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Manuela Thies is our Fund Selector of the Month
Fund selectors

Manuela Thies is our Fund Selector of the Month

Manuela Thies is our fund selector of the month for January.
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19 JAN, 2022

By Constanza Ramos

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Manuela Thies is the Head of Retail Multi Management in Allianz GIobal Investors Multi Asset Europe which consists of two investment teams focusing on fund manager research / selection and the management of multi asset funds designed for retail clients. Since September 2020, the team’s responsibilities also include fund manager research and selection of liquid investment strategies for advisory clients.  Prior to August 2018,  Manuela headed the AllianzGI Multi Asset Active Allocation Retail team in Europe. She was also a Senior Portfolio Manager of Multi Management products.  Before Manuela joined the company in August 2009 she worked for Commerzbank AG for 14 years. Manuela graduated from the  University of Applied Sciences - Frankfurt School of Finance and Management in 2001 and holds a Master’s degree in business administration, specialized in banking and finance. Manuela is a CFA charter holder and consultant for Hedge Funds (EBS/BAI).

When did you start your career? What made you want to work in the financial sector? 

Coming from a family of entrepreneurs, I was initially interested in institutional lending and started my career in 1995 with a bank apprenticeship. Then I studied business administration, specializing in banking and finance and at the same time I worked in the asset management department of a German bank. What was originally a means to finance my studies, started fascinating me so much I just kept going. I started early to invest my own money in mutual funds of different asset classes at various providers, watched my asset basis grow - and melting away again with the Asian crisis and Russian crisis in the late 1990s. I wrote my thesis about quantitative fund selection in 2001 and enjoyed the topic, hence, I decided to pursue a career in the multi management business. 

What do you enjoy the most about your role as a MD, Head of Multi Asset Retail MultiManagement at Allianz Global Investors? And which are your biggest challenges?

Our MultiManagement team consists of 15 Investment specialists, who have a dual function: we are all both fund analysts and portfolio managers of multi asset multi management funds. We are convinced about the merits of such an integrated approach: only if research and portfolio construction go hand in hand, we can identify the most suitable funds to implement our current investment strategy. We have started this approach more than 2 decades ago. I really enjoy working with such an excellent team and the great expertise we have built over many years, both in terms of selecting managers and navigating financial markets, and the long-term relationship developed with many portfolio managers inside and outside of our company. This expertise is fundamental to conscientiously managing the EUR 33 billion in assets under management that our clients entrust to us. 

One of our biggest challenge is to early identify and apply new “secular trends”. Example of those trends in the past are the change from “traditional balanced” to truly “Multi Asset” by adding additional asset classes like liquid alternatives and commodity investments, or the latest secular trend: sustainable investing. While challenging, these trends always provide great opportunities to us, as we can leverage on innovations of our own house, and thanks to our open-architecture manager selection approach also through innovation provided by the more than 300 external asset managers we collaborate with. 

How is your fund selection process? What are the key factors that make you want to have a certain investment fund in your portfolio? What parts of the selection process are more time consuming? 

By gaining a deep understanding of how internal and external managers run their strategies, the team aims to select stable outperformers within each asset class and peer group. When selecting managers, we make use of comprehensive quantitative screenings and perform a qualitative due diligence. The team uses external databases and a proprietary scoring tool for the quantitative screening process. 

The quantitative analysis starts with a clear definition of clusters or peer groups to avoid comparing apples and oranges. We consider various risk, return and risk-adjusted return measures, like downside volatility, information ratio and Jensen’s Alpha to evaluate past performance. The most attractive funds are subject to further investigation. 

For the qualitative due diligence, which is the most time-consuming part of our selection process, the team uses its proprietary MaRS (Manager Research and Selection) database, which facilitates RfP-processes, documentation, and an internal rating process of eligible managers. Criteria we evaluate on investment fund level include for example investment philosophy and process, management team, various operational aspects including costs, risk oversight/ compliance and – increasingly important – sustainability aspects. This evaluation of the selection criteria is done based on RfP information and detailed interviews with the portfolio managers in charge, and the assessment is completed with an internal rating for each fund/manager we invest in. 

Understanding managers and strategies in depth is in our view the best way to ensure that the ideal funds are selected in accordance with the current market assessment and investment strategy.

Do you have any red lines when selecting an investment fund for your portfolio? 

When selecting funds for our multi management products or for our advisory clients, we look for highest quality and attractive return potential. Therefore, we have indeed defined several red lines in our qualitative due diligence process: lack of transparency or information disclosure, lack of experience of the people in charge, lack of plausibility of the investment strategy, insufficient performance and risk management, or operational topics like unfavorable fund size or shortcomings in the order process would refrain us from selecting a fund. Finally, the pricing of a fund can mark a red line if it is not in line with the value proposition of the product. These red lines are systematically flagged in our internal fund rating process.

Which asset classes, sectors, or funds do you think are particularly interesting right now? 

Sustainable investment will remain important going forward, including impact strategies and thematic investments, for example those which are involved in the long-term transition to green energy.

As inflation risks stay elevated, and we believe inflation will last longer than many investors anticipate, we like asset classes that provide some protection, like commodities. We are more careful with respect to traditional fixed income investments.

We are constructive on equity markets but become more careful and selective. While the global economy is set to remain in expansionary territory in 2022, we expect economic growth rates to come down from impressive levels they achieved as economies reopened following the Covid lockdowns. We also see monetary and fiscal tailwinds fading. With this scenario, we expect volatility to be elevated. Flexible and active asset allocation and conscious diversification – for example by adding selected liquid alternatives funds to equity-, fixed income- and commodity funds – remain important.

What is the most exciting thing you have seen in the markets since you started working in the financial sector? 

The technological disruption and speed of digital transformation is for sure one of the most exciting developments, which has enormous effects on our personal lives and the way we communicate and do business. It helps us to collect, digest and process ever growing quantity of information and data, which we need in the financial sector for investment decisions making. Digitalization has also enormously increased the efficiency of order processing. Our investment landscape and the structure of financial markets have evolved accordingly: I witnessed the build-up and bursting of the dot-com-bubble, and two decades later, the list of top 10 global companies in terms of market cap is dominated by tech companies like Apple, Microsoft, Alphabet, or high- tech driven consumer companies like Amazon. Technological disruption is an exciting development, which will continue.

Do you have any advice for anyone wanting to pursue a career in the asset management industry, especially in fund selection? 

Enrich your analytical skills by developing a good balance between openness and curiosity on the one hand, and a healthy level of skepticism on the other hand.  

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