PPS Multi Managers have appointed Terebinth Capital as the new underlying asset manager of the PPS Defensive Fund. This boutique asset manager is primarily focused on fixed income, and their excellent long-term track record attests to their capabilities. In 2021, Terebinth Capital launched an equity fund, with the intention of establishing a compelling and competitive multi-asset solution. As a testament to their robust investment process, they have delivered strong risk-adjusted returns, and assets under management have grown rapidly: from R3bn in 2018 to R33.4bn by the end of 2023.

Through our meticulous manager selection process, we identified Terebinth as the most suitable fund manager for the PPS Defensive Fund. We frequently favor managers who have expanded their hedge fund expertise into the long-only market for our single managed funds because they typically possess a distinct skill set. This includes, in the case of Terebinth, their exceptional capital protection expertise even in volatile markets and their agility in making portfolio adjustments. Through its initiatives, Terebinth has aligned itself with PPS Investments’ broader societal and environmental objectives, scoring well in terms of their dedication to gender equality, educational advancement and sustainable change.

Investment Style

Terebinth Capital uses a combination of top-down and bottom-up analyses in their investment process. Their macro-based approach is rooted in cycle analysis, and the implications for the fundamental macro drivers of asset class returns going forward. Bottom-up security selection, while based on quantitative methods, considers both the fundamentals and where we are positioned in the cycle.

Quantitative tools are used to incorporate multiple outcomes, their base case view, and an upside and downside scenario, to ensure portfolios are not positioned for a single outcome. In addition, active asset allocation is a key return driver.

Portfolio Construction

To achieve the fund’s investment objectives, Terebinth allocates to the asset classes that will deliver the real return objective, with the least amount of risk. Their optimized asset allocation process is focused on how to allocate risk between asset classes, given return expectations, while their well-researched qualitative top-down views complement the final asset allocation decision.