Our Public Markets team is responsible for managing the Schemes’ investments in equities and fixed income, both directly and through overseeing external managers.
The Public Markets team are primarily responsible for managing the assets of the Growth Fund, including the internal equity strategies and other pooled funds that invest in public market assets.
Public Markets is also responsible for implementing and executing all trading and portfolio management activities, covering equity, fixed income, foreign exchange, derivatives, and liquidity management.
We believe in the importance of maintaining strong in-house capabilities that enable cost control and transparency. We invest directly where we are confident in our knowledge and expertise. However, we partner with external support where we believe it is advantageous and would improve outcomes for our clients and members.
A good example of this is where we may wish to invest for a finite period or where there is a high degree of research required that other experts have a unique capacity for and track record in doing so. Railpen has a rich heritage of amplifying our own skills with solid external managers partnerships.
Our Public Markets team has three sub-teams:
Fixed Income & Trading (FIT)
The FIT team is responsible for all portfolio management, execution and implementation activity.
They manage our internal government bond pooled funds, and oversee externally managed fixed-income portfolios. FIT also manage our strong relationships with third-party providers across asset classes (Equities, Fixed Income, Derivatives and FX).
Our in-house expertise allows us to fully leverage our relationships and focus our resources in areas where we have knowledge and capability. Railpen’s internal Trading Desk enables us to efficiently execute trading activity, working in conjunction with various internal teams to sustain and enhance our execution capabilities and ensure best execution is achieved for our clients. The Trading Desk has three core areas of focus: execution, transaction cost analysis and market structure.
Fundamental Equities (FE)
The FE team primarily manages our fundamental equity portfolios. These portfolios are focussed on companies with high barriers to entry and sustainable competitive advantages. They also help colleagues assess investment opportunities.
The Fundamental Equities team consists of generalist portfolio managers and specialist sector-based analysts. The bedrock of all investments is the quality of our proprietary, holistic and comprehensive fundamental research. This is enriched by close collaboration with our Sustainable Ownership team. We believe it is possible, and necessary, to deliver the returns the schemes’ need, while positively contributing to the world our members will retire into by using capital to reduce societal and systematic risks where possible.
Our flexible and multi-layered approach enables us to manage concentrated equity portfolios, typically with very low turnover. Ideal investments are companies that benefit from powerful structural growth trends, have business models with high entry barriers and exhibit a high degree of innovation that helps them adapt and capitalise on a rapidly changing market environment.
Quantitative Strategies (QS)
The QS team manages Railpen’s internal and fully systematic strategies, ranging from long-only and market-neutral equity portfolios to multi-asset diversifying funds using risk-based allocation techniques.
They are also in charge of exploring new sources of data, applying novel technologies and uncovering sources of return for the benefit of our members.
The QS team has a strong background in researching, designing, and implementing strategies within quantitative equities across global markets.
They manage both single and multi-factor portfolios designed to enhance returns over a long-time horizon based on factors that are well established in industry and academia.
The QS team is also in charge of researching and managing a growing allocation in strategies designed to be diversifying to equity risk. These currently include a leveraged multi-asset risk-balanced portfolio and an equity market neutral portfolio.