Trustnet Magazine Issue 46 December 2018 | Page 20

Advertorial feature
James de Bunsen and Peter Webster reveal how they are positioning
Henderson Alternative Strategies Trust for the latter stages of the
business cycle
Alternative times
call for alternative
solutions
A
t Henderson Alternative
Strategies Trust (HAST),
we have been gradually
reducing the portfolio’s
riskier positions in anticipation of a
downturn and October’s sell-off was a
comforting nod to the team’s efforts.
October may have been a sign
of things to come with increased
volatility typical of the latter stages
of the business cycle. The FTSE
World Index, which HAST aims
to outperform over the long-term,
returned -5.5% during the month. The
Trust returned -2.2%, which means it
outperformed the benchmark by 3.3%
(source: Bloomberg) during a tough
month for global investment markets.
The Trust’s NAV was also less sensitive
to the late January/early February sell-
off in global equity markets.
This is encouraging in the sense that
we have built the portfolio to be less
FE TRUSTNET
[ JANUS HENDERSON ]
18 / 19
correlated with mainstream equity
and bond markets over recent years. It
gives us some confidence that we are
moving in the right direction and we
can weather the storm and keep our
shareholders happy.
Reorienting the portfolio to a ‘risk-
off’ (less risky) position has been a
gradual process, but now we are close
to where we want to be. We have
divided the portfolio into six distinct
categories: hedge funds (23.7% as
at 21st November), private equity
(29.6%), listed equity (15.4%), property
(12.2%), commodities (4.0%) and
credit (11.1%). Using these categories
we can demonstrate the diversity of
the portfolio and why we believe it will
be resilient to volatility.
hedge fund positions with the sector
taking a heavy beating during the
month. Our largest hedge fund holding
is the Blackrock European Hedge Fund.
The fund takes both long and short
positions to invest in the public equity
markets of Europe. It invests in stocks of
companies operating across diversified
sectors and invests across all market
capitalisations, with the primary aim of
maximising total returns.
We have built the portfolio
to be less correlated with
mainstream equity and bond
markets over recent years.
It gives us some confidence
that we are moving in the
right direction
Listed equity
Private equity
Litigation finance firm Burford
One pick from the private equity sleeve Capital was one of two new positions
of the portfolio is Mantra Investment
added during October and it is one
Partners’ Mantra Special Opportunities we are very keen on. The market
Fund, also one of the Trust’s largest
sell-off in early October provided
holdings. The fund invests in a broad
a good entry point for us to open a
range of private equity businesses
position in Burford, which suffered
and we like it because it buys these
as did many small and medium-
businesses at significant discounts to
net asset value.
Hedge funds
We took the opportunity during
October’s sell-off to top up a few of our
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