1st «Experts Roundtable» in Geneva on 14.09.2021
Six experts talking about excellent investment solutions
Caduff: Ladies and Gentlemen, what makes the financial centre of Geneva so interesting for your company?
Marmor: Sectoral is an investment manager focusing on one sector only but adopting a truly global approach. With offices and investment professionals sitting in Canada and Hong Kong, we are ideally positioned to research, understand and identify the best investment ideas and dynamics for our sector. Our local presence in Geneva allows us to be close to our current and prospective investors.
Salzmann: Switzerland is a very important market to Principal. We focus on understanding our clients' needs, providing investment solutions to support their goals, and providing excellent customer service. As part of this focus, Principal is covering the entire Swiss Market holistically out of the Zurich office. Geneva with its rich diversity across the full spectrum of clients - from institutional players and cantonal and regional banks, over to family offices and independent asset managers is of great importance to us, as we aim to offer our broad range of capabilities.
Dalla Corte: Eurizon started its commercial activities in Switzerland three years ago. From the very beginning, we have been involved in the Geneva financial center. We presented our investment solutions to private banks and external asset managers and have since been able to build very solid relationships. However, due to the Covid-19 outbreak and travel restrictions, we have unfortunately not been able to be as physically present as we would like. However, we hope to be back in Geneva soon with our portfolio managers to expand our contact with clients and prospects on the ground and share our market assessments.
Safft: We are a fund boutique with ca. 3 billion Euros assets and an international client base that includes institutional investors, family offices and wealth managers from French and Spanish speaking regions, for whom Geneva is a preferred location. Our publications are issued also in these languages. Asset protection is a main motivation to hold assets in Switzerland. It is also the core of our investment strategy: Companies of highest quality with above average growth expectations - «Quality Growth Equities». Our Geneva based business partners allow investors to combine our quality growth strategy with Switzerland´s geopolitical advantages. Switzerland is one of our strongest growing markets and we decided two years ago to cover this market directly from Zurich.
Ipsaryaris: Geneva is a global leading hub for wealth management with headquarters of the worldwide most well-known private banks as well as the centre for many supranational organisations. Geneva also boasts a long multicultural tradition with residences and visitors from all over the world. In Switzerland Geneva is for us a very important region, with cross-border wealth management services and hence very relevant for Aviva Investors global business, which is coordinated from my team in Switzerland.
Prömm: Besides that Geneva is a wonderful city, it plays an important role as the door to the Suisse Romande. Being one of the most successful investment boutiques in Europe, we offer equity strategies that in the times of no or low interest rates, rising inflation and weak performing alternative strategies are attractive to investors all over Europe. The combination of attractive returns and low volatility, the long-term partnership with the companies we invest in can also offer attractive opportunities for Swiss investors. Switzerland has a lot of interesting asset management companies, however, we believe, that we can offer an added value. Stable equity-equivalent returns, high distributions and sustainable investments are an attractive investment opportunity - not only for endowments.
Caduff: Which of your investment solutions are currently attracting the most interest from investors?
Ipsaryaris: Next to sustainable outcome strategies in all asset classes, chasing for yield due to the long-lasting market situation is still key. Additionally our real asset range e.g., infrastructure debt, private debt, long lease strategies trigger increased interest. Aviva Investors is focussing on three sustainable outcome topics thus being «Climate», «Earth» and «People». In the climate space our product range includes global and European climate transition equity strategies, a climate transition credit fund and we only recently launched the climate transition real asset strategy in the UK. Lookout for news, as more to come also related to the «Earth» and «People» pillars.
Safft: As a fund boutique, we focus our resources on one investment strategy. This allows us to compete with our largest competitors: six top research analysts, who cover on average ten companies, work exclusively for the Seilern Universe, which holds the 50 to 70 stocks out of 58,000 stocks globally that fulfil all our «10 Golden Rules». Accordingly, we attract only investors that decided to invest in a quality growth strategy based on their asset allocation strategy. Many investors realize that the best quality growth companies enjoy above average profitability also in an environment of restrictive monetary policies and inflation expectations, which may explain the continued growth of our funds.
Dalla Corte: Without a doubt, China Onshore Bond and Green Bond funds are the two strategies that are attracting the most interest from our clients. Our China Onshore Bond fund has delivered decorrelated and positive returns since its launch in 2018, which is much appreciated in an environment of negative interest rates. The fact that we were among the first to launch a China Onshore Bond-focused strategy, covering the entire Chinese market, has been a key factor in our success. Green bonds, in turn, are currently proving to be the perfect asset class for implementing an ESG-conscious FI strategy, with the added benefit of demonstrating realized impact to investors. In addition, our absolute return approach, which allows us to actively manage duration, is a distinctive feature that has enabled us to outperform the market to date.
