A six-person team behind Pictet's successful water fund and other themes wants to lift assets to $5 billion after setting up at Natixis. Fund manager Karen Kharmandarian outlines targets to finews.com.

Karen Kharmandarian, you and five partners have just moved from Pictet to Natixis. What are your goals?

We have disclosed $5 billion as a three- to five-year goal, but we don’t want to just focus on assets under management. We come from a shop with an excellent reputation. The main priority of Thematitics Asset Management is to capture the best investment opportunities for our clients and deliver the best servicing, with transparency around everything we do.

Your team is generally viewed as the first thematic investors when you began at Pictet a number of years ago. What’s next?

Our ambition is to launch a new investment theme in the third quarter, and more over time. I can’t disclose yet what it is, but it’s a strategy which doesn’t exist yet on the thematic investing market.

How does what you do link back to impact or sustainable investing?

We’re convinced that the sense of purpose in investing is a long-term trend. Thanks to Natixis investment management's sustainable and responsible investing arm, Mirova, we will be able to track and report the impact of our investments. We integrate the environmental, social, and governance criteria throughout the investment process. It’s part of the process to mitigate risk.

How often do you envisage the team launching new products?

The idea is not to be chasing what is trendy and releasing two to three products per year – we haven’t made any commitment of that sort. If we identify something that makes sense, we might propose two strategies in one year, or nothing for two to three years. We don’t want to come back to clients after three years and tell them the universe is no longer there, or it’s performing badly.

Who are your main competitors in the thematic areas?

In robotics, I’d say Pictet most closely resembles what we do. In safety, the market is sometimes defined more widely to include biotech and defense. There, our main competitors would again be Pictet, but also Credit Suisse. In water funds, which is the most mature theme of the three, it would be RobecoSAM, Amundi’s KBI, and Impaxx, which is part of BNP Paribas.

There are exchange-traded thematic funds available. Why pay for an active manager?

Thematic ETFs are actually quite pricey compared to plain-vanilla ETFs! We have a pretty concentrated universe, and typically hold our positions for at least five years in our portfolio. The low level of portfolio activity doesn’t mean it’s not active though: we’re constantly monitoring and adjusting the size of our positions.

What deal have you struck with Natixis?

The idea is for Natixis Investment Managers to own 50.1 percent of the company, and we six partners share the rest.

What about hiring?

We’re looking to add people. We’d like to have two portfolio managers on each theme. We’d like to add several more people, including for the fourth strategy in the third quarter.

Karen Kharmandarian is a founder and owner of Thematics Asset Management, a newly-formed company of Natixis. Kharmandarian spent more than 14 years as a senior portfolio manager at Pictet. He is one of six portfolio managers – Arnaud Bisschop, who co-manages the water fund, Frédéric Dupraz, Nolan Hoffmeyer, Simon Gottelier, and Mohammed Amor – to recently join Natixis' investment arm  from Pictet. Based in Paris, Kharmandarian is chairman investment chief of the company, and co-manages a robotics fund.