In this series of short profiles, we ask leading fund managers to defend their investment strategies, reveal their views on cryptocurrency, and tell us what they’d never buy.
This time our interviewee is Ori Ben-Akiva, director of portfolio management at Man Numeric. He oversees various funds, including the Man Numeric Emerging Market Equity fund, which has a Morningstar Medalist Rating of Neutral.
Which Sector Shows the Biggest Promise in 2023?
We employ a disciplined quantitative process that primarily focuses on idiosyncratic stock opportunities. Identifying sectors isn’t a core part of our process, but personally, I like sectors that outperform and contribute to investment strategies. Ask me in a year and I will tell you which ones…
What’s the Biggest Economic Risk Today?
The fragility of credit formation and potentially stifling effect it could have on growth. Geopolitical issues are also front and centre and could materially impact global supply chains and growth. In my 25+ years as a quantitative investor I don’t remember many periods that were fraught with so much uncertainty.
Describe Your Investment Strategy
At Man Numeric, we believe that fundamentals matter and quantitative tools can help us identify companies that are mispriced relative to current and forecast fundamentals. We use a broad range of alternative data, data science and machine learning techniques to achieve this and ultimately aim to deliver differentiated alpha to our clients through systematic security selection.
Within the Man Numeric Emerging Market Equity UCITS fund specifically, we take a multi-factor approach to selecting securities from a broad universe of approximately 4,500 stocks across 24 emerging market countries. The fund recently converted to Article 8 and includes a larger weighting of our proprietary ESG factor alongside the diverse core alpha models and signals we run to identify which securities will likely outperform.
Which Investor Do You Admire?
Given my quantitative orientation, I tend to admire some of the pioneers in the industry that first realized the potential of using academic advances and computational power to build investment strategies. There are numerous academics and early practitioners that paved the way for firms like Numeric, but I have a special fondness for people who challenge commonly held beliefs and vested interests and that stick to their convictions. John Bogle, the founder of Vanguard, didn’t invent index investing but realised the potential benefit to investors and his efforts helped democratizse access to the markets. In the process generating tremendous, largely unmeasurable, value creation for investors in foregone fees paid to investment managers that don’t deliver. That said, I’m very much a believer that skilled investors can deliver value to investors net of fees, otherwise I’m in the wrong industry.
Name Your Favourite ‘Forever Stock’
Based on our investment process, I’d say there’s no such thing – it’s much better to build a diversified portfolio of stocks and allow yourself the opportunity to sleep at night.
What Would You Never Invest In?
Cryptocurrency. That’s not to say that it won’t evolve into a viable investment someday, but for now it feels like a trading opportunity at best.
Growth or Value?
I don’t think you can separate the two. The recent past has once again highlighted that growth for growth’s sake can be destructive if investors don’t effectively value the growth. The tendency to get enamoured with the latest “big thing” can lead to creative rationalisations as to why this time is different, but as history has reminded us numerous times at some point fundamentals will win out. Ultimately a successful investment process considers, at a minimum, both the value and growth dynamics to assess investment opportunities.
House or Pension?
They say that you don’t own a house, that a house owns you. I can speak to this from personal experience. I would pick pension!
Crypto: Brilliant or Bad?
The underpinning technology is innovative and application to decentralised finance, but so far the use case appears to be mostly bad.
What Can be Done to Improve Diversity in Fund Management?
It starts with education and providing a level playing field. We are big believers across Man Group in paving the way to help address the “pipeline” issue and to promote finance as a career choice to young people from all backgrounds. Fund management can more broadly support diversity by making it a core objective and establishing programs like our rotational program that take a longer-term view on people’s development and ability to contribute.
Have you Ever Engaged with a Company and Been Particularly Proud (or Disappointed) in the Outcome?
As quantitative investors we don’t often engage directly with companies, but as part of Man Group we are able to leverage the firm-wide stewardship team and the rigorous engagement work they carry out with investee companies across the five investment engines. In 2022, they engaged with 176 companies across 25 countries and we are proud to be a part of that effort.
What’s the Best Advice You’ve Ever Been Given?
Think of your career as a marathon, not a sprint. The overload of information and social media we face today, tethered to us by our phones, have made short termism a societal disease.
What Would You be if You Weren’t a Fund Manager?
An NBA player. I would add diversity as a short, slow, below average athlete.
