Spotlight on Danica Hampton, Senior Portfolio Manager & Head of Sales-APAC, Adrian Lee & Partners
Global Thought Leader Spotlight
Danica Hampton, Senior Portfolio Manager & Head of Sales-APAC, Adrian Lee & Partners
“In my role as a Senior Portfolio Manager and Head of Sales – APAC, at Adrian Lee & Partners I am responsible for designing and implementing currency solutions for institutional investors in the Asia Pacific Region.
“Adrian Lee & Partners is a specialist currency manager, who offers a full spectrum of currency solutions ranging from passive risk management through to alpha generating active strategies.
“We manage approximately AU$25 billion of assets, of which about AU$10 billion is for Australian superannuation funds. We have 30 employees worldwide, who are based in London, Dublin, New York and Sydney.
“There is no ‘one-size-fits-all’ when it comes to currency solutions. We work with clients to understand their unique requirements and customise solutions to best suit their objectives, constraints, and risk budgets.
“Foreign currency exposures in the typical Australian portfolio have been increasing over time. This means the decisions investors make about the role currency plays in their portfolio, and how to manage currency risk, are becoming more important in terms of the impact on overall portfolio performance.
“Currency can play many roles in a portfolio – for example, risk management, diversification, downside protection, return generation and asset allocation. Historically, most Australian investors have prioritised currency’s role as a risk management tool or a defensive asset. It is worth considering, some of the other benefits that currency management can bring to a portfolio.
“In the past, Australian investors have predominantly used a mechanical passive approach to currency risk management. However, investment conditions have changed. The historical positive yield advantage associated with pure passive hedging no longer exists, it now costs investors to passively hedge back to AUD (and this is even more pronounced in emerging market currencies). Does the current cost of pure passive hedging merit its benefits? Is it time to consider alternative strategies that combine risk management with active strategies to adapt to changing market conditions?
“Decisions on how to manage currency risk are becoming increasingly important for Australian investors. Passive currency risk management served Australian investors well in the past, but market conditions have changed.
“Active currency strategies can be customised to suit investor requirements – whether the priority is reducing risk, reducing the cost of carry, or enhancing returns. Undoubtedly, incorporating some active management into your currency strategy allows for greater flexibility amid a backdrop of changing financial market conditions (especially important in emerging market exposures where volatility tends to be greater).
“Looking ahead, investors could consider customised currency hedging solutions to better align outcomes with objectives and improve portfolio flexibility. Active currency management, used in conjunction with risk control, has consistently delivered positive performance over the past decade.”
Danica will be presenting at Global Investment Institute’s upcoming Fixed Income & Altenratives Investment Forum, taking place on Thursday, 7 September 2023 at the Westin Melbourne, Victoria.
To register your interest in attending, click here or for more information email zlatan.kapetanovic@globalii.com.au.
Danica Hampton, Senior Portfolio Manager & Head of Sales-APAC, Adrian Lee & Partners
As Senior Portfolio Manager and Head of Sales for the APAC region at Adrian Lee & Partners, Danica spends most of her time talking to Australasian investors about how to manage currency risk.
Danica has over 20 years’ experience in the investment management industry, including Head of Currency Overlay & Solution Sales at National Australia Bank and Head of Investment Specialists at Citi. Her career started in research, she worked at both the RBNZ and RBA – before becoming the currency strategist for BNZ. She has a Masters in Economics and has completed the CFA program.
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