Asset Management
With Intent.
At Salvo Investment Managers, our main objective is to manage investment portfolios that generate above-average investment returns at below-average risk.
We believe that this is possible by combining Building Block solutions that employ unique, specialist asset managers. This, together with an active asset allocation process, can enhance returns whilst simultaneously lowering risk for investors throughout a market cycle.
Additionaly, investors can access truly uncorrelated Alternative investment portfolios to ensure that they are truly diversified in their long-term portfolios.
Authorised FSP 47740
Qualified Team
Award winning
Multi-Manager Solutions
Successful Long-Term
Track Record
About SALVO Investment Managers
Salvo Investment Managers (Pty) Ltd is a registered Category II Fincancial Service Provider with the Financial Sector Conduct Authority (FSP 47740). Our primary function is the management of investment portfolios. Our core strengths are our independence, objectivity, and flexibility in the way we manage these portfolios. We believe in surrounding ourselves with quality third-party service providers as we constantly aim to improve our investment processes and outcomes. The company is managed by a team of dedicated investment professionals with relevant experience and qualifications.
Meet your specialised team
Salvo Investment Managers
56 Years of Experience
Qualified Team
Independent & Owner Managed
R4 Bn + AUM
Investment Offering
Salvo Investment Solutions
Salvo BCI Income Fund
Fund Mandate
ASISA Multi-Asset Income Category
Asset allocation across asset classes
This fund complies with Regulation 28
Fund Objective
The investment objective is to outperform the STEFI Composite index by 1%. We employ specialist income managers and overlay a well-researched asset allocation process to achieve a high level of sustainable real income and real capital preservation. The fund invests primarily invests in a combination of liquid assets such as money market instruments, government bonds, corporate debt, listed property, preference shares and equity securities.
Ideal Investor
A conservative investor that is looking for an alternative to cash or bank deposits over a 1-2 year period.
Corion FR Absolute Retail Hedge Fund
Fund Mandate
ASISA Multi-Strategy Retail Hedge Fund
The fund may be included in a portfolio that complies with Regulation 28 but does itself not comply
Salvo manages the fund in association with Corion Capital.
Fund Objective
The investment objective of the Fund is to outperform STEFI Composite over the medium term. The target return of the fund is to outperform STEFI by 3% after costs. The fund invests in different, non-correlated hedge fund strategies that aim to generate Absolute returns regardless of overall market directions. A secondary objective of the fund is to have a low correlation to traditional funds and asset classes, thereby complementing such portfolios over the medium term.
Ideal Investor
Moderate-Conservative Investors that seek diversification to an existing traditional portfolio
Salvo BCI Dynamic Flexible Fund
Fund Mandate
ASISA Multi-Asset Flexible Category
No minimum or maximum exposure to equities
Maximum of 45% exposure to international assets
Fund Objective
The investment objective of the portfolio is to outperform JSE-listed equities (JSE Capped All Share Index) at a lower risk over the long term. The fund invests across different local and international asset classes and utilises a flexible investment mandate, which allows us to actively manage risk and enhance returns. The fund does not comply with Regulation 28.
Ideal Investor
Investors with an Aggressive risk profile and a Time horizon of more than 7 years.
Salvo Global Managed Fund
Fund Mandate
Guernsey registered master fund
TFSCA Section 65 Approved & feeder fund
No minimum or maximum exposure to equities
Fund Objective
The investment objective of the portfolio is to generate capital growth from international markets. The fund seeks to outperform a composite benchmark of: 75% MSCI World Net Index and 25% US Cash rates. The fund invests across different international asset classes and utilises a flexible investment mandate which allows us to manage risk and enhance returns.
Ideal Investor
Investors with an Aggressive risk profile that seek exposure to international markets with a time horizon of more than 7 years.
Investment Philosophy
Our investment philosophy is consistent and applied across our entire investment offering. It anchors the way we manage capital & provides us with flexibility to adapt to changing cycles and investment regimes.
