The current investing environment seems more unpredictable than at any time in recent memory. Yet, uncertainty about where to invest represents a major opportunity for multi-asset managers with global reach and the ability to opportunistically select markets and underlying strategies.
For well over a decade, the PineBridge Multi-Asset team has demonstrated an ability to maneuver through ever-changing market conditions. We seek to outperform irrespective of economic, political, and market backdrops. Our process seeks to invest by embracing the right markets, at the right time, with attractive underlying strategies and managers.
How do we do it? With an innovative investment culture built around diverse points of view, collaboration with colleagues, and partnerships with clients. This keeps us connected to the challenges facing investors across and within markets.
One of the most unique aspects of PineBridge’s Multi-Asset team is its diversity. Spread across five locations around the world and featuring a wide range of languages, ethnicities, and fundamental expertise as well as scientific backgrounds, the team is able to leverage a network of approximately 200 on-the-ground specialists to get an edge over our far bigger, yet less cohesive, competitors. As Global Head of Multi-Asset Michael Kelly puts it, “this means we function both as a team of 21 and a team of ~200.1”
Generally, we’re competing with other multi-asset firms that are huge, yet siloed. We believe our midsize footprint and collaborative culture drive better outcomes for our clients. This enables us to identify opportunities that most purely top-down managers would never see, yet to compare the best-of-the-best ideas across asset classes with potentially greater objectivity than specialists, who often grow too attached to their asset classes.
Our network enables us to synthesize top-down views with bottom-up perspectives through active debate, which can thrive only when people know each other well and bring many different perspectives to the table. While our network and portfolios are global, with experienced specialists in EMEA, Latin America, and the US, we have a particularly strong base across Asia – where the world’s most significant changes are occurring.
“Where PineBridge has demonstrated expertise, we’re bringing it to our clients for no additional cost, and that’s something invaluable from their perspective – having that partnership and connectivity to our entire firm,” says Portfolio Manager Deanne Nezas. Indeed, our clients often visit on-site to gain deeper insights from professionals across the firm, helping them navigate areas where they’re seeking additional perspectives.
“We have many feet on the street throughout Asia,” Kelly says. “Our numerous China watchers helped us build conviction to make a significant investment in mainland China during a challenging time for markets at the end of 2018.”
Having differences of opinion represented at the table is crucial to being able to foresee change, and this philosophy is an integral part of how we work at PineBridge. We have a unique culture - don’t have a house view; instead, we encourage people to express their own views on how they see the world evolving through an institutionalized set of meetings.
Kelly explains: “If you’re in a communicative, collaborative firm like ours that can discuss differences of opinion, and can disagree without becoming disagreeable, you have a potential edge on the market.”
Big market moves are born out of uncertainty. House views impose certainty, thereby destroying most of the information diverse firms have by virtue of their global footprints. “Given the breadth of skill sets and geographic perspectives inside PineBridge, the right answer is almost always in the room or on the phone. We just need to get it out in the conversation, have a process that compares all the potentials to ferret out the truth, and know it when we hear it,” says Kelly.
A solid basis of research and fundamental and macroeconomic analysis is in the hands of Chief Economist Markus Schomer, who takes advantage of PineBridge’s large network of local experts. Schomer focuses on the topdown analysis at PineBridge and develops macroeconomic scenarios across the firm.
Schomer and the team focus on the intermediate-term horizon, an outlook from nine to 18 months, as well as a longer view looking out up to three years. “This enables us to form more meaningful macro scenarios,” says Schomer. He partners with multi-asset senior investment leadership to bridge the macro to the micro, and help the team determine the best way to optimize the two within a disciplined risk budget.
Strategy meetings and forums inform the construction of our Capital Market Line, a five-year view of risk and return across the investment spectrum. These quarterly sessions represent an opportunity to tune out market noise and think clearly together. These are then supplemented with seven monthly strategy meetings that focus more on current developments.
The forums focus on what’s moving markets, and all of our investment professionals can participate and hear the latest from our subject-matter experts on what’s relevant for each market, whether it’s currencies or rates, or at an asset class level. Our unique culture enables constant dialogue, not only through these meetings but through everyday interactions. This organized familiarity is a cornerstone of our firm’s culture and sets us apart in the industry.
The regular meetings that inform the Capital Market Line enable the Multi-Asset team to assess the most compelling opinions from across asset classes and distill them to form our forward-looking view of risk and return.
