Harvard looking for short-sellers

A couple of weeks ago, the Financial Times published an article highlighting the cautiousness Harvard’s $38 billion endowment fund was now exercising with respect to its outlook for global financial markets.

It’s perhaps little wonder. Take a look at the table below circulated by economic observer, Cullen Roche, last month. Every single major asset class has negative one year returns!

In the case of Harvard, they have put the call out to investment managers with expertise in short selling. As investors in Montaka will already know, holding a well-constructed short portfolio in parallel to one’s long portfolio of investments serves two key objectives: (i) to dramatically increase the downside-protection of the overall portfolio; and (ii) to allow the investment manager of the short portfolio to add value through superior stock selection.

In the current volatile market environment, in which downside risk clearly persists, a well-constructed short portfolio is enormously valuable to investors.

Andrew Macken is a Portfolio Manager with Montgomery Global Investment Management. To learn more about Montaka, please call +612 7202 0100.