Picard Angst (PA) is an independent Swiss financial services provider, established in 2003. Based in Zurich and the UAE, the firm offers different investment solutions and takes on individual asset management mandates with its 40 investment professionals. It runs several investment strategies in the listed and alternative space, including the Food Revolution Fund, different commodity and real estate strategies and two medical technology venture capital funds.

Jann Breitenmoser works as a senior investment manager at PA and is part of the food revolution team. Previously, he worked at Man Group, where he co-managed a thematic investment strategy focused on water and the circular economy. Before that, he worked as portfolio manager at J Safra Sarasin Asset Management, where he managed different impact and sustainable equity strategies. He started his career more than 14 years ago at Akina (formerly Lombard Odier Private Equity), working as a private equity associate.

What is PA’s client base?
We have a broad client base of mainly Swiss and international institutional investors.

What are its assets under management?
We currently manage more than $4 bn in assets under management with continued inflows across both regions and into our various product solutions and services.

What is the Food Revolution Fund’s investment objective?
The global agri-food system is highly inefficient. The yearly food production value amounts to $8 tn, corresponding to around 10 percent of global GDP. In producing this 10 percent, the agri-food sector generates a third of global emissions, occupies half of the planet’s habitable land and consumes more than two thirds of the available fresh water. This makes the agri-food system a source of significant external costs related to environmental and health damages or malnutrition, which are not reflected in the price of food. This market failure results in false incentives and a structural overuse of natural resources.

In recent years we have seen an increasing pressure to internalize and address these external costs. In this structural shift toward a more efficient and sustainable food system, the global food industry, which is dominated by large multinationals, has an important role to play and bears a lot of responsibility. At the same time, this process poses significant challenges for these ‘old food’ companies. The vast majority of them sit on huge historically grown portfolios that are dominated by plastic, sugar, meat and other problematic products, and are facing growing pressure to adjust.

As investors in the food revolution, we leave these old-food companies aside and focus on innovative companies that we consider to be part of the solution. As the winners of tomorrow’s food industry, they should enjoy a significant tailwind in the years to come and offer attractive investment opportunities. These companies can be found in both the large-cap and small-cap space.

What is the fund’s strategy and style?
The fund adopts a fundamental, thematic and style-agnostic investment approach, with a focus on the agri-food industry. We aim to capitalize on major catalysts for change and fundamental trends around the food revolution that evolve independently of the economic cycle and can become a permanent source of capital growth and attract future money flows.

We invest in 40-60 publicly listed equities (using no benchmark) offering exposure to six sub-themes covering the entirety of the agri-food value chain:
• Alternative proteins (such as ADM)
• Sustainable packaging solutions (such as Graphic Packaging)
• Organic, healthy and functional food (such as BellRing Brands)
• New forms of consumption (such as Zebra Technologies)
• Automation and agri-tech (such as GEA Group)
• Food safety and clean label (such as Novonesis)

By focusing on such themes throughout the entire agri-food value chain rather than through sectors, our equity long-only fund is able to invest across all geographies and market capitalizations, thereby offering an undiluted exposure to winners of the food revolution, combined with sufficient diversification. This should help to reach an uncorrelated and differentiated alpha generation relative to more traditional equity benchmarks.

Which screens do you use?
Our investment decisions and portfolio weightings are based on an in-depth bottom-up analysis. For all of our invested companies we conduct a detailed fundamental analysis and calculate an intrinsic value for each company. This is, however, only one aspect of several that we consider in our own proprietary scoring system.

Among other aspects, we assess in detail:
• Competitive landscape and defendable entry barriers (moat)
• Earnings momentum and estimate revisions
• Ability to fund future growth
• Access to and track record of management
• Earnings quality and return on invested capital
• Short and long-term catalysts
• ESG considerations and general profile of each company

How are ESG and sustainability embedded into the investment process?
Our sustainability strategy applies a systematic, modular ESG approach, the PA ESG layer, which is fully integrated into the investment process and part of risk management. This takes into account both exclusion criteria (such as low ESG ratings, controversial weapons, stranded assets or companies involved in serious controversies) and integration of ESG scores to reduce risks and optimize opportunities. On top of the general exclusions mentioned above, we apply an ESG framework specific to the food revolution strategy, including specific inclusion criteria.

