We can manage an investment ourselves or we can contract a third party, an external investment or asset manager, to manage it for us.
We only invest through third parties when we believe that doing so is the most effective and efficient way to access an investment. External managers are also required to satisfy a set of demanding due diligence hurdles.
When appointing active managers, we look for third parties who are operating in an environment where we believe it is possible to generate active returns (i.e. returns over and above the passive alternative, after costs) and who, because of a combination of experience, good execution, good strategy and discipline, are themselves capable of generating such returns.