SVS RM Defensive Capital
Previously called SVS Brooks Macdonald Defensive Capital
Long-term capital growth and protection is the name of the game for this defensive, multi-asset fund. It aims to deliver positive absolute returns over rolling three-year periods, in a range of market conditions, with less volatility than equity funds. Beginning life as a fund used solely by Brooks Macdonald for its clients' own money, Brooks Macdonald Defensive Capital was subsequently opened to the public due to increased investor demand. The fund has since moved to RM Capital Markets in October 2024 but management of the fund has not changed. This fund does not have a performance fee.
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Fund Manager
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Niall O'Connor, Lead Manager Niall joined the Defensive Capital Fund management team at Brooks Macdonald in November 2016, bringing over 20 years of investment experience. He continues to manage the fund after it's move to RM Capital Markets. He has held senior roles in asset management and investment banking, including being part of the equities team at Credit Suisse Securities and serving as an Equity Analyst at the hedge fund Nevsky Capital. Niall also developed complex derivative pricing and risk models and served as COO at Independent Risk Monitoring, ensuring hedge fund compliance with UCITS regulations. He holds a PhD, MA, and BA in Physics from Cambridge University.
Niall O'Connor, Lead Manager Niall joined the Defensive Capital Fund management team at Brooks Macdonald in November 2016, bringing over 20 years of investment experience. He continues to manage the fund after it's move to RM Capital Markets. He has held senior roles in asset management and investment banking, including being part of the equities team at Credit Suisse Securities and serving as an Equity Analyst at the hedge fund Nevsky Capital. Niall also developed complex derivative pricing and risk models and served as COO at Independent Risk Monitoring, ensuring hedge fund compliance with UCITS regulations. He holds a PhD, MA, and BA in Physics from Cambridge University.
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Company Description
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Quote from the Fund Manager
Life is all about calculated risks; our fund prefers tortoises to hares, but is happy to take risk where already priced in or where capital is protected.
Niall O'Connor
Lead Manager
Investment process
While the types of assets that this fund holds can be a bit complicated—convertible bonds, preference shares, structured notes, bond and loan assets, and discounted assets—the goal of delivering positive total returns, regardless of market conditions, is straightforward enough. The managers seek to create a portfolio with ‘predictable’ performance by investing in assets that have fixed returns. They are careful not to overpay and will always try to buy assets when they are trading below their intrinsic value. Niall keeps a close eye on the portfolio mix and won’t hesitate to sell one of their holdings if its yield drops unacceptably, or if it seems likely to move in tandem with falling markets.
Risk
As with all absolute return funds, it’s important to remember that its absolute return target is not a guarantee, and the value of an investment can still fall. To reduce the risk of assets failing to meet expectations, the fund typically has between 80 and 110 holdings and its underlying exposure is further diversified across different regions and sectors. During its lifetime, SVS RM Defensive Capital's volatility has been higher than other absolute return and mixed asset funds, but much lower than equity funds.
ESG
ESG - Integrated
ESG considerations are fully integrated into the investment process. Each holding is assessed individually, with information taken from multiple sources including prospectuses, annual reports and recent news. As the team conducts this research itself, it can assess both risks and opportunities.
This research is built into a 25-point checklist to create a scorecard for each stock. Those with poor results will be excluded. The ESG work doesn’t stop there. The scorecard is updated annually, with improving scores adding credibility to a holding. There is also ongoing monitoring and engagement with underlying company management teams.
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