Juerg Sturzenegger, chief executive officer of Fisch Asset Management, talks to Alex Rolandi about the challenges of the pandemic, the pros and cons of being a niche player – and how the remote working phenomenon will aid international growth.
“We are not extremely unhappy if we have volatility,” says Juerg Sturzenegger, chief executive officer of Swiss-based boutique Fisch Asset Management.
For the niche active manager, having market turbulence is an opportunity. “This is what we do, this is asset management. We have to deal with financial markets, and if the road gets bumpy, this is where we should get going,” he tells Funds Europe from his home via Microsoft Teams.
As of March 31 this year, the fund manager had nearly 13 billion Swiss francs (€11.8 billion) in assets under management (AuM), following inflows which came close to 800 million Swiss francs in the first quarter.
Adapting quickly to working remotely in the new paradigm paid off. During the pandemic, when volatility was at its height, the convertibles market remained a key area of strength where the firm managed to achieve strong returns. Notably, its Convertible Global Dynamic strategy returned more than 30% over the course of last year.
Sturzenegger calls Fisch AM, a niche player in the market, a “special animal”. He has been sole CEO since the surprise departure of co-CEO Philipp Good in December 2019.
“As always, corporations have a certain lifecycle, and here the founders and the board had to make a decision that it’s now time to take one major step forward. We would like to grow. Growth means success,” says Sturzenegger.
“We need to be a certain size to be recognised in the market, so growth is the way we’d like to go, and with growth comes changes.”
His former colleague, he says, “did a great job, but he wanted to go in a different direction.
“From a company perspective, it’s more about having a stable structure than one single person. We want to establish many steady pillars that we are then able to build on.”
Cross-border hurdles
Fisch AM already has a well-established footprint in Europe’s German-speaking regions. When it comes to marketing products elsewhere, it’s a challenge to expand into other countries from Switzerland, says Sturzenegger. There are cross-border hurdles to contend with.
“We have to find a way – we cannot just develop a marketing plan, we have to find different ways of channelling our marketing, be it through third-p
arty marketing, platforms, distribution platforms, collaboration, partners which are located in the respective country. That’s quite a complex task.”
As part of the firm’s growth strategy, the fund manager continues to find ways to develop these channels. “You have to find the opportunities, and then you have to implement them,” its chief executive says.
“With asset management, it’s always the balance of art and science, which means it’s the balance of people and systems,” he adds.
According to Sturzenegger, the fight for talent is still there – that hasn’t changed. “Obviously, if you’re a niche player, then you depend much more on having the right people and right experts.”
There are pros and cons to being a niche player, says Sturzenegger. On the one hand, Fisch AM commands a certain credibility for being focused, particularly when it comes to the convertible bonds space. “But when it comes to other products, things are different.”
He adds: “In emerging markets, for example, the competition is more intense – we’re competing with the large players. And, of course, it’s much more difficult when it comes to markets such as corporate bonds.”
Nevertheless, he says it’s been an exceptional year in many ways. In February, the firm launched a new convertible bond fund, while in May it rolled out a corporate bond fund with a focus on investment grade names. During the course of 2020, the fund manager achieved its growth target and reported a 10% increase in AuM, despite Covid-19. That growth continued into 2021.
Where next?
Following the success of its flexible working arrangements during the pandemic, the niche manager is eyeing up expansion plans overseas, looking to hire staff who will work from abroad in emerging market locations such as Asia.
Pre-Covid, this would never have been the case, says Sturzenegger. “We never thought about that, we always thought that people had to move to Zurich.
“But you can really profit from having someone in Latin America or Asia, covering the markets from there, and working remotely as a virtual team.”
As always, technology is the enabler. “Our traders can sit anywhere, for example in an airport, and trade, and this flexibility helps a lot.”
Looking forward, the firm will adopt a more flexible working approach and allow employees to continue working from home for one or two days a week post-Covid. Fisch AM’s previous investment in technology enabled a smooth transition when the pandemic hit.
Sturzenegger highlights how Covid has accelerated the asset management industry’s move to adopt technology in the working environment and develop how it interacts with clients.
“The pandemic has led to a bit more visibility: who are the winners and who are the losers,” he says. If firms aren’t able to keep up, they will get left behind – “but that’s the nature of the business again”.
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