Advertising space
Magdalena Fest, from Apo Asset Management is our Fund Selector of the Month
Fund selectors

Magdalena Fest, from Apo Asset Management is our Fund Selector of the Month

Magdalena Fest is our Fund Selector of the month for March.
Imagen del autor

16 MAR, 2022

By Constanza Ramos

Share
LinkedInLinkedIn
TwitterTwitter
MailMail

Magdalena Fest, CFA, has been working at Apo Asset Management GmbH (apoAsset) since 2017, initially in the Trading & Advisory Desk and since 2019 as a portfolio manager for multi-asset funds. Prior to that, she spent 6 years as an analyst and investment specialist at Heidelberger Leben. She also holds a B.A. in economics.

When did you start your career? What made you want to pursue a career in the asset management industry? 

It was at the eve of the financial market crisis 15 years ago, when I was a trainee at a life insurance company and student of business management. In 2008, when the crisis dominated the news, I wanted to look behind the scenes and understand how the financial markets work in detail and in real life. So I asked the company’s investment team if I could spend some weeks there and learn more about their daily work.

Although this was not part of my unit training plan, I got the chance to prove myself a full semester there and finally the opportunity to work as a Reporting Analyst after my studies. Later, as an Investment Specialist, I was responsible for quantitative and qualitative fund selection as well as for the preparation of recommendations for the internal investment committees. Over time, I recognized that the asset management industry is constantly evolving and covers a wide range of interesting sub areas.

I wanted to gain more specific knowledge and started my CFA studies. This helped me to extend my experiences and ability to understand complex interactions that make up the bigger picture. Step by step, I grew in this exciting business, and today I am working as a multi asset funds of funds manager of what I am very passionate about.

How does your work on daily basis look like, and what kind of problems do you normally face as a Portfolio Manager at Apo Asset Management? 

No day is like the other. To put it in a nutshell: We are in constant dialogue about market developments, current positioning and ideas to shape our investment strategy. I usually have many conversations with target fund managers from all over the world. These are very valuable as they give us the opportunity to obtain first-hand information not only on their funds, but also on different countries and ways of thinking. This allows me to develop a more global perspective. 

We also face different challenges: As a fund selector, you make many decisions in a complex and constantly evolving environment. We need to keep ourselves constantly updated regarding the financial markets, investment approaches, regulatory and sustainability requirements. At the same time, we need to scrutinize our work and performance, act counter-cyclical and keep a clear mind even in a market sell-off. We look for the best target funds in the long-term, but in some situations we also need to act very fast and determined. 

What key principles drive your investment processes and why?

Active management and real diversification are the keys. I personally believe that markets are not fully efficient as investors not always act rationally, especially in the short term. Therefore active managers are able to outperform in certain circumstances.

This fits well with our investment philosophy of our funds of funds. It is our core assumption that different investment approaches have differing suitability in certain market phases and circumstances. In the appropriate environment, specialists are able to generate higher performance than generalists.

There is not only black or white, but several shades of grey in the markets. We believe it is important to find managers where their individual believes are aligned with the core principles of the company they work for. Diversification over various investment styles and managers leads to more stable results in the long run. 

How many people are there in your team, and how is it organised? 

Our multi asset team is a unique mix of 5 independent minds, who bring different skill sets and backgrounds to the table. Instead of focusing on fund selection from just one standardized perspective this leads to lively discussions as we generate ideas not just through quantitative screenings, but also by looking at opportunities within the markets or from discussions we have with the fund managers. Dr. Boris Leissner adds value as a quant physicist by slicing and dicing our portfolios as well as those of our investments.

Angelika Tansley-Becker brings ESG insights to the table, while Christian Hein and myself are deeply rooted in fund selection, portfolio construction and keeping close contact to our network of over 400 different asset management companies globally. So, while Marc Momberg as Head of Portfolio Management structures the process and has the final say in case of any deadlock, we usually find ways to agree on a common denominator in the end. That way we all develop a broad and cross-thematic knowledge base on which we base our decisions and thus the key person risk should anyone leave the company is greatly reduced. 

