How do we create multidimensional value for investors?

Investors currently have to deal with massive changes: the current geopolitical developments, especially the Russian war of aggression against Ukraine, the developments triggered by the Corona pandemic, rising inflation rates and growing uncertainty in equity and fixed-income markets.

In addition, a fundamental paradigm shift is taking place with regard to the way we live and do business. There is a growing realisation that economic activity cannot be sustainable without taking ecological and social factors into account. Climate change in particular is already a real threat – but the good news is that we have the knowledge and technology to embark on a path of transformation that will provide a positive future for generations to come. Above all, this requires reducing global emissions and achieving climate neutrality by 2050 at the latest.

However, this transformation comes at a cost. To meet the EU’s climate and energy targets by 2030, Europe needs to make up an annual investment shortfall of almost 180 billion euro. Policymakers have recognised that the financial sector has a key role to play in the urgently needed transformation of the real economy towards greater sustainability. The EU’s ambitious sustainability and climate goals cannot be borne by the public sector alone – private capital is also urgently needed to drive the necessary changes.

Old rules no longer apply

The need for change is accompanied by growing challenges for investors. It is becoming increasingly important for them to reconsider existing practices and investment approaches and to consider whether these remain future-oriented and forward-looking. The rules of the game are changing in a rapidly evolving world. Yesterday’s solutions and approaches may no longer work tomorrow – they need to be continually challenged and modified to meet the new requirements. The asset management industry must take these changes into account and at the same time support and accompany investors in this development in the best possible way.

At Quoniam, we see it as our mission not just to manage money, but to create multidimensional value. We are here to create value for multiple stakeholders, both current and future. We are very conscious that our first obligation is to our clients, and at the same time we believe that all stakeholders are interconnected, and hence our clients’ interests are best served by a sustainable system as a whole. As a science-based asset manager, we aim to use our technological and analytical capabilities in combination with our capital market expertise to create concrete solutions for assisting our clients through this transformation.

In terms of our services and client relationships, this means that we aim to deliver alpha for our clients, successfully manage risk and thus provide them with robust investment strategies. The goal is above-average risk-adjusted returns over the long term. A central building block is the promotion of innovation, which leads to continuous improvement throughout the company which then finds its way into our clients’ portfolios – for example, in the investment area through the identification of new alpha sources.

Transparency and customised solutions

At the same time, we want to offer customised solutions that help investors achieve their long-term goals, by understanding their investment beliefs and ensuring these are expressed in their portfolios. In doing so, we attach great importance to maximum transparency, starting with our quantitative investment process and ending with reporting. At the same time, it is important to offer insight, analysis and orientation. Based on our systematic, fact-based quant perspective, we can explain and clarify interdependencies.

This is especially true for the topic of sustainability. It has become an important criterion for institutional investors – not only with regard to the risk/return profile, but also with regard to the implementation of sustainability goals in their portfolios. When it comes to sustainability and ESG, we help our clients to meet regulatory requirements and achieve their goals.

Sustainability has become a big data issue. The amount and variety of data has grown strongly and will continue to do so in the future. However, it is not only the quantity that matters for ESG integration into the investment process – the quality of data is equally as important, if not more so. We are well positioned for this at Quoniam, because as a long-standing and successful quant manager, we have the know-how to organise the multitude of ESG data sources that are relevant for the investment process, to analyse them in a targeted manner and to consistently transfer them into investment decisions.