Pictet: 'Volatility set to last, investors hunting for stability'

"Volatility and uncertainty are phenomena that we will have to live with for a long time, which is also why investors are demanding more stability and are choosing to be more conservative." What comes from François Pictet at a time of perhaps unexpected turbulence, at least to the extent of it, is at bottom a call for caution, an invitation to his clients not to lose sight of their true long-term goals and to continue to pursue them through active strategies in portfolio construction. "In a more volatile, uncertain and less predictable world," explains the managing partner of Pictet Group, an independent investment firm, "it is essential to favour this kind of approach, because it is able to look at sectors that can benefit from long-term trends and identify companies that generate value over time.

His gaze is particularly focused on the top end of the client base, those with high assets to manage who are generally identified with the private segment and for whom a key component of the portfolio is represented by those private markets that in their own way are reacting to the growing uncertainty and insecurity of the geopolitical scenario. "Over the past few years, we have seen a slowdown in liquidity events, fewer IPOs, transactions have been reduced and so have valuations," admits Pictet, while emphasising that private assets remain a good investment opportunity, especially in light of the current uncertainty.

"For the time being, valuations have not moved too much on the private equity side," explains the manager, before, however, making one essential element clear and remembering that in this case "investment requires patient capital and a long-term outlook that an unlisted company such as ours is able to maintain without being pressurised, both in terms of business management and asset management. Another key point of the approach concerns sharing objectives with clients themselves, which the Swiss company pursues by choosing the right partners and above all by acting in the role of investor rather than distributor: "By only recommending funds in which we invest ourselves, we can ensure alignment with their interests," Pictet assures us, "as well as building stronger and more predictable companies.

Italy - which is the group's second largest market after Switzerland and where the Wealth Management division is headed by Alessandra Losito, Country Head since 2021 - has its own peculiarities. "As regards liquidity events, the market has indeed slowed down, but to a lesser extent than in other countries," explains Pictet, attributing the different dynamic largely to the family structure typical of our economy. "Many companies," he points out, "are going through phases of transition between the generations that typically coexist, or they need to scale up their size in order to compete internationally, and to achieve these goals they very often rely on external partners such as private equity funds that can best accompany SMEs and entrepreneurs in such moments of discontinuity.

Among other things, the dynamism has helped to partly reduce the valuation gap that historically plagues Italian companies compared to those in France, Germany or the UK. "We have also seen a shift in cross-border mergers and acquisitions activity and now transaction volumes are more balanced," acknowledges Pictet, ready to attribute the realignment also to the fact that the market has felt a "sense of greater stability" in Italy. That same stability which, after all, remains one of the three key factors in the response provided by the group to its clients over its 25 years of presence, along with innovation and the quality of the team. "Our strategy," he points out, "has been to remain present and constantly available in the face of an investor who today has become more evolved, precisely because the new generations tend to have a higher level of financial education and, being more informed and sophisticated, seek different and more advanced solutions.