The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
The 15 Pictet Funds portfolios on offer to Hong KongÆs retail market fall under six investment themes that focus on long-term socio-economic drivers, particularly climate change, evolving demographics and global threats. Pictet FundsÆ portfolios were previously available in Hong Kong only through private banks.
The 15 funds are: Biotech; Global Equity Selection; Clean Energy; Japanese Equity Selection; Continental European Equities; Premium Brands; Eastern Europe; Security; Emerging Markets Large-Cap; Small-Cap Europe; European Equity Selection; Telecom; European Sustainable Equities; US Equity Selection; and Generic portfolios.
By launching theme-focused portfolios, Pictet Funds hopes to capture a niche in Hong KongÆs crowded market of retail players.
ôWe realise that we are a newcomerö in the retail market, says Amy Cho, managing director and head of regional business development in Asia-Pacific, adding that the theme focus will help the firm to be more competitive. ôThere is a very strong supply and demand dynamic in Hong Kong. Distributors are increasingly more demanding and are looking for unique portfoliosö to add to their suite of products.
Pictet Funds, which works closely with distributors instead of directly with retails clients, has initially made its retail funds available through ABN Amro, Bank of China (Hong Kong), Chiyu Banking Corporation, Dah Sing Bank, Mevas Bank, Nanyang Commercial Bank and Standard Chartered Bank. The minimum investment for the funds will be set by the distributors.
The launch of the 15 funds serves as Pictet FundsÆ initial batch of retail offerings in Hong Kong. The firm already has several other funds awaiting approval from the Securities & Exchange Commission, including its $6 billion Water fund, a portfolio that the firm pioneered in 2000 and has been considered the best in its class in terms of performance. The Water fund didnÆt make it to the first batch of retail offerings in Hong Kong due to capacity issues.
Pictet Asset Management, the institutional investment management arm of the Pictet & Cie, entered the Asia ex-Japan market in 2006. Prior to that, Pictet Asset Management had already established a presence in Japan, where it is now among the largest foreign players in the retail market. After Taiwan and Hong Kong, Pictet Funds hopes to bring its retail funds to other markets in Asia, although there is no specific target for the timeframe of its further expansion into the region.
ôWe are looking out for more opportunities in Asia,ö says Pictet & Cie managing partner Remy Best, who flew from Geneva to Hong Kong for the launch of its retail operations. ôPictet as a firm does things when we think that we are up to it and we feel that we can deliver.ö
Best says China and South Korea are among the other Asian markets Pictet is looking at in terms of exploring retail opportunities. On the institutional investors' side of the business, PictetÆs portfolios are available through private banking channels throughout Asia, but mostly through private banks in Hong Kong and Singapore.
Pictet Funds has a team of more than 200 fund managers in 12 offices worldwide and distributes its funds to clients in around 20 countries, ranging from Chile, Japan and Scandinavia through to the Middle East. It has around $62 billion in assets under management. In Asia, Pictet Funds has offices in Singapore and Tokyo. To illustrate PictetÆs commitment to Asia, Best notes that the firm has had an uninterrupted presence of more than 25 years in Japan.
Pictet & Cie, Pictet FundsÆ parent, opened its entire fund range to retail investors with the launch of Pictet Funds in 1996. So far, out of the $125.7 billion in assets managed by Pictet Asset Management, PictetÆs institutional investment management arm, around 46% is sourced from retail investors.
Pictet Funds is hoping to capitalise on Pictet & CieÆs strong brand name in establishing its retail presence in Hong Kong and the rest of Asia. The firm hopes the theme-focused funds will help it gain a following in this region, with Best noting that such portfolios offer greater diversification and are one of the most effective ways of investing in volatile markets. Combined, assets under management of Pictet's range of theme funds total $9 billion.
Security and Clean Energy are two funds used by Pictet to illustrate its investment themes and investment process.
The Security fund invests in companies worldwide that help address global threats such as the physical threat of terrorist attacks and the cyber threat of intellectual property theft. In doing so, such companies secure the integrity, health and freedom of individuals, companies and governments.
Terrorist attacks, for example, have tripled over the past 15 years, says Yves Kramer, a Geneva-based senior investment manager at Pictet Asset Management, who co-manages the Security fund.
Such terrorist threats ôshall unfortunately persist and drive continuously higher infrastructure spendingö, Kramer says. Intellectual property theft, meanwhile, is a major threat for all industries, ôdriving the need for more IT spending and security applicationsö.
Sector-wise, the $202-million Security fund invests 34% of the portfolio in internet security, 30% in physical security, 18% in security services, 10% in identification security systems, and the rest in cash.
Around 37% of the fund is invested in the US, 14% in the UK, 7% in Israel, 6% in Sweden, 4% in Japan, 4% in South Korea, and the rest in other markets
The fundÆs top 10 holdings are Microsoft, Smiths Group, G4S, Stanley Works, Cisco Systems, Secom, Interfek Group, IBM, Autoliv, and Idex. The fund, which has holdings in 43 companies, invests in a range of 30 to 50 stocks.
The Clean Energy fund invests in companies worldwide that contribute and profit from the worldÆs transition to less carbon-intensive energy.
Sector-wise, the $926-million Clean Energy fund invests 36% in infrastructure, 34% in technology and equipment, 16% in energy efficiency, 8% in resources, and the rest in cash.
Around 44% of the fund is invested in the US, 6% each in China, the UK, and Spain, 5% each in Denmark and Germany, and the rest in other markets.
The fundÆs top 10 holdings are Vestas Wind Systems, Chesapeake Energy, FPL Group, Energais de Portugal, Gamesa Corporacion Tecnologica, Williams Companies, MEMC Electronic Materials, Southwestern Energy, Renewable Energy Corporation, and Zoltek Companies. The fund, which has holdings in 69 companies, invests in a range of 50 to 80 stocks.
Pictet & Cie was founded in Geneva in 1805 and is today one of the largest private banks in Switzerland and a leading independent asset manager in Europe, with more than $378 billion under management and custody.
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