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Thematic investing

Exploring Pictet AM's THEMATIC ADVISORY BOARDS

Thematic Advisory Boards: experts that give our investment managers an edge

November 2018

Philippe Rohner, Chairman of Thematic Advisory Boards

Investment managers of our thematic equity strategies always focus on the long-term. Our Thematic Advisory Boards help them maintain that perspective.  

What are the Pictet Thematic Advisory Boards?

Philippe Rohner: They are a key pillar of our thematic offering and essential for helping our portfolio managers deliver the long-term outperformance our investors are seeking from us.

Each of our stand-alone thematic strategies has a dedicated Advisory Board which comprises of up to three external consultants with an established track-record in either a relevant government function, industry and/or academic role.

Thematic Advisory Boards channel deep expertise into our thematic equity platform.  – Philippe Rohner

Thematic Advisory Board members aren't necessarily high-profile, super-authorities - the views of such people are often quite visible and therefore freely available.

Rather we choose to work with experts whose insights draw on a strong industrial or entrepreneurial track record or an impressive body of academic research.

Our Thematic Advisory Boards meet formally twice a year. In addition to Pictet Asset Management thematic investment managers our product specialists also attend the meetings, as does the occasional guest.  My role is to administer and chair these meetings.

Why do we use advisory boards?

PR: We believe this external expertise helps our investment teams better track and manage the evolution of our themes.

The role of a Thematic Advisory Board is not to help with investment decisions per se, nor to ‘pick’ stocks for the portfolio, but rather support the investment managers.

Thematic advisory boards help track the long-term course of a theme.
The Thematic Advisory Boards help track the long-term course of a theme and provide specific insights on shorter-term developments, too. The Boards are useful because they allow our investment managers to remain  focused on portfolio construction matters such as stock selection - confident that the ‘big picture’ developments are not passing them by.

How have thematic advisory boards helped reposition a theme?

PR: I can think of several instances when the Thematic Advisory Boards have helped us either to confirm or to evolve and thus re-position our themes. The recent re-positioning of our Pictet Agriculture strategy into Pictet Nutrition in 2017 is one example of how we use the insights gleaned from our Advisory Board. 

The decision to re-position was reinforced by the analysis provided by researchers from our other partner the Copenhagen Institute of Future Studies (CIFS). What we discovered from our discussions with our partners was that the global food production complex was moving away from a question of ‘quantity’ (can we produce enough food for the world?) to the more consumer-led focus on ‘quality’ (how do we produce better food?). In that light, the re-positioning made strategic sense.  

Thematic Advisory board member: PRofessor ASit K. Biswas
key details on Professor Asit Biswas, water expert

Where do the boards meet?

PR: Typically the meetings take place in our Geneva offices, but not always. For example, we recently conducted the Thematic Advisory Board for our Timber strategy in Shanghai so we could also attend a global timber conference and visit local industrial sites.

Occasionally we hold workshops where an advisory board meets with experts from the CIFS whose megatrend framework we use as a lens through which we view and monitor the long-term secular growth drivers of a given theme.

Thematic Advisory board member: Vaclav smil
key details on Professor Vaclav Smi, clean energy expert

Why do we use the Copenhagen Institute?

PR: I should underline first that there are other established megatrend frameworks that would arguably be equally suitable. That said, what we particularly like about CIFS is that their ‘raison d’être’ is their megatrends framework: they are not simply a  generalist research consultancy. We also believe the fact that they are a commercial not-for-profit organisation ensures a level of objectivity.

Thematic Advisory board member: SANDrine ZERBIB
key facts about Sandrine Zerbib, Premium brands expert
Overall, because their remit is not investment-focused, we think the CIFS brings a level of complementarity to us. They are also very strong in tracking how megatrends evolve. As members of the CIFS we benefit from their proprietary research and content generation.

What is your role?

PR: My role is to facilitate, moderate and manage the interaction and most crucially drive the output of the thematic advisory boards.

A typical advisory board agenda
A typical advisory board agenda

This is a responsibility that allows me to bring together my broad industry and investment experience. Forty years ago, beginning my career as a chemical engineer I chose to focus on environmental issues associated with water use at a major oil company, of course I had no idea then I would end up in my current position.

Looking back however I can see the natural evolution of my career at Pictet, which began as a sell-side equity analyst 20 years ago. In 2002, I became a portfolio manager with Hans Peter Portner on the Pictet Water strategy. In subsequent years I have had the great pleasure of playing my own part in the successful expansion of our thematic equity platform.