At Brightwell, our investment approach is designed to help pension schemes build confidence in an uncertain world.
We focus on creating resilient portfolios that are aligned to each scheme’s funding objectives, maturity profile and long-term purpose: delivering members’ benefits over time.
We do this by combining liability-aware strategy, disciplined portfolio construction, active oversight and robust governance. Our aim is not simply to pursue return, but to help schemes withstand change, manage risks and make better investment decisions as market, economic and geopolitical conditions evolve.
| Portfolio construction | – Liability-aware strategy – Diversification – Liquidity – Governance – Rewarded risk selection |
| Mandate design and manager selection | – Manager flexibility – Active oversight – Evidence of navigating market shocks – Alignment with scheme objectives |
| Ongoing monitoring | – Stress testing – Exposure analysis – Concentration risk – Scenario thinking |
| Engagement and best practice | – Manager engagement – Stewardship – Sustainability integration – Clear communication of decisions |
Investment
implementation
beliefs
Market inefficiencies create the necessary environment for outperformance:
- The most inefficient asset classes offer the best alpha opportunity.
- Significant capital flows can lead to distortions (and opportunities).
Outperformance is captured through alternative beta and alpha:
- Alternative betas have positive expected returns; they are often mistaken for alpha.
- Beta can be harvested cheaply; alpha is more expensive and valuable.
ESG matters and offers a different “lens” for evaluating managers:
- The best long-term managers inherently consider ESG factors – sometimes without articulating it.
- Evaluating managers’ ESG approaches facilitates a different dialogue, giving another insight into their approach which helps us form a more complete picture.
Outperforming managers tend to have certain characteristics:
- A demonstrable “edge” that is known and on which their approach and process focuses.
- The desire and ability to understand and learn from past investment mistakes.
- Transparency – good managers are unafraid to share their research.
Cost control (fees, expenses, and transaction) leads to superior long-term performance:
- Fees are a given, outperformance is not.
Portfolio construction is critical to generate consistent performance:
- Risk based diversification is important and not necessarily the same as asset diversification.
- A focus on avoiding downside risks provides a more predictable and secure way of meeting client needs – particularly for long-term pension investors with sequencing risk.
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Sustainable Investment
What we do has a real-world impact At Brightwell, we firmly believe that integrating sustainability into the investment process contributes to better investment outcomes through…
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Climate Change
We believe that addressing climate risks within portfolios is critical to managing risk. Using our experience of setting a 2035 net zero ambition for BTPS,…
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Investment Philosophy
Every defined benefit pension scheme has its own objectives, liabilities, funding position, cashflow requirements and sponsor circumstances. We design and manage portfolio around each scheme’s objectives and required outcomes, rather than allowing conventional asset-class boundaries or market benchmarks to dictate the strategy.
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