Election results, diversification and search for talent occupy selector thoughts

European election results, elements of diversification, and the global search for talented managers figure prominently among the latest collection of views of fund selectors.

alan-theinElection results reduce risk

Name: Alan Thein
Title: Co-manager, multi-manager range
Company: Legal & General
Base: London


What did you make of the elections in Greece and France?

In Greece, the likelihood of a near-term destabilising risk event has been reduced. That said, one immediate potential fly in the ointment is PASOK’s current demand for Syriza to participate in a coalition government, which Syriza is ruling out.

Whatever the result, Greece still faces extreme economic pressure and uncertainties and the eurozone’s debt crisis is far from resolved.

The French parliamentary elections also took place and President François Hollande’s Socialist government gained an outright majority of seats in the National Assembly (over 300 of the 577) and thus will not need to rely on the support of the Left Front, a party steadfastly opposed to austerity measures, to govern.

This, in turn, should mean it is able to adopt a more moderate/mainstream stance on key political matters, which will thus be more warmly received by markets.


duret-didier-abn-amro-cut-outSegmented approach  

Name: Didier Duret
Title: Chief investment officer
Company: ABN AMRO Private Banking
Base: Amsterdam


ABN AMRO Private Banking recently recommended overweighting hedge funds. Why?

We favour a segmented approach: invest in relative-value and event-driven hedge funds that can exploit the dislocation in valuations across credit and equity markets or profit from company-specific events, together with investment in global macro and commodity trading adviser hedge funds.

Global macro funds have proven expertise in understanding and benefiting from the impact of structural shifts on financial markets. They, as well as CTA hedge funds, are negatively correlated with long-only equity and fixed-income investments and most other hedge fund strategies. They can flexibly invest across various asset classes and markets using the most liquid instruments available.  


da-dalt-simone-credem-spa-cutoutDiversification vital 

Name: Simone Da Dalt
Title: Fund selector
Company: Credem Spa
Base: Reggio Emilia, Italy


What is the current market sentiment in Italy, and how has investors’ appetite changed on the back of contagion fears from Greece?

Yes, we are very top-down in terms of allocation, and we express our views by investing in managers. We move our exposure to different asset classes, regions, strategies and through to managers – quite aggressively. When there is an inflexion point in the environment, we tend to switch 60% to 70% of the exposure we have.

When we remain in the same environment, we may tweak the fund of funds at the margins, maybe shifting 15% or 20% of the portfolio. At present, we do not have a lot of equity exposure – about 20% – but when we do like equities, you still will not find us in global equity long/short managers. It will be more the sector specialists.
We may think, for example, there is a ­specific argument for investing in healthcare or ­technology.

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