Prömm: Up to today, we have a few contacts with Swiss private banks and family offices that are interested in our stock picking expertise especially in European small caps. In our philosophy, we follow the four principles of value investing in the tradition of Warren Buffett: buy with a margin of safety, invest in business owners and businesses with an economic moat and consider the moods of Mr. Market. From this philosophy our CIO Frank Fischer has developed our «Modern Value» investment approach over the years which results in superior stock picking returns and lower volatility. In combination with our ESG overlay, this approach sets its focus on what we call wonderful companies with stable business models, low leverage and high-quality management.
Marmor: Biotech is attracting significant interest from investors drawn to the innovation in the space and the robust growth outlook for those companies succeeding in developing new medicines in high unmet need conditions. The remarkable pace of progress is highlighted by the rapid advancement of vaccines for coronavirus, and is also seen across new therapeutic modalities like gene therapy, cellular therapy and mRNA based medicines, as well as in areas transforming scientific progress such as artificial intelligence.
Salzmann: We have a range of investment managers and strategies that are of strong interest to our clients. These include Finisterre Capital and the total return strategy for emerging market bonds, as well as a fund operated by Spectrum Asset Management that invests in preferred securities. On the high yield side, we see interest in the limited term high yield strategy, managed by our Los Angeles based boutique Post Advisory. Lastly, we see substantial interest in our US equity strategy, managed by Aligned investors, which focusses on investing for the long-term in competitively advantaged businesses led by owner-operators. With Principal among the top 10 real estate players globally, our capabilities within the four quadrants of real estate (public/private equity & debt) are also in strong demand.
Caduff: What makes these funds so special (performance, size, etc.)?
Dalla Corte: What makes our funds special is a mix of factors that determine the success of a strategy. Being among the first to enter a newly accessible market like the Chinese onshore bond market, or being an early investor with a particular investment approach in an emerging niche market like green bonds, speaks to Eurizon's entrepreneurial spirit and constant willingness to offer innovative strategies to our investors. The Bond Aggregate RMB and Absolute Green Bonds funds now have substantial Assets under Management (AuM) of 3.2 billion Euros and 2.3 billion Euros respectively, which, combined with their excellent returns since inception and the in-depth knowledge of the investment teams, represent highly valuable investment opportunities for a wide range of investors.
Marmor: The biotech fund is unique in its positioning to best capture the innovation in the space. The fund is composed of concentrated positions in high conviction ideas based on deep due diligence, focusing on companies where the data to date support a high likelihood of success in the next value creating event, be it clinical, regulatory, or commercial progress. The fund is biased towards mid and small cap companies which are most levered to innovation in biotech. While innovation is present across a range of therapeutic indications, oncology and orphan genetic diseases are areas with significant exposure given the large number of opportunities and the potential for genetic data to increase the likelihood of success in these settings.
Salzmann: As a multi-boutique manager, each of our investment boutiques is specialized in a select asset class. Finisterre Capital manages the above-mentioned strategy with a focus on delivering 90 percent of the broad market’s upside, with only 50 percent of its volatility and 50 percent of its drawdown. The resulting superior sharpe ratio has proven to be an attractive feature of this all-weather solution. Post Advisory’s approach is based on getting credit right, which is much easier on a short-term horizon and duration hardly has an impact. The boutique is dedicated to off-benchmark HY/Senior Loan investing and the default rate in their portfolios has been zero since 2002. Limited Term HY can be seen as cash and investment grade alternative with attractive risk adjusted returns.
Safft: Our proprietary research is comprehensive: Before we add a company to our universe, we have written an internal report of 150 to 200 pages - a result of several months of analysis. The high confidence we gain from this process allows us to structure high conviction portfolios of 17 to 25 companies. This ensures the undiluted impact of our proprietary research on the performance of our funds. We only add a company, if we expect a meaningful improvement of the risk-adjusted return, not just to increase diversification. The result is an investment process that has generated superior risk-adjusted returns for more than 30 years, which is also reflected by various awards that we have won every year, like Lipper and EuroFund Awards, Deutscher Fondspreis, etc.
Prömm: What makes us unique is the combination of ESG investing and stock picking. We calculate the expected total shareholder return for the next five years and follow cash-flows and not just low multiples. As Buffett says: better buy a wonderful company at a fair price than a fair company for a wonderful price. Our flagship fund is originally designed to meet the requirements of endowments (German Stiftungen). It delivers stable returns of almost 9 percent p.a. since inception, distributions of 3 percent p.a., while offering a much lower volatility than equity markets. Besides we run more focused strategies that offer much higher returns than equity markets by investing in very concentrated portfolios of small companies. One of these strategies is up 50 percent ytd and 370 percent since 2011 which is more than 15 percent p.a.
