PGEQ provides an alternative strategy

“For us, this is the first platform that opens the game. This investment gives us the confidence to find a place in the Canadian market, “said Christian Fournier, partner and director of Authentic, in an interview.

The firm made the first final presentation of its strategy at PGEQ last spring and the second in the fall. An in-depth inspection was then carried out before it was selected for the first investment.

Event component

Authentic’s absolute return strategy has attracted the attention of the Program, which aims to support Quebec’s financial sector by attracting new managers. Thus, it allows to respond to the growing demand for alternative solutions among distributors, in particular for diversification purposes, the organization said.

The strategy developed by Toronto is based on the event component. Mergers and acquisitions, changes in disclosure policies, top managers who suddenly leave the company: the smallest significant facts of changes in the direction of activities are carefully checked and analyzed in investment decisions, – says Christian Fournier.

“We are adding an innovative macro overlay to mitigate downside risks and add a risk-adjusted alpha source,” he adds. This macro component intervenes to protect the strategy of events. This can take the form of, for example, hedging stock indices, commodity positions or bond strategies.

The manager believes that this approach will meet the challenges of the current situation. “These strategies have been tested during previous crises. Inflation and the changing geopolitical climate are not temporary, they will continue. In this context, our strategy is to identify these changes in order to limit risks and make a profit. »

The firm remains restrained in terms of the amount of assets it manages. However, the strategy of events may allow him, according to the leader, to accumulate up to 1.5 billion before closing or changing. The annual target return is 10% with a low correlation with stocks.

Risk management

Authentic Asset Management was founded in 2015 in Toronto by Duncan Webster, a former CIBC Global Asset Management and Private Investment Advisor with nearly 30 years of financial experience. The clientele consists of public and private investors. In particular, she manages internal alternative strategies for PSP Investissements.

Christian Fournier and Eric Green joined the firm as portfolio managers in July 2020 and became shareholders in 2021. Christian Fournier developed his approach to risk management, first as a strategist and portfolio manager at the Quebec Ministry of Finance, from 1995 to 2005, when he had to deal with the bond crisis in public liquidity management. He then joined Casgrain, then PSP Investissements in 2007, in the midst of the financial crisis. substandardportfolio manager, until the appointment to the position of Director General of the institution of the public procurement sector.

Eric Green was previously a managing partner of Open Door Trading in New York. He has also been the Managing Director and Global Head of Exchange Rates, Economic Performance, Foreign Exchange and Commodities Research at TD Securities.

Montreal experience

The company will relocate its headquarters to Montreal, which is a PGEQ requirement, and will retain offices in Toronto, as well as its presence in a larger Boston area to serve the United States market.

Christian Fournier, who already works in Montreal, will be in charge of the office in Montreal, which is to hire two people for 6-12 months. The manager believes that the quality of the workforce in Montreal, including its experience in derivatives, will be an advantage for the development of the firm.

Eric Green will continue to run the US office in Boston, and Duncan Weber will remain in charge of the Toronto office.

Structured as a fund, PGEQ was launched in 2016 under the leadership of Finance Montréal to accelerate the development of new managers by empowering them to manage through institutional investors. As of August 31, 2021, the assets of the PGEQ fund under management reached $ 406 million.