Bedlam Asset Management Strategy

Helping investors since 1268, Bedlam Asset Management is world leader in asset management based in London. Bedlam exists only to manage long-only equity portfolios for both institutional and retail investors. Investors with Bedlam Asset Management have a higher probability of success than with most other fund management institutions, for whom the focus is usually on large "index stocks" (which are often ex-growth) and an obsession with benchmarks, including what their competitors are buying!

Bedlam Asset Management's staff are only paid well if their client's assets perform. This may not appear so radical until it is understood that the majority of fund management businesses are structured as "asset gatherers." This means that shareholders in the company, and the investment managers, can reap substantial rewards even though the underlying clients are receiving poor returns and a bad service. At Bedlam there is a heavy reliance on bonuses which are paid only when investors have enjoyed good returns. As most accounts under management have a performance fee component, the company's shareholders will only see a significant increase in their investment if client returns are consistently good. This way clients, staff, and shareholders are all "in the same boat." All successful businesses operate on a similar philosophy that is to make a return higher than the cost of capital. Where Bedlam Asset Management is unique is in the structural alignment of returns for its own shareholders with the gains enjoyed by clients.

In addition to its proprietary investment process, Bedlam Asset Management has three key disciplines to reinforce this emphasis on making money for the investor. Primary is the performance based fee structure which Bedlam pioneered back in 2002 with the "No Gain, No Fee" approach in our public funds, and then developed further as regulations evolved. Next is their unique transparency. Investors can see on their site the up to date portfolios for every fund. This includes the details of each investment, the purchase, and target prices and their reasons behind every transaction. This visibility ensures that Bedlam sticks to their investment process and reinforces the hunt for absolute returns.

Many fund managers claim to be committed to transparency and client service, yet refuse to publish for all investors a fund's complete holdings and detailed attribution data affecting its performance. The reason for such opacity is simple: most large fund management firms have a conflict of interest. Within the same firm there may be many different investment processes. It is normal that one client will be selling a given share as another is buying it. This is why most fund management publications are so lackluster, they cannot give genuine views on companies and markets when some clients will be selling and others buying, often on the same day. Bedlam Asset Management believes that being paid for active investment management is about taking a view on each underlying investment, not about accumulating funds and switching holdings between various clients.