Investment process

Disciplined, transparent three-step process using active, bottom-up approach:

• Idea generation: Best company ideas derive from three sources of insight integrated into a proprietary ranking methodology.

Within BNP PAM’s research universe, each source provides an “Alpha”, the common expression of a company’s attractiveness as an investment prospect. The three sources are fundamental analysis through calculating a target price through three valuation models and company visits; Quantitative analysis, ranking companies by “scoring” a combination of growth, value, quality and momentum indicators; Portfolio managers’ expertise, studying closely each company to ensure it meets required qualitative criteria (strength of management, visibility of earnings forecasts, sustainable cash flow generation to finance growth) and assess the fundamental and quant alphas. The amalgamation of these various alphas generates a final ranking.

• Model portfolio construction. Based on the total alpha, model portfolio is built through an optimiser model respecting guidelines and risk management principles.

• Client portfolio construction. Model portfolio fine-tuned by portfolio manager to emphasise his stock convictions and to respect client guidelines.

The portfolio manager is ultimately responsible for the product and has the final decision for stock and sector positions.

Team composition

BNP PAM’s Pan-European equity portfolios are managed on a collective basis by a team including five portfolio managers specialised by country, 10 buy-side analysts plus 3 Sustainability Research analysts specialised by sector and five quant analysts.

European equities are co-ordinated by Olivier Rudigoz, who joined in 2003 from Merrill Lynch and has 15 years’ experience. The senior team comprises Catherine Guinefort, Jacqueline Vidé, Damien Kohler and Eric Borremans. The latter joined BNP PAM in 2002 as head of social responsibility and sustainable development, with 12 years’ experience in the area.

BNP PAM promotes a core growth-oriented style, selecting quality companies with a steady growth profile. The fundamental aspects of its investment process have remained unchanged. Improvements have been focused on quantitative discipline, model portfolio, risk control and technology.

Guinefort joined BNP PAM in 1988

Borremans: head of social responsibility