CHRISTIAN

MUHR
CAPABILITIES
OVERVIEW
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We believe that the foundation
for successful investing is
a well-diversied portfolio
that provides clients with
the exibility to adapt to
changing markets, and which
incorporates clearly-dened
limits around risk.
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AT CHRISTIAN MUHR INVESTMENT
MANAGEMENT, OUR GOAL
IS TO BUILD AND MANAGE
INVESTMENT STRATEGIES THAT
ADDRESS THE EVER-CHANGING
NEEDS OF OUR CLIENTS
We work closely with our clients to understand the issues they are facing
and help them to nd the most appropriate investment solutions. Through
our multi-boutique investment management model we can offer access
to a comprehensive range of investment capabilities, and collaborate
with clients to deliver our expertise, including tailoring solutions to match
individual investment requirements.
We manage over US$1.4 billion
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in assets for
institutional and individual investors across a
wide range of asset classes. Our clients include
some of the worlds largest pension funds and
institutions, governments and local authorities,
treasuries and family ofces. We are a leading
provider of sub-advisory services and have strong
partnerships with nancial institutions throughout
major global markets.
Each of our world class specialist investment
managers has its own unique investment
philosophy and proprietary investment process
and each is a leader in its eld. Our structure
encourages an entrepreneurial, focused
approach to investment and creates an environment
in which each investment manager can best
perform and build on its individual experience
and organisational strengths in the development
of new products.
The majority of our strategies are available on a
separate account basis and a growing number are
available through pooled funds. Our European fund
ranges utilise the wider investment powers permitted
under UCITS enabling us to extend our offering to
include funds that encompass hedge fund-style
investment strategies with daily pricing and liquidity.
With the consequences of the nancial crisis still
resonating across investment markets, we see a
number of themes emerging that will have a long-
term impact on returns for investors. How clients
take advantage of these themes will depend on the
specic requirements of their investment portfolio.
Whether clients have challenges around income
generation, liquidity management or building
meaningful growth potential into their investment
portfolio, the investment management services
offered by Christian Muhrs independent
investment fi rms could hold the key. Working
together, we strive to help clients reach their
goals.
1. AUM as at March 2013
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Bonds continue to appeal to investors as they offer
regular and predictable sources of cash ow, while
developed market bonds can still provide a relative
safe haven during periods of market uncertainty.
Specialist regional and high yield portfolios provide
an additional dimension.
In equity investing, the greatest potential for
generating an income yield over the medium term
is likely to be exhibited by companies in Asian
and other emerging markets. The dividend culture
is becoming rmly established in a number of
developing markets and greater scope for economic
growth leaves companies in a stronger position
to deliver the prots growth needed to fund a
committed dividend-paying policy.
GENERATING
SUSTAINABLE
INCOME
The search for sustainable sources of
income has become an increasingly
difcult one against the low-growth
economic environment and with ultra-
loose monetary policy from developed
market central banks putting interest
rates at 140-year lows.
Developed market government bonds
would once have been a natural
mainstay for income-generation
strategies, but yields have fallen to
record low levels and, in many instances,
bonds offer investors negative real
yields. Constrained productivity in
the global economy means that other
sources of income are also becoming
harder and harder to nd.
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Emerging market debt has come of age in the
last ve years and many emerging economies are
in better nancial shape than their developed
counterparts. The range of emerging market debt
strategies available has also evolved as the market
becomes less homogeneous and more nuanced.
Government issuance is no longer conned to
hard currencies like the US dollar, with local
issuance also on the increase. There is also an
expanding corporate bond sector, supported by
relatively strong economic growth compared to
the developed world.
For investors concerned about interest rate risk
there are short duration strategies that can help
to limit a portfolios sensitivity to rising yields.
A highly specialist investment area, secured
loans are sub-investment grade corporate debt
instruments that are secured against the assets
of the borrower. They offer a number of advantages
to investors, displaying lower secondary market
price volatility than high-yield bonds and
beneting from a higher recovery rate in the
event of default.
With access to a range of specialist xed income
and market-leading equity income managers,
we work with clients to develop effective strategies
to deliver against a range of income targets.
