Klaus Ingemann of AllianceBernstein Copenhagen on investment strategies, Mifid II and ESG
AllianceBernstein (AB) worldwide has $779 bn in assets under management, 51 locations and 4,050 employees, including 352 investment professionals. The Copenhagen office has assets under management of $21 bn.
AB Copenhagen was founded in 2014 when CPH Capital, founded in 2010, was acquired by AB. The Copenhagen-based investment team manages its investments autonomously but has access to AB’s global reach, managing equity portfolios for both retail and institutional clients from around the world.
Klaus Ingemann, co-CIO, joined AB in 2014 as portfolio manager and senior research analyst and was promoted to co-chief investment officer of global core equity in 2018. He served as an executive member of the investment board at CPH Capital, which he co-founded in 2011. Before that, he was chief portfolio manager and a member of the investment board at BankInvest. He worked as a corporate finance adviser for Carnegie Bank and spent four years in the finance department at Tele Danmark. He holds a BSc in business administration and an MSc in finance and accounting from the Copenhagen Business School and is a CFA charterholder.
How many staff do you have in the AB Copenhagen office and what are your roles?
There are eight of us – seven are fundamental analysts and one is a quant analyst. We manage one portfolio and are fully invested in holding 60 stocks, style-neutral – so not value, growth or quality. We are well diversified across geographies including emerging markets and industries.
The list of companies we hold is very different from our benchmark. The 60 stocks are benchmark-agnostic but the portfolio itself is a very risk-neutral strategy, and the fund behaves like our benchmarks (MSCI All Country World Index and MSCI World). Our beta is 1.0.
We focus on companies with exposure to growth, sound business strategies and value-creative characteristics. We like companies that grow and pay dividends at the same time, but we don’t require a dividend so we favor companies that can grow and create positive cash flow at the same time. Having a long-term license to operate takes us into ESG territory. We want to invest when a stock is cheap, and we use free cash flow-based valuation models.
The portfolio should grow faster and be of higher quality than the market, have a cleaner ESG profile and be cheaper. That’s the balance we try to strike. We do use some quant tools, but we use a bottom-up qualitative approach to find opportunities.
One other thing to mention is that we’ve been doing it a long time – 20 years in my case. The average tenure of the team is 15 years so it’s an extremely stable group.
How do you work with other AB offices? Do you share meetings and investment ideas?
AB has a siloed approach to investment research. We can buy a stock when others sell and there is no global buy list. But we do share meetings so if I take a meeting, my colleagues can dial in, and we will share viewpoints afterwards.
On ESG, though, we collaborate a lot more. We share research and conclusions and we push companies with our combined voting power, rather than each team voting individually.
This is an extract of a feature from the summer 2022 issue of IR Magazine. Click here to read the full article.