20 Oct 2020

Adapting to Changing Times: Lion Global Investors Builds Curated Portfolios Capability

  • Proprietary investment research and insights across asset classes and strategies, increasing the probability of outperformance
  • Comprehensive manager research and selecting managers that have outperformed by skill rather than luck
  • Open architecture and access to Best-in-Class investment capability
  • Disciplined risk management, portfolio monitoring and rebalancing
  • Well-diversified portfolios and solutions

SINGAPORE, 20 October 2020 – Lion Global Investors (LGI), one of the leading asset management companies in Southeast Asia announces that the firm has set up a Curated Portfolios Team (CPT) to provide retail investors with access to ”private banking” solutions while taking care of their needs and demands across the entire investment value chain.

Democratising Premium Portfolios Through Digital Partners

This is in response to the disruption of the Asset Management Industry (AMCs) where the big has become bigger. These big AMCs have the economy of scale to deliver products cheaply and efficiently, and ultimately become oligopolies and dominate the rest. In response to this phenomenon, LGI has strategically decided to offer a portfolio of funds as one of its offerings.

By so doing, LGI is providing access to “private banking” investment solutions to the mass affluent and retail sectors. Curated Portfolios, which involves asset allocation, active fund selection, portfolio monitoring and rebalancing, were previously available only to high-net-worth clients. Access to such solutions will be delivered in partnership with and through digital players in the market.

Data Driven Insights to Improve Investment Decisions

In the manager research and due diligence phase of our investment process, idea generation typically begins with broad sweeps of various fund managers/fund databases across investment strategies and asset classes. Where we begin to differentiate ourselves is at the secondary stage of our research process. During this stage, we take a deeper dive into understanding a fund manager’s decision and portfolio contruction/fund which has caught our attention. Here, we are guided by our philosophy that, as attractive as historical performance may be, such top-line observation can mask the difference between skill and luck. And this is why we partner Inalytics in our fund manager due diligence work.

Inalytics differentiates itself from other investment tools by using a proprietary approach - analysing a fund manager’s high frequency decisions, particularly in the areas of research and portfolio construction. The Inalytics tool is able to provide us with insights into the following key factors:

  • Initial “buys”, that is, the first time the fund manager introduces a stock to the portfolio: this first buy must result in good outperformance otherwise the manager’s research capabilities should be called into question;
  • Position sizing: the existence of a position must bring about tangible effects to the portfolio; and
  • Alpha decay and the discipline to run winners and cut losers: many managers overstay their welcome as they keep adding to their positions, i.e., they fall in love with their positions and fail to get out once enough money has been made.

”With Inalytics, we are better equipped to establish the link between process and performance, a link which is often ignored by just focusing on performance numbers. And having a good grasp of a fund manager’s process-performance link will help us figure out whether good performance is due to skill or luck. Armed with this rigour, it will give LGI a competitive advantage in curating a portfolio of funds for our clients. ” said Gerard Lee, CEO of Lion Global Investors.

“I am delighted that LGI has decided to use our analysis of investment skill to build their curated portfolios. The service is used by asset owners and fund managers in 10 countries and LGI will be the first fund house to collaborate with Inalytics in Singapore.” Rick Di Mascio, CEO and Founder of Inalytics, said.

Inalytics brings evidence to the due diligence process by analysing the critical decisions that generate alpha, which are;

  • A research process that investigates ideas and adds the best of them to the portfolio.
  • The ability to back the research with conviction through sizing decisions, so that it has a real impact on performance.
  • The self-discipline to not dissipate the alpha generated through research and sizing through poor selling decisions.
  • Ensuring that the long-term holdings do not suffer from Alpha decay or in plain terms ‘get passed their sell by date’.

About Lion Global Investors Limited

Lion Global Investors Limited, incorporated in the Republic of Singapore (Co Reg No. 198601745D) is a member of the Oversea-Chinese Banking Corporation Limited (OCBC) Group, and one of the leading asset management companies in Southeast Asia. Established since 1986, it is uniquely positioned to provide Asian equities andfixed income strategies and funds to both institutional and retail investors.
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