to look after what is happening in London and Gibraltar as well as in the Channel Islands.
Verleyen has only been in his role as CIO since December 2011 and has overseen quite a change in investment strategy since then to turn the focus on four core strategies – bond, conservative, balanced and dynamic. Next to these sits a target return strategy run by the former Baring Asset Management team that joined in May last year.
Verleyen explains: “We used to have more strategies but are going through a rationalisation of process, trying to limit ourself to be more focused and to spend more time avoiding too many model portfolios, because we want to be efficient and quick when we make decisions. We need to be focused to avoid any implementation lag. That is the idea.”
The strategies that have disappeared, he added, are those that sit between, say, conservative and balanced where such small distinctions were deemed unnecessary as a separate portfolio. For larger clients a bespoke proposition can be designed from scratch, the distinction being that the firm’s core client has around £3m in investable assets.
“We can offer access to funds or strategies that are only available to our larger clients, such as certain private equity or hedge fund deals. We can definitely offer a more sophisticated approach for larger clients but for £3m we manage money with a solid process and very professionally, and this remains the hub of our offering.”
Risk and exposure
Irrespective of the client’s financial outlay, the portfolios run on their behalf are based on a risk profile, ensuring they are well diversified, as well as exposed to any potential market upside. The total return strategy aims for CPI plus 5% and is the only one that has a prescribed return. The others Verleyen describes as having normal returns given the market conditions, but they are designed using risk tolerance first and then, with a set risk premium in mind, aiming for the best possible returns.
“It is pretty common today to have this approach for asset allocation, based on the risk budget we are trying to achieve to give the best return. It is difficult because if a client wants, say, a 5% return, with very low inflation and interest rates, you may have to go for a balanced-type portfolio. In three years’ time inflation may come back, so you may
get a 5% return from a deposit account.”
Structured products
SGPB Hambros uses the full gamut of assets available, including direct equities and fixed interest securities as well as funds housed on its Guernsey-based Fund Solutions platform. The team are also big users of structured products, leaning heavily on their parent firm’s expertise, as well as hedge funds through the Lyxor platform, another wholly-owned subsidiary of Société Générale.
In January, we had a structured product developed in-house aiming to capture the performance of the dollar versus the euro. [It] enabled us to have 130% of the appreciation of the dollar against the euro, and only 100% of the downside.
“In January, we had a structured product developed in-house aiming to capture the performance of the dollar versus the euro,” Verleyen says, “This was a product that enabled us to have 130% of the appreciation of the dollar against the euro, and only 100% of the downside.”
SGPB Hambros is now a French-owned UK bank from a Scandinavian heritage and a heavy bias towards investment business in Jersey, Guernsey and Gibraltar with recent business growth from Middle East and Russian investors. Verleyen himself is a French national brought up in Belgium, Japan, the Ivory Coast and Luxembourg who also studied in Belgium and passed his CFA qualifications when he was in Hong Kong. He is an international CIO of a truly global business.
< Previous Page 1 2 >