Ipsaryaris: Deliver exceptional experience while building a sustainable world for wealth and retirement, this is our vision and drives our investment strategies, with a dual goal «profit with purpose». All our sustainable outcome strategies have three sleeves; «avoid harm», «invest in solutions» and «support change». We are never going to change the world by simply walk away. Our climate escalation policy makes it clear that unless companies act, we’re out. It shows our commitment to living our purpose and creating a better tomorrow. Aviva, became the first major insurer worldwide to target net zero carbon by 2040. Our pledge includes the commitment to invest 2.5 billion British Pounds in low carbon and renewable energy infrastructure and power all our offices with 100 percent renewable electricity. «We walk the talk» and this makes us a credible partner for our clients.
Manuel Dalla Corte joined Eurizon in June 2018 as Country Head for Switzerland. Responsible for the business development he works closely with banks, asset managers and institutional clients. Prior to this his over 20 years experience was gained at Aviva Investors, Jefferies AM, Lombard Odier and UBS.
Rula Ipsaryaris is based in Zurich and focuses on growth opportunities for institutional clients and wholesale customers in her region. She has over 30 years in the financial service sector. Prior to joining Aviva Investors, she worked as Senior Sales Executive and Deputy Head Switzerland & Liechtenstein for Vanguard. She gained her professional experience in various leading positions in the fiduciary industry with an American broker, both international and Swiss private banks, as well as with one of the worldwide largest asset custodians. Rula Ipsaryaris holds a CAS (Certificate of Advanced Studies) in Sales and Distribution Management from Lucerne University as well as Fiduciary with Swiss Federal Accreditation.
Mina Marmor joined Sectoral Asset Management in 2006 and was promoted to Senior Portfolio Manager in 2018. She is the portfolio manager of the biotech strategy and mid and small-cap healthcare strategies, as well as responsible for analytic coverage of biotechnology companies. She graduated in 2001 from the University of Toronto with a Ph.D. in immunology. She obtained her CFA charter in 2010. Prior to joining Sectoral, Mina Marmor worked with Health Science Communications in New York as an associate medical director. She previously worked as a post-doctoral fellow in the fields of cell signaling and oncology.
Philipp Proemm is Head of Marketing and Sales as well as Managing Director at Shareholder Value Management AG. Before he joined Shareholder Value in 2012, he was a board member and founder of Fundmatrix AG, one of Europes first full-service fund distributors. At Fundmatrix AG he was responsible for the selection of various asset managers from all over the world and developed distribution for them in German-speaking Europe. Before founding Fundmatrix AG, Philipp Proemm was Product Manager for mutual funds at Credit Suisse Asset Management (Deutschland) GmbH. Philipp Proemm graduated from the Justus Liebig University in Giessen with a degree in business administration. His diploma thesis analyzed Price-Earnings-Ratios in a cooperation with B. Metzler seel. Sohn & Co. KgaA.
Karl Safft joined Seilern in 2019 as Investment Specialist. His responsibilities include advising clients in the DACH region. Prior to that, he ran his own multi family office boutique, focussing on fund selection and strategic asset allocation to structure multi-manager, multi-asset-class portfolios. He started his career in 1994 in accounting with PricewaterhouseCoopers, Hamburg. In 1996, he joined 3i Group plc as private equity investor, focussing on direct investments in the German «Mittelstand». 1999 - 2005, he worked with Morgan Stanley International to build their asset management business for German-speaking UHNWI and semi-institutional investors. He continued to serve this client segment at Credit Suisse Investment Partners until 2010. Karl Safft holds a Diplom-Kaufmann (MSc) degree in accounting from University of Cologne and an MBA (honors) in Finance from the Kellogg School of Management, Evanston/Chicago, where he studied as a Fulbright Scholar. He is fluent in German and English.
Christoph Salzmann is a Director of Swiss fund distribution at Principal Global Investors (Switzerland), since 2019. He has over 30 years of experience in financial markets and started his career with Swiss Bank Corporation in 1991. After its merger with UBS he worked as a relationship manager for private clients. In 2002 he worked in active portfolio advisory for the international UHNW team. In 2014 Christoph Salzmann joined BNPP AM, responsible for banks, family offices and EAMs in the German-speaking part of Switzerland.
Thomas J. Caduff is the CEO of Fundplat LLC. He has worked in the financial industry for about 40 years. His professional experience includes roles at the stock exchange commissariat of the Canton of Zurich, Bank Vontobel, Credit Suisse and UBS. Thomas J. Caduff also served for three decades in one division and multiple brigades of the Swiss Army, as a communication/media officer.