Robotics is the hot topic among asset managers seeking to tap into fast-paced innovation.
But Pictet’s Peter Lingen was ahead of the curve with the launch of his dedicated approach at the start of 2016 and he is now sitting a-top the thematics sector. But what has really powered this outperformance?
‘There have been a few main drivers for us,’ he says. ‘Of course tech has been a big part and we have around 55% of the portfolio there. Industrials makes up about 30% and healthcare sits at around 10-15%, and they have all contributed nicely.’
The fund returned 28.2% in US dollar terms over the past year but the investor response has been phenomenal.
Closing to new money after just 18 months in the market, the Pictet-Robotics fund now boasts almost €6 billion in assets. Lingen says this success is hard to pinpoint but a ‘pure’ focus has certainly helped.
‘A lot of our revenues are directly related to robotics, automation and AI [artificial intelligence]. For example, we don’t play all industrials, we look at companies like Siemens (4.2%) and Fanuc (4.6%).
'What we like about these businesses is their direct relation to our theme, the underlying change and how they are adapting their businesses to embrace technology.
‘How they use technological change is key. AI is a bit of a buzzword but we are keen to see firms developing products based on that. It could be anything from diagnosing cancer or it could be a company like Siemens making the factory floor more efficient by reducing downtime with predictive maintenance,’ he says.
With technology constantly evolving, Lingen says identifying new investments is all about looking for firms that thrive on change. These involve themes at the fund’s core such as robotics and automation.
‘The semiconductor sector has been very important for the fund. We identified some of the companies in that space quite early on and that has worked very well for us.’
Lingen says companies that are early adopters of new technology would also be on the team’s radar. ‘It could be that these companies want to move into one of our core themes.
'One example could be an auto supplier breaking up in order to be more focused on the transition to the self-driving car, which would increase the purity and potentially make it investable for us,’ he says.
This interview originally appeared in the 2017 edition of Citywire's Euro Stars publication.