We keep a strong link to certain leading universities both in Europe and the US in order to remain closely involved in the latest developments of finance theory. The time lag between academic research and industry implementation remains considerable. We strongly believe an empirical and quantitative approach to finance is the best basis for investment, even if it may underperform occasionally during certain periods, which subsequently often turn out to have been periods of “less rational behaviour”, i.e. bubbles.

As we believe that as alpha is rare, it is sometimes better to track indices than to pay generous asset management fees per year to the active manager who generally fails to beat the index. Free-riding on a market which remains largely efficient thanks to the abundance of active managers, by investing in indices, should in our opinion be part of every good investment strategy.

Many investors are overexposed to liquid assets and underexposed to illiquid investments. The market once again pays a substantial risk premium to investors willing to take long-term positions, and for those investors who do not need the liquidity, we like to offer investment opportunities where such willingness to accept illiquidity pays off.

We believe that markets are relatively efficient and hence that alpha is largely inexistent. However, if every investor was investing in indices, the markets would be very inefficient and outperformance opportunities would be abundant. It is our belief that there is a market equilibrium that causes risk-adjusted returns on active and passive investing to equalize over time. Whilst the overall contribution of research to financial markets is to ensure that they remain efficient, some research products tend to be a step ahead and therefore are capable of delivering considerable outperformance or alpha. We attempt to identify the best of investment banks’ research to be able to offer access to the real alpha opportunities.

Most investors like convexity, i.e. an increasing market exposure when the market goes up and a decreasing market exposure when the market goes down. We believe that for most investors this is much more important than “beating the index”. Structuring risk-return profiles is about combining wealth preservation in bad times and wealth aggregation in good times. There are multiple derivatives and portfolio hedging strategies that can achieve this. In contrast, we try to avoid any “bells and whistles” derivatives which have as main aim to create nice optics but usually deliver very disappointing returns.