HEAD-TO-HEAD: Axa versus Fidelity

123456

Manager review 

The Axa fund is led by Frédérick Tempel, who has been involved with the product since 2006 but formally became its manager in 2008, according to Van Genderen. Tempel joined the firm in 1996 and became responsible for leading the listed real estate team in 2003.

Tempel leads a dedicated real estate team of three other managers. Salma Baho, who covers Asia, co-manages the fund. Besides the global real estate product, the whole team manages a European-focused portfolio.

Tempel’s team also has input from the firm’s other real estate investment teams, including one group covering commercial real estate financing and another responsible for the private real estate market.

“The team behind the fund is strong, experienced and stable, and the other real estate teams can add additional insight. It is a pretty strong line-up for a global real estate fund,” Van Genderen said.

Turning to the Fidelity Fund, he said that the product is solely managed by Dirk Philippa, who has been leading the portfolio since 2013.

Although this is Philippa’s first stint as a portfolio manager, he already has a good track record of managing the fund and has been covering the real estate market since 1997.

“He has devoted his entire career to the property sector,” he said.

Supporting Philippa is an 11-member global real estate securities team, which includes another portfolio manager covering the Asia market and nine analysts.

However, Van Genderen noted that the team has had high turnover since 2016.

He explained that at Fidelity, analysts rotate to cover different sectors. The rotation has caused high turnover within the team covering real estate.

“Although Philippa wants to have a more stable team of analysts, we expect that the turnover will continue, given that the rotational shifts in Fidelity applies to all of its analysts,” he said.

Van Genderen also believes that Philippa’s investment process is not repeatable.

He explained that although Philippa receives recommendations from the team’s analysts, he also provides his own opinion based on their research.

“What you get is that around 50% of the portfolio is positively rated by an analyst, while the remainder is either not covered or has a negative rating by the analyst.

“We think that the structure makes the process less repeatable, and we think that the repeatability can be improved by having more alignment between the research done by the analyst and Philippa’s security selection decisions.”

123456