Fund Manager Q&A: BRIAN McCARTHY, Alder Capital www.aldercapital.com

Brian McCarthy is the founder and managing director of the Dublin-based currency investment specialist Alder Capital. Alder Capital manages the Insight Currency Fund for Friends First.

What is your investment approach?

We only invest in G8 currencies, so we’re at the most liquid end of the most liquid market in the world. We use a systematic, computerised investing process (created in- house) rather than a discretionary approach, which is the predominant methodology used in the equity space.

The systematic approach looks for patterns in previous price movements in order to identify good opportunities. We are continually researching ways to improve our investment programme.

Lots of currency market participants are not in the market for profit-maximising purposes, but rather to conduct day-to-day affairs. This causes currencies to move and creates opportunities that managers like ourselves can try and take advantage of.

How has your fund performed?

The fund reached its ninth birthday at the end of February. Since it was launched in March 2001, it was delivered a return of over 100 per cent. It was positive in each of the last five years, which is very significant as this period includes the credit crunch.

In the five years to the end of January, the fund’s return was running at 11.3 per cent per annum.

This is a good return in its own right, but is particularly impressive as the currency fund was able to perform when others were not.

What is your outlook?

The future is a very, very uncertain place and probably more so today than ever before, certainly in living memory.

In order to deal with this, investors need to build a diverse portfolio with assets that don’t go up and down at the same time. Currencies are not better than equities, bonds and property, they’re just different. Putting together different asset classes can help to build a more bullet-proof portfolio.

In conversation with Caroline Madden