Clément Schoeb, a founder of an independent asset manager Schoeb Frôté, speaks to Citywire Switzerland in our latest Q&A session.
Schoeb Frôté fact file:
- Date opened: 2013
- Assets under management: CHF 400 million
- Size of team: 6
- Asset allocation pick: European equities
- Cash position (balanced portfolio): 15-20%
- Fund picks: GAM Star Credit Opportunities, loomis Sayles Multisector Income
Why are you based in Neuchâtel?
It was important to find a place with few competitors but a good client base. In Neuchâtel, Jura and Bern there are many wealthy individuals from the industrial sector. They are not making headlines but still need someone to manage their money.
What is the biggest challenge of being based there?
With modern technology, if you want to be in touch with an important broker you don’t need to be in physical contact with them – you can email and phone.
Who is your average client?
Currently 99% of our clients are Swiss nationals and 80% of them have links to the industrial sector. They are people who are still working and are well known in their field.
Which investments do your clients like/avoid?
As private entrepreneurs our clients like everything connected to private equities, which is a challenge for us. They are not very comfortable with the stock market and prefer to invest directly, because they know the names and understand their balance sheets. They don’t like funds, especially hedge funds, because they see them as a melting pot with a lot of components.
Do you invest in funds?
We use funds for really specific investments only, usually where it is difficult to gain direct exposure, for example US small caps and emerging markets. We invest directly in names including duty-free company Dufry, industrial bakery Aryzta and Austrian mid-cap technology company and sensor specialist AMF.
What distinguishes you from the competition?
We are a long-term investment company with a strong focus on direct-line investing. We also provide a full spectrum of services to clients, including legal advice, accounting and wealth management, leveraging the expertise of partner companies Frôté & Partner, F&P Services and Capitalium Advisors.
Are you bullish or bearish at the moment?
For the first time in a long while we are bullish on the Swiss stock market, because firms did a good job adjusting to the strong Swiss franc. We are more bearish on the US equity market based on political reasons and valuations. In Europe we are more bullish, but we have been keeping a close eye on the French election.
How do you allocate to fixed income?
We tend to avoid Swiss franc bonds. We have gone back into US dollar-denominated investment grade bonds. We are cautious on US high yield and in Europe we invest in names such as logistics company Bollore, which yields 2%, and avoid high yield.
What is your current portfolio breakdown?
In the balanced portfolio we are slightly overweight equities, with an exposure of 45%. We also allocate 15% to defensive structured products with high barriers. Between 15% and 20% of the portfolio is cash holdings.
If you were in Neuchâtel on a business trip for 24 hours, where would you go?
The restaurant Le Bocca in St Blaise is a famous place with almost 30 years of history and amazing food and wine.
This article originally appeared in the May 2017 edition of Citywire Switzerland magazine.