Pictet TR Aquila

Pictet TR Aquila is one of the latest additions to Pictet’s TR range which dates back to 2004 and currently manages c. $11bn across 13 strategies. Aquila launched in July 2020 but has been run as a sleeve of a multi-manager product since 2018. It is a global equity market neutral strategy with primary focus on liquid US and European names (c. 90% of risk) with a sector-focus on Healthcare, TMT and Consumer whilst avoiding macro-dependent and interest rate sensitive sectors such as energy and financials. The process is research-intensive and bottom-up with an emphasis on differentiated, primary research (with the regular use of alternative data sets), rather than relying on broker research. Overall, the manager screens for companies that are able to control their top-line and cost base, for which there are observable/measurable inputs and outputs, and forecastable cash flows (cornerstone of the manager's valuation framework). The long book consists of high conviction positions (20-35) and a 1-3 year holding period. Long positions are split out into four buckets: businesses in transition, structural winners, disruptors, and special situations/event driven. The short book has more positions (40-70) which are held for a shorter period, typically 3-9 months. Here they look for structural or catalyst-driven shorts, with all shorts single stocks and used as stand-alone alpha sources, or to mitigate unintended risks on the long side. Position sizing (max is 10%) is a function of valuation, how the security has traded relative to the sector and market, and upcoming catalysts.