Making your mark in today’s fund selection and advisory market is no easy task.
For Standard Chartered’s Alexis Calla (seated, right) and Dany Dupasquier (standing, left), rising above the crowd is all about what you can bring to the table.
‘Everybody in the fund selection business uses more or less the same criteria to select funds,’ says Dupasquier, the group’s head of fund selection, who reports to Calla. ‘Where you add value is the way you are able to interpret the information you are getting, and for me there is nothing that can replace experience and hard work.’
This notion of interpreting information is also something that Calla – the bank’s global head of investment strategy, advisory and managed investments, overseeing $150 billion in wealth management assets – insists upon in his approach to running the business.
A fan of photography, Calla’s enthusiam for the art form has helped him understand how people interpret data.
‘What I enjoy with photography is you can give five people a camera each, and then point towards something and you will get five different pictures.
‘To me this relates a lot to what we do every day as investment professionals.
‘We look at markets and financial data, but there will always be something missing, the same way that in a picture someone will capture something that I haven’t, there is always something useful to learn.
‘I am very interested in this capacity we have to keep discovering the differences in perspective.’
CV: Alexis Calla
The French investor began his career in the mid-90s when he joined Citibank as a junior portfolio manager in the group’s Paris office. He then moved to London to cover European investment markets.
In 2004, still with Citi, moved to New York where he was global head of investment products and advice for the retail bank.
In total he spent 17 years with the US group before deciding to join Standard Chartered’s Singapore office in November 2010.
‘I’ve been lucky that I have covered the entire value chain in wealth management and done pretty much all the geographies with maybe the exception of Australia and Japan,’ he says.
Both Calla and Dupasquier come from similar parts of the world, and both found a similar route into the industry. Calla hails from Tours in the celebrated French wine region the Loire valley, and Dupasquier comes from the French-speaking part of Switzerland.
Both earned their fund selection stripes working in the European markets at the start of their careers. They now work together shaping the global bank’s fund offering from its Singapore headquarters.
Dupasquier’s view that there’s no substitute for experience is shared by Calla.
‘In fund selection, a lot of what you do is subjective in nature, so you need references and to have seen many investment teams, lots of different situations and ways of doing things.’
When he joined the group in 2010, Calla says that one of his mains goals was to increase communication among the various teams to enhance their investment and selection processes.
‘If you really want to be successful in advising clients about their investments you can’t do fund selection in isolation, it has to be in the context of your other views,’ says Calla.
‘In my opinion the weakness in many organisations is that people tend to focus on their speciality and they stop talking to each other, or they are in very different geographies and can’t really benefit from each other.’
Both Calla and Dupasquier say their roles prior to joining Standard Chartered had a big impact on their outlooks.
French native Calla has close to 20 years’ investment experience based in Paris, London and New York for Citi, where he worked across the asset and wealth management desks, product development, and fund selection areas of the business.
‘I think having responsibilities in different parts of the world and sharing your knowledge with actual investors makes you realise that human beings are not really driven by maths or economics but by emotions, behavioural traits and culture.’
His colleague Dupasquier spent eight years as a selector in Lombard Odier’s Geneva-based fund of hedge fund team before joining Standard Chartered in 2009.
‘My time in Geneva was a very important and formative period in my career because we were a rather small team compared with the industry standard, with seven people covering all the strategies and all the geographies.’
His Geneva years also taught him that although a manager’s past performance is required reading to determine their ability, understanding how they make money, and how they think, is what really makes the difference.
‘All fund managers will go through a rough patch. When this difficult period happens, if your decision was based only on past performance you will have been a bit too quick to have removed them from your list,’ Dupasquier says.
Going for long/short
The importance of communication is reflected in the team’s structure, with the investment, advisory and private market desks also based in Singapore.
A vital part of Dupasquier’s job is working closely with the group’s investment strategy division, which is led by Steve Brice, who reports to Calla.
This collaboration has led them to view long/ short strategies as a good bet in the current environment.
‘We think that in a market environment where many stocks tend to trade more based on their fundamentals, equity long/short managers should do well.
‘There are also signs that correlations between stocks and sectors are decreasing, which is good news for long/short managers.’
Within this theme one of the fund managers he has been following since his time with Lombard Odier is Kurt Feuerman. He runs the AllianceBernstein Select Absolute Alpha fund – currently on Standard Chartered’s recommended list – but was previously with the New York-based global macro hedge fund manager Caxton Associates. Upon joining AllianceBernstein in 2011 he launched a fund, which adopted the same strategy he’s been using since 1999.
‘With the AB fund, my level of comfort was high because I have been following this manager since 2005. When we started talking about including it I didn’t have to start my research from scratch as I know how he runs money and what to expect and that is key.’
Another long/short fund on the group’s recommendation list is the Henderson Pan European Alpha, which they added in the past few weeks. It’s managed by Citywire AAA-rated John Bennett and AA-rated Léopold Arminjon.