Our investment approach is focused on pure-play companies, which we consider to be beneficiaries of the structural shift toward a more sustainable and efficient food industry. Hence, we do not invest into structurally challenged old-food companies. We use a systematic approach to structure the listed agri-food universe into categories, based on the food revolution ‘purity’ of their revenues.

This measures the percentage of revenues a given company is generating along the value chains of our previously mentioned six sub-themes. The weighted average revenue purity of the overall portfolio must exceed 75 percent, so we mainly focus on companies with A and B ratings. We also exclude category D companies, which are considered old food.

Do you use external ESG ratings providers?
Currently more than 95 percent of the portfolio’s market value is invested in companies with an existing ESG score. For these companies, we apply internal ESG criteria and also use data from large third-party providers. For the other companies without a rating – mainly due to their small market cap – we apply our internal ESG criteria. Our strategy currently has an overall AA MSCI ESG Rating.

Do you have market cap constraints?
No. Our portfolio reflects a mix of young, smaller, fast-growing ‘disruptors’ and established companies with a strong market positioning, a clear moat and attractive cash generation. Currently 40 percent of our portfolio is invested in companies with a market cap of more than $10 bn. Another 40 percent is invested in companies with a market cap between $2 bn and $10 bn, and the remaining 20 percent is invested in smaller firms with a market cap below $2 bn.

What is your average holding period?
By its very nature, thematic investing is looking at changes and trends that have durability. Our strategic time horizon tends to focus on three to four-year cycles. Tactically we have a shorter time horizon, mostly focused on the calibration of risk-reward and rebalancing. The portfolio is expected to see a yearly turnover of around a third.

Do you like to meet management before you buy a stock?
As previously mentioned, one of the key aspects in our proprietary scoring system is access to and track record of management. Hence, it is crucial for us to first engage in a thorough discussion with the company. This ensures that we fully understand its operations, strategic goals and financial health, allowing us to make well-informed, long-term investment decisions.

What is your preferred format for meetings?
For us it is very important to be in regular contact with management and the firm’s IR department. We actively seek opportunities to engage with management through multiple channels, including one-on-one, in-person meetings, virtual discussions and interactions at conferences and roadshows here in Switzerland.

Why should companies meet you?
Within the food revolution team, we are a dedicated team of five specialists with a broad network of corporate contacts and investors. We are a trusted and valued investment partner, thanks to our extensive expertise in the agri-food industry. We maintain close connections with companies across both the publicly traded and private equity sectors. This dual approach allows us to gain a comprehensive understanding of a wide range of market developments, opportunities and new emerging technologies along the entire agri-food value chain.

What is your outlook for the remainder of 2024?
Within our universe, we see encouraging signs that the food industry is about to enter a new innovation and volume cycle after an extended period of high food inflation, ‘shrinkflation’ and de-stocking. We are very positive on companies exposed to organic and healthy foods, as well as companies active in the food ingredients space. We are confident that such firms will benefit from the improving general dynamics in the food industry.

We are also confident in the potential of companies that specialize in sustainable packaging solutions. This industry is gaining global traction as governments intensify their efforts to tackle food packaging issues. Policies are being implemented to ensure packaging is recyclable, setting mandatory reuse targets and restricting certain single-use packaging types.

By Gill Newton, partner at Phoenix-IR.

Liontrust was launched in 1995 and listed on the London Stock Exchange in 1999. Today, there are seven teams that invest in global equities, sustainable investment, global fixed income, and multi- asset. A third of Liontrust’s AuMA is in sustainable investment. There is no single house view. AUM are $27.8 billion as at 31 December 2023. The firm is a signatory to the United Nations Principles for Responsible Investment (UN PRI).

The Liontrust GF Sustainable Future US Growth Fund was launched in July 2023 and is managed by Chris Foster, Simon Clements, and Peter Michaelis. It is an Article 9 fund and focuses on 35 – 55 stocks.

Chris Foster joined Liontrust in April 2017 as part of the acquisition of Alliance Trust Investments (ATI). Chris had initially joined ATI through the management training programme after graduating with a First Class Honours degree in Economics and Mathematics from the University of Edinburgh. Chris is a CFA Charterholder. Chris has ten years’ industry experience and has been part of the Liontrust Sustainable Investment team for eight years.

Co-fund managers Simon Clements and Peter Michaelis also joined Liontrust in April 2017. Prior to managing funds at ATI for five years, Simon spent 12 years at Aviva Investors where latterly he was Head of Global Equities. Peter has managed Sustainable and Responsible Investment portfolios for over 20 years and was previously Head of Sustainable and Responsible Investment at Aviva Investments.

In recent years, Liontrust has made a number of acquisitions such as Majedie and Neptune, how are acquisitions integrated?
Each team is very much independent from the rest of the organisation. Our team joined in April
2017 and has been kept as a separate team to those other acquisitions. We don’t have a CIO and we don’t have a house view. It’s been very seamless for us – the support services we get from Liontrust, the sales, the marketing, the compliance, the risk, the performance stuff and all the distribution is unchanged.

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Rathbones Group is a leading, independent provider of investment and wealth management
services for private investors, charities and trustees, including discretionary investment
management. In September 2023, Rathbone and Investec Wealth & Investment UK
combined – creating the UK’s leading discretionary wealth manager with $125 billion of
funds under management and administration. Within the group, Rathbone Investment
Management (discretionary management) are fundamental investors who combine top-
down asset allocation and sector analysis with stock-picking.

Sanjiv Tumkur joined Rathbone Investment Management in 2016 as Head of Equity Research, becoming Head of Equities in 2022. He is responsible for developing and promoting
Rathbones’ equity investment philosophy and process. He joined from Investec Wealth where he was a member of the Research team and provided equity analysis and recommendations to the firm’s investment managers. After reading Philosophy, Politics and Economics at Oxford University, Sanjiv spent nine years at Morgan Grenfell. He then spent three years at AllianceBernstein.

How have things changed since the merger?
Post-completion, we are working to align Rathbones’ and IWI UK’s approaches, looking at
both organisations and incorporating the best from each. We are similar businesses, with
similar client bases and client objectives, and we are excited about the opportunity to create
the UK’s leading discretionary wealth manager. Continue reading →

Pyrford International, founded in 1987, is an investment boutique that operates independently within Columbia Threadneedle Investments. Pyrford is a provider of global asset
management services for collective investment funds, investment management companies,
local and state bodies, pension schemes, endowments and foundations. Its investment
approach is rooted in capital preservation and its strategies include global absolute return,
global equity and international equity.

Suhail Arain is head of portfolio management for the Americas. He joined Pyrford in 2008 as a portfolio manager covering North American equities having previously worked at Scottish Widows as a global equities portfolio manager and research analyst. He has more than 25 years’ experience in the asset management industry with a particular emphasis on US and
global equities.

Arain graduated from King’s College, London with a degree in law and completed a masters in finance from London Business School. He also holds the CFA designation and has held positions at KPMG, Hambros Merchant Bank, Prudential and ABP Investments.

Pyrford is owned by Columbia Threadneedle. Do you operate independently?
We operate independently of Columbia Threadneedle so nothing has changed for us in terms
of our investment process or our clients.

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David Shaw is co-head of global equities at AXA Investment Management. He also manages the Global Sustainable Distribution Fund, co-manages the Global Sustainable Managed Fund and is deputy on the American Growth fund. He joined AXA in 2016 from Aerion Fund Management (2000-2016). Before this he worked at NPI, NatWest Investment Management and United Friendly Asset Management. He was educated at City University and has a BSc (Hons), Electronic Engineering.

