Syz Asset Management has made huge strides to strengthen its multi-asset capabilities and will now focus on reinforcing its existing expertise as opposed to branching out into new segments.
Katia Coudray, chief executive officer of the Geneva-based group, told Citywire Selector there are no plans to expand into new investment areas as the group will focus on a limited number of areas of expertise.
‘We don't want to cover everything, we just want to concentrate on areas where we are able to create a significant portion of alpha.’
In Syz AM’s case, that applies mainly to European and Japanese equities, high alpha strategies as well as multi-asset and European credit.
The group is still strengthening its multi-asset and quantitative capabilities, she said. This has seen the mixed asset team expand from four to nine investment professionals in recent years.
‘To add new sources of return we have added into the macro research and we have added a framework of research for an asset valuation model and that's looking through all the big asset classes, equity rates, currencies, credit, nominal rates and so on.’
However, while it aims to focus on existing areas, it did expand its coverage last month with the launch of a global risk premia long/short fund, called Oyster Equity Premia Global.
As a former fund selector, her past experience has been instrumental in her current job, she said, as it has been a big benefit when it comes to onboarding talent.
‘Fund selection has helped me a lot in growing the asset management business because it gives me a lot of understanding about what makes a high performing managers and the environment that makes them perform the best.
The strengthening and consolidation of expertise also extends to the asset manager’s regional development, as the group recently shut its Asian operations by closing its Hong Kong and Dubai offices.
Previous CEO Xavier Guillion had identified MENA as a key growth area back in 2014. However, Coudray said distribution was becoming fragmented and the Asian presence was ‘premature’, which has led the group to rebalance in Europe.
Caps lock on
Coudray said one area which requires constant attention is fund capacity levels, as it can be a big threat to alpha generation.
‘We've seen a move since the crisis where the doors of open architecture have slowly closed and you have seen a focus on big names and franchises, so all the selection processes have institutionalised a lot.
‘That has probably had an impact on these larger funds that have since become very big,' she added.
There is no doubt that size can be an issue for generating decent alpha, Coudray said, which is why a lot of attention has been placed on size analysis as of late.
‘If you want to control quality, then you need to set a cap. Having managed funds in the past, I can understand the difficulty in allocating these large sums of money.’
Across both small and large cap European equity funds, the assets under management total less than CHF 2 billion (€1.71 billion), a figure the group is closely monitoring, she said.
The group has since set specific upper limit levels for the global team in particular, however one segment that doesn’t require such tight reins is multi asset.
‘Multi assets are very scalable strategies because they also invest in futures, ETFs and you have no real capacity limits.’