3 min read

The Buy-Side Trading Desk: A Fund Manager's View

The Buy-Side Trading Desk: A Fund Manager's View

"I expect the trading desk to offer the best service while having a large set of counterparties...(and) to know when to trade via platform or by voice."

With Brigitte Le Bris, Head of Global Fixed Income and Currency
at Ostrum Asset Management

Briefly discuss your career background and current role/responsibilities.

I started my career in the City of London, more than 30 years ago, after graduating from Grande Ecole d’Ingenieurs in France. My first position was as a consultant at Credit Lyonnais; very rapidly I decided to move towards the fascinating world of trading.

I started the adventure as a fixed income sales and quickly turned to trading itself. After acting as a proprietary trader at Banque Louis Dreyfus (now ING) for four years, I decided to turn to asset management. I joined CDC Asset management where I successively managed money market, Euro then global fixed income funds and mandates. In 2000, I joined Société Générale Asset Management (now Amundi) and in 2003 took the responsibility of the global fixed income unit. In that role, I successfully developed global sovereign, global aggregate, total return strategies and won several mandates for European institutions but also for Asian central banks.

In 2010, I joined Natixis Asset management (now Ostrum) to develop global fixed income, a position I still hold today. Among global fixed income, the Emerging Fixed Income franchise has been quite successful: from zero assets when I joined, Ostrum now manages close to $5 bn of emerging fixed income, of which $1.5 bn is fully dedicated to EM. And we have developed a client base not only in Europe but also in Asia.

What is the profile / capabilities of Ostrum’s fixed income management?

Ostrum AM is a leading European and Responsible investment manager with €389 bn of assets under management as of June 2023 and 140 professionals fully dedicated to investments.

Fixed income investment management sits at the core of Ostrum AM’s identity, as we draw on our teams’ expertise and their average 20 years’ experience in interest rate and credit investment across all geographical areas and management styles, including sustainable bonds.

Ostrum AM offers a range of strategies across all fixed income asset classes as we seek to address institutional investors’ regulatory, social and environmental requirements with a single overarching goal: to offer an innovative and personalized service to pursue yield while adapting to each individual risk profile.

As a responsible and committed investment company, 100% of our assets are analyzed through ESG criteria, and we managed 30 bn Euros in sustainable bonds as of June 2023.

As a fund manager, what do you expect from your trading desk?

First, the relationship must be based on mutual trust and respect.

Let me illustrate this by one example. When sending the order to the trading desk, I try to give a price limit if any, and not to intervene with the quotation. I always consider the trader has done his best effort to get the quotation, even if sometimes the price is not exactly what I was expecting.

In return, I expect the trading desk to offer the best service while having a large set of counterparties, with a good knowledge of their offer. I expect them to know when to trade via platform or directly by voice. I also expect from the trading desk to get market color about liquidity, to know which counterparty to request, etc. And of course, I want the trading desk to respect all our internal constraints (authorized counterparties), plus to help our middle office to manage settlement issues if necessary.

What do you expect from your relationships with external providers/counterparties?

I want them to help us with macro and market research, to facilitate the relationship with analysts, to get informed if their market views become radically different.

When trading I expect the best liquidity as possible and to be fairly served on primary markets. I want them to be close to our traders so that we get good execution.

Which broad market / macro factors are most impact for your portfolio management decisions?

Some of the most important, and certainly the most difficult, factors are to assess properly the evolution of US and Euro economic growth, to gauge the impact of inflation, and decide about China’s growth. Central banks, especially the US Federal Reserve, are telling us they will act according to incoming data. We are at a turning point on rates, the question is now about a potential normalization of yield curves or not. Prospects for risky markets depends on this. Regarding FX, I believe that as long as the Fed will keep a hawkish tone, the US Dollar will remain bid.

What is your view on generative AI – are you using it for anything currently, or do you expect to?

AI is a great innovation. I see it as very powerful tool, however only a tool: in my opinion it will never fully replace human thinking. Internally, it is already used by our quantitative analysts to develop proprietary models. I have no doubt its use for portfolio management can only grow further. But I am not afraid: I still think asset management will need fund managers for a long time! 

 

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