CV: Dany Dupasquier
The Swiss selector began his career as a hedge fund analyst as part of Lombard Odier’s fund of hedge fund group in 2001. During his eight years at their Geneva group he worked in a team of seven people and says one person there had a great impact on him – his previous boss Frédéric Lebel, who left the group in 2007.
‘He is someone I admire a lot. He is one of the smartest people I have met, and he was so passionate about his job. With him I learned the importance of discipline, hard work and passion. Without passion it is hard to do this job well.’
In 2009 he left Geneva behind to move to Singapore to join Standard Chartered as the group’s head of group funds.
Dealing with clients means you also have to deal with their proclivities and emotions, which can have a knock-on effect on how portfolios are constructed. In Calla and Dupasquier’s case this translates into a slight bias towards Asian markets for Asian clients’ portfolios, while still underweighting emerging markets in their overall asset allocation.
‘There is no point having an academically perfect solution if it has no appeal to your clients and doesn’t get implemented,’ says Calla.
‘Sometimes this means the portfolios may not be perfectly diversified. You need to design solutions that they are comfortable with and fit with their aspirations – solutions that are both solid and relevant to them. It is a difficult craft.’
In Dupasquier’s view one of the standout groups that covers the Asian market is First State, with Citywire AA-rated Martin Lau being his manager of choice through his First State Dividend Advantage, First State Asian Equity Plus and First State China funds.
His recommended fund list also includes JP Morgan’s ASEAN fund – run by Citywire + rated Pauline Ng, Sarinee Sernsukskul and Changqi Ong – and the Greater China fund, which is managed by Citywire + rated Emerson Yip and Howard Wang.
Across their whole portfolio Calla and Dupasquier tend to opt for fund managers of scale, and this is no different in their multi-asset allocation – another favourite theme among their Asian clients.
Their recommended list includes the Schroder ISF Global Multi-Asset Income fund, run by Aymeric Forest and Iain Cunningham; JPM Global Income, managed by Citywire A-rated Michael Schoenhaut and Citywire + Talib Sheikh; BGF Global Multi-Asset Income, run by the BlackRock trio of Michael Fredericks, Justin Christofel and Lutz-Peter Wilke; and Allianz Income and Growth managed by Doug Forsyth and Michael Yee.
Boutique fund houses tend to not feature prominently in the group’s portfolios, as brand recognition and size are seen as a necessary boost to get clients to invest in a fund.
‘Since the crisis there has not been huge demand for boutiques,’ says Dupasquier. ‘It is coming back gradually, but when it comes to boutiques our approach has been to work with them for our discretionary offering. We have a very successful offering in that space that is rather unique as it is mostly sub-advised.
‘Gradually we might consider more boutiques but then we have to make sure that, beyond pure performance, they are able to provide us with strong support and a high quality service.’
The group’s house view is to maintain an overweight position towards developed market equities, while underweighting fixed income and emerging markets.
For their core fund recommendations, Dupasquier says they have the AllianceBernstein Select US Equity and the BGF Europe funds on their list for the broad and flexible exposure they offer to the US and European equity markets.
One bond manager Dupasquier has been favouring for some time is Michael Hasenstab and his Templeton Global Bond and Templeton Global Total Return Bond funds.
The renowned bond manager’s recent foray into Ukrainian bonds has not led the Swiss investor to change his view.
‘The size of Hasenstab’s exposure is manageable with regards to the size of the fund, but we also like the manager, his strong conviction approach which is even contrarian at times, and what we have always highlighted is that it is not a plain vanilla bond fund.’
After nearly two decades working across many different markets Calla has learnt the importance of creating tailored solutions for clients. That was one of the reasons why, after stints in Paris, London and New York, he chose to relocate to Asia.
‘My impression was that quite a lot of financial institutions were advising retail clients in Asia using tools or processes developed in other parts of the world.
‘With many cultural differences it wasn’t really working, so I thought I could use my knowledge and try to help shape a more Asian way of offering wealth management solutions.’
Once again, the idea of learning from past experiences and taking an alternative view of the investment world proved crucial.
‘You come with your own recipes, the ones you have learned from your own country, and sometimes you realise they don’t work so you have to re-learn and re-discover. This is something that really fascinates me,’ Calla says.
When he joined the group in 2010 investments were being made in the iron grip of central banks; only now are market forces coming back into play.
‘But how do you manage that, and what will be the pace of change?’ asks Calla.
‘We still believe there are great opportunities in more risky assets, but we are going to have to be more agile, more dynamic, and aware of the developments in central bank economics and everything else more closely because there will be a few turning points.’
A critical challenge for Asian investors is transitioning from a decade where emerging Asia was doing extremely well, commodities were key and China was leading the world to dealing with the current rebalancing act in the region.
‘If you were an investor and had enjoyed uninterrupted growth, how do you now adapt your approach and expectations?’ Calla says.
‘Those are some of the big challenges that we are facing.’
This article originally appeared in the May issue of Citywire Asia magazine