Our portfolio

Equities

SHL owns a sizeable equity portfolio, with a mix of passive and active management throughout its holdings in both single manager funds and index linked ETFs. SHL invests in a broad range of geographies and industries, all OECD-based and institutional quality, with holdings in small to large capitalisation stocks in most major OECD markets. The portfolio’s objective, which was successfully achieved in recent years, is to exceed the return generated by the MSCI World Index on a net dividends reinvested basis.

Fixed income

SHL’s fixed income portfolio acts as a back-stop and a key provider of liquidity for other investment opportunities. The portfolio is actively managed, with maturities varying according to a variety of factors including the shape of the respective yield curves and SHL’s expectations for official interest rates. SHL’s fixed income portfolio aims to achieve a return in excess of prevailing cash rates.

Alternative investments

SHL’s alternative investments include hedge fund and similar holdings which employ a broad array of strategies, ranging from long/short equity to event-driven and distressed securities. Most of its managers are based in Europe and the United States, although their investment mandates may extend beyond these markets. This part of the portfolio is designed to provide both downside protection and access to niche strategies that go beyond what is happening in traditional long equity investment. It is a key part of SHL’s preference for absolute rather than relative returns.

Private equity

SHL saw the opportunities presented by private equity at an early stage and has been making such investments in private equity since the early 1980s. While typically opting for a fund based investment strategy, SHL is increasingly looking to take a direct stake in a growing and sustainable business as part of its overall private equity portfolio. The focus of the portfolio is relatively broad with SHL’s underlying funds investing in early stage, venture and buy-out opportunities. Although returns can be heavily influenced by the stage of the economic cycle, the portfolio aims to achieve a net IRR in excess of 15%.

SHL receives advice on its private equity investment strategy from Bowmark Capital.

Real assets

SHL’s global real estate investment strategy reflects the Board’s belief that high quality real estate investments in OECD markets have strong potential to produce meaningful returns in the longer term. SHL has purchased and sold major commercial assets, and has also pursued a number of joint ventures with partners in high-end locations around the world. The company has in recent years invested successfully in Canary Wharf, the City of London and Vancouver.

In addition to a range of key market real estate funds, SHL’s real asset portfolio comprises both direct and indirect investments in what would traditionally be regarded as the commodities sector. As such, the portfolio holds investments in the energy, materials and natural resources sectors, amongst others. The portfolio aims to benefit from increasing demand for scarce resources with the investment horizon strategy keeping in line with SHL’s overall long term view.