The Med³® investment process captures the know-how and intellectual capital built up over the last 15 years by the Irish investment team. Med³® is based upon the basic premise of active investment and that capital markets are not perfectly efficient in the short/medium term.
Our process seeks to identify investment opportunities for our clients represented by changes in prices of assets and instruments and by the inefficient pricing of market risks. We identify such opportunities by utilising a combination of fundamental and technical analysis combined with an appreciation of short and medium term investor sentiment.
We believe that temporary capital market inefficiency is the direct result of behavioural biases evident in market participants, manifesting itself in over optimistic/pessimistic market pricing of risks. This results in large divergences in the asset and instruments prices from their intrinsic value, and this creates investment opportunities that have asymmetric payoff profiles. Utilising Med³® we attempt to translate into investment decisions the opportunities offered by the vast array of investments and instruments within capital markets and their variance in performance from one year to the next and the importance of correctly allocating capital. We are convinced that Med³® will set a solid basis for us to support the evolution of our relationship with clients and investors from an act of ‘Faith’ to act of ‘Trust’ through transparency and education on what we do every day.
The process follows the key steps detailed below:
Worldwide Opportunities: This is the selection of assets from which we can invest. We explicitly attempt not to limit our investment universe to give ourselves as diverse an opportunity set as possible.
Research Process: Our research process is split across the various divisions in the investment team. It focuses on narrowing our vast opportunity set into the initial stages of trade ideas.
Idea Generation: The cross team research is combined to formulate an investment idea.
Instrument Selection: An instrument is then chosen as a vehicle for expressing the trade via our instrument matrix.
Manager Selection: If we don’t have the necessary skill set, we identify the best managers/partners to work with.
Implementation of Investment Idea: Once an idea has been generated we then utilise our trade mapping matrix to see on which funds the trade can be applied. The trade is then subjected to a risk assessment.
Trade Execution: The finalised trade is sent to the market utilising our execution matrix. Trade targets and stop losses are set.
Trade Risk Monitoring & Evaluation: Executed trade is monitored until position is closed.