Liontrust appoints new SAA and risk profile oversight providers for Multi-Asset ranges

January 31, 2023

Liontrust has appointed new providers of the Strategic Asset Allocation (SAA) and risk profile oversight services for its Multi-Asset (MA) ranges of funds and portfolios. The Liontrust Multi-Asset investment team, headed by John Husselbee and James Klempster, manages £5.8 billion in AuMA (assets under management and advice) across their MA fund and portfolio ranges (as at 16 January 2023).

Liontrust has chosen Hymans Robertson as provider of SAA and Defaqto as provider of risk profile oversight services. This followed a periodic review in 2022 of the leading providers in the market as part of Liontrust’s ongoing due diligence on behalf of investors.

Hymans Robertson is working with Liontrust to develop models for the broadest range of investable asset classes and has the expertise to help combine these asset classes in constructing SAAs to help meet the suitability requirements of investors.

Hymans Robertson is working on ensuring Liontrust can utilise the broadest range of asset classes and combine asset classes for the benefit of the SAA and meeting the suitability requirements of investors. For example, Hymans Robertson has created a bespoke model for an Alternative Investments asset class to replace the current use of UK Property in the SAA which enables larger and more diversified allocations to alternative investments.

John Husselbee, Head of the Liontrust Multi-Asset team, said:

“Numerous studies have demonstrated that the SAA drives the majority of the risk and return of investment funds over the long term and both providers have key roles in ensuring our funds and portfolios meet investors’ suitability requirements.

“These changes are also being made because we believe the next 10 years of investing will be different from the previous decade. This requires investors to have greater flexibility over asset allocation and access to asset classes.

“Hymans Robertson has a strong track record with an over 100-year history in independent pensions and financial services. The company provides us with access to a large team of professionals and systems to support Liontrust and therefore our investors.

“Defaqto has been operating for over 25 years, employing more than 60 analysts who spend 400 hours a day monitoring the market. Defaqto analyses over 18,000 funds including fund performance, risk-adjusted return ratios and costs.

“Both Defaqto and Hymans Robertson have demonstrated that they can add significant value to the Liontrust Multi-Asset team and therefore advisers and their clients.”

Liontrust will be managing each of the target risk funds and portfolios in line with their stated risk profile and these profiles will now be measured and overseen by Defaqto, with an associated Defaqto risk profile. They will continue to map to a range of widely used third-party risk profiling providers.

Liontrust is also changing the names of some of its fund and portfolio ranges to better reflect the way they invest and to bring consistency across them.

We are changing the name of the MA Passive fund range to MA Dynamic Passive in April 2023. The Multi-Asset investment team actively manages the MA Passive range, including through the ability to select investments from across the market and change them when appropriate, as well as alter the tactical asset allocation (TAA) on a quarterly basis to reflect the economic and investment markets’ environment and the fund managers’ changing investment views. While the underlying holdings are passive securities and vehicles, the dynamic management of the funds has led us to change the name of the range to MA Dynamic Passive.

The name of the MA Passive Dynamic Fund is changing to the MA Dynamic Passive Adventurous Fund. This better reflects the fact that the Fund has the highest risk profile within the range. We will also be changing the names of the MPS ranges to bring them into line with the Liontrust MA fund ranges. These name changes are: