CapitalatWork

At CapitalatWork we distinguish between Alpha and Beta investments. “Beta investments” is the term used by many investors for passive investments. Through Beta investments, the investor tries to capture the return of an index at a minimal cost. One of the pitfalls of many indices is that they are based on the price or market value of their constituents. This has given birth to a concept which is called “Fundamental Indexing”.

At the origins of CapitalatWork is the search for Alpha. From the beginning, at CapitalatWork, we have been active “value” investors. Based on a consistent implementation of our valuation methodology (Free cash-flow and enterprise value) we construct our portfolios bottom-up without regard for benchmarks.

Read more about this under Active Asset Management.

Belgium
Laurent Ollinger  T. +32 2 663 78 41
Jurgen Fransen  T. +31 70 750 39 30

The Netherlands
Jurgen Fransen  T. +31 70 750 39 30

Luxembourg
Laurent Ollinger  T. +352 31 41 40 222
David Pawelowski T. +352 31 41 40 216

Switzerland
Olivier Beti T. +41 22 817 11 56

Other regions
Laurent Ollinger  T. +32 2 663 78 41

Our methodology and skills are made available to our institutional investors by means of vehicles that suit their specific needs:

• Institutional Funds : pooled or dedicated
• Dedicated Mandates
• Tailor Made Solutions

As an independent investment manger, CapitalatWork has no obligations towards brokers or other financial institutions.

This allows us to ensure the best execution of trades at the best prices.  We are constantly looking for better ways and channels to execute.  Since we do not charge any additional execution fees, there are no hidden costs reducing portfolio performances.

Contact us

Belgium
Laurent Ollinger  T. +32 2 663 78 41
Jurgen Fransen  T. +31 70 750 39 30

The Netherlands
Jurgen Fransen  T. +31 70 750 39 30

Luxembourg
Laurent Ollinger  T. +352 31 41 40 222
David Pawelowski T. +352 31 41 40 216

Spain
Eric Ollinger  T. +34 91 781 24 12

Switzerland
Anke Pfitzer  T. +41 22 817 11 57

DEALING INSTRUCTIONS

For CapitalatWork Umbrella Fund

For non-Belgian institutional clients (and only if institutionals), please send your instructions to RBC Dexia Investment Services Bank :
  T. +352 26 05 97 30
  F. +352 24 60 95 00

For Belgian institutional clients our “Front Office” is at your disposal:
Fabrice Steyaert  T. +32 2 663 48 85 – F. +32 2 673 51 70
Christophe Dufrasne  T. +32 2 663 48 83 – F. +32 2 673 51 70
Hilde Godefroid  T. +32 2 663 78 43 – F. +32 2 673 51 70

For CapitalatWork Alternative Fund

Institutional Funds

We offer a full range of institutional funds, based on our proprietary investment philosophy and methodology, to our customers. Our specialists cover the full spectrum of traditional asset classes, as well as some more unique investment classes:

• Equity Funds
• Bond Funds
• Asset Allocation Funds
• Fundamental Eurostocks Index

These funds are also available under the customer’s proprietary brand.

Dedicated Mandates

The CapitalatWork philosophy and methodology are available through Separate Account Management.

These accounts allow clients to set specific guidelines or restrictions, thus allowing for a truly customized approach. The client has the flexibility to choose his own custodial bank for safe keeping and record keeping, depending on the size of the mandate.

Tailor Made Solutions

At CapitalatWork we partner with our clients to come up with solutions that are tailored for their unique needs. These solutions can range from client specific portfolio construction to made-to-measure performance reporting.

Examples of solutions:

• risk management solutions using CPPI or Dynamic Portfolio Insurance techniques
• performance attribution reports
• non-standard portfolio analytics

For more information, please contact our Institutional Business Development team.

CapitalatWork is driven by the quest for value and is an active asset manager. When looking for value, we do not take into account any benchmark constraints. If we find true value, we extract it, independent of where we find it. Portfolios are then constructed using specific diversification guidelines and risk is measured for each individual investment.

Specifically for our fixed income funds we implement a target interest rate risk / absolute return strategy, that allows our customers to integrate the funds in their overall asset and liability models. In addition, this approach allows CapitalatWork to focus on the search for value.

For those investors that cannot have their portfolios managed in an active manner, we implement a Fundamental Indexing approach, immunizing some of the issues that are typical for regular index strategies.

To serve our clients in the most optimal manner, we assign two points of contact. This enables us to respond directly to the client’s needs and questions, depending on the subject matter expertise required.

