– Trendsetters –
TOP INDEPENDENT ASSET MANAGERS 2023
18 May 2023 – Paromita Dey, Deputy editor – Citywire Middle East
In the GCC, the independent asset managers (IAM) space is growing at pace in a market traditionally dominated by private banks. Citywire Middle East asked the region’s top IAMs to share their insight.
CITYWIRE – What is your investment philosophy?
Alain Raad: “We are firm believers in the principle of “conditional edge staking”, or in other words making high-conviction probabilistic assessments based on accumulated evidence and a clear read of market conditions. As such, we put consistency in our systematic and model-based approach, and in risk management, at the forefront of our investment process, in order to minimize drawdowns, protect our investors’ capital and achieve superior risk-adjusted returns.
What makes us stand out is our ability to remain neutral to any asset classes, which allows us to generate trade and investment ideas in any market conditions.
We also remain very much in harmony with our local DNA, as evidenced by products such as our smart-beta Saudi fund – FTSE ADS Saudi Minimum Variance Fund – for example, which provides investors with exposure to the Saudi market on a reduced volatility basis, while outperforming the index.
What are the drivers behind the growing demand for IAMs in the region?
Beyond specific products or local markets expertise and knowledge, the rising demand for IAMs in the region can be attributed to clients’ growing need for customized solutions that larger firms may not be able to offer.
In response, IAMs have focused on developing a deeper understanding of their clients’ concerns, and adopting a more personal approach, to find ad-hoc and personalized solutions that are well-suited to their needs and the region’s specific requirements.
Are the local regulatory conditions conducive for setting up an independent firm?
Local regulatory conditions have greatly improved over the last few years. Financial hubs such as ADGM have managed to strike a balance between creating a business-friendly environment for these firms and at the same time maintaining an industry-standard level of investor protection.
What do you look for in an intermediary bank and what services do you value the most?
Given the large competition and the alignment of fees across the industry nowadays, pricing has become less of a criteria to select a financial intermediary. Focusing on high-quality client service is the best way for asset and wealth managers to distinguish themselves from the rest.
This particular aspect of client-focus does not only involve the way a client is engaged but also the way a whole product suite is designed (e.g.: client interface, personalized investment solutions, etc). Firms that manage to combine these characteristics while maintaining trust, ethics, transparency and integrity as their core values will have a competitive advantage to succeed.
What are the challenges for independent asset managers?
One of the biggest challenges independent asset managers face is the pressure to continuously innovate in terms of both technology and client centricity. To prepare for the future of asset and wealth management over the next decade, firms need to take action today, across their entire business model. This includes product strategy, investment capabilities, sales and distribution channels and operations.
Embracing new technology capabilities will be vital to achieving scalability, as well as reinventing client interaction and improving their investment decision-making process through the use of AI and other advanced technologies. By incorporating these elements into their business strategies, asset managers can position themselves for success in the years to come.
What is your favourite sport?
I am a huge sports fan in general, and passionately follow – much to my wife’s dismay – most Olympic sport events. But if I had to pick a favorite as a former swimmer, it would definitely be swimming. I believe the qualities required to excel as an athlete align remarkably well with the world of finance and asset management. Traits such as focusing and preparing for peak performance, having a genuine passion for the craft, persistency in learning and honing skills, the courage to take calculated risks, resilience, adapting to challenge and, of course, integrity, all play vital roles in both arenas.
Chief Investment Officer – ADSI