We
are in a period of change, marked by technological advances, globalisation
and bewildering investment choices for the investor.
He
can today consider equities, government issued securities
and derivatives listed on more than 100 stock and bond exchanges.
He may choose from over 50.000 funds globally, track indices
around the world and structure any derivatives, not to mention
the multitude of IPOs and less liquid investments. This has
encouraged the creation of a multitude of funds which are
largely focused, as the rest of the asset management community,
on relative performance.
To
ensure benchmark performance, a large part of the asset management
community is indexing their portfolios. Such indexation logic
has given way to an unhealthy trend as the process of passive
investment creates a distortion in equity markets.
The
technical demand, triggered by the asset manager having to
follow an index, rather than fundamentals, based on active
management, leads to a disproportionate amount of money chasing
a narrow range of securities. Indexation may minimise the risk
of bad relative performance, but in terms of absolute performance,
it misses the mark and limits the performance of the investor's
portfolio.
BiBT
is dedicated to active management where it can take advantage
of pricing anomalies. Whole segments of industry move in and
out of fashion according to broad-brush economic assumptions.
But in all sectors, there are companies, which can beat the
underlying trend, whether through superior products, market
niches or visionary management. This is BiBT's traditional "fishing pond".
BiBT believes in the merits of active management with direct investments
into securities. Portfolios are often not benchmarked with the
main focus being on absolute returns.
BiBT only uses selected third-party funds in the areas which
are not part of its core competence (e.g. real estate, hedge
funds, debt restructuring), and will use a best of class approach
by selecting the finest funds available in the market.
Similarly and depending on the client's needs, BiBT can
hand pick the optimum hedge funds or enter any derivative strategies
using structured products.