We adhere to “best execution” principles when executing trades for our client portfolios and our funds. We are constantly looking for better ways to execute transactions.  We assess counterparties, electronic execution platforms and order management channels on a continuous basis.

Benchmarking is used primarily as a tool for performance measurement. Various statistical methods have been created in the search for constantly improving performance measurement. It is a clear but simple method of describing how a manager is doing. It is also very much backward looking.

But, what exactly are you measuring? A benchmark, public or not, limits a manager’s security selection to the benchmark. It discourages the manager from taking a lot of excursions outside the benchmark. As a result, benchmarking gives you little or no information on a manager’s skill.

We at CapitalatWork refuse to be locked up in a style box. We want to be free of benchmark-constraints. We have developed an investment philosophy that puts us in the camp of “Value Investing”. Therefore, we feel that we should not be constrained to a specific index. Value can be found in any corner of the market.  And these corners continuously change.

Benchmarking also has uses in risk control. Once again, various statistical methods have been developed to scrutinize the level of risk taken against a specified benchmark. We believe that these statistical methods fail to fully reflect the risks taken. We want to control the risk in our portfolios, investment by investment, each investment separately. We want to understand the fundamental risks inherent in each and every one of our investments. We feel this offers us better risk control than relying on statistical data and filling a portfolio with positions just because they are in a benchmark. 

Fundamental indexing is a new weighting format that suggests to weight stocks in an index according to their fundamentals, which are non valuation linked parameters, such as sales, dividends, book value, net income and total employment… This new weighting scheme has been created to avoid faddish overvaluations and fear-driven undervaluations that occur with a market capitalization weighted index. Indeed, while common sense suggests that a portfolio should overweight undervalued stocks and underweight overvalued stocks, a market value weighted index does exactly the opposite by giving larger weights to overvalued stocks and smaller weights to undervalued stocks. Empirical studies have proven that an index weighted by non-valuation linked parameters (fundamentals) is more mean-variance optimal (higher returns with the same risk) than any others.

CapitalatWork, has launched a fund implementing these ideas. This fund is called the “Fundamental Eurostocks Index”. Our fundamental index is constructed on the basis of equities in the Euro zone.

For further information, please contact our Institutional Business Development team.

CapitalatWork has a two pronged approach to client servicing to ensure complete and focused coverage of the client’s needs. Clients are covered by a Client Relationship Manager and a dedicated Portfolio Manager.

The Client Relationship Manager is the first point of contact for the client and ensures the coordination of all non-portfolio related matters. The Client Relationship Manager is available for comprehensive advise on overall investment management solutions and the product range.

The Portfolio Manager is the investment related contact. He is responsible for client-specific portfolio construction based on our disciplined investment process and a well defined mandate. The Portfolio Manager will update the client with respect to portfolio activity and behavior on a regular basis.

We believe that this dual approach is best suited to guarantee optimal client servicing.

Although we do not adhere to benchmark driven investment techniques, this does not mean that we lay all our eggs in one basket or do not measure and monitor portfolio risks.

At CapitalatWork we design and implement portfolio specific diversification guidelines. In addition risk is measured for each individual investment.

CapitalatWork occasionally uses derivatives to reduce and model overall portfolio risk, depending on the investment guidelines for the mandate. Derivatives are also being used to fade in and out of positions, whilst generating extra income for the portfolios. Derivatives are never used to increase overall portfolio risk.

Specific risk management solutions are available to meet particular client needs (see Tailor Made Solutions).

Our absolute return approach

Our goal with our Fixed Income Investments is to generate alpha using various complementary strategies. Our approach to generating this alpha is by investing where we see value, without being constrained by benchmarks. Our benchmark is only used as an intermediary comparative tool. The ultimate goal is to deliver extra return above the nominal risk-free rate and this over a medium-term horizon.

In this respect we use duration not only as an indicator of sensibility to movements in yields. The reason being that it is almost impossible to predict what interest rates will do over a short-term horizon. We prefer to use duration for immunization purposes. It allows us to express a clear-cut view of what our investors can expect over a medium-term horizon, and what the value proposition of our portfolio is today:

If the duration of the fund stays constant over a time-period (Figure 1), then the annualized future return over that same time-period for an investor who invests in our portfolio today will be the current yield to maturity of the portfolio. And, this will happen regardless of intermediary interest rate movements (Figure 2)

Figure 1: Duration Bonds at Work



Figure 2: Running Yield