Over 40 Italy-based fund selectors gathered recently in Milan to look at investment themes making an impact in social and environmental finance on the first edition of the Thematic Forum Milan 2019.
Hosted by InvestmentEurope, the Thematic Forum Milan 2019 took place on the 22 of November at the Four Seasons Hotel in the Italian city, bringing together a batch of sell side professionals from five leading asset management groups speaking across boardroom sessions.
Delegates listened to presentations from Eurizon, Principal Global Investors, Natixis Investment Managers, Mirabaud Asset Management, and Artisan Partners.
The event, which counted with the CFA Society Italy as its educational partner, also featured a panel discussion on the challenges of selecting and assessing sustainable and responsible investment strategies at a time when this type of investment is on everyone's lips.
REAL ESTATE SECURITIES
Simon Hedger, managing director and global portfolio manager, Property Securities at Principal Global Investors, spoke about real estate investment trusts (REITs) and the valuation opportunities presented within that sector.
Hedger said:"Despite superior liquidity, niche high growth sectors, and access to public market capital, REITs currently trade at a discount to private real estate values.
"Today's 10.7% average discount to their average long term price to net asset value (NAV) is the widest since the global financial crisis. This is arisen due to fears, late last year, regarding the potential for rising interest rates and declining earnings growth."
He concluded: "More recently, bond market yields instead indicate interest rates are likely to remain lower for an extended period, thus underpinning real estate valuations for most sectors. A valuation gap this wide is an opportunity for investors to own REITs at fairly inexpensive relative valuations under current market conditions."
SAFETY AS AN ASSET CLASS
Frédéric Dupraz, co-founder of Natixis Investment Managers' Thematics Asset Management, presented the Safety Fund, a strategy co-managed by himself andNolan Hoffmeyer.
The Fund invests primarily in equity securities of companies around the world that have been identified by the manager as being participants in or having an exposure to potential growth relating to the investment theme of global safety. It is actively managed with an emphasis on companies developing their services and technology in relation to the global safety theme like physical safety and food safety, internet security software, telecommunications and computer hardware security, access and identification security, traffic security and workplace security.
Dupraz said: "Safety is a fast-growing and resilient market. Technology is rapidly changing our world, creating new risks to the safety of individuals, communities, industries and nation states.
"The ever-growing demand for greater safety in all aspect of our lives - from data protection and secure payment to safe transport - represents an attractive and differentiated investment opportunity."
Thematics Asset Management was set up by several former Pictet fund managers in March of this year. The group, which exists within Natixis IM's multi-boutique set-up, launched with a range of high conviction strategies covering robotics and AI, safety and water.