22 JUN, 2022
By Constanza Ramos
Ian Crispo is a Managing Director within Deutsche Bank International Private Bank, currently Head of Fund Research and Due Diligence, and as such responsible for onboarding private equity, real assets, hedge funds and mutual funds to the bank’s global platforms. He joined the company in 2005, holding prior to his current role a variety of positions within the alternative investments and fund areas. Prior to joining DB, he served as a management consultant for a number of years.
The fund research and due diligence process at Deutsche Bank is very structured while retaining the ability to remain flexible to be able to handle different types of environments, situations and types of funds. ESG is embedded at all stages of the process and is part of the way we operate. While the main building blocks of our process are similar across asset types, we adapt the process to the nature of the investment opportunity and its asset class. Conducting due diligence on a niche startup fund in an esoteric hedge fund strategy or less liquid asset class requires a more tailored approach than for example looking at a plain vanilla government bond mutual fund in UCITS realm. We carry out our due diligence based on the views of our IPB CIO team, and align the outcomes of our research with the needs of the business.
We have ten senior and experienced people in the team, aligned to the asset classes they cover - each analyst is responsible to cover one or more specific asset classes or sectors. We have analysts responsible for private markets, for real assets, for hedge funds, and for traditional assets. While all analysts participate to the ESG diligence efforts, we have also an analyst responsible for ESG who is our ESG champion. As an example of the specifics, our equity analysts have both sector and regional coverage, and our hedge fund analyst would have expertise in a number of hedge fund strategies part of the universe.
The most complex part of the job is to continuously manage and keep aligned our fund offering with the needs of the different parts of the business – we deal with a significant number of stakeholders all of which have specific requirements. While this is certainly challenging on a day to day basis, it is also one of the most rewarding parts of the job.
We take a hands on approach to selecting funds and obviously will look at traditional aspects such as manager track record, investment process, quality and alignment of the teams, organizational set-up and similar. One aspect that we pay particular attention to, is that we give ESG and risk considerations the same importance than we provide to the alpha side. ESG, Risk and operational aspects are extremely important to us, and we constantly look for potential red flags when diligencing managers. This philosophy has so far paid off handsomely for us over the years, allowing us to avoid all the manager blow ups the industry has seen over the last couple of decades.
We have built up processes within the team to have permanent dialogue with managers, including new launches and less established players, which allow us to have a good view of the teams and managers we would potentially want to work with in the future. Having an high quality diverse and experienced team certainly helps as well in this regard.
Commonsense drives everything we do, we look at a number of yellow and red flags when looking a funds and after conducting due diligence we take a view on whether we can go ahead or not. Some of these flags such as governance problems, reputational risk, a criminal record or regulatory problems are applicable across all fund types, whereas other may be more specific to particular funds. The sectors and themes we invest in are driven by our CIO views, and we follow these in our fund selection process.
We expect equity markets to stay volatile in the near term but see upside on a 12-month horizon as companies continue to grow earnings, and visibility regarding the central bank’s hiking cycle and the state of the economy improves. In fixed income, we see bouts of volatility continuing in the near term but longer term we are constructive the EUR investment grade sector given the fundamental backdrop, as the negative real yield environment in the Eurozone speaks in favor of the sector.
We have been going through the current inflation and volatility in the markets by continuously adapting our fund platform to ensure we have appropriate and relevant funds so that our clients and advisors have the right tools allowing to navigate these. As an example we have recently added a number of short duration, floating rate and income focused solutions on the fixed income side, a number of relative value players on the hedge fund side, as well as a more defensive equity manager. Real assets continues to be a theme on the private markets side, we are looking at a number of funds in this space as well.
When not working, I like to meet up with friends, reading and to cycle. Travelling and discovering new places has always been a passion of mine, I try to keep doing that when the opportunity opens up.