Flexible & boutique
Our mandates are unconstrained as far as possible, allowing only the best ideas to enter a portfolio. Boutique managers offer significant advantages such as transparency, implementation & costs.
Diversification
To us, diversification is more than just exposure to different asset classes. Rather, it is targeted & concentrated into the Best Ideas. We avoid over-diversification at all costs, which erodes investor returns over time.
RISK-ADJUSTED RETURNS
We believe above-average risk-adjusted returns will outperform most other managers through the investment cycle. Asset allocation & active risk management help us achieve this objective over time.
investment costs
We aim provide the diversification benefits of multi-manager and multi-strategy investing at the cost of the average single-manager portfolio with a comparable mandate.
ACCESS OUR SOLUTIONS
Our investment solutions are available on most retail investment platforms with the exception of the Share Portfolio (Which is directly mandated with us). Our unit trust funds are available on the following administration platforms:
Allan Gray
Momentum Wealth
Glacier Investments
PPS Investments
Old Mutual
INN8
Frequently Asked Questions
INVESTMENTS 101
Asset classes are the underlying instrument of an investment portfolio in which an investor’s capital is invested in. Asset classes can be categorised as traditional or alternative.
This is a risk management strategy that reduces overall investment risk by spreading the portfolio’s exposure between underlying assets, managers, geographies etc.
The sharpe ratio is the average return earned in excess of the risk-free rate per unit of standard deviation or risk. So if an investment returns 12% at a standard deviation of 5% and the risk-free rate was 4%, the sharpe ratio is: (12-4)/5 = 1.6
Volatility refers to fluctuations in value of an asset or portfolio. Higher fluctuations (volatility) in value are dangerous for an investor with a short-term investment horizon, because the value of the underlying asset could possibly not recover from a large drop in value in the short term. Different asset classes have different levels of volatility, therefore it’s important to allocate capital appropriately according to the invest need.
ALTERNATIVE ASSETS
Hedge funds aim to achieve positive returns at a reduced level of risk. Characteristics making hedge funds unique include the use of derivatives, short selling, leverage etc. to be able to extract positive performance in both upward and downward trending financial markets. Although hedge funds invest in the same asset classes as traditional unit trust funds, they can take advantage of a wide range of price adjustments and thereby generate other sources of return. Hedge Funds tend to have low correlations to traditional portfolios of stocks and bonds, therefore, allocating an exposure to hedge funds can be a good diversifier.
Under the new regulation, CISCA classifies hedge funds into two categories- retail investor funds(RIHF) which have more stringent regulatory requirements, and qualified investor hedge funds(QIHF)
A qualified investor, as defined by the Financial Services Board(FSCA) Board Notice 52 of 2015, is any person who invests a minimum investment amount of R1 million per hedge fund and who –
- Has demonstrable knowledge and experience in financial and business matters which would enable the investor to assess the merits and risks of a hedge fund; or
- Has appointed a Financial Services Provider (FSP) who has demonstrable knowledge and experience to advise the investor regarding the merits and risks of a hedge fund investment.
A retail investor hedge fund is defined as a hedge fund in which any investor may invest because it meets the requirements set out by the FSCA.
Some of the characteristics are tabulated below:
| Retail Investor Hedge Fund | Qualified Investor Hedge Fund | |
|---|---|---|
| Investors | Available to general public (different minimums) | Only available to qualified investors (>R1,000,000) |
| Gross exposure limit | <200% | Not Defined |
| Disclosure to clients | Monthly | Quarterly |
| Max equity holdings | <10% | Not Defined |
| Investor Liquidity | Calendar month | 90 Days |
| Risk management | Daily | Daily |
| Marketing | Able to solicit investments from all investors. | Only solicit and accept investments from a restricted pool of qualified investors. |
The buying of a security such as stock, commodity or
currency, with the expectation that the asset will rise in
value.
For example, an owner of shares in Stock Sasol is said to
be “long Sasol” or “has a long position in stock Sasol”
For example
Buy 10 Sasol shares @ R100 per share (with the expectation that the asset will rise in value).
