The increasing challenge facing the pension fund industry is the hunt for yield for its pensioners amid an environment of low interest rates. This is interestingly a similar challenge faced by asset managers who are continuously asked to deliver higher than expected returns while limiting the downside risk of the portfolios they manage.
At AXYS Investment Partners, we encourage having portfolios which contain alternative products as an asset class. We believe pension funds facing these challenges may not achieve their required return targets by keeping a traditional mix of Fixed Income and Equities.
Krishen Patten (left): CFA, FRM, Chief Risk Officer and Kugan Parapen (right), Chief Economist – AXYS Investment Partners
Given the long-term horizon generally available to pension funds, they should seek to enhance returns by adding illiquid and private investments to their portfolios while obviously maintaining an adequate level of diversification.
Additionally, African pension funds should tap into their own markets within Africa. African markets are becoming more sophisticated but international asset managers are taking time to look at the available opportunities. We believe that with proper due diligence there are excellent opportunities available to pension funds to achieve the required risk-adjusted returns.
Corporate issuances in Africa also offer good investment opportunities. Although a corporate issue cannot have a higher rating than its own country of domicile, it is sometimes the case that these companies have a pan-African or even global presence, making them diversified and less risky than may be portrayed by their investment rating. These are investment opportunities that should not be ignored in the hunt for yield.
"Given the long-term horizon generally available to pension funds, they
should seek to enhance returns by adding illiquid and private investments
to their portfolios while obviously maintaining an adequate level of diversification.
AXYS Investment Partners provides such advice to our institutional clients. We offer portfolio management services and have a team of professionals with a diversified and international experience in these fields. We collaborate with top-tier international global financial institutions and we have built a close relationship with markets leaders in their respective fields.
This blend of expertise enables us to provide our client base with innovative products in an open architectural structure. We have developed significant savoir-faire in alternative investments, targeting unsophisticated markets.
Through a methodical and focused approach, we deliver independent, tailor-made and innovative financial solutions that make a difference in shaping our clients’ portfolios and achieving their long-term investment goals.
There are a number of challenges facing the pension fund industry. AXYS Investment Partners strongly believes that investment opportunities in Africa could hold the key to enhancing the risk-adjusted returns required by the industry.
Kugan Parapen: Chief Economist – AXYS Investment Partners.Kugan holds a BSc (Hons.) in Economics from the University of Warwick in the UK and has completed his CFA Level III examinations. Kugan started his career in 2008 as a European interest rate derivatives trader at GHF Futures Ltd, an international proprietary trading company. He moved to MCB Capital Markets in 2011 and managed the CIS Bond and Currency Fund. He joined AXYS Investment Partners in 2014 as a Fund Manager focused on Fixed Income. Kugan is a member of the Investment Committee and Risk Management Committee.
Krishen Patten: CFA, FRM, Chief Risk Officer – AXYS Investment Partners.Krishen holds a First Class Honours degree in Actuarial Science from the London School of Economics & Political Science (LSE). He started his career in the Market Risk Management & Analysis division at Goldman Sachs in London in 2006 where he risk managed multiple asset classes for trading desks before being promoted to Executive Director/VP. He then joined LCH.Clearnet, a leading European clearing house, as a Fixed Income Risk Manager in London in 2012. He subsequently relocated to Abu Dhabi (UAE) in 2013 to work as a Senior Risk Specialist for the Abu Dhabi Investment Council, a multi-billion dollar sovereign wealth fund of the Government of Abu Dhabi. He joined AXYS Investment Partners in 2016. He is a member of both the Investment Committee and Risk Management Committee.
AXYS Investment Partners Ltd is licensed by the Financial Services Commission (FSC) of Mauritius to act as an Investment Advisor (unrestricted), CIS Manager and Distributor of Financial Products.
