Founded in 1991 by Jörg Bantleon, it’s not until the year 2000 that this firm, focused on the management of high quality bond portfolios, starts to manage assets. Their strategy and focus towards “secure” investments took them in 2012 to surpass EUR10 bn in assets under management. The premises are clear “first preserve the capital, and then maximize concentration in order to achieve attractive returns" as matter of fact almost 60% of the company’s capital is invested in Bantleon funds.
With offices in Switzerland and Germany, Bantleon counts with a team of 32 people, of which 13 of them are asset managers or investment professionals, stable and with little rotation. Their offer includes investment grade bond funds, absolute return and multi strategy funds, fundamentally directed toward institutional clients.
In 2008 they launched the Bantleon Opportunities L strategy that benefits from the joint economic development of both the bond and equity markets. The returns come from the intense duration management together with the flexible investment in equities that can be of either 0% or 40%.
“Our fundamental focus is on predicting the estate of the economic cycle” comments Stephan Kuhnke, CEO of Bantleon Bank and responsible for portfolio management and trading, in an exclusive interview for funds society.
“On the equity side of the portfolio we invest in the DAX, as it’s the index that best represents the real economy, compared to the MSCI World that underperforms in upswings but falls less in downswings. The companies in the DAX are export oriented and therefore highly correlated to the economic cycle and it’s also the most liquid index”.
According to Kuhnke, their model counts with two components, strategic and tactic. “For the strategic component we analyze the fundamental environment to predict where we are within the economic cycle and determine if we invest or not in equity.” The floor is zero. The tactical side combines trends and momentum.
The results of both components have to be positive in order for the strategy to invest in equity. If either is negative, they do not enter the equity market. “Our objective is absolute return, our purpose is capital preservation”.
The bond portfolio plays with the carry and the duration of the bonds, that ranges from 0 to 9 (0-2-4-9). “We mainly invest in debt with AAA rating”.
Since its launch Bantleon Opportunities has never had a negative year. Even during the most turbulent markets like the 2000-2002 crisis or the collapse of the financial markets in 2008, their management method has been very stable. This good track record has got them various Lipper and Bloomberg prizes and a 5 star Morningstar rating. In 2012 and this year, Bantleon has been awarded with the FeriEuroRatingServices as the best manager in Germany, Austria and Switzerland in the absolute return category.
As for 2014, Kuhnke expects the economic cycle to continue its positive trend until the second quarter that will be followed by some slower growth. “In this scenario we will be long in equities and reduce the duration of our portfolio.”
Nevertheless, towards the third quarter of the year, “things will change towards a low growth environment that will lead us to close our position in equity and increase duration”.