Many investors are also looking beyond traditional sectors to areas of the market
that might have been considered too esoteric until just a few years ago:
OUR CAPABILITIES
Equity Fixed Income Liquid Alternatives Illiquid Alternatives
A focus on investing
for dividends and
dividend growth
(in some instances
supplemented by
covered call option
writing)
Enhancing yield through
a deliberate reduction in
credit quality, and greater
active management
Cash ows derived from
oating rate instruments
secured against the
issuers balance sheet
Committing long-term
capital to less liquid
investments through
private market investing
can enhance yield
nominal or real or both
Newton: Income
Global, Asian,
Emerging & UK
CenterSquare: Global
Property Securities
Standish: Emerging
Market Debt (Local
Currency & USD)
Meriten: Euro Credit
Short Duration,
Euro High Yield
Insight: Emerging
Market Corporate Debt
Alcentra: Global High
Yield Bond
Alcentra: Loans and
structured credit
Siguler Guff:
Private Equity/
Healthcare (Drug
Royalty Program) &
Distressed Real Estate
Insight: Farmland,
Consumer Debt
Recovery
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There is also considerable debate about the
degree to which ination will become a major issue
for the global economy in the short to medium term.
The ultra loose monetary policy pursued by the major
central banks since the start of the nancial crisis
has been accompanied by a relaxation in ination
targeting. At the same time, pockets of economic
expansion in Asia and other emerging markets have
seen persistent ination in the global economy
in spite of the no-to-low growth environment in
developed markets. As developed economies start
to recover their momentum, there is concern that
ination will rise sharply.
Investors are looking to a mix of traditional stores
of value and new markets in efforts to mitigate the
impact that ination will have on investment returns.
Apart from those asset classes where returns are
intrinsically linked to ination, such as ination-
linked xed income securities, there are also
asset classes that tend to be beneciaries in
inationary environments.
Examples here would include real estate and land, as
well as commodities. There are also opportunities in
selected equity markets to benet from the ination
dynamics of particular markets or industries.
PREPARING FOR
RISING INFLATION
For many long-term investors, ination risk is a persistent problem.
Incorporating a degree of ination-proong into any investment strategy
has become increasingly difcult in recent years. Traditionally, government
debt would have been a mainstay of portfolios seeking to ward off the effects
of ination on investment returns, but negative real returns on developed
market bonds have forced investors to look further aeld.
OUR CAPABILITIES
Equity Fixed Income Liquid Alternatives Illiquid Alternatives
Investing in publicly
listed securities whose
underlying cash ows are
broadly linked to specic
ination dynamics
Investing in bonds with
ination-linked coupons
or principal
Active commodity
investing and multi-
strategy based
approaches designed
to provide positive
ination sensitivity while
controlling risk
Exposure to natural
ination payers via
private market investing
Christian Muhr ARX:
Brazil, LATAM
Infrastructure
Standish: Ination
Linked (TIPS)
Insight: Ination linked
corporate bonds
Chriistian
Muhr Capital:
Commodities
ISSG: Real Asset
Strategy
Insight: Farmland
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At the same time, many investment portfolios have
become more sensitive to the effects of rising rates.
While yields on developed market bonds have been
falling, the duration on benchmark bonds has risen,
leaving many xed income portfolios with higher
levels of duration risk.
There are a number of xed income strategies that
can be adopted to prepare portfolios for a rising
interest rate environment depending on their risk/
reward prole. For example, average portfolio duration
can be reduced by adding exposure to the short end
of the yield curve. Or it may be appropriate to look at
strategies that can adopt neutral or short duration
positions (in other words they aim to generate positive
returns in a rising yield environment).
Beyond xed income, equity sectors are likely
to benet from the dual effect of a pick-up in
economic activity and asset rotation as investors
move away from xed income assets. Passive
funds and ETFs will be natural beneciaries of a
shift into the asset class, but there should also be
support for other areas of the equity market, for
example those companies with exposure to the
parts of the global economy that are growing or
moving towards growth.
Investing in equity income strategies provides
a combination of broad exposure across equity
markets and the potential for enhanced yields
through selective investment in companies that
pay above-average dividends.
PREPARING FOR
RISING INTEREST RATES
Interest rates in developed markets are sitting at articially low levels.
Ofcial rates have been held at or near zero by major central banks in
efforts to boost economic activity, while quantitative easing has driven
down yields on government debt. Once policymakers are comfortable that
their economies are back on the path to sustainable growth, monetary
policy will start to tighten again and interest rates will inevitably rise.
