Bespoke solutions designed to achieve investment success
The need for bespoke investment vehicles amongst our clients has never been greater. In an ever-changing market environment, they are placing more emphasis on achieving specific objectives and targets, often requiring different asset allocations and investment approaches that can be tailored to suit their risk appetite more precisely. Our clients are also looking to incorporate new regulatory constraints, as well as specific environmental, social and governance (ESG) criteria.
Unigestion has decades of experience in creating such solutions and today we are entrusted with managing USD 13 billion, or more than 50% of our assets under management, in tailor-made investment portfolios. We are proud to partner with sophisticated investors from around the world, including pension funds, sovereign wealth funds, insurance companies, financial institutions and family offices.
Dialogue and partnership
We work in partnership with our investors to co-create tailored strategies that meet their specific requirements – a ‘made with you’ rather than ‘made for you’ approach. Through open and transparent dialogue, and by sharing our research and ideas, we aim to gain a deep understanding their needs, constraints and challenges.
That dialogue starts with an analysis of a client’s current asset allocation. Applying our expertise, experience and analytical tools, we work with clients to identify any potential dislocation between the risk profile of their overall portfolio and their investment goals. We then consider any regulatory or accounting constraints, as well as any ethical considerations, in order to build the optimal portfolio.
ESG investing – your way
In recent years, there has been a growing focus on Environmental, Social and Governance (ESG) issues, both within the asset management industry and in our clients’ priorities. We have been running segregated mandates with ESG constraints since 2004 and we currently manage USD 2.8 billion of client assets in this way.
We recognise that our clients have their own views on ESG issues and we are able to build dedicated mandates that incorporate their specific criteria within our investment process. We can filter out single stocks that represent specific ESG risks – such as environmental risk, workforce treatment issues or corporate governance matters – or entire sectors, such as tobacco.
It is not only within equites that ESG plays an important role for clients. These issues are also addressed and assessed within our private equity, liquid alternative and multi asset offerings.
We collaborate with clients to co-create bespoke strategies in four distinct areas:
We offer a range of active strategies which seek to optimise the equity return premium while reducing downside risk in all market conditions. We maintain a consistent investment philosophy across all our equity portfolios, combining our proprietary and holistic 360-degree risk analysis with human insights to deliver smarter, faster and better-informed investment decisions.
Our investment solutions include risk-managed, long-only equity strategies and a factor allocation equity strategy. All are completely customisable to suit individual client needs. Clients can select their preferred level of active risk and/or implement a factor tilt, as required. We can also construct, integrate and manage a specific environment, social and governance (ESG) overlay across all our equity strategies.
- Private Equity
We have been helping investors to tap the potential of private equity for 25 years, thanks to our deep knowledge of local markets. We offer clients access to private equity opportunities using three distinct strategies (primary, secondary and direct) aimed at delivering high returns, while diversifying risks. We invest globally across all market segments, with a particular focus on the small and mid-market. We target high quality buyout, growth capital and carefully selected special situations, with diversification of risk at the forefront of our strategies.
We offer investors tailor-made strategies to meet individual preferences. Our customised programmes provide for full flexibility in terms of structuring, investment strategy, capital deployment and distribution pace. Investors choose the level of involvement in their programme. They have access to our web-based reporting platform, which allows tailoring of reports, benchmarking of performance and monitoring of risk.
- Liquid Alternatives
Our history in alternative investments stretches back to the mid-1980s as one of the first European investors in hedge funds. Since then, our capabilities have evolved significantly and today we internally manage a diversified range of liquid alternative strategies across both pooled funds and bespoke mandates.
Our flagship alternative risk premia strategy is an innovative, actively managed multi strategy that aims to deliver consistent, high risk-adjusted returns, with limited sensitivity to global markets, particularly equity markets. In addition, we offer investors customised solutions by combining individual building blocks in order to meet their specific requirements (performance objectives, risk profile, portfolio beta, leverage and diversification). These include long/short equity factor, alternative income and volatility strategies.
- Multi Asset
We have been managing multi asset portfolios since 1993. Our approach has evolved over time to provide differentiated and innovative alternatives to more traditional diversified growth and multi asset strategies. Our flagship multi asset strategy offers investors a unique, macro risk-based multi asset solution that aims to deliver smooth returns across all market conditions.
To achieve this objective, our investment approach focuses on enhanced diversification and dynamic risk management. Our macro risk-based framework is used in all multi asset strategies that we customise for investors according to their individual risk profile, investment objectives and constraints (such as desired target return or Solvency II capital requirements).
Co-creating solutions with our clients
In a changing world, we recognise that adaptability is crucial. Our forward-looking research in all asset classes is focused on potential future sources of risk, and our creativity and innovation are directed toward how to manage these potential pitfalls. Our clients are integral to this process. Through ongoing dialogue and collaboration with our clients, we constantly look to enhance our offering, processes and services to better meet their needs.
The following examples illustrate just some of the ways we have adapted to our clients’ needs.
Equity completion portfolio for a pension fund
Objective: Using an equity portfolio to diversify global risk on an allocation.
Investment solution: A risk-completion equity strategy specifically designed for a pension fund, which aims to reduce asset allocation exposure to various risk factors, such as interest rates.
Capitalising on private equity opportunities
Objective: A regulatory change in France prompted an increased allocation to private equity in French funds.
Investment solution: We took advantage of this change and worked with our clients to launch a private equity fund that invests in Europe (ex UK and France) through co-investment and direct transactions to provide diversification and cost-efficient exposure.
Equity hedge fund for an insurance company
Objective: To build an equity risk-budgeted solution for insurance companies to optimise Solvency II capital requirements.
Investment solution: We designed dynamic equity risk-budgeted strategies using derivatives positions to complement an equity portfolio.
Optimising a model portfolio under Solvency II constraints
Objective: To build a bespoke multi asset portfolio allocation designed to achieve a specific performance objective while meeting Solvency II capital requirements (SCR).
Investment solution: We ran an optimisation based on a broad multi asset universe comprising 30+ instruments, including bonds, equities, commodities and currencies. As returns are difficult to estimate, we took into account the carry of each asset (i.e. the expected return received for holding an asset if the price does not move, e.g. dividend yield). Having computed the individual SCR for each instrument, and taking into account its carry, we built a portfolio that has the maximum carry (expected return) with a limited SCR (below a fixed target). As a second step, we replicated the model allocation resulting from the optimisation with ETFs and funds. Finally, we created a portfolio comprising 10+ ETFs and funds that met the SCR target while maximising expected returns.
Experienced in handling client restrictions
Examples of client-led constraints in our bespoke mandates
- Socially Responsible Investment constraints
- Solvency II constraints
- Specific regulatory constraints
- Investment vehicles’ constraints
- Geographic constraints
- Benchmark constraints
- Dividend yield constraints
- Customised constraints
Contact us to discuss co-creating a bespoke solution