The Luxembourg-headquartered Quintet Private Bank on 16 April 2024 announced the launch of an actively managed US equity fund, the first in a series of multi-manager Ucits funds that has been designed together with the global asset manager Blackrock as part of an .

“The heart of this partnership allows Quintet to deliver to our clients superior investment outcomes and experience,” , group head of investment & client solutions at Quintet Private Bank, explained to Delano during an interview ahead of the announcement. “We combine the deep local knowledge of Quintet’s buy-and-service teams with the excellence, sophistication and product reach of the world's largest asset manager.”

Blackrock has worked “very closely with Quintet’s investment team to co-design and co-create a range of actively managed multi-manager funds that are specifically tailored to Quintet’s needs,” added Bettina Mazzocchi, co-head of wealth solutions EMEA, multi-asset strategies & solutions at Blackrock. “They have been crafted to reflect Quintet’s investment , guidelines, the sustainable investment policy, and they are aiming to deliver strategic exposure in fixed income and equities.”

The newly launched fund--QMM Actively Managed US Equity--is the first in a series, with others expected later this quarter. These are all “multi-manager” funds, which means “we’re blending a selection of third-party equity strategies into one fund,” said Mazzocchi. It’s the first part of a “holistic solution that we are developing with Quintet.”

“Completely customised”

The partnership between the private bank and asset manager is “unique because it addresses Quintet’s specific needs and objectives,” Mazzocchi continued. “No two solutions that Blackrock creates are the same, because it’s completely customised to each client’s need.”

Moreover, from a “qualitative view,” the collaboration is special as it “brings together capabilities from across the range of Blackrock’s services--think about investment, advisory, technology--and it brings all this together in a single service model to deliver better outcomes for Quintet’s clients,” she said. “It is especially forward thinking in a rapidly--and, I would say, profoundly--transforming wealth industry.”

Integrates into Quintet’s own investment process

Quintet has its own investment team of around 50 specialists, added , head of portfolio management at the private bank. “This partnership--through technology, capabilities, solutions and advice--really segues nicely into the existing Quintet investment process. From our perspective on portfolio management, it really forms a tangible extension that builds upon the foundation we have internally.”

It’s useful from the start of the process (such as with setting up portfolio structures) to the middle (looking at market intelligence, for instance) to the end (where Quintet gets access to specialist capabilities), said Hastings. But the “cherry on the cake,” he added, “is the integration of Aladdin.”

A platform to “provide clarity” on investment decisions

So what is this magical Aladdin platform?

“Aladdin is originally Blackrock’s own proprietary platform that has been made available to our clients,” Mazzocchi explained. “It’s a platform that integrates risks, investment and operational process with the objective to inform and provide clarity for people making the investment decisions.” It “unifies the investment management process,” providing a “common language” across a variety of dimensions, whether it’s across public and private markets, different departments with a firm, or various investment teams.

The platform “serves more than 1,000 clients” worldwide, she noted, and helps them achieve three things: “understand and manage risk; operate more efficiently; and make more informed investment decisions.”

“Integrating Aladdin is the key pillar of technology that we really have appreciated from the partnership,” said Quintet’s Hastings. “It’s the most tangible and visible part of the technology, sort of evolution, we’ve gained through the partnership. It’s given us significant modernisation of the investment process, and ultimately, it leads to better constructing portfolios.”

That’s thanks to “improved transparency on how positions in the portfolios interact with each other,” he said, as well as a “clearer and faster identification of the risks--both intended and unintended.” It also provides detailed performance and risk reporting, which “gives us a better understanding of the underlying drivers of performance and the sources of risks that are constantly--in live time--impacting the portfolio.”

All of that sums up to a “more consistent and stable delivery of the client investment performance,” argued Hastings.

Sustainability integrated throughout

Coming back to the newly launched equity fund, Hastings explained that it’s classified as an article 8 fund under the Sustainable Finance Disclosure Regulation. Article 8 funds promote environmental and/or social characteristics; article 9 funds have a sustainable investment objective; while article 6 funds do not have any particular ESG criteria.

Around 85% of the fund’s content will be aligned with environmental and social characteristics, “focusing essentially on companies that mitigate climate change and social impacts on their businesses,” said Hastings. “Within that 85%, we’ve committed to also holding at least 20% in what we call ‘sustainable companies,’ although in reality, the QMM US equity strategy will be closer to 40% in fully sustainable investments within that 85%.” These companies are not “only” working on mitigating climate change, but “have a net positive impact on both the planet and people.”

The structure of the portfolio also takes into account specific ESG exclusions and limits exposure to certain areas, such as the oil and gas sectors, for instance, he noted. “Quintet integrates sustainable factors and considerations across our discretionary portfolio management platform.”

Three more funds coming soon

The US equity fund is the first of a series, and “we plan to launch three more differentiated solutions for our clients later this quarter,” said Quintet’s Crawford. “All are actively managed, open architecture, best in class and competitively priced, with the goal for each of those funds to deliver alpha directly into our portfolios. Those three will focus on global high-yield bonds, European equities and global investment-grade bonds.”

“We also have future plans to expand the QMM actively managed fund range later in the year,” he added, and “we’re working with Blackrock on further developments to our product offering across passive income and impact-based solutions.”

“It’s an extremely close collaboration,” Crawford concluded, referring to the partnership between the private bank and the asset manager. “Our investment teams are linked across Europe, speaking multiple times together every day in order to meet client needs.” The spirit of “co-creation” and “co-design” is “very important to the partnership.”

“But the real fundamental element of this partnership is being able to leverage the capabilities of Blackrock to allow Quintet to spend more time with clients,” said Crawford, such as taking time to understand their needs or financial objectives. The bank’s capabilities are “enhanced” by Blackrock’s “power” as the world’s largest asset manager, “and we believe that combination of personalised service and offering quality positions Quintet amongst the best in our industry.”