He is definitely one of the most active chief executive officers of the French asset management industry on social networks. Nothing surprising as Athymis Gestion’s CEO Stéphane Toullieux is passionate about tech and has been looking for years at the market’s current megatrends such as digitalisation, ESG and millennials.
He recently brought his company into a new challenge with the launch of the Athymis Better Life fund on 28 July 2017, a socially responsible investing strategy the firm has built from scratch.
“The launch of the Athymis Better Life fund has been the result of several factors, first of which being my relationship to impact investing and SRI strategies. It dates back to 2001 when I started working at La Financière de l’Echiquier. I have taken part actively to the launch of the LFDE foundation in 2004 that supports a number of social initiatives mainly through sharing funds. Then, at Athymis Gestion, we have launched two strategies (Athymis Millennials, Athymis Millennials Europe) focused on the millennial trend last year which is much connected to the SRI universe,” explains Toullieux to InvestmentEurope.
He adds: “The election of Donald Trump as US president and his announcement regarding the withdrawal of the United States from the 2-degree Paris Agreement were another layer in our decision to launch Athymis Better Life. Lastly, we were disappointed with the SRI fund offering available in France. Too many so-called SRI strategies follow a best-in-class approach that nobody understands. Being also a multi-manager, I am not confident with running a fund of best-in-class SRI funds. Consequently, we have built from scratch an SRI fund that fits our expectations.”
The idea of investing in companies that help to make the world a better place will prevail in the fund. Athymis Gestion has adopted a strict exclusion policy towards a number of sectors such as gambling, alcohol beverages, tobacco, weapons and coal.
Pharmaceuticals are being monitored closely as the firm believes the sector could carry a negative impact to a certain extent.
“Performance remains key: we look at companies that we think are the best positioned to achieve the best investment performances of tomorrow’s world. Renewable energies and circular economy will be two of the sectors considered for the fund,” Toullieux says.
The fund will hold around 30 global stocks, of which roughly two-thirds will be shares of European companies. The stock-picking will rely on a fundamental research together with the use of SRI-specific data.
“We will put an emphasis on the controversy risk. The stocks we will pick will likely be large-mid caps. The current conjuncture for small caps does not appear compelling since valuations are high and the liquidity lacks,” argues Athymis Gestion’s CEO.
Concerned with making a positive impact while investing, Toullieux highlights that some 10% of the fund revenue will be reversed to charity projects that will focus on people and planet, two core topics of the Athymis Millennial funds.
“Supporting social entrepreneurs, helping associations fighting against certain diseases for instance. On a long-term perspective, we will consider the creation of a club or board that will not be only composed of individuals working in finance but also clients and leaders of philanthropic projects. We will also need to feel the authenticity of the projects we will support.”
Regarding the French SRI label that is supported by the French authorities to guide investors (mostly retail) in the SRI fund offering, Toullieux suggests that labels should not exist if the management of a fund was transparent and its approach clear.
Millennials remain among targeted clients of the newly launched fund, a generation of which Toullieux says tomorrow’s world belongs to.
“Magazines that were published 30 years ago such as Popular Science were describing today’s world like a universe of flying cars, huge skyscrapers and robots. It is somehow funny to see that today, we believe our future will be made of huge skyscrapers, robots and… flying cars. Nobody can foresee the future. Most jobs that we will occupy in 25 years from now do not exist yet.
“What we know is that tomorrow’s world is being shaped by millennials. In the US, most CEOs are looking at this generation and try to understand its habits. Millennials are permanently zapping, they are on the move and more engaged in societal issues than previous generations. Social networks, e-commerce, circular economy, new consumption ways, our current world has been designed by millennials,” Athymis Gestion’s CEO says.
Toullieux embraces the digitalisation of the asset management industry and does not see the recent spate of AI-controlled fund launches as a danger. Though he remains vigilant as a few threats could emerge if the automated trend gets too far.
“I want to remain open minded but in 20 years, besides passive investing strategies, no one has found the “killer algorithm” that does systematically better manage funds than humans and we have not seen yet a rush towards AI-controlled funds.
“All the more, an automatisation trend, coupled with the rise of ETFs in which human action is limited, carries a major threat to the financial eco-system both in terms of risk and regarding the very essence of financial markets. A number of good companies will think twice before getting listed on stock exchange if 99% of investors are not humans,” he underlines.
He also expresses reserves regarding crypto-currencies. “The blockchain trend is fascinating but loads of speculation remain on the use of Bitcoin or that of Ethereum. We have often seen flash crashes on crypto-currencies. At this stage, I find it worrying that Bitcoin could be the future of payment,” Toullieux says.