Our Dynamic Approach Adjusts Based on the Unique Opportunities of Each Market Cycle
For illustrative purposes only. We are not soliciting or recommending any action based on this material. Any views represent the opinion of the investment manager and are subject to change.
At other asset managers, the equity team will decide what the equity market return will be, the fixed income team decides their own return, and the multi-asset just combines them together. But the overall portfolio can end up with inconsistent, incoherent views. According to Portfolio Manager Hani Redha, “at PineBridge, our team assesses the most convincing arguments and combines them to form the Capital Market Line, which informs our portfolio construction.”
These investment forums also enable the team to respond dynamically to market volatility by ensuring that everyone is regularly exposed to different perspectives on the data, helping to glean fundamental signals and inflection points from the noise. This can be highly valuable, both in terms of spotting new opportunities and conducting risk management.
“We only have an edge if we communicate very effectively with our bottom-up specialists,” Redha says. “So when volatility spikes, we can de-risk because of the trajectory we – generalists and specialists working together – see unfolding for those fundamentals.”
This ability to be nimble, and adjust as market conditions dictate, is critical to helping our clients meet their specific objectives.
“When we asked our specialists what exactly these companies were investing in, it was very clear that it was in different forms of technology to make these businesses more efficient and more productive.” adds Ng.
To benefit from this trend, our Multi-Asset and Equity teams collaborated to identify stocks with the highest potential revenue exposure to these themes – for example, stocks in cloud computing and cybersecurity – ultimately creating a thematic basket in which to express this theme.
The team’s productivity basket was recognized by Chief Investment Officer magazine, which named PineBridge’s Multi-Asset team as the most innovative multi-asset manager of 2018.2
At the same time, not every thematic idea will make it into the portfolio. As Michael Kelly puts it, “You need to be selective and surgical. And the only way you can do that is by looking through the noise and identifying the fundamental driver and how it will affect those select emerging markets or portions of developed markets over time.”
We can be highly flexible, and go deep quickly, through collaboration between the Multi-Asset and specialist teams at PineBridge.
One example is collateralized loan obligations (CLOs). “The firm has great depth of capability in CLOs,” Kelly says. “Our fixed income teamis a prominent issuer of CLOs, and having that expertise at the firm allows us to identify the most potentially valuable portions of the capital structures of other CLOs in the market.”
This same flexibility exists when it comes to applying ESG screening, something the team has been committed to for a decade. PineBridge is a signatory to the UN Principles for Responsible Investing.
“ESG is something that’s important to us as a firm,” says Portfolio Manager Paul Mazzacano. “We understand that environmental, social, and governance issues present risks as well as opportunities. As a team, we incorporate these decisions within our investment process, using them as an additive input, rather than relying on an exclusionary approach.”
“We go out of our way to be transparent and understandable to clients,” Kelly says. “We think the industry has a lot of heterogeneity in the way multi-asset strategies are delivered, which clients and consultant constituents sometimes struggle to understand. When we speak to clients, they recognize that our alpha source comes primarily from opportunistically selecting about 10 to 15 high-conviction markets in a portfolio construct, and then secondarily, how we express this with a mix of underlying strategies.”
He adds, “Most multi-asset managers will only utilize a set menu of internal strategies. But we are committed to results for our client portfolios, and allocate flexibly across passive, enhanced, and internal or external active strategies, whichever our manager research reveals should add the most value.”
1 As of 30 June 2021. Investment professionals include portfolio managers, research analysts, traders, portfolio strategists and product specialists, and are subject to change. Includes investment professionals at the senior vice president and managing director level.
2 The CIO Industry Innovation Awards are split into two general categories: asset management/servicing and asset owners. The CIO editorial team makes the final decisions as to finalists and eventual winners with input from their awards Advisory Board, as well as surveys and data where applicable. Third-party rankings and recognition from rating services or publications are no guarantee of future investment success. Working with a highly rated advisor does not ensure that a client or prospective client will experience a higher level of performance or results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluation.
PineBridge Investments is a group of international companies that provides investment advice and markets asset management products and services to clients around the world. PineBridge Investments is a registered trademark proprietary to PineBridge Investments IP Holding Company Limited.
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Opinions: Any opinions expressed in this document represent the views of the manager, are valid only as of the date indicated, and are subject to change without notice. There can be no guarantee that any of the opinions expressed in this document or any underlying position will be maintained at the time of this presentation or thereafter. We are not soliciting or recommending any action based on this material.