AXA IM is part of France’s AXA Group, a global leader in insurance and asset management with AUM of $916 billion. AXA IM traces its roots back to 1994 and today is present in 22 offices in 18 countries. The firm is an active, long-term, global, multi-asset investor. AXA’s primary equity management operations are Paris and London. The London office runs a number of global equity funds including a number of thematic and geographic funds.

Equity AUM in London and Paris?
$61 billion in equities.

What’s the equity AUM figure for London?
$36 billion.

How do London and Paris co-operate?
Paris is predominantly European equities, the global small cap team, the convertibles team and the multi-asset team. London manages sector specific funds such as technology, healthcare, Thematic and regional funds such as The American Growth Fund as well as a number of global funds. Many of the sector specialist fund are quite US-centric given their technology/healthcare skew. If you note that >60% of the MSCI is US, then we have higher exposure to US equities. But I wouldn’t want to put people off visiting Paris. We do collaborate and often share ideas with the global small cap team in Paris, for example.

In terms of collaboration, we have two formal meetings a week – one with a regional focus and the other is more thematic/sector specific. Teams from London, Paris and Hong Kong share thoughts. We do a good job of getting the London and Paris teams to collaborate. Names from the American Growth may also be held in the global small cap fund.

Which screens do you use?
Fund managers have a lot of personal autonomy. We tend to look for quality growth. Some strategies are more GARP while others are out and out growth. (We hold a few names that are still unprofitable but working towards it, companies with innovative, breakthrough technologies).

Do you use benchmarks?
Yes – most strategies have an appropriate benchmark. We are benchmark aware, not benchmark driven.

Active share?
Most portfolios hold 40-60 stocks, so our active share ranges between 60 – 70% dependent on the fund.

Minimum market cap?
Around $1 billion – Small cap team would be lower.

Average position size and largest?
Largest – we would have exposure to Apple even if it is underweight for our US funds. So that would be our largest holding without being an active bet. A typical active weight is 100 BP above the benchmark.

Average length of a holding?
4-5 years+. A couple of names in my US portfolio we’ve held for 6 – 7 years. We buy and hold where companies are executing well. We want to be long term investors, and invest in companies that grow and develop. However, fund managers may trade around a position so will trim if sentiment is overly optimistic.

Geographic allocation?
>60% in US. A lot of the global/specialist strategies are heavily exposed to the US e.g. our healthcare and technology funds.

Sector allocation?
We pay attention to sector allocation but look for good organic innovative, growth names. Some sectors such as healthcare, technology and consumer discretionary in the US are good places for innovation and new ideas. Sectors where you don’t see much innovation and growth are, for example, financials, utilities and energy and we are typically underweight these sectors.

How does the team split sectors and geographies?
We do have our technology and healthcare specialists, but fund managers are attracted to certain sectors by the nature of their investment style. Steve Kelly and I tend to focus our attention on Healthcare, Technology and Consumer.

61% of assets are ESG integrated, how is ESG integrated into the investment process?
We have a large Responsible Investment team (more than 30 people) which supports the whole business, not just equities. In addition, there is a team of 7 ESG & Impact analysts who work more closely with the equity team. We have an Impact Fund range as well as dedicated ESG funds (our ACT range). The sustainable funds that I’m involved in all have a high degree of ESG integration. The sustainable funds look for companies that can deliver sustainable opportunities including environmental or social progress. As growth investors, we are looking for businesses of the future and they normally align well with ESG. Younger businesses take those responsibilities more seriously.

Discuss some holdings and why you invested?
Mondelez – bought it for my US funds in 2016 and still hold it. The weighting has increased as my confidence in the growth dynamics and management has grown over time. When I first bought it, I didn’t have much exposure to consumer staples. It was one of the better food producers, with faster growing categories. It was growing slower than its overall category due to a focus on margins that was stifling growth. The management transition of 2018 has gone well, and Dirk and Luca were very early in transitioning from a cost focus to looking for more
growth. They also moved away from the traditional US centralised Chicago HQ to a more decentralised localised management style where local offices have a say on sales’ strategies and product development. So, growth is now in line, and they have managed to keep within their margin framework.

