Thierry Guérillot began his career in 1983 as an auditor with the firm Guérard Delbor Vallas. In 1989, he joined UFF as head of the UCITS back and middle office for its management company Ufigest, of which he became Chairman in 1997. At the same time, he was responsible for monitoring and developing the UCITS range. From 2004, he also became Head of Asset Allocation and then Fund of Funds management for several sub-funds of a Luxembourg SICAV, and in 2008, he took over responsibility for the entire Financial Offer.
In 2014, he joined Myria AM as Head of Fund Selection where he is also in charge of proprietary quantitative models and the organisation of tenders leading to the creation of white label funds on behalf of UFF with delegated financial management. Since 2018, he has been in charge of developing the hosting business.
What do you think leads to success in the business industry? Can you give some unique advice for people starting a career in asset management?
Be curious. But don’t give in to the sirens of fashion. You don’t build up an asset allocation on fragile foundations based on speculation. Beware of volatility. A bad investment timing is clue. Don’t invest in high risk funds you won’t be able to bear if the going gets tough.
My second advice is not to be lured by past performances. We don’t drive a car constantly having our eyes on the rearview mirror,.. Finally, understand what you get ! Bear in mind what could be wrong and have a clear view on what leads performance and risks !
What is the greatest challenge as a fund selector?
When you build a house, you assemble bricks that may be of different size with specific purposes. When building a portfolio, it is quite the same. You select a fund that will complete a structure, harmoniously if you can. That’s to say that as a fund selector, you have to think pocket by pocket (US equities, European equities, Emerging equities, DM Govies, DM Corporate IG Bonds…) and inside each one, have a diversity of alpha. Actually, you have to think as a portfolio manager and rate correlations inside your construction.
What aspects do you consider most important when selecting a fund for a portfolio?
Consistency and transparency. We at Myria have a global approach by risk factors when managing a portfolio. It is far easier for us to follow and compare the risk/return of a fund with the benchmark linked with that risk factor. That is why we need a good transparency of these ones through specific monthly reportings for each fund we select.
What kind of adjustments did you make in the portfolios that you manage, in terms of hedging or risk management?
Once you know the risk factors of a fund and by aggregation of the portfolio we manage, we can easily see the main differences we may have with our benchmark and adjust our risks consequently. Thus, from time to time, we may complete our fund selection by investment in derivatives or hedging measures. For example, we used derivatives to invest in the financial sector, as growth funds in our selection are structurally underweighted in that field.
How do you integrate quantitative investment strategies into your fund selection process?
Quantitative strategies are a possibility among others when building up our model portfolio on a specific asset such as European equities for example. But if it is a possibility, it is not a prerequisite. We have several quantitative funds in our short list, such as Digital-Stars Europe ex UK, SSGA Europe Managed Volatility Equity and Uni-Global Equities Europe. Considering their tracking-error and main risk factor, we may use them when appropriate to mitigate our risks and alphas.