Risk Warning: All investments involve risk, including possible loss of principal. If applicable, the offering document should be read for further details including the risk factors. Our investment management services relate to a variety of investments, each of which can fluctuate in value. The investment risks vary between different types of instruments. For example, for investments involving exposure to a currency other than that in which the portfolio is denominated, changes in the rate of exchange may cause the value of investments, and consequently the value of the portfolio, to go up or down. In the case of a higher volatility portfolio, the loss on realization or cancellation may be very high (including total loss of investment), as the value of such an investment may fall suddenly and substantially. In making an investment decision, prospective investors must rely on their own examination of the merits and risks involved.
Performance Notes: Past performance is not indicative of future results. There can be no assurance that any investment objective will be met. PineBridge Investments often uses benchmarks for the purpose of comparison of results. Benchmarks are used for illustrative purposes only, and any such references should not be understood to mean there would necessarily be a correlation between investment returns of any investment and any benchmark. Any referenced benchmark does not reflect fees and expenses associated with the active management of an investment. PineBridge Investments may, from time to time, show the efficacy of its strategies or communicate general industry views via modeling. Such methods are intended to show only an expected range of possible investment outcomes, and should not be viewed as a guide to future performance. There is no assurance that any returns can be achieved, that the strategy will be successful or profitable for any investor, or that any industry views will come to pass. Actual investors may experience different results.
Information is unaudited unless otherwise indicated, and any information from third-party sources is believed to be reliable, but PineBridge Investments cannot guarantee its accuracy or completeness.
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Disclosures by location:
Australia: PineBridge Investments LLC is exempt from the requirement to hold an Australian financial services license under the Corporations Act 2001 (Cth) in respect of the financial services it provides to wholesale clients, and is not licensed to provide financial services to individual investors or retail clients. Nothing herein constitutes an offer or solicitation to anyone in or outside Australia where such offer or solicitation is not authorised or to whom it is unlawful. This information is not directed to any person to whom its publication or availability is restricted.
Brazil: PineBridge Investments is not accredited with the Brazilian Securities Commission - CVM to perform investment management services. The investment management services may not be publicly offered or sold to the public in Brazil. Documents relating to the investment management services as well as the information contained therein may not be supplied to the public in Brazil.
Chile: PineBridge Investments is not registered or licensed in Chile to provide managed account services and is not subject to the supervision of the Comisión para el Mercado Financiero of Chile (“CMF”). The managed account services may not be publicly offered or sold in Chile.
Colombia: This document does not have the purpose or the effect of initiating, directly or indirectly, the purchase of a product or the rendering of a service by PineBridge Investments ("investment adviser") to Colombian residents. The investment adviser’s products and/or services may not be promoted or marketed in Colombia or to Colombian residents unless such promotion and marketing is made in compliance with decree 2555 of 2010 and other applicable rules and regulations related to the promotion of foreign financial and/or securities related products or services in Colombia. The investment adviser has not received authorisation of licensing from The Financial Superintendency of Colombia or any other governmental authority in Colombia to market or sell its financial products or services in Colombia. By receiving this document, each recipient resident in Colombia acknowledges and agrees that such recipient has contacted the investment adviser at its own initiative and not as a result of any promotion or publicity by the investment adviser or any of its representatives. Colombian residents acknowledge and represent that (1) the receipt of this presentation does not constitute a solicitation from the investment adviser for its financial products and/or services, and (2) they are not receiving from the investment adviser any direct or indirect promotion or marketing of financial products and/or services. Marketing and offering of products and/or services of a foreign financial [or securities related] entity represented in Colombia.
Promoción y oferta de los negocios y servicios de la entidad del mercado de valores del exterior [o financiera, según sea el caso] representada en Colombia.
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Ireland: When this document is issued in the EEA, unless stated otherwise, it is approved and issued by PineBridge Investments Ireland Limited, licensed and regulated by the Central Bank of Ireland.
