Priority to active management

Mathieu Harivel (pictured) is products specialist at Crédit Foncier de Monaco, a branch of Credit Agricole Private Banking, since 2007.

He describes Monaco’s market as “composed of experienced investors and well known banks offering services of the highest quality.”

Harivel is involved in fund selection across all asset classes, geographical areas and currencies. CFM Monaco runs a buy list of around 350 funds, managed by approximately 80 partner asset managers and all approved by a committee including other Crédit Agricole Private Banking’s entities.

“We only select funds with active management in order to provide added value to our clients,” Harivel highlights.

CFM’s products specialist says a rigorous process is used to select, advise and track investment funds. It implies a quantitative analysis of the risk/reward couple in order “to monitor how funds are ranked in the same category or how investment in the same asset class behave over a given time period.”

A qualitative analysis completes the process and relies on interviews with top fund managers who have been identified through quantitative analysis in order to assess their resources, investment processes, management style and objectives.

The firm also tracks recommended funds closely and analyses portfolios regularly to ensure stable management and compliance are in line with investment rules.

Key factors Harivel looks at when selecting a fund include consistent performance, low volatility, weak drawdowns and fees structure. Among reasons leading the team to sell a fund remain underperformance, manager’s departure, drop in assets under management.

“We need to pay attention to the management of the fund : it must be strictly in line with the management policy specified in the prospectus,” Harivel says.

CFM Monaco’s current asset allocation slightly over-weights equities.

“We are currently favouring European equities for the following reasons: the quantitative easing policy led by the European Central Bank, the weak valuation of European equities in comparison with other equity markets, in particular the US, companies are restructured and have international activities and revenues,” he explains.

“Regarding fixed income we are positive on European high yield. We have large cash position and we maintain a significant US dollar exposure,” he adds.

As popular strategies requested by the firm’s clients, Harivel stresses that fixed income total return products come first followed by strategies that are diversified and those with high and regular income.

Several ultra high-net-worth individuals are looking for high level of diversification, he highlights.

“Having alternative investments in their portfolio, help reducing portfolio’s correlation to Equities and Fixed Income. Nowadays we do not propose single managers because we are reshaping our offer. We like absolute return and we have selected several Long Short Ucits strategies,” he says.

Harivel also spots interest for a few themes on equities.

He asserts that finding the most suitable funds for the firm’s investment views and identifying managers who are truly active are the current challenges he faces in fund selection.

According to Harivel, changes in the asset management industry dwell in its consolidation with less big players but still innovative boutiques as well as in the funds offering, passive managers with ETFs challenging strongly convinced active managers.

Adrien Paredes-Vanheule
Adrien Paredes-Vanheule is French-Speaking Europe Correspondent for InvestmentEurope, covering France, Belgium, Geneva and Monaco. Prior to joining InvestmentEurope, he spent almost five years writing for various publications in Monaco, primarily as a criminal and financial court reporter. Before that, he worked for newspapers and radio stations in France, in particular in Lyon.

Read more from Adrien Paredes-Vanheule

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