An asset manager with a Swiss Heritage and a very different investment philosophy

Georges Gutmans, executive chairman of EI Sturdza Investment Funds, discusses the rich history behind this young and dynamic asset management business and why its investment philosophy is so unique.

Fund Commentary
24 Nov 2017

Georges Gutmans, executive chairman of EI Sturdza Investment Funds, discusses the rich history behind this young and dynamic asset management business and why its investment philosophy is so unique.

Much has changed since the inception of EI Sturdza Investment Funds, a multi-boutique asset management business born out of the Geneva-based Banque Eric Sturdza group in 1999.

Investors are now all too familiar with the seismic events of the global financial crisis in 2008, the wave of financial regulation that continues to follow, as well as a patchy economic recovery across North America and Europe. As markets have evolved, technology has also had a significant day-to-day impact, shaping investment strategies, the way in which institutional and retail investors select funds and how equity and fixed income markets function today.

Commitment to a unique investment philosophy

Yet, despite deep market changes, our commitment to identify and develop exclusive relationships with world class investment managers – often not known to fund selectors – that hold outstanding track records has remained unchanged.

Crucially, unlike conventional asset management firms, the portfolio teams managing our range of investment strategies are not employees of EI Sturdza. They maintain full independence in a close working partnership, with the advantage of being completely free from the constraints imposed by in-house investment directors, such as an economic or market “house view”. Why is this important? It means our investment teams focus exclusively on managing money.

For investor peace of mind, we outsource fund administration, custody and legal services to some of the largest and most respected financial institutions and providers, giving us economies of scale and best execution. It is a rare approach that has enabled us to develop a strong reputation in Europe for the quality and performance of our global equity and fixed income funds and ultimately, to expand our offering to a global platform.

Yet, EI Sturdza Investment Funds has also evolved with the market, forming a relationship with VIA AM, a Paris-based asset management company formed by a team of experienced ‘systematic investment strategies’ managers and analysts in 2015. The addition of VIA AM, specialists in this new era of quantitative investing, strengthens our existing fund offering, while providing investors with greater choice.

It is a strategy that appears to be working. Our track record as expert selectors of investment management talent is confirmed by the likes of Morningstar and Citywire, as well as a string of industry awards. In March 2017, we won the coveted Best European Equities Group award at the Citywire Switzerland Awards, while Morningstar last year crowned EI Sturdza’s Strategic Europe Value Fund the best European equity fund in Germany and Switzerland over five years.

Putting risk management at the very core

High profile geopolitical events in Europe and North America in 2016 reminded us all of the value of effective risk management. For us, risk management is not a “box-ticking” exercise, it is much more.

Our first layer of risk management is embedded within the investment strategies of each individual investment team, which involves proactive forward-looking risk analysis.

The second layer includes operational risk, regulatory compliance across multiple jurisdictions and market risk. However, EI Sturdza does not intervene directly in the positions of the portfolios; rather we monitor and enforce compliance within the strategy’s guidelines. It is this commitment to risk management that has mitigated our exposure to market turbulence.

What next?

The past has been very successful indeed and we expect to continue to grow our business and provide investors with high quality funds managed by experienced, yet untapped, investment managers.

Our immediate focus remains on developing our existing and recently launched funds including the Strategic Japan Opportunities Fund, launched in partnership with Rheos Capital Works Inc, a top local investment management business based in Tokyo.

But we haven’t stopped there. The launch of our Strategic Beta Flex Fund, a flexible beta fund that combines systematic investing with active management is another exciting development for the business. The fund invests in a global basket of equity funds, whilst the investment team actively manage the fund’s net exposure based on their views of prevailing market conditions to reduce the portfolio’s overall volatility.

Beyond fund specific news, we are excited to announce a strategic partnership with Johann & Graemiger Partners, a local fund distributor in Zurich, to communicate the value of our fund offering in the German speaking regions of Switzerland. With roots in Geneva through Banque Eric Sturdza, Switzerland has always been a core part of our business and we look forward to deepening our relationship with investors here.

While EI Sturdza Investment Funds enters another exciting stage of growth, our commitment to identify excellent investment talent and provide these teams with the infrastructure, tools and support they need to succeed for investors, will remain the heart of our business.

This article was recently published in Swiss publication, B2B Magazin in German.