Ardea Investment Management
Ardea Investment Management (Ardea) is a specialist fixed income investment boutique with a focus on delivering consistent alpha to clients through an investment process supported by a highly intuitive risk system.
Formed in 2008 by its four founding principles, Ardea is a boutique fixed income investment manager with a focus on delivering stable, risk-controlled returns to investors. With extensive capabilities across inflation linked and nominal bonds, as well as credit and cash markets, Ardea has a long and successful track record in managing fixed income portfolios from traditional, defensive products, inflation-linked bonds, and also benchmark unaware and objectives-based solutions. Across all of these strategies, the team seeks to identify and exploit inefficiencies to deliver excess returns over and above the relevant benchmark with comparatively low risk.
Ardea’s focus is on low-risk, medium return strategies in the fixed income space. Portfolios are constructed to take advantage of particular inefficiencies through innovative ideas which maintain market beta but add alpha. These inefficiencies result from:
- Supply and demand factors driven by market participation
- Fundamental inefficiencies arising from market valuations which are inconsistent with economic fundamentals
- Technical inefficiencies where assets or instruments with the same or similar risk characteristics are not priced consistently
As alpha is derived from inefficiencies in the market rather than wholly from directional risk taking, the portfolio risk taken is low relative to the net benefit to the client and relative to other asset classes such as equities. Ardea customises their investment approach by switching on or off, or scaling, their broad investment strategies - credit, interest rates and arbitrage – to take advantage of the inefficiencies above. Ardea has a proprietary set of risk management systems and processes that allow detailed assessment of the relative risks and value of these various assets, while a qualitative overlay ensures that trades bring the intended risk and return to the portfolio.