Investment Philosophy and Process  

The firm’s investment philosophy is to add active return over time through disciplined research-driven quantitative fundamental management of clients’ underlying currency exposures. Lee Overlay Partners actively manages over 25 curencies. The investment process uses only proven, repeatable signals. The investment research has been ongoing and successfully applied in practice since 1989. This research has identified through rigorous testing specific fundamental factors that add value in a similar way across the major currencies. Each factor is theoretically logical and separate, and when applied in a linear tactical framework generates a high and stable information ratio. Lee Overlay Partners also provides currency risk control for clients by implementing client-selected benchmarks, in conjunction with active management. The active process is based on the concept of incorporating three separate and diversified Alpha Centres: 

Three Alpha Centers

1. Alpha Centre 1
Fundamental Tactical Model maximizes the information ratio from quantitative economic factors  

2. Alpha Centre 2
Current Market Trends are captured by technical signals  

3. Alpha Centre 3
Fundamental Market Dynamics are quantified by experienced portfolio managers, adding value and diversification through focusing on factors not included in the other Alpha Centres

 Each Alpha Centre is separate, non-corruptive and additive.

The positions generated by each Alpha Centre are then added together to create the recommended portfolio position, as illustrated in the charts below. The firm’s research and experience indicates that it can provide high and consistent performance information ratios.

 Importantly this derives from:

A process that is logical and diversified 

• Many separate models and factors 

• · Self selected professionals who are experienced in, and dedicated to active currency overlay, with a significantly positive track record. 

Additionally, the firm is committed to the highest standards of risk control in all aspects of currency management. The firm also provides the highest standards of individual client attention and service. All the systems at Lee Overlay Partners are bespoke and the seven integrated systems allow straight through processing from asset input to settlement. All aspects of client mandates are coded into the systems infrastructure and each client is provided with a dedicated secure website with individualised reporting.

Overall, Lee Overlay Partners have an established record of positive performance over 16 years in active currency management and are confident in their ability to add value to clients’ portfolios in the future.