Chloé De Calatchi is Head of Selection (Manager & Operational Due Diligence) at ABN AMRO Investment Solutions. She started her career in 2004 as a Legal advisor within ABN AMRO Advisors. She then joined the Bank and Finance department at Clifford Chance. She also worked as Legal Counsel at Lombard Odier Darier Hentsh.
In 2006, Chloé joined La Française AM as a due diligence analyst for the alternative funds but was also legal counsel on the Luxembourg range products. In March 2016, Chloé joined ABN AMRO Investment Solutions as a Senior operational due diligence analyst. She holds a Master’s Degree in Financial Law from University Paris XI in Partnership with ESCP-EAP. She also holds a IMDD certificate on Private Equity Operational due diligence (Professional Level) and the CFA ESG.
What made you decide to go into the financial sector? Did you have any other vocations?
The initial plan was to be a criminal lawyer, but soon enough I found out the emotional component of it would be a hard obstacle. I was lucky enough to have inspiring teachers in law school but also great mentors every step of the way and financial law became the obvious, especially since a multidisciplinary approach has always been part of my DNA.
Still today it is the backbone of what I do as Head of Manager Due Diligence (MDD) and Operational Due Diligence (ODD), this dual approach being the most robust and complementary in the selection industry. It seems I am where I was meant to be.
Within the fund selection process, what is the task that consumes most of your time?
At ABN AMRO Investment Solutions (AAIS), ahead of the other market players we have developed a Due diligence Digital platform. Thus, we managed to remove low value tasks to spend time on high impact tasks for an efficient, high value-added and shareable process.
Our focus today is to refine our auto-rating system embedded in the platform. It allows our seasoned MDD and ODD analysts to evolve in a decision collar to get the best consistency and accuracy on the ratings issued. Worth mentioning that apart from traditional ratings, we internally developed our ESG ratings on both MDD and ODD side to assess the ESG quality of the strategies and the Investment Managers’ commitment to ESG. This ESG pillar has been constantly improved over the past 10 years taking into account best practices and their evolution as well as the new ESG regulations which is more dynamic than ever.
What is the main criterion for a selector to take a fund off the shopping list?
Our whole dual selection process is built on the search of strong and trustworthy partners that can explain and reproduce their performances over time through disciplined processes. Transparency is of the essence. Also, due diligences in our fields are mostly detection of inconsistencies and misalignment on best practices. Trust loss and inconsistency would definitely raise a red flag and potentially lead to drop the strategy or the Investment Manager. That being said AAIS has a strong engagement culture and we would definitely engage with the Investment Managers to give them the opportunity to put in place remediation actions.
Could you mention a fund you have recently analyzed that you think will do very well in 2023? Why?
So far this year, the market was driven by “the Magnificent Seven”. As history shows us that trees don’t grow to the sky, we tend to favour the AAF-Parnassus US ESG Equities fund. The strategy is high quality and defensive. The portfolio managers invest in truly unique businesses from a moat and relevancy perspective. The portfolio is highly concentrated with a high active share. The fund has solid long-term track record versus the US market especially during the volatile periods. We like the return characteristics with an average upside capture ratio of 90% and a downside capture ratio of 80%. We believe that this fund can benefit from the rotation of the 7 mega caps, but is also able to keep up if there is a deviation in our expectations.
What is the current asset allocation of your model portfolios?
Activity and consumer resilience surprised positively thanks to healthier household and corporate balance sheets as well as firmer labour markets. Market conditions suggest that a mild recession/soft landing in 2023 has already been priced in 2022. The biggest uncertainty currently is the extent to which bank and non-bank lenders tighten credit and raise borrowing costs, and how this will weigh on economic activity.
Consequently, we think that it is too risky to be negatively positioned on equities, as economic slowdown should be limited and inflation is cooling down. Earnings proved to be resilient and soft landing is very likely. We slightly overweight equities and high return bonds within fixed income (high yield and emerging debt) but we stay neutral on duration and styles regarding uncertainty on the level of interest rates along the curve.
What do you most enjoy doing in your spare time?
Spare time on week-ends is dedicated to my family and my friends, it’s my recharging spot. I enjoy cooking for them and they never complained, at least the one who survived…
On vacation nothing but a good dive or a good hike in the mountains where I was raised.