Food producers can face challenges and our Responsible Investment (RI) team have been a huge help in this regard. We, as a firm, wanted to learn more about deforestation and so our RI team had a meeting with Mondelez about how they ensure their suppliers are not involved in deforestation. Overall we felt that Mondelez are ahead of their peers. While we would like them to do more, it is good to have the back up of RI team and they came away with good outcome from their engagement.

NextEra – the only US utility that we own. We own it in our global portfolios, as well as some US funds. They are forward thinking, and it has delivered the best organic growth amongst US utilities, partly due to its innovative early adoption of renewable energy. And being based in Florida helps (population growth). NextEra has more organic growth than most US utilities. It is also very well positioned due to its renewables exposure in terms of ESG. Their target is “real zero” – by 2045 – 100% renewable energy generation – and they are well on way to achieving it.

Chipotle – My colleague, Steve Kelly, first invested over a decade ago for the American Growth Fund. It has a combination of organic growth via new store expansion and menu innovation. (It has a simple menu so it can add in one or two new ideas). It has some of the best unit dynamics in the quick service industry in US. Covid gave them the opportunity to develop their digital offering – on-line or take away and they’ve been very successful there. 2023 sales are forecast to be 80% higher than in 2019. So, they have managed to grow very strongly for last 3 – 4 years and there are still some things they can do better. Productivity is probably not as high as should be as they have a number of new hires who take time to get faster at making burritos, for example.

Dexcom – another >10 year holding. Great example of a holding that started with one team and other teams have become interested. It started out as a holding in the American Growth Fund, and it is now widely held on our Thematic funds, our healthcare funds, Global funds and the convertible team owns the convertible. So cross pollination of ideas leads to more teams owning it. Holdings of names that execute on the long term growth strategy, do snowball as fund managers hear the story, and it becomes a major holding across the firm. Dexcom is
the creator of the continuous glucose monitoring industry. Innovation keeps coming, making the product smaller, making the sensor last longer etc. It improves health outcomes and users are big fans.

Chart Industries – a newer name we recently added. I met the company properly in November 2021. The business has changed in recent years. Their core business and expertise are in gas compression and liquification technology. In the last 3-4 years, management has transitioned the business away from the legacy LNG business and is growing in hydrogen, biomass, carbon capture and storage. So, from fossils fuels to fuels of the future. We originally added it to the US funds and now it is in convertibles and global small caps as well as we’ve spoken to other teams about it.

Do you like to meet management?
Yes, but it can be hard work to carve out time to prepare for a meeting and we do like to do our homework. We like to check market expectations, and gain comfort from management as we are looking to be long term holders. We want a company to meet/exceed long term guidance. We want to understand what levers a company has if things don’t go as expected.

Preferred method of meeting management?
1/1s generally – with a popular name you could have 4-5 PMs joining the meeting from Axa IM. Group meetings can be productive though as sometimes another investor takes a different angle that you hadn’t appreciated. We prefer face to face meetings if possible. And we like companies to be consistent. It is frustrating if a company comes over and starts to build interest and then don’t come back. Year 1 our US specialist may see it, year 2 – a chance to get the company in front of a few more colleagues. Just because we are an existing holder, it doesn’t
mean the position couldn’t be increased (by other funds internally).

Any companies that stand out as particularly good at IR and why?
Tractor Supply stands out, it’s a fairly recent addition to both my GARP US portfolio and the Global Sustainable Fund. They are good at explaining the business mix and the cyclicality. Mary Winn Pilkington (Investor Relations) does a good job of explaining the different parts of the business and management are quite forthcoming.

Brunswick – we like how IR tries to frame the business. Some look at its history and how it performed during the Global Financial Crisis, but the business is now very different as the growth in Mercury engines business has reduced its cyclicality. They’ve downsized the pure boat business so that is now only 30% of revenues. Engines and accessories are the lion’s share and is more a repeat business so less cyclical.

Why should companies meet you?
We are genuinely long term and positions can be increased across numerous funds, even convertibles.

