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Paul Seaton, Fulcrum Asset Management

Fulcrum gains US traction amid uncertain markets

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Fulcrum Asset Management is continuing its push into the US, with Paul Seaton, director, commenting that the less certain investment environment is encouraging interest in their multi-asset offering.
 

Founded in 2004, Fulcrum Asset Management has assets under management of USD5 billion and a team of over 70 people that includes economists, asset class specialists and systematic researchers.

 

Seaton’s US operation launched in 2016 and has a team of three in New York. “It takes time to establish ourselves in the US, get into the network and ensure people understand why we can be relevant to them,” Seaton says.

“We have big tailwinds in our favour as the environment has become less certain, with more volatility in the markets and people considering alternatives that can generate attractive returns with less sensitivity to traditional markets.”

Seaton likens his firm’s situation at the moment as ‘plumbing’. “A lot of it is the plumbing, getting onto the wealth and fund execution and custody platforms takes time.”
 
The firm is now on some of the major wealth management platforms and on the main execution platforms such as Fidelity, Schwab and Pershing.
 
“The big thing in terms of progress is getting the vehicle available in more and more places across different wealth management platforms so that we are on the menu for people to select from if they are looking for these liquid things to add to their portfolios.”

Multi-asset investments are more widely recognised as a category in the UK where Fulcrum began, Seaton says, but interest is growing in the US.

“People have done very well from portfolios of straightforward bonds and equities and this is something else in the middle that we can put in.”
 
The profile of the multi-asset fund is closer to a fixed income portfolio, so Seaton comments. “If you have a dedicated alternative sleeve it’s easy to add new managers but if it’s your first foray into alternatives and you fund it out of fixed income, the funding decision is an easier one as it has a similar profile,” Seaton says.

“We are trying to explain what environment we do well in what we don’t do so well in and there have been a few episodes where bonds and equities have gone down together which has shaken people and they have realised they are more exposed than they thought.”

The audience for Fulcrum at the moment is largely professional buying groups such as wealth managers or big registered investment advisers. There is some institutional interest as well, with endowments or pension attracted by the liquidity and cost of the offering.

“It can help if you have something run by a committee such as an endowment as they may not have the framework for the active decisions they might want to take and we might be able to fulfil part of that role for them,” Seaton says.

“The big state plans are looking at liquidity and fees in the portfolio and this certainly fits the bill.

Last year’s fourth quarter volatility ‘wobbled people’ Seaton says. This year’s good markets so far haven’t entirely eased investor concern of a coming downturn.

“There are risks to the global economy which haven’t gone away and no one is calling it but people are saying ‘how do I build something into my portfolio which will help me rather than timing it myself which is a very different thing’. And that solution might be multi-asset.”
 
 
 
 

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