There is one quality that exceeds all others in importance when it comes to selecting a fund manager, according to Laurent Truchi, head of fixed income fund selection at the private banking division of Edmond de Rothschild in Geneva.
“By far the most important criterion for me is whether a fund manager is passionate about his job. In order to do your job well, you need to be passionate,” he stresses.
“When I meet a fund manager, I approach it as a job interview: I observe their body language.” Truchi, who characterises himself as “quite passionate about finance”, looks for managers he can identify with. “I have Italian roots,” he explains. “To express my emotions I talk with my hands.”
The two managers that first spring to Truchi’s mind when asked to give an example of passion are from South America: Andres Sanchez Balcazar, manager of the Pictet Absolute Return Fixed Income Fund, and Bolivia-born Sergio Trigo Paz, head of emerging market debt at BlackRock.
“They are people that really make something happen when you meet them. They have a macro vision that is much deeper and instinctive than that of the average manager,” he says. “When I meet a portfolio manager, I want to be sure he speaks his mind and doesn’t stick to a marketing text. I’m not interested in meeting an investment specialist who explains the investment process to me. During a due diligence process I want to meet the human being who will run my clients’ money and experience his personality.”
When meeting these managers, Truchi looks for hints that reveal their passion. One is dedication to their job: “Sergio Trigo Paz, the BlackRock manager, told me his team spent three consecutive days and nights at their desks after Trump’s election. They slept and ate at their desks. Such a thing proves they are passionate.”
Another hint of passion in a fund manager can be contrarianism: “Balcazar told me he thought he wouldn’t get the job when he went for an interview at Pictet many years ago because he had a very different approach than the other guys in that team. But they hired him just because of that,” Truchi notes. “Balcazar is very focused on avoiding macro risks, while the other team members are driven very much by macro trends.”
But Truchi only happens to meet passionate fund managers at the final, qualitative stage of his due diligence process. The first four stages of Edmond de Rothschild’s fund selection process are all about the numbers.
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