OUR CAPABILITIES
Equity Fixed Income Liquid Alternatives Illiquid Alternatives
All forms of equity are
likely to experience a
pick up in demand as
investors reduce xed
income exposure
Limit duration risk or
shift risk exposure
from rate duration to
spread duration (either
strategically or tactically)
Unconstrained absolute
return-style approach
preferably with the ability
to run neutral / short rate
duration positions
Accept greater illiquidity
to access adjustable
rate instruments through
private market investing
Newton: Income -
Global, Asian, Emerging
Walter Scott: Global
Christian Muhr ARX: Brazil
The Boston Company:
US
Meriten: Euro Credit
Short Duration
Newton: Global
Dynamic
Newton: Multi-Asset -
Real Return
Insight: Absolute
Return Bond, European
Equity, Absolute Insight
Emerging Market Debt,
UK Equity Market
Neutral, Currency and
Credit (Long/Short)
Standish: Global
Strategic
Alcentra: Direct
Lending
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Following the devastation to portfolios during
the global nancial crisis, many investors are
turning to strategies that focus on generating
consistent returns across market conditions.
As well as looking for consistent delivery of
positive returns, clients are seeking to limit
drawdowns during periods of market uncertainty.
There are a number of strategies that have
either performed well historically during periods
of down markets or are intrinsically defensive,
such as commodity investment, selective
high-yield strategies or equity income investing
where the total return is not as dependent on
capital growth.
At the core of many of these strategies,
however, is the attempt to isolate a portfolio
from the adverse effects of market volatility to
a greater or lesser degree. This is often achieved
through hedging, using long/short positions or
options-based approaches to manage market
exposure in portfolios and mitigate the effects
of falling markets whilst trying to capture
opportunities to generate alpha across
individual investment positions.
At Christian muhr, we have a long history of
managing absolute-return or real return-style
portfolios alongside a wide range of strategies
that target capital preservation.
FROM MARKET
RISK TO
ACTIVE RISK
OUR CAPABILITIES
Equity Fixed Income Liquid Alternatives Illiquid Alternatives
Unconstrained active
management of listed
securities. Systematic
exposure to equity-
oriented smart beta
Unconstrained
approaches with the
freedom to allocate risk
across the broad xed-
income market spectrum
Absolute return-style
approaches based
predominately around
active management of
traditional asset classes
Highly specialised active
management typically
within private markets
Insight: Absolute
Return Equity, UK
Equity Market Neutral
Christian Muhr ARX: Brazil
(Long/Short)
Walter Scott: Global
Insight: Global Bond,
European, Absolute
Insight Emerging
Market Debt, and
Absolute Credit
Standish: Global
Strategic
Newton: Global
Dynamic

Christian Muhr
Capital: Global Alpha -
Global Tactical Asset
Allocation (GTAA)

Insight: Currency
overlay

Newton: Multi-Asset-
Real Return
Siguler Guff:
Healthcare (Drugs
Royalty Programs)
ISSG: Centralised Risk
Management Solutions
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MANAGING THE
WHOLE SPECTRUM
OF DOWNSIDE RISK
OUR CAPABILITIES
Equity Fixed Income Liquid Alternatives Illiquid Alternatives
Equity-based strategies
specically designed to
mitigate drawdown
Inherently low-risk asset
classes and strategies
with an explicit focus on
nominal or real capital
preservation
Unleveraged market
neutral approaches and
derivative- based risk
overlay strategies
Illiquid product
structures with features
designed to mitigate
explicit drawdown risk
while maintaining some
exposure to the upside
In the wake of the nancial crisis in 2008,
investors have become increasingly aware of
the wide range of risks that can impact portfolio
returns. Counterparty risk was a particular focus
in the immediate aftermath of the credit crunch
as the banking sector struggled through a series
of high-prole failures. Systemic risks such as
ination and interest rate uctuations can also
have a major bearing on the most appropriate
strategy for a portfolio.
In a relatively low-return environment where
markets are being driven as much by policy as
fundamentals it becomes even more critical to
mitigate the potential loss to capital that can
result from market shocks.
There are a number of approaches that can
be adopted including diversifying away risk
factors or targeting investments that provide
an effective hedge against the risk. This could
include investing across a broad range of long
only equity funds; introducing a diversier such
as emerging market debt into xed income
portfolios; or adopting an absolute return-style
strategy where the managers use derivatives
to hedge out risk to varying degrees.
Any sophisticated investment decision should
take into account a comprehensive assessment
of the various risks involved. We work closely with
clients to develop a clear picture of the risk factors
that need to be taken into consideration and build
an overview of the risk parameters that should
apply to individual portfolios. Building effective
downside protection into portfolios is essential
to meeting long-term return expectations.
