Pictet’s Horn spots China, Europe and Japan as hedge-fund targets

Doc Horn, head of the Total Return Equities Fund at Pictet Asset Management, oversees the firm’s Total Return business and roughly $10bn in allocations. He told clients the firm will deploy that capital across 15–20 internal hedge‑fund teams over the next 12 months, splitting resources between offensive opportunities and defensive holdings.

Horn said recent macro shocks have widened the set of market inefficiencies active managers can exploit, while warning that avoiding large drawdowns remains a priority in an uncertain market.

Pictet’s multi‑manager platform runs those 15–20 internal teams and uses a mix of strategy types to generate returns across different market cycles. Horn noted fundamental and event‑driven strategies performed strongly early in the year, while systematic approaches struggled before rebounding in March and providing diversification benefits.

On regional focus, Horn highlighted China, Europe and Japan. He drew a distinction between China beta — broad directional exposure — and China alpha, which he described as more attractive when pursued through selective stock picking. Pictet has operated in China for more than 20 years, a record the firm cited when selecting individual investments.

In Europe, Horn pointed to mid‑cap companies as an area often overlooked by investors and therefore a potential source of returns for active managers. In Japan, he flagged recent corporate governance reforms and a stronger emphasis on shareholder returns as factors driving new opportunities.

About one‑third of Pictet’s hedge capital is allocated to multi‑strategy managers. He noted allocator interest is growing in private wealth and intermediary channels and described multi‑strategy funds as “alpha bricks” within diversified portfolios. Horn added the firm is expanding event‑driven and special situations strategies and has hired a team to pursue convertible arbitrage opportunities.

On talent, Horn pointed to Pictet’s combination of institutional stability and the option for teams to launch independent strategies under the Pictet umbrella as an arrangement that attracts experienced investment professionals.

Over the coming year, Horn expects the firm’s results to hinge on how nimbly it allocates capital across internal teams and strategy types, balancing the search for selective alpha with measures intended to limit large losses.