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Consultancy firm CEO eyes PE and 'beaten up' listed companies

Consultancy firm CEO eyes PE and 'beaten up' listed companies

We have interviewed several investors asking them about the biggest issues they are facing at the moment. Here's what Queisser & CIE's Derek Queisser told us.

Name:
Derek Queisser
Role: Queisser & CIE
Country: Switzerland

In the face of profound public market structural changes, we are undertaking an in-depth review of how to best achieve capital preservation and attractive inflation-adjusted yields for institutional investors over a full investment cycle.

Our approach involves constructing two types of portfolios: one managed for yield, which would traditionally involve liquid financial instruments such as bonds or real estate investments, and another, managed for capital growth, which would traditionally involve investments in private equity, venture capital or hedge funds.

Given today’s market dislocations, we believe the role of certain asset classes may shift or materially evolve within an overall asset allocation process.

"We may have to consider replacing some bond holdings with direct or private equity fund-led industrial and infrastructure assets."

For example, to achieve an attractive inflation-adjusted yield in a low interest rate environment subject to erratic market behaviour, we may have to consider replacing some bond holdings with direct or private equity fund-led industrial and infrastructure assets generating stable cash flow dividends.

Or, on the other hand, to generate medium-term capital appreciation, we may have to consider allocating some risk capital to ‘deep value’ or ad hoc ‘beaten-up’ quoted companies benefiting from longer-term megatrends.

Such non-traditional or counterintuitive asset allocation decisions may become important tools to help meet the investment goals of sophisticated capital owners.

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