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Oct 04, 2022

Fund manager profile: Roberto Magnatantini of Decalia

Roberto Magnatantini explains to Gill Newton why all his holdings are exposed to the aging population theme, how ESG is integrated into investment approaches and which companies have ‘outstanding’ IR

Founded in 2014 and headquartered in Geneva, Decalia is a fast-growing independent investment management company, managing private and institutional assets. As of December 2021, it has CHF4.9 bn ($5.1 bn) in assets under management and more than 70 employees focusing on three activities: wealth management, asset management and private markets.

Roberto Magnatantini joined Decalia in 2020. He is lead portfolio manager of the Decalia Silver Generation and Decalia Eternity funds. Before joining the firm, he was head of global equities at Syz Asset Management, where he spent 12 years managing two strategies for the Oyster funds franchise. Before that, he worked for four years at Lombard Odier and four years at HSBC where he managed equity funds. He is a certified financial analyst and chartered market technician and holds an ESG certification from PRI.

Roberto Magnatantini, Decalia

How does Decalia fit into the Geneva-based investment community?

Decalia is ranked among the Top 50 independent asset managers in Switzerland by Citywire. The firm is also a board member of the Alliance of Swiss Wealth Managers, which unifies the largest wealth managers in Switzerland.

You are a team of 12 fund managers – do you split sectors and geographies?

At Decalia, all portfolio managers have a double expertise: investment manager and equity analyst. We are all seasoned fund managers so know the sectors and regions we cover but in addition, for example, I tend to focus on healthcare and consumer. We try to meet all companies in which we are invested, and then all investment ideas are discussed by the entire team during the weekly team meeting or on a less formal basis if needed.

For example, if I met Danaher, I would provide my colleagues with feedback after the meeting.

How is ESG integrated into your investment approach?

The investment team is supported by three ESG analysts with a sector focus for each analyst: industrials & clean tech, healthcare and consumer. In terms of external providers, we mostly use MSCI. If MSCI ranks a company CCC, it is ‘untouchable’. But we regularly question MSCI ratings if we think the rating does not entirely reflect the company’s credentials. Mid-caps, for example, are often less transparent in terms of ESG and this can negatively affect their ranking.

Do you vote your proxy for US and European stocks?

We work with ISS to outsource the first step and then our ESG analysts review the ISS proposal. In most cases, we align with ISS.

What screens do you use, given that you look for quality growth?

We believe the proof is in the pudding, so we like to see that over the long term – 10 years – a company has generated value. UnitedHealth, which we’ve held for a long time, is a good example as the stock price has outperformed with low volatility, reflecting its strong compounding characteristics.

We also focus on return on capital employed – how a company has invested and the returns it has provided. A caveat is that companies with a moat that are high quality and have a competitive advantage can be pricey. So we also look for deep value and recovery plays (or fallen angels) – we look for catalysts for the companies such as margin improvement and/or recovering market share, for example.

Any sectors you can’t invest in?

Yes: tobacco, nuclear, controversial weapons – across all funds. Gambling for some funds, too. Companies with a CCC MSCI ESG rating. My fund is focused on the demographics of an aging population, which not only addresses the increasing consumption of older people but also fighting aging itself, so companies that have nothing to do with my theme are off limits. To give an example, even if I were convinced that Snap might be a good stock, I would not invest in order to maintain my thematic purity.

This is an extract of an article that was published in the Fall 2022 issue of IR Magazine. Click here to read the full article.

 

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Gill Newton

Gill Newton

Gill Newton of Phoenix IR
Partner at Phoenix-IR