Iveagh, the family office created to manage the Guinness family wealth, is launching its first retail fund, the Iveagh Wealth fund, next week.
It is a mirror fund of the portfolio managed for the Guinness family, the Iveagh trust, established in 1886 by Edward Guinness.
The main objective of the fund is wealth preservation and it is aimed at families seeking to protect their assets and pass wealth from one generation to the next.
The fund, managed by John Ricciardi and Cambiz Alikhani, uses a multi-asset approach to seek annualised returns of 9.5%.
It will invest in a range of alternatives, including hedge funds, private equity and structured products in addition to equities, bonds, cash, real estate, natural resources and precious metals.
The tactical allocation strategy is applied by making adjustments to holdings on a quarterly basis.
However, if there is a need to adjust in between the quarterly time period, changes will be made, says Ricciardi.
“We would like to work quarter by quarter but we can move in between. The fund is targeting a 10% return with low volatility. We need a multi asset approach to achieve that,” he says.
Although the Iveagh Wealth fund has the flexibility to invest in all regions and sectors, in practice there is, what Ricciardi calls a “base-case”, an optimised asset allocation split within the portfolio.
For example, the current exposure to corporate bonds in the portfolio is 2%, while the base-case allocation is 8%. Alikhani (pictured) says he plans to bring this back up to 8% soon. Likewise, the fund’s exposure to equities is below its planned allocation.
“The portfolio is below the base-case on risk assets,” says Alikhani. “Equity markets need to have a decline of 10% or more from current levels before we put some of those risks back in.”
Equity exposure to Britain, continental Europe and Japan in particular, is low in the portfolio.
Alikhani says he wants to see either valuations reflect the worst case, or for Britain, Japan or Europe to start showing signs of recovery, before he increases his position.
Minimum investment in the Iveagh Wealth fund is £50,000. The annual management fee is 1.5% and there is no set initial charge.