How UBP chooses and removes investment funds
Aman Dhingra is head of advisory for Singapore at Union Bancaire Privée (UBP). He leads the team of multi-asset advisers providing clients with guidance on their investment portfolios through bespoke advisory mandates.
He has spent more than 15 years working in Asian markets managing product platforms and leading investment advisory and new product development.
In an interview with AsianInvestor, the Singapore-based investment veteran offers up details on the private bank’s funds platform, its fund selection process, and when to cut funds from its platform.
Q How many funds do you have in your approved lists?
In the long-only space, we have a list of about 120 to 150 names, which we believe is satisfactory in meeting the needs of our clients, in view of their portfolios and asset allocation requirements.
Similarly, in the hedge fund space, as there are multiple strategies like long-short, market macros, credit, event-driven etc., and taking geographic exposure into account, we have about 60 to 70 strategies between Ucits and offshore hedge funds. There is also an ETF list of about 100 to 150 names, which acts as a supplementary list to the active platform.
Q How is the fund selection process managed in Asia?
We do primary research on the funds we on-board. The effort on long-only funds and ETFs is led by our multi-management and fund research team whose members are dispersed geographically, and includes representatives in Hong Kong and Singapore.
For hedge funds, the due diligence and research team is based in New York as that enables close proximity to the (large number of) investment managers.
Q When do you decide to remove funds from the platform?
We typically have around 10 to 15 replacements a year. The triggers for moving a fund out of the recommended lists can be varied. Among those, key man risk (i.e. a loss of key personnel), a material drift in style or if the manager takes risks that they are not supposed to are the more significant events to watch for. In some cases capacity management becomes a trigger – where funds get too large and do not close when they are supposed to.
If we remove a fund for performance reasons alone, then it is done after due consideration. If I were to look at one recent removal as an example, we actually monitored it for about three years. During the first year and a half, the performance was borderline acceptable. Then we saw a material dip, and after that, when a recovery did not happen in the next 18 months we exited. If it is only performance-driven, we tend to give managers time.
This is the first in a two-part interview, which was adapted from a feature that originally appeared in AsianInvestor's October/November 2018 magazine edition. Look out for the second part in the coming days.