Keeping It Simple
If you can't explain it simply, you don't understand it well enough (By Rob Nankivell, 1st November 2019)
One of our core ambitions when we set up the iPartners business was to enable investor access to a range of alternatives for their portfolio in a simple way.
We focused initially on building the investor on-boarding process to be as simple and intuitive as possible. Adding investing entities and accessing transaction data rooms followed as did the process of actually investing. An online full service platform has been the result, and the investor experience is front of mind at all times.
iPartners' messaging similarly is simple, easy to understand and clear on both the potential returns , and also the risks of an investment.
By way of contrast, I noted a paragraph from the recent annual report from the Future Fund - the linguistic gymnastics seen here are something we try to avoid - even though we are fans of what the fund has achieved by way of it's heavy emphasis on alternatives as a core asset class. It says:
"Within the enhanced beta sleeve, we have refined the implementation of each sub-strategy. During the year, we further diversified our allocations to achieve a more robust balance of long term equity factor premia and risk. We continue to maintain a defensive core via our exposure to high quality and value risk premia."
Whilst their target audience may be different to ours I think their message is clear: we are trying to increase returns by taking a range of risks around a dependable core. But your interpretation may be different from mine.
As our business grows, and the range of investments within which we participate broadens, we maintain a simple, repeatable path to market with a consistent document package and investment philosophy.
That philosophy is based upon an understandable thesis, a clear path to exit, and a co-invest model where our investor's interests are aligned with others who have material skin in the game.
As Albert Einstein was apparently fond of saying:
"if you can't explain it simply, you don't understand it well enough"
We will continue to look deliver interesting investment opportunities - these need to be expressed simply and be easily understood. Once done, the process of making the investment and monitoring it going forward all have to meet the KIS (keep it simple) fundamentals.