A long-term approach, a concentrated portfolio and an investment team with extensive experience are all factors that have contributed to GuardCap being selected as the latest equity manager at LD Pensions. Over the past year, LD Pensions has put all its equity mandates out to tender within the EU, and with GuardCap on board, LD Pensions is just one equity manager away from having assembled a highly effective equity portfolio.
We have been lacking a fund manager who can provide us with exposure to high-quality companies with strong growth and high earnings, which not only perform well in low-interest-rate growth environments such as the current one, but can also protect the portfolio during crises.
GuardCap provides this, whilst also offering an investment style that fits in with the rest of the equity portfolio.
LD Pensions has been looking for a fund manager who takes a long-term view and uses their specialist knowledge of specific companies to anticipate their future growth. With GuardCap, LD Pensions will invest in 20–25 companies which the investment team is convinced have the potential to grow over the next 5–10 years.
In the tender for the equity mandate, it was also of crucial importance in LD Pensions that a new manager integrates sustainability and active ownership into the investment process. In this respect, GuardCap was also convincing, as they have integrated ESG analysis and active ownership into their equity analysis and selection process.
A robust process and convincing results
GuardCap’s investment performance has been among the best over the past five years. GuardCap’s investment style has proved effective over the past decade of low interest rates, but that alone has not been the reason for its success. Skilled stock selection, a very robust process and strong teamwork are behind GuardCap’s successes.
“We are very aware that the macroeconomic tailwinds which have favoured GuardCap’s investment style may be challenged in the future, but with a strong investment team characterised by good diversity and dynamism, and a rigorous process in which the investment team’s decisions and views are constantly challenged, we expect the quality of our stock selection to continue and keep the returns high,” says Kristoffer Birch.
The investment team is based in London, but GuardCap Asset Management is owned by the Canadian listed financial group Guardian Capital.
Both the cost-of-living allowance funds and the new holiday allowance funds must be invested
GuardCap won the contract in a competitive tender involving 33 Danish and international fund managers, all of whom submitted bids in response to LD Pensions’ EU tender. Both funds managed by LD Pensions – The Cost-of-Living Allowance Fund and The Holiday Allowance Fund – will benefit from the forthcoming collaboration with GuardCap. The management of LD Pensions’ assets will commence in autumn 2020 at the earliest.
LD Pensions currently manages DKK 35 billion, which originates from the contributions made during the period of high inflation in the late 1970s. In 2020, LD Pensions began managing holiday allowance funds from the transitional year leading up to a new holiday legislation. This amounts to a total of DKK 40 billion, which will be partly invested in securities and partly held as receivables from employers.
