AXA Rosenberg uses past lessons learnt to strengthen going forward
04 September 2012
In common with the rest of the financial industry, quantitative managers have seen their own share of turmoil in the sector; whilst most have put the troubles from the previous crisis behind them, new challenges are emerging on the horizon. In the current low yield environment, money managers of every stripe and colour have been hard pressed to deliver, especially in a period where fundamentals have little in common with the markets. This year has been one where trend followers have had a challenging time; hedge fund managers, too, have struggled with a host of well-known names seeing their assets shrivel in the past one year.
For AXA Rosenberg, a unit of AXA Investment Managers (AXA IM), work is in progress in re-building its franchise. Jeremy Baskin, the chief executive officer at AXA Rosenberg, says the firm has started to re-engage the asset consulting industry and the early discussions have revolved around the firm’s structure.
“From what we have heard from existing and previous clients, the feedback has been rather positive,” says Mr. Baskin who joined AXA Rosenberg in late 2010. Mr. Baskin succeeded Stephane Prunet who was made an advisor to the chief executive of AXA IM.
Three years ago, the firm went through a crisis as a result of a coding error. “We have now moved well beyond that phase and since then, we have been re-building the trust and confidence of clients,” proclaims Mr. Baskin, a 22-year veteran at Northern Trust where he honed his skills as a quant manager. “We are seeing the industry regaining ground and as a firm, we are committed to quant investing.” He says that the lessons in the past have been well learnt and absorbed and the steps reflect this approach that the firm has taken recently.
AXA Rosenberg’s main implementation in Asia is located in Singapore; the investment team is headed by industry veteran Kevin Chen, its chief investment officer. The Singapore platform has 21 people, mainly research analysts, portfolio managers, traders, and some back office functions. AXA Rosenberg is also present in Tokyo.
According to Mr. Chen, as a unit of the AXA IM group, AXA Rosenberg does not need to maintain a full scale operation as it is able to share some common functions with the parent group, including finance and compliance. Importantly, too, the firm benefits from AXA IM’s distribution platform right across the region, in both the institutional and retail arena. “This allows us to focus on the main investment activities by virtue of the support that we have from our group,” he adds.
In the market for retail products, Mr. Baskin says that there is good potential in markets such as Taiwan. In Korea, AXA IM has a joint-venture with Kyobo Life and that provides a strong platform for the firm to access both the retail and institutional segments.
As of June this year, AXA Rosenberg assets under management were US$18.9 billion. According to its website, AXA Rosenberg tracks about 21,000 companies globally and because of the way the firm manages money, it does not need to have an army of analysts scouring the globe looking for individual stocks unlike the fundamental approach adopted by traditional, long only managers. The firm had 58 investment professionals worldwide as at end June. The firm’s Asia-focused strategies account for over US$3 billion of assets under management.
According to Mr. Baskin, the company has been working on rolling out a number of new strategies for its retail and institutional clients in Asia. “Smart beta is an area that we have been working on for some time and it is a strategy that will be introduced to Asia later this year,” he explains. It is a strategy that will also help to address some of the short-comings seen in the traditional cap weighted indices.
He notes that in Asia, clients are looking for solutions in light of the ongoing crisis and this has been reflected in some of the global mandates that have surfaced recently.
“For us, Asia is an important area and in view of the rapid accumulation of wealth in the region, we see a lot of opportunities in the next few years so it is a region that building a presence is important.” “Our priority as always is to deliver investment performance and if we do that well, we will have opportunities to build the business and to work with our distribution partners in the region.”
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