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. Our clients increasingly require different asset allocations and investment approaches that can be tailored to suit their risk appetite more precisely. They are also looking to incorporate new regulatory constraints, as well as specific environmental, social and governance (ESG) criteria.
Unigestion has decades of experience in running bespoke solutions, which today represent more than 60% of our assets under management. We are proud to partner with sophisticated investors from around the world, including pension funds, insurance companies, financial institutions and family offices.
Dialogue and partnership
We work in partnership with investors to co-create strategies that meet their specific requirements. We take a ‘made with you’ rather than a ‘made for you’ approach. Through open dialogue, and by sharing our research and ideas, we aim to gain a deep understanding their needs and challenges.
Our dialogue with clients starts with an analysis of their current asset allocation. We work with them to identify any potential dislocation between their portfolio risk profile 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
There is a growing focus on ESG issues, both within the asset management industry and in our clients’ priorities. Unigestion has been running segregated mandates with ESG constraints since 2004. Currently, we manage USD 2.7 billion of client assets in this way.
We recognise that our clients have their own views on ESG issues. 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 workforce treatment issues or corporate governance matters – or entire sectors, such as tobacco.
It is not only within equities 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 investment strategies in four distinct areas:
Our active risk-managed equity strategies aim to deliver long-term outperformance with reduced downside risk. We maintain a consistent approach across all equity portfolios, taking a 360-degree view of risk that combines systematic and discretionary analysis.
Investors can use our equity strategies to gain standalone equity exposure, or as building blocks to complement an existing portfolio. They are ideally suited to investors dealing with liability management, risk budget, capital preservation or absolute return objectives.
All our equity strategies 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 ESG overlay across all our equity strategies.
- Private Equity
We have been helping investors to tap the potential of private equity for 25 years. We offer three distinct strategies (primary, secondary and direct), which aim to deliver 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. Diversification of risk is at the forefront of our strategies.
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. Today, we manage a range of liquid alternative investment strategies across both pooled funds and bespoke mandates.
In a low yield environment, investors need new sources of returns beyond traditional assets. Our flagship alternative risk premia strategy aims to deliver consistent, high risk-adjusted returns, with limited sensitivity to global markets. We also offer customised solutions by combining individual building blocks to meet investors’ specific requirements (performance objectives, risk profile, portfolio beta, leverage and diversification). These include long/short equity factor, trend-following, 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 strategy aims to deliver consistent returns across all market conditions using a unique, macro risk-based approach. To achieve this objective, our investment approach focuses on enhanced diversification and dynamic risk management.
Using our macro risk-based framework, we can customise our strategies for investors according to their risk profile, investment objectives and constraints. These include strategic allocation strategies as well as global macro uncorrelated solutions, based on our dynamic allocation process. We also offer Solvency II-optimised solutions and dedicated model portfolios for wealth managers.
Co-creating solutions with our clients
In a changing world, we recognise that adaptability is crucial. Our research focuses on potential future sources of risk, and our creativity and innovation are directed toward managing these potential pitfalls. Our clients are integral to this process. Through ongoing dialogue and collaboration, 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. It 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). The fund invests 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 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. 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 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