Investment decisions by two fund managers at Geneva's Lombard Odier on the stock exchange turned sour. Alerted, the bank's bosses called in a fund giant to help out, research by finews.ch showed.

Two fund managers at Lombard Odier in Geneva had a plan. They wanted to use LO Funds-Technology fund to profit from the rising valuations of technology firms. They put money on the topic «industry 4.0» and thus hoped to outperform the market.

Their decision did not work out as Lombard Odier Investment Managers, the asset manager of the bank, told finews.ch. «The focus of the fund on new technologies had a tough time in a situation when established giants outperformed,» the company said.

Both fund managers were unlucky in two ways: UCITS fund rules didn't permit them to put even more money on IT-giants such as Google and Apple. Thus, their fund participated only partially in their performance and suffered from withdrawn assets from investors.

Fidelity International to Help Out

Lombard Odier Investment Managers decided to act. It called Fidelity International for help. The asset manager, which has a distribution network in Switzerland, is an active manager and renowned as an astute analyst of technology firms. Fidelity is now mandated to provide research and investment advice at the LO-Technology fund. The investment decisions remain in the hands of the Geneva-based bank.

«The decision will strengthen the fund and ensure that it will be able to continue to satisfy the expectations of customers,» Lombard Odier Investment Managers said. The portfolio is worth $204 million.

Speculation About More to Come

The cooperation has led to a flurry of speculation in the industry, because Fidelity is known as a force of consolidation in the fund industry. So far however there are no signs that the cooperation between the private bank and the fund giant is the beginning of a deeper connection.