"BEKB's goal is to be the leader in sustainability"

Jürg Hostettler
Head Asset Management / Professional Investors BEKB

 

Mr. Hostettler, BEKB has been operating an asset management organisation for 25 years. What prompted you to join AMAS now?

We want to further expand our investment business. Strong and well-networked asset management is key to this. That's why we decided to join AMAS.

What are your expectations of AMAS and what can BEKB contribute?

We hope that our membership will lead to a fruitful exchange of knowledge. Especially in the areas of sustainability and machine learning. On the one hand, because we have set ourselves the goal of being the leading financial services provider in the area of sustainability. On the other hand, because we want to set the tone in the use of machine learning in asset management.

BEKB has set itself the goal of becoming a leader in sustainability, with asset management playing a central role. What steps are you taking to achieve this goal?

We have been consistently pursuing the topic of sustainability for almost 30 years and are continuously expanding our long-standing commitment to responsible investing. When we started in 1992, sustainability initially related to the bank itself. In 2010, we began offering sustainable asset management mandates. In September 2017, we launched our own sustainable investment funds (including pension funds). These cover the asset classes CHF bonds, foreign currency bonds, Swiss equities and foreign equities and are based on BEKB's proven investment approaches. In 2020, the sustainability approach was extended to the Swiss property asset class. We also take sustainability criteria into account in traditional investment funds and in our advisory services and have increased the transparency of our investment solutions by publishing sustainability indicators such as the ‘Swiss Climate Scores’.

Sustainable finance is becoming increasingly regulated: Where do you see opportunities for BEKB to differentiate itself?

For us, sustainability is not just an investment approach, but a cornerstone of our business activities. At BEKB, sustainability is understood and practised as an overall concept, and sustainability aspects are taken into account in our services, in banking operations, as an employer and as part of our social, societal and cultural commitment. We have been committed to sustainable development for decades. We see sustainability as a path that has accompanied us for a long time and will continue to do so in the future. Sustainability cannot be implemented overnight and must be continuously developed. At the beginning of 2022, for example, we expanded and tightened our sustainability criteria in the investment business and increased the transparency of our investment solutions and customer portfolios through sustainability assessments. Our financial coaches are trained on sustainability topics, for example with ‘Sustainable investments’ securities seminars or on the BEKB sustainability approach. The comprehensive sustainability training programme that we launched for all employees in 2021 will focus on the investment business.

In terms of size, BEKB is a niche player in Swiss asset management. Is that why you concentrate primarily on your traditional catchment area?

The catchment area is mainly centred on the two economic areas of Berne and Solothurn. BEKB provides its core services in these two regions. We are active throughout Switzerland in the institutional business and in fund sales.

In addition to sustainability, the topic of artificial intelligence (AI) is generally seen as an industry driver in asset management. Does BEKB use this technology?

Yes, we at BEKB Asset Management have been using machine learning to support credit selection for some time now. AI can reveal correlations that are not immediately apparent to the portfolio manager. Monthly time series from the bond and equity world as well as company-specific data are analysed. The most meaningful of over 100 factors are then incorporated into a forecasting model. Our AI then delivers recommendations such as ‘strong buy’ or ‘hold’. It is important to emphasise that the AI only depicts probabilities and not the truth. The investment decision ultimately lies with the human being, in this case the portfolio manager. The central application of AI in asset management lies in improving the quality of credit selection. AI gives buy signals if, for example, the development of credit risk premiums is stable compared to comparable bonds (‘peers’) and, for example, the yield to maturity is above average compared to the peers. The time saved in day-to-day business should also not be underestimated. In a global bond market comprising around 25,000 individual securities, manual selection is practically impossible or too time-consuming. Although AI is an integral part of the selection process, each selection is subject to a thorough credit and follow-up check.

How is your asset management team organised?

BEKB Asset Management has been managing the assets of private and institutional clients since 1988 according to the motto ‘anchored in Berne - globally invested’. The 35 investment specialists in the Asset Management / Professional Investors division with an average market experience of around 20 years manage an investment volume of around CHF 13.5 billion at the Berne location. All analyses and decisions are made by us on site. Direct contact with clients is possible at all times. The Asset Management / Professional Investors division consists of six teams: Investment Strategy, Investment Boutique, Multi-Asset Investments, Investment Advisory / Solutions, Investment Controlling and Professional Investors. In the area of professional and institutional clients, we have continuously strengthened and expanded our expertise and solutions for wealthy private clients, foundations, associations and church organisations in recent years. Since 2009, our investment solutions have been honoured a total of 16 times by an independent jury of experts from Bilanz. The BEKB fund range has also been honoured with Lipper Fund Awards and by Morningstar. In the Swiss Asset Management study, the BEKB funds were ranked 1st and 3rd respectively in the important categories of Global Equities and Swiss Bonds in terms of information ratio.

What are your leadership principles?

The guiding principles on the five topics of networking and learning, team, courage, trust and feedback are our compass on the way to our goal. They provide orientation for goal-orientated work and provide impetus for discussions within the team and in bilateral talks. In our daily interactions and based on our values (trust, commitment, sustainability), we create the framework for a collaborative culture of partnership on an equal footing.