Candriam Investors Group has launched a new digital long short equity strategy, designed to invest in companies benefiting from the digital evolution of the economy by tapping into the growth potential of innovative companies and shorting disrupted companies.
This Digital Long Short strategy is the latest addition to Candriam’s thematic strategies which already include specialist strategies in demography, biotechnology and robotics. Thematic strategies allow investors to capitalise on long-term socio-economic trends.
The investment mandate enables the team to invest in digital champions over the long term, but also short companies which rely on legacy technology and have a negative profit momentum.
It also implements opportunistic pair trades, a market neutral strategy which takes no directional market risk. Stocks are selected from a worldwide equity universe, resulting in a high conviction portfolio with a maximum of 50 companies selected.
“The digital evolution of the economy is affecting all sectors and is pushing legacy firms to choose between transformation and economic death,” says César Zeitouni (pictured), who is in charge of the new strategy. “Digital technologies are no longer confined to the technology sector, but are redefining sectors from banking, to retail, to automotive. In the current economy, we believe there is an ‘Airbnb’ hidden in all sectors.
“We aim at investing in companies across sectors that are investing successfully in this new digital economy.
“Technological innovation is happening at a speed that has never been observed before. In the first wave of disruptive technology, from 2000 to 2015, we saw the proliferation of high-tech devices such as smart phones and PCs. In the next phase – the current phase – we are witnessing the ‘Uberisation’ of the economy.”