What are the major changes you’ve seen during your tenure in investment management?
Information flow has increased massively – in both detail and complexity. However, the fundamentals remain the same – if you buy a company with good organic, innovative ideas you tend to get rewarded. And you have to keep evolving and building on skills learned elsewhere.

This interview appeared in the recent digital edition of IR Magazine

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Pacific Asset Management (PAM) is an independent asset manager based in London.  PAM’s investment teams manage global assets in excess of $4.4 billion. PAM’s single manager Craft
Investment approach offers strategies where investment skill and experience have proven to
outperform, by focusing on markets that are less efficient, whilst their multi-asset teams provide technology enabled and innovate risk targeted fund ranges. PAM is committed to sustainable investing and offers a range of sustainable multi-asset portfolios, as well as an Article 8, global long only Longevity & Social Change fund.

Dani Saurymper is the Portfolio Manager in Pacific’s Longevity and Social Change team. Prior to joining PAM in July 2021, Dani worked at AXA where he was Portfolio Manager of the AXA Framlington Longevity Economy fund. He was also Portfolio Manager of the AXA Framlington Health Fund and research lead for Health, Ageing & Lifestyle at AXA Framlington. Dani has over 20 years experience in the Healthcare sector.

Julia Varesko is a Senior Analyst in Pacific’s Longevity and Social Change Team. Prior to joining PAM in September 2021, Julia was a senior analyst covering diversified financials at JP Morgan. She has also held roles at Elsworthy Capital and Berenberg Bank as well as a prior period at JP Morgan where she spent six years covering the Capital Goods sector. Julia is a CFA Charterholder and holds an MSc in Accounting and Finance from the London School of Economics and a BSc in Economics from University College London.

AUM in the fund?

Currently $50 million as the fund was only launched in late October/early November 2021. We have lofty ambitions and believe the capacity for a fund such as ours could be at least $1 billion.

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Robeco is one of Europe’s largest asset managers with more than $200 bn in assets under management. Founded in 1929, just weeks after the Wall Street Crash, by seven Rotterdam businessmen who formed a syndicate to invest people’s savings and manage money collectively, it was called the Rotterdamsch Beleggings Consortium, later shortened to Robeco.

The multinational firm is a research-driven active manager, renowned for its sustainability investing. In the US, it owns Harbor Capital Advisors and Boston Partners Asset Management, and acquired Sustainable Asset Management in Zurich in the 2000s. Robeco’s ‘investment engineers’ routinely integrate sustainability factors into their entire range of equity and fixed-income strategies and their investment style is bottom-up stock selection with top-down checks.

The Robeco Sustainable Global Stars Equities Fund has been investing worldwide since 1929, making it the oldest existing fund in the Netherlands. Today it has $5 bn in assets under management and both a 5-Star and 5-Globe ESG Morningstar rating. Oliver Attwater joined Robeco in September 2021 and works alongside five other portfolio managers on the Sustainable Global Stars Equities Fund.

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Roberto Magnatantini joined DECALIA in 2020. He is lead portfolio manager of DECALIA Silver Generation and DECALIA Eternity funds. Before joining DECALIA, Roberto was Head of Global Equities at SYZ Asset Management, where he spent 12 years managing two strategies for the OYSTER funds’ franchise. Before that, he worked four years at Lombard Odier and four years at HSBC where he managed equity funds. He is a CFA and CMT charter holder and holds a ESG certification from PRI.

Founded in 2014 and headquartered in Geneva, DECALIA SA is a fast-growing independent
investment management company, managing private and institutional assets. As of December 2021, it has $5 billion (4.9 bn CHF) AUM and 60+ employees, focusing on three activities: Wealth Management, Asset Management and Private Markets. DECALIA has expanded rapidly, thanks to its active-management experience built up over the last 30 years by its founders. The firm’s investment philosophy is based on several fundamental principles: stringent risk management, capital preservation, an active management style and selection of the best talent. They focus on developing investment solutions in four key investment themes: long-term trends, quest for yield, disintermediation of banking sector, inefficiencies in Europe. DECALIA are signatories of PRI and included in Article 8 of SFDR.

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