What aspects do you consider more important when selecting a fund for a portfolio? And what processes do you have in place when selecting funds? 

Our fund selection and due diligence process follows a holistic and multistage approach which considers quantitative as well as qualitative factors. Potential risks are evaluated from different perspectives, including e.g. the impact of a manager change or market liquidity drying up. This ensures that we only invest in funds which we have analysed in-depth. We look at multiple time periods and market phases and assess how the fund performed and what actions were taken by the manager. 

For these reasons, we have many conversations with target fund managers. This is essential to understand the mindset of the decision-makers and to get deeper insights into their thought process. We believe that the people behind the products have a crucial impact on the long-term performance. The added value might be outperformance, but can also mean providing some degree of downside protection or diversification within the portfolio context.

Which themes or sectors do you think are particularly interesting at the moment with the current situation of the markets? and what sectors do you think could become more attractive in the near future? 

We follow a long-term approach and look far beyond short-term market situations. Over the next 10 to 15 years, technology, health care and climate as well as environment will shape the global development. Therefore, our portfolios are structured around these topics, which are interpreted on a broader basis. We are already investing in a wide range of thematic target funds, which cover topics like digital health, human demand for security, prevention of the natural environment, improving the environment and ocean engagement, which aims to improve the health of the ocean and turning portfolio companies into ocean champions. We are still expanding this approach but without sacrificing diversification through regional opportunities. 

As a women working in Fund Selection - Do you see the industry evolving towards gender equality? 

Gender diversity is a key of success for competitive and sustainable asset management companies. This gained even more momentum over the last 2 years when the Covid crisis dominated our daily lives. Business models can’t ignore the gender shift in the long run, if they want to succeed in the future, too. There is a lot of potential: According to studies, only 18% of the actively managed funds are currently run by a woman, a female team or a mixed team. This shows how much women are still underrepresented in the fund industry. Hence, companies need to create an inclusive environment, where women are encouraged, can prosper and are able to bring in their strengths to their full extent. Usually, women bring in different views and follow different approaches. These can be very valuable and beneficial for the business and investment process.  

apoAsset has recognized this increasing importance and supports gender diversity on various levels. Apart from offering job-sharing and flexible working hours, we signed the “Charta der Vielfalt”, a German initiative for more diversity, tolerance and fairness in corporate culture. In addition, we also support the career network “Fondsfrauen”, a professional network for women in asset management and finance mainly in Germany, Austria and Switzerland. We even won the Fondsfrauen Award 2021 in the category “Company of the year” for our engagement regarding gender diversity.  

On a product level this matter plays a role as well: E.g. gender diversity is considered as a diversification element in the fund selection process. Currently, the percentage of our invested target funds managed by a woman, a female team or a mixed team is above average.

But to sum up, for asset management companies there is still some way to go and we need more than just paying lip service. Additionally, I would appreciate if more women will see and realize the interesting opportunities this exciting industry offers, so that hopefully the lack of female fund managers will decrease with time. 

What are you passionate about? Do you have any hobbies? 

I love to bake cakes. It is hard to resist my lemon curd baiser tarte. But I am also passionate about dancing and acrobatics. In this way, the extra calories can be worked off fast. Should my career in the investment industry do not go well anymore, I would think about creating wedding cakes. 

What would you say to your “you” from 15 years ago? 

First, I would say: You don’t know how much you don’t know. I was completely clueless when leaving school without being aware of it!

At the same time I would also say: Don’t waste your time by thinking what others think about you and to allow them to take control over you and your thoughts. We need diverse minds to reach success and therefore it is nonsense to compare yourself to others. Our uniqueness is an asset. You can only fail by trying to please everybody and to fit into their box. To be dominated by the views and expectations of others keeps you from learning and growing. The best ideas are made when you think unrestricted. Be open-minded, trust in your potential and go your own way. Leave your comfort zone as this will stretch your knowledge and pushes you forward. Revisit positive feedback, don’t fear the unknown and let your work speak for itself. This attitude I also try to project to my daughter so that some day she will be able to act independently, trust in herself and live up to her potential.

Advertising space
Advertising space
Advertising space