In the latest series of Selector Snapshot, Citywire Selector speaks to leading selectors on how to handle the ever-changing European equity market and uncover what strategies can remain resilient against a backdrop of creeping populism.
Selector: Markus Bamert
Company: Lenox Capital (Switzerland)
We have focused a lot on investing via boutiques, as we feel our interests are aligned. They tend to concentrate on a particular investment strategy, which prevents expansion purely for the sake of growing AUM, with the corresponding build-up of administration and internal politics.
There are, of course, also large providers with highly independent boutiques inside. We refine our search by looking for fund managers that have an investment strategy in place for a full market cycle, thereby avoiding aggressive beta players.
This allows us to stay invested with the same funds for many years and ensures geographic asset allocation is fairly stable. For a long time, we have generally focused on funds without a large exposure to financials, as the unresolved leverage and debt-issues seem more important to us than the geographic allocation.
One of our typical, broadly diversified 65% equity mandates invests 5% of its entire portfolio in two eurozone-focused funds: Oddo Avenir Euro and Montpensier BBM. The former has no exposure to financials and focuses on the cross-border expansion of mid-sized companies.
The latter works with four sub-strategies within the portfolio and does have some exposure to financials, which is exceptional for us. Another 5% is invested in the Greiff Special Situations fund, a low volatility strategy with a primary focus on Germany’s highly regulated merger market, as well as the Schroder European Alpha Absolute Return fund. With such diversification, our allocation in Europe remains stable in spite of intermediate changes in the market environment.