Total investment = R100 x 10 = R1000
The share price rises to R135 per share
Portfolio Value = R135 x 10 = R1350
Profit (when selling) = R1350 – R1000 = R1350 = R350/R35 per share
The sale of a borrowed security, commodity or currency
with the expectation that the asset will fall in value.
For example, if a manager borrows and sells Stock Sasol,
it is said to be “short Sasol” or “has a short position in
Stock Sasol”
For example
Borrows 10 Sasol shares and sells on the open market @ R100 per share (with the expectation that the asset will fall in value).
Share price declines to R75 per share
Portfolio Value = R75 x 10 = R750
Profit (when buying back) = R1000 – R750 = R250 = R250/R25 per share
Equity long/short:
Funds aim to generate positive returns by being simultaneously long and short in the equity market. Market risk is reduced while company specific risk is retained. The majority of local equity long/short funds tend to be long biased.
An investing strategy of taking long positions in stocks that are expected to appreciate and short positions in stocks that are expected to decline. A long/short equity strategy seeks to minimize market exposure, while profiting from stock gains in the long positions and price declines in the short positions.
Equity Market Neutral:
Funds take similar sized long and short positions in related equity sectors with that effect that directional market risk is offset.
A strategy undertaken by a manager that seeks to profit from both increasing and decreasing prices. Market-neutral strategies are often attained by taking matching long and short positions in different stocks to benefit from mispricing and delivering positive returns from both the long and the short stock selections and reducing risk from movements in the broad market.
Fixed Income Arbitrage:
An investment strategy that attempts to profit from arbitrage opportunities in interest rate securities. When using a fixed-income arbitrage strategy, the investor assumes opposing positions in the market to take advantage of small price discrepancies while limiting interest rate risk.
This general strategy type includes basis (e.g. cash, futures), yield-curve and credit spread trading, as well as volatility arbitrage.
Statistical arbitrage:
Quantitative models are used to identify market opportunities and establish short-term positions involving a large number of securities.
Volatility arbitrage:
Funds aim to exploit mispricing is the result of different volatility assumptions by price makers.
Commodities:
Funds that predominantly invest in soft or hard commodities. These funds can follow a number of different strategies to obtain alpha from this asset class, including trend following or non-directional market neutral strategies.
Traditional Assets
A traditional asset class consists of the following 4 asset classes: cash, bonds, property and equity.
Cash is the asset class with the lowest exposure to risk because a fixed interest rate is used. Cash as asset class is predominantly represented by money market instruments. When cash is used as an underlying asset it is important to into consideration the effect of inflation because traditionally this asset class struggles to outperform inflation over the long term. Cash can thus be seen as a short term asset class which can act as a safe haven in times of market fluctuations.
Bonds contain more risk than cash. Corporate and governmental institutions borrow capital and repay it at a fixed interest rate for a fixed time period. Capital is thus not liquid in this time period. Interest earned by the bond (the coupon) is usually higher than that of cash but is correlated to prevailing market cycles.
Property as an asset class contains more risk than fixed interest investments. An investment in property will be appropriate for investors requiring income as well as capital growth.
Equity is the asset class that has delivered the highest growth over time compared to other asset classes over the last 20 years. It also contains the highest level of risk. In an investment portfolio equity is used for capital growth but dividends are also declared by the underlying companies. This asset class is suitable for investors with an investment horizon of more than 5 years because of the inherent volatility of equities.
WHAT TO EXPECT FROM MY INVESTMENT
It’s your investment – you decide how much, when and how you want to invest. You can add lump sums to your investment at any time. You can set up a debit order (minimum R500) at any time, which you can change, pause or cancel as your needs change. You own the units you have bought and your investment continues to earn return until you decide to sell your units.
We will send you a statement monthly showing how many units you have in your account, and what the rand value is. Alternatively, you can call Salvo at any time to get info about your investment.
