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

With Brigitte Le Bris, Head of Global Fixed Income and Currency, 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 the Grande Ecole d’Ingenieurs in France. My first position was as a consultant at Credit Lyonnais; very quickly I decided to move towards the fascinating world of commerce.

I started the adventure as a fixed income sale and quickly turned to trading myself. After working as a proprietary trader at Banque Louis Dreyfus (now ING) for four years, I decided to turn to wealth management. I joined CDC Asset Management where I successively managed the money market, euro and then global fixed income funds and mandates. In 2000 I joined Société Générale Asset Management (now Amundi) and in 2003 took responsibility for 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 $5bn. in emerging interest, of which $1.5 billion is fully dedicated to the EC. And we have developed a customer base not only in Europe, but also in Asia.

What is the profile / possibilities for Ostrum’s interest management?

Ostrum AM is a leading European and responsible investment manager with DKK 389 billion. € of assets under management in June 2023 and 140 professionals fully dedicated to investments.

Fixed income investment management is at the core of Ostrum AM’s identity, as we draw on our team’s expertise and their average 20 years of experience in fixed income and credit investments across all geographies and management styles, including sustainable bonds.

Ostrum AM offers a range of strategies across all fixed income asset classes as we seek to meet the regulatory, social and environmental requirements of institutional investors with a single overarching goal: to offer an innovative and personalized service to pursue returns 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 DKK 30 billion. euros in sustainable bonds in 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 with an example. When I send the order to the trading desk, I try to give a possible price limit and not interfere with the offer. I always believe that the trader has done their best to get the offer, even if sometimes the price is not exactly what I expected.

On the other hand, I expect the trading desk to offer the best service, while at the same time there is a large set of counterparties, with a good knowledge of their offer. I expect them to know when to act via platform or directly by voice. I also expect the trading desk to get the market’s view of liquidity, to know which counterparty to request, etc. And of course, I want the trading department to respect all our internal restrictions (authorized counterparties), as well as help our middle office deal with settlement issues if needed.

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

I want them to help us with macro and market research, to facilitate relations with analysts, to be informed if their market view becomes radically different.

When I trade, I expect the best liquidity possible and to be served fairly in the primary markets. I want them to be close to our traders so we get good execution.

What broad market/macro factors most influence your portfolio management decisions?

Some of the most important, and certainly the most difficult, factors are correctly assessing the development of economic growth in the US and the Euro, measuring the effect of inflation and taking a position on China’s growth. Central banks, especially the Fed, are telling us that they will act on incoming data. We are at a turning point for interest rates, the question now is whether or not there is a potential normalization of yield curves. The outlook for risky markets depends on this. On the currency front, I think as long as the Fed will maintain a hawkish tone, the US dollar will remain bid.

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

AI is a great innovation. I see it as a very powerful tool, but 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 that its use for portfolio management can only grow further. But I’m not afraid: I still think asset management will need fund managers for a long time!

This article was first published in GlobalTrading magazine.

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