Accountability is the reason why Jean-François Hautemulle has made the selection process at UniCredit Private Banking as simple and transparent as possible.
The key attributes Hautemulle likes in managers are:
• a consistent performance over longer periods with high probability to provide first-quartile performance over three to five years within peer group;
• the perception of the manager as a key player with an outstanding expertise in the asset class;
• a clear and repeatable investment process;
• a well-resourced and stable fund management team; and
• strong support from the management firm.
“We don’t like one-man shows,” he adds.
Ongoing risk monitoring
In terms of risk control skills, the selector is looking for a risk management monitoring process that is ongoing.
“We want the managers have a close working relationship with their risk management team and a clearly articulated sell discipline which is used in a systematic manner,” Hautemulle says.
Meanwhile, clients in the three countries remain very concerned and very cautious regarding current market conditions
“Since we are working in three key countries [Austria, Germany and Italy], local sentiment and client needs can be quite different,” says Hautemulle. “However, we can say our clients are currently very concerned and very cautious.”
In Germany, clients currently prefer to diversify their investments and multi-asset funds are becoming very popular in the market. In Italy clients have been asking for currency diversification outside the euro.
Austria remains a very conservative market.
“We have an older and more conservative client base and they tend to be more risk adverse,” says the manager. “They look for solutions that will provide income potential, preservation of capital as well as liquidity. We have also seen an increased demand for currency diversification.”
UniCredit Private Banking has been encouraging clients to diversify their portfolios, away from single bonds or stock holdings into professionally and actively managed funds and fixed income funds, especially global bonds funds, are definitely in demand in all core countries.
Hautemulle adds: “We have a very short list of recommended funds in the absolute return space, as most of them haven’t lived to the expectations. Hence our clients have limited exposure to this asset class. We favour cross-border UCITS funds from either Luxembourg or Dublin”.
Finally, high net worth individuals are looking for solutions that combine potential return and risk control rather than single products.
“We can therefore expect more packaging of products or dedicated solutions to meet the client needs. Clients are asking for more transparency in a straightforward format,” he says.