"I only see opportunities"

Bettina Ducat
Co-Head Lombard Odier Investment Management

 

You are co-heading Lombard Odier Investment Managers together with Jean-Pascal Porcherot. What is the rationale behind the co-leadership of the unit?

This is my first time co-managing and I really appreciate this duality. The co-leadership of Lombard Odier Investment Managers is based on the belief that shared leadership strengthens the strategic vision and operational agility of the organization. It's a very effective way of managing: We benefit from each other's strength, perspective and expertise, always with the utmost respect for one another. This collaborative approach enhances our forward-looking decision-making process and enables us to navigate the complexities of the investment management landscape more effectively to successfully meet the challenges and opportunities of the global marketplace for the organization and our clients. In terms of responsibilities, I am very happy to share them with Jean-Pascal Porcherot, Managing Partner. Business Development, Core investment activities and HR report to me, while holistiQ our sustainable investment and research units, and Alternatives, report to Jean-Pascal Porcherot. I would also like to highlight Lombard Odier's unique governance model, organised as an independent partnership where decisions are taken unanimously. It is unique and allows us to take a long-term vision that others don’t have.

Active asset management relies heavily on individual skills of portfolio managers and their teams, while all activities are under constant regulatory scrutiny. How do you maintain a balance in order to be successful?

We rely on the continuous training of our portfolio managers and their teams. Of course, we have implemented strict internal controls and compliance policies to ensure that all activities comply with regulatory requirements. Our investment and compliance teams work closely together to enable rapid adaptation and implementation of regulatory changes. More generally, it's also an opportunity to take advantage of these developments to rethink our processes and develop our expertise. This also applies to sustainability and regulatory developments, for which we can rely on our sustainable investment research and investment division holistiQ, which is keeping a close eye on these regulatory changes and their implications.

What culture should an asset management business foster to be successful in the future?

To succeed in the future, an asset management business should foster a culture of boldness and entrepreneurship, which is decisive: you have to be able to take initiatives, be hands-on and shoulder responsibilities while remaining humble. The ability to operate nimbly and internationally is necessary to adapt market changes. It is also important to focus on attracting new talent that seeks to develop innovative solutions. By identifying and nurturing these individuals, the business can ensure that it remains competitive in the future.

The need for investments in human resources and technology are on the rise: Do you see this as a challenge or an opportunity?

I only see opportunities. Our people are our most valuable asset. Their continuous development, together with investment in technology, increases our efficiency and frees up resources to develop innovative solutions for future success. As a business, owned and led by its Managing Partners, our relatively modest size means we can stay close to our employees and follow their progress, as well as offering opportunities for mobility. We focus on talented people and support their development with dedicated leadership programmes - including female leadership. There is no limit to excellence.

Your ultimate goal has to be to add value to clients: How do deal with the sometimes short-term approach of investors?

We stand out because we are truly research-driven. For example, we don't follow the crowd in our approach to high yield investing. We have thoroughly researched the investment universe to find the most fertile ground. This has led us to differentiate ourselves by targeting the fallen angels part of the market, a higher quality segment. Here we take a contrarian approach, investing in bonds that we believe the market has mispriced and will recover based on fundamentals. We are innovative and have a first-mover approach. Most importantly, our clients understand that we have a long-term proposition and approach that is based on scientific and academic research, coupled with our recognised investment expertise.

With the wave of passive investing showing no signs of receding, how do you as active managers stand out?

We have developed important key strengths that set us apart from the established players: differentiated strategies, research-backed convictions, recognized leadership in sustainability, private-market initiatives and robust operations. Our mission is to deliver performance and generate alpha by going beyond traditional investment strategies and focusing on profound trends transforming our economy and new investment opportunities arising, particularly towards sustainability. We believe that sustainable transformation represents one of the greatest investment opportunities and have therefore massively invested in a sustainability research team and restructured our research and analysis approaches, with dedicated teams of scientists, experts and analysts working closely together. Instead of sector-based analysis, we focus on systemic change. We are also collaborating with Oxford University and E4S in Lausanne, and we have been using the Stockholm Resilience Centre’s Global Limits model since 2021. The focus is always on working with clients as partners and to guide them on their journey towards sustainable investments. Innovation and customized solutions are key to adding value for clients and differentiating from passive investment strategies.

There has been a massive shift into private assets, dominated by large incumbent players. How do you establish yourself as a relevant new entrant in this space?

Private market initiatives belongs to the strategic strength we have developed that is part of our value proposition. For example: The combination of our sustainability research and investment expertise is unique. Our approach focuses on emerging and under-explored segments of the market. For example, we have successfully implemented a sustainable private credit strategy that delivers Environmental impact through short duration loans. We are also actively involved in plastics circularity and raised USD 100 million to invest in companies across the Plastics value chain. This strategy is targeting an internal rate of return in the mid-teens while reducing plastic waste and GHG emissions.

What goals have you set for yourself?

We have people with a lot of talent and vision. I believe we are a daring company that makes bold moves. My goal is to turn that vision and energy into success. I have adopted a quote from Mark Twain: “They did not know it was impossible, so they did it.” It illustrates what can be achieved with belief, ability and boldness!