Finding fund manager talent in the toughest sectors

In some sectors, finding talented fund managers is more difficult than in others, or so investment professionals often tell us. So we asked a panel of leading analysts which asset classes and sectors were most problematic and why. Citywire’s European research team compiled the results, in the third and final part of the series. Parts one and two can be found here.

Benoît Boru — Insti7

In euro government bonds, usually managers tend to add value through adding external beta, such as credit for example. It is quite difficult to find managers able to add alpha with curve and duration bets within the constrained benchmark universe.

Another example is absolute return funds, it is rare to find managers able to provide positive absolute performance in all market circumstances.

In this space, some managers such as Emeric Challier at AFIM try to introduce new processes for both euro bond and absolute return funds, using leading indicators and quantitative systems to build tactical and strategic positions.

However, as the market by definition constantly evolves, some managers could emerge quite rapidly in these areas.

Sylvain Landreau — Portzamparc

Emerging market equities, that actually can’t be ignored when managing risky assets, represent a category in which manager talent is rare. The countries to cover are numerous and specific. The stock universe is also very large. The MSCI Emerging Markets Index already holds more than 700 different stocks.

Our choices fell among others on Kristoffer Stensrud of Skagen Kon-Tiki and Jaap van der Hart of Robeco Emerging Stars. These two portfolio managers assume their own convictions by concentrating their selection of stocks. For funds with more constraints to control and monitor risks and exposures, we particularly appreciate Patrice Lemonnier of Amundi Actions Emergents.