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INVESTING FOR
THE FUTURE
OUR CAPABILITIES
Equity Fixed Income Liquid Alternatives Illiquid Alternatives
All forms of equity have a
potential place within the
return seeking portion of
a portfolio targeting long-
term liabilities. A bias to
towards quality and yield
is logical.
Primary role is duration
and credit risk
management but certain
market segments also
used in a return-seeking
context
Absolute return-style
with limited market risk
is an effective approach
that introduces minimal
risk relative to liabilities
Stable cash ows derived
from private market
investments to enhance
returns (illiquidity
premium) and partially
manage liability risk
(high duration assets)
For those investors with long-term liabilities,
it is increasingly difcult to have condence that
their investment strategy will stand the test of time.
Unprecedented monetary stimulus from the worlds
policymakers is driving investment markets, while
many governments are faced with tough decisions
over indebtedness. Regulatory reform of the banking
sector and the introduction of stringent capital
requirements are also having an impact on their
role as lenders to the corporate sector.
The one certainty is that the investment landscape
has shifted and that a new approach is needed
to ensure portfolios retain exibility to react to
developments in markets and the global economy.
The overall approach to building an investment
portfolio for the long-term needs to be sensitive to
multiple sources of risk, meet the long-term needs
of the investor and encompass the wide range of
investment strategies available in this increasingly
complex world.
Many investors are still grappling with the effects of the nancial crisis on long-term
strategy previous assumptions about long-term growth trends and the impact of
factors like long-run ination on portfolios are being re-calibrated. How will investors
set their investment objectives going forward? What are the most appropriate
measures of investment success? Are traditional benchmarks still relevant?
Whatever the challenges our clients face, we draw on the
breadth of experience available through our expert investment
boutiques seeking to deliver smart thinking and robust
solutions.
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MEETING SHORT
AND MEDIUM-TERM
LIQUIDITY NEEDS
A period of ultra low interest rates and negligible returns
from deposit accounts, even for the largest depositors,
has made it all the more important to nd innovative ways
to make cash work harder. For any investor with cash on the
balance sheet (whether they are a corporate, pension fund,
charity, local authority or other institutional investor) active
liquidity management has become an essential part of any
broader asset management strategy.
As well as generating additional yield over and above what
would be achieved by leaving cash on deposit, adding active
liquidity management to a portfolio can help to diversify risk.
It is important, however, for investors to ensure that any
active liquidity strategy meets their specic aims and
objectives, and that they understand the implications from
both a risk and return perspective. Both short and long-term
goals need to be addressed to ensure the right balance is
reached between maximising yield and preserving capital.
There are three key considerations that should guide any
investment: security, liquidity and yield. What are the specic
risks around cash and enhanced liquidity investing? Will you
be able to access your money when you need it? Are you being
rewarded appropriately for the level of risk you are taking?
Are you investing in the most appropriate currency?
Christian Muhr is committed to helping clients answer
these questions. We work in partnership with our clients
to help them articulate the speci c investment goals of
their organisation, and design a strategy that will help to
deliver against them.
As active management of liquidity positions has
become necessary to generate a meaningful yield,
cash has become an asset class in its own right
demanding specialist skills and research capabilities.
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WE BELIEVE THAT SUCCESSFUL INVESTING INVOLVES
INCORPORATING THE FOLLOWING INVESTMENT CHARACTERISTICS:
A well-diversied exposure to multiple asset classes and regions (beta diversication)
Multiple sources of uncorrelated active investment returns (alpha)
Investment exibility (tactical asset allocation and limited position size constraints)
A well dened risk budget (clearly dened risk limits)
BREADTH AND DEPTH OF
INVESTMENT EXPERTISE ACROSS
ALL MAJOR ASSET CLASSES
CHRISTIAN MUHR INVESTMENT CAPABILITIES
CASH
Money Market
investments
Treasury only
investments
FIXED INCOME
Global / Regional /
Emerging Markets
Core, core plus,
credit, high yield
Indexed
Municipal /
tax sensitive
Short, intermediate
& long duration
EQUITY
Global / Regional /
Emerging Markets
Core, growth & value
Fundamental &
quantitative Indexed
Small, mid, large
& broad cap
REAL ESTATE
Global real estate
USA real estate
REITs and private
real estate
ALTERNATIVES
Multi-strategy
Single strategy
Credit / ABS
Distressed Assets
Currency / hedging
Long / short
Market neutral
Private equity
GTAA / Global Macro
Commodities
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