Union Bancaire Privée, the Swiss-based private bank, has announced the launch of the UBAM - Global Fintech Equity fund, a new global equity strategy investing in a wide range of areas across the fintech industry.
The fund is managed by UBP's Swiss & Global Equity team, its co-head Martin Moeller acting as leading portfolio manager.
It invests in 20 to 40 stocks offering global exposure across fintech-related themes ranging from global payments to financial IT infrastructure, networks & security, data and analytics, insurtech & regtech, and innovative financial platforms.
The fintech theme is benefiting from structural trends and has been further boosted by the increased need for e-commerce and data technology solutions amid the covid-19 pandemic."
With around 180 companies and a market cap depth of more than $2trn, the fintech industry offers a growing and diversified investment universe, making up close to 3% of the MSCI AC World. In this wide and active ecosystem with frequent IPOs and acquisitions, the fund adopts a comprehensive industry view with a selective bottom-up approach based on proprietary valuation models that emphasise cash generation (Cash Flow Return On Investment - CFROI).
Investments are made across the CFROI lifecycle and focus on companies that are achieving higher growth than expected by the market, companies that can "beat the fade" through high barriers to entry, and companies able to reinvent themselves in difficult periods.
The allocation to these three alpha opportunities will also depend on the macroeconomic environment and the team's strong convictions on specific stocks.
Commenting on this new launch, Michaël Lok, co-CEO Asset Management at UBP, said: "The fintech theme is benefiting from structural trends and has been further boosted by the increased need for e-commerce and data technology solutions amid the covid-19 pandemic."
"After four years of research, we are therefore extremely proud to have put together this new strategy based on our proprietary CFROI investment framework, and to offer another innovative thematic solution to investors. Such a strategy can help to diversify a tech exposure and is an efficient way to secure an allocation to various disruptive trends within the fintech industry."
Martin Moeller, portfolio manager and co-head of Swiss and Global Equity at UBP, added: "The fintech segment provides access to a well-established secular growth theme and to value creation, at a reasonable price."
"It is an attractive hunting ground for companies with proven business models that can increase cash flow generation with high visibility. In our experience superior value creation leads to long-term outperformance, and we find the fintech universe offers outstanding opportunities."