Its first venture is a long-only, active, systematic stock-picking strategy derived from QuantCube’s big data analytics, and which is managed by UBP’s cross assets solutions team in Geneva and is available to accredited investors in Singapore.
“The stock selection process is based on bottom-up leading indicators, which are derived from alternative data sources. These are vast, non-structured, real-time, public datasets, which require technology to be of use to the asset manager,” a Tommaso Sanzin, managing director, alternative investments & cross-asset solutions, UBP told FSA.
QuantCube Technology is a fintech company headquartered in Paris which specialises in artificial intelligence (AI) and alternative data analytics for economic intelligence. It uses AI to process unstructured data to provide macroeconomic and financial predictions, and other strategic information to companies and governments.
“Specific expertise and technology are key to structuring and extracting value from alternative data sources,” said Sanzin.
The technology provides robust, medium-term, single-stock and sector sentiment signals, with intuitive and fundamental rationale, according to the spokeswoman. Examples of data sources are social media, financial blogs and other web-scraped business information such as job openings.
Actual portfolio construction is quantitative, risk and cost-aware and primarily predicated on diversification, resulting in a very active high conviction portfolio of 30–50 US large-capitalisation positions with a medium-term holding period.
UBP, which has CHF137.2bn ($149bn) in AUM as at 30 June 2020, is the fund manager and has both fiduciary duty as well as risk and execution oversight. However, the investment process is entirely systematic in order to be agnostic of any investment bias or style.
“Although the technology has a global reach, for now it is mostly applied on the US, which is the most liquid equity market, where it has the longest track record,” said Sanzin.
Separately, UBP earlier this month advised its clients to view the pandemic and lockdown of the global economy in the first half of 2020 as a catalyst, first for re-anchoring portfolios in the face of new risks, and then for focusing on the opportunities the new era will offer.
Norman Villamin, CIO wealth management and head of asset allocation at UBP, recommended ditching G3 government bonds, and switch into US growth stocks (especially technology companies) and credit, as well as using option strategies and gold to provide ballast to portfolios.
Asia expansion
The Swiss private bank has also been extending its footprint in Asia. It gained a Qualified Domestic Limited Partnership licence from the Asset Management Association of China in May, which will allow it to raise money in China, within assigned quotas, to invest in offshore traditional and alternative investments, including overseas equity and bond funds, hedge funds and property.
Last year, UBP set up an asset management unit in Taiwan following the award of a Securities Investment Consulting Enterprises business license in late 2018. The licence enables it to distribute its stable of funds registered in Taiwan directly to domestic investors as a master agent, by-passing local banks and other financial institutions.
Also in 2019, the Monetary Authority of Singapore upgraded UBP’s licence to encompass wholesale banking, which allows the firm to offer Singapore dollar services, including deposits and loans, and provide a wider set of investment products to domestic clients in Singapore.
