ensure that the next generation at least knows about careers in finance – whether they opt to take it or not is another thing. But the education of finance and money at school age is woeful. I was part of an initiative called Young Enterprise when I was at school and it was there that my eyes were opened to how the money world went around. I am keen to support similar initiatives and will take any and every opportunity to spread the word through schools and universities.”
Conclusion
The insights shared by Judith MacKenzie and Rosemary Banyard reinforce the vital role of education in empowering more women to pursue careers in finance. Their experiences highlight both the progress achieved and the approaches to encourage and support the next generation of women in finance.
At Downing, we encourage the #AccelerateAction theme of International Women's Day by fostering an environment where knowledge, mentorship, and opportunity drive meaningful change. By promoting education and increasing visibility for women in finance, we can inspire the next generation of female leaders and build a more inclusive industry.
Further resources:
Judith and Rosemary delve deep into the challenges and opportunities of being a woman in finance in Season One of their Investing for the Long Term podcast.Listen to the podcast.
Rosemary also participated in ShareSoc's webinar where the panel discussed "How we can encourage more women to take an interest in investing?". Watch on-demand.
In addition to the above, Rosemary appeared as a guest on Edison's webinar panel, where the group discussed "International Women’s Day: Are we missing a trick?". In this discussion, a panel of highly experienced women from across the financial community talk about the additional value that a female perspective brings to investment decision making and the missed opportunities for addressing a wider audience in terms of how we market financial products. Watch it on demand.
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