Sourcing strategies clients didn’t know they needed
Moving from a large to a smaller organisation has effected a different kind of selection process for Lupus Alpha’s Claudia Röring.
At the beginning of 2015, Claudia Röring moved from DeAWM (Deutsche Asset and Wealth Management) to Lupus Alpha, where she is now in charge of Research & Development, which includes manager selection. InvestmentEurope caught up with her to discuss how the change has affected her selection strategies.
Just as at Deutsche, Röring continues to analyse multi management funds in the liquid alternatives segment, specifically aimed at institutional investors. However, in contrast to her previous position, Röring now works in a much smaller team with different volumes of investment, which offers new opportunities, she argues.
A DIFFERENT AMBITION
“Working for a big name like Deutsche, you can rely on a research team and scalability remains a key priority. At Lupus Alpha, while scalability continues to be an issue, we are more flexible and have a different ambition. We want to become a platform that ,identifies younger, maybe less known managers. We are looking to support the growth trajectory of new talent and I now have the opportunity to look into new names.”
Röring selects liquid alternative strategies, which she defines as “strategies which offer exposure to non-traditional risks, in other words, are uncorrelated from stock and bond market performances.” This includes amongst others market-neutral and derivative based asset allocation strategies.
“Here in Germany, many investors have not really advanced their portfolios from traditional strategies. At Lupus Alpha, we want to contribute to developing liquid Malternative strategies in various segments as a diversifying component,” she argues. Of course, being market neutral is often easier said than done. “Classic fixed income investments certainly do not have the same levels of liquidity they used to have several years ago.
Markets have already been tested and it is likely that we will see other fierce disruptions. But this also creates opportunities. And highly liquid derivatives strategies give Myou a chance to exploit either environment,” says Röring.
LIVE THE PHILOSOPHY
Partly, because of this focus on innovation, Röring does not run with a classic approved list, although the quantitative screening of databases remains Man initial step of her selection process. But it is the qualitative step which is crucial to the selection procedure; here Röring builds on her years of experience as a selector at DeAWM.
“There are of course the standard questions, but I got into the habit of reading between the lines during one on one conversations in order to find out just how much the manager really backs his strategy, and if he really lives the philosophy that is being presented to us.”
“Because we don’t have a major analyst team, identifying the red flags is more or less my responsibility. Have there been any major personnel changes? Has the strategy changed unexpectedly? That requires consistent monitoring and reassessing decisions,” she emphasises. It is of course one thing to select a convincing new strategy, and another to find one that is compatible with the requirements of institutional investors she is working for.
“We try to source the strategies clients have not even realised they needed. With regulatory challenges such as Solvency II coming up, investors tend to be grateful if we help them to think outside the box and to source funds, which are both Ucits compliant and offer access to a new pool of talented fund managers. Being a small boutique offers us plenty of interesting opportunities to play into this demand,” she concludes.