"Our 'Weather Map' investment strategy enables us to manage volatility and changes in the regional and global economies and to effectively capture opportunity."
As a Group, we not only focus on managing volatility and change in order to protect wealth, we are also focused on turning the unpredictable and fast-changing nature of the world economy into a source of opportunity for the Group.
We believe that, if navigated effectively, changes in tax, monetary and regulatory policies, as well as shifting demographics and wealth, can create enormous opportunity. Working with our global investment arm, Safanad, and teams across the Group, we have established a unique ‘Weather Map’ approach, which we use to identify and track market dislocations – or ‘storm systems,’ as we call them – much the same way in which meteorologists analyze and track weather patterns.
The premise of the ‘Weather Map’ is that in nature, small pressure and temperature gaps produce the gradual change we see in everyday weather. Recent advances in physics have shown that when gaps exceed a critical value they produce the violent, unpredictable change we know as storm systems.
It is similar in economics. When gaps are small they lead to the gradual price change we call arbitrage. When gaps are large enough they produce the violent, disruptive change and non-price credit rationing we know as financial crises.
This is how ‘Weather Map’ investing enables us to identify situations and deploy capital where return differentials are large enough to trigger financial crises that lead to non-price credit rationing. We deploy capital in the path of these storm systems and we harvest capital when they have spent their energy.