LeapRate Exclusive… Emilio Munoz is the Director and Chairman of the Board at Fortage Funds, a Luxembourg-based investment funds umbrella-platform, distinguished by an open architecture approach, that provides service to HNIs, institutions, intermediaries, and emerging managers stepping into the alternative funds industry.
Emilio Munoz, Director and Chairman of the Board at Fortage Funds
Emilio started his career ten years ago in asset management in the United States at the CTA FinTech Silicom Internet, and has hold several C-level roles at global OTC brokerage firms in London, Madrid, and Limassol, successfully spearheading their expansion efforts.
Emilio joins LeapRate today to talk about Fortage Funds and the funds industry in Luxembourg.
LR: Hi, Emilio, happy to have you at LeapRate. As a start, could you please give us a short history of Fortage Funds – when was it started, product offerings, office locations?
Emilio: Fortage is an umbrella funds platform established in Luxembourg and authorised by the CSSF as SICAV-RAIF that counts with a multi-national quantitative, operations, and business development teams spread among our global offices.
Our platform was launched with an initial quantitative sub-fund in spot FX that counts with five years audited live track record with private investors and outstanding risk/reward ratios. We opened this investment model to the general public through our Fund Fortage Global Diversified with the clear intention to disrupt the FX Portfolio Management Industry, which we have identified as finding itself in the urge to find sustainable and skilled high yield managers to lead the way, we have come to the industry to occupy at that space.
In a nutshell, with an average yearly net performance from 2015 in a 15%, and risk classification of only a 3, based in value at risk (VAR) indicators, the product is a breakthrough disregarding asset class, you will seldom find an investment fund with such track record and ratios nowadays.
LR: What do you think are the challenges and opportunities in the Luxembourg funds industry?
Emilio: For us, there is only a valid reason as to why an investor would choose to invest into any investment fund instead of position himself at the S&P 500 during 20 years in a row (which shall be providing him with a return of 8%+ per year after one year), and it is the strongest one, volatility.
That is the real value of investing into funds, to suffer the lowest volatility with a higher return than the most used benchmark, the S&P 500. Is on this specific in what we have consistently succeed, but we have to say that it is not the case of the largest investment banks and funds, all of them with presence in Luxembourg. There is the real challenge most of the industry has.
On the other hand, there are many opportunities arising in Luxembourg at the time being. As the jurisdiction of choice for investment funds it is, there are emerging managers that have the vision and skillset to design products that cater to our interests and are approaching Luxembourg with the aim to set up a vehicle. We are at the time being analysing a number of opportunities in this direction.
LR: Please describe the investment philosophy of the fund – what are its pillars and what do you think mostly differentiates Fortage from competitors?
Emilio: We count with world-class quantitative engineers, computer scientists and business-builders that constitute a 360 degrees backbone.
Our proprietary algorithms discovery process utilizes data mining, genetic evolution and artificial intelligence based technology underpinned by the same philosophy, the belief that the movement of markets can be modelled and forecast to a valuable degree using modern scientific and computing methods based in statistical significance.
Our investment philosophy is based on three core principles, built on research and experience. The first is that we only rely in sound economic theories to help us deliver sustainable and potentially repeatable results. The second is that we follow a disciplined methodology that underlies everything we do. Our investment process is based on ongoing design, validation, refinement, testing, and repetition exercises. The third is that we are meticulous in every detail of the investment process.
Furthermore, we do have an open architecture approach and are delighted to onboard into our team emerging managers with the same vision and quality standards.
LR: What is the client base of Fortage Funds – what are the tailor-made products, what are some of the customized solutions the fund offers?
Emilio: Our product offering is available to High Networth Individuals, Financial Institutions and Intermediaries. Each investor profile has its own requirements and, accordingly, we do offer the flexibility to accommodate their needs either directly at our umbrella funds platform or through affiliate entities to offer the right solution. Clients range from direct investors, and other funds, to brokers seeking to offer a competitive product for their clients through a flexible solution.
LR: Fortage relies heavily on technology and one of the core principles of the Fund is quantitative investing. Do you see this element as the biggest competitive advantage? What are some of the opportunities ahead when it comes to technology – given the latest trends such as blockchain?
Emilio: It is indeed. In todays markets it is not possible to achieve acceptable returns, and steady ratios through low volatility if it is not through a heavy investment in quantitative teams and technology.
Despite the hype in fintech we are experiencing, we have to say in this industry technology investments are worth nothing if are not supported by a thoroughly designed investment process and a consolidated team of experts in coding, quantitative analysis, and risk management. We do believe we are well positioned in the quantitative arena, and are open to share some of our techniques and research.
LR: Are there any particular goals you would like to achieve during 2020 in terms of returns, customer base growth, projects ?
Emilio: We are working in partnerships with several banks and brokerages, and do have a number of funds projects we are working on, quantitatives, in green energy and real estate, but we can’t comment at the moment further on them.