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Kuwait: The offering of any security in any vehicle has not been approved or licensed by the Kuwait Capital Markets Authority or any other relevant licensing authorities in the State of Kuwait, and accordingly does not constitute a public offer in the State of Kuwait in accordance with Law no. 7 for 2010 regarding the Establishment of the Capital Markets Authority and the Regulating Securities Activities (“CMA Law”). This document is strictly private and confidential and is being issued to a limited number of professional investors: A) who meet the criteria of a Professional Client by Nature as defined in Article 2-6 of Module 8 of the Executive Regulations No. 72 of 2015 of the CMA Law; B) upon their request and confirmation that they understand that the securities have not been approved or licensed by or registered with the Kuwait Capital Markets Authority or any other relevant licensing authorities or governmental agencies in the State of Kuwait; and must not be provided to any person other than the original recipient, and may not be reproduced or used for any other purposes whatsoever.
Malaysia: PineBridge Investments Malaysia Sdn Bhd is licensed and regulated by Securities Commission of Malaysia (SC). This material is not reviewed or endorsed by the SC.
Netherlands: PineBridge Investment Ireland Limited, Netherlands Branch is licensed and regulated by The Dutch Authority for the Financial Markets (AFM). This is a branch office of PineBridge Investments Ireland Limited, licensed and regulated by the Central Bank of Ireland.
Peru: Specifically, the Interests will not be subject to a public offering in Peru. The Interests described herein have not been and will not be approved by or registered with the Peruvian Superintendency of Capital Markets (Superintendencia del Mercado de Valores, or the “SMV”) or the Lima Stock Exchange (Bolsa de Valores de Lima). Accordingly, the Interests may not be offered or sold in Peru except, among others, if such offering is considered a private offer under the securities laws and regulations of Peru. The Interests cannot be offered or sold in Peru or in any other jurisdiction except in compliance with the securities laws thereof. In making an investment decision, institutional investors (as defined by Peruvian law) must rely on their own examination of the terms of the offering of the Interests to determine their ability to invest in the Interests. All content in this document is for information or general use only. The information contained in this document is referential and may not be construed as an offer, invitation or recommendation, nor should be taken as a basis to take (or stop taking) any decision. This document has been prepared on the basis of public information that is subject to change. This information may not be construed as services provided by PineBridge Investments within Peru without having the corresponding banking or similar license according to the applicable regulation.
Singapore: PineBridge Investments Singapore Limited is licensed and regulated by the Monetary Authority of Singapore (MAS). In Singapore, this material may not be suitable to a retail investor. This advertisement or publication has not been reviewed by the MAS.
Sweden: PineBridge Investments Ireland Limited Sweden filial is licensed and regulated by Finansinspektionen. This is a branch office of PineBridge Investments Ireland Limited, licensed and regulated by the Central Bank of Ireland.
Switzerland: This material is issued by PineBridge Investments Switzerland GmbH and classes this communication as a financial promotion which is intended for Institutional and Professional clients as defined by the Swiss Federal Financial Services Act ("FinSA") and its implementing ordinance, the Federal Financial Services Ordinance ("FinSO"). PineBridge Investments Switzerland GmbH is affiliated with the Swiss Chambers’ Arbitration Institution (SCAI), 4, boulevard du Théâtre, P.O. Box 5039, 1211 Geneva 11, Switzerland, Tel: +41 (0)22 819 91 57.
Taiwan: PineBridge Investments Management Taiwan Ltd. Is licensed and regulated by Securities and Futures Bureau of Taiwan (SFB). In Taiwan, this material may not be suitable to investors and is not reviewed or endorsed by the SFB.
United Kingdom: This material is issued by PineBridge Investments Europe Limited, licensed and regulated by the Financial Conduct Authority. In the UK this communication is a financial promotion solely intended for professional clients as defined in the FCA Handbook and has been approved by PineBridge Investments Europe Limited. Should you like to request a different classification, please contact your PineBridge representative.
In the UK, this material may also be issued by PineBridge Benson Elliot LLP, registered in England (company number OC317119) with its registered address at 50 Hans Crescent, London, SW1X 0NA. PineBridge Benson Elliot LLP is authorised and regulated by the Financial Conduct Authority.
Uruguay: The sale of the securities qualifies as a private placement pursuant to section 2 of Uruguayan law 18.627. The issuer represents and agrees that it has not offered or sold, and will not offer or sell, any securities to the public in Uruguay, except in circumstances which do not constitute a public offering or distribution under Uruguayan laws and regulations. The securities are not and will not be registered with the Central Bank of Uruguay to be publicly offered in Uruguay. The securities correspond to investment funds that are not investment funds regulated by Uruguayan law 16,774 dated 27 September 1996, as amended.
Last updated 3 June 2021