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A meeting with ... Jacques Mahaux

Jacques Mahaux has worked at Orea Capital since XX. He became chairman in early June 2024, a perfect opportunity for a conversation about the evolution of the financial sector, Orea Capital's investment philosophy and assets and... antique coins. Moreover, Mr Mahaux also has some ideas for talking points if you were stuck in a lift.

You have been active in the banking sector since 1986. What developments in these nearly 40 years have impressed you most?

The banking sector covers a wide range of activities: corporate lending, asset management, mergers and acquisitions, etc. They have each experienced significant developments in their own right, driven by financial and monetary crises, and thanks to the development of new financial instruments - in an increasingly international context.

I see one common point, the development of legislation aimed at protecting investors and consumers of services - and correspondingly strengthening the powers of regulators. This has led to significant industry consolidation. Today, compliance with legislation entails a considerable administrative burden. It is not enough just to comply with standards, one must document this compliance and have supervisory and control bodies in place. This has created a barrier to entry into financial professions.

What does this mean for smaller players? It is true that only large organisations with an extensive range of standardised services and an international client base are viable - but so are small niche players with a focused offering, who are alert and flexible.

In terms of asset management, the growth of mutual funds and life insurance stands out to me. These created access to a wide range of markets, under the strict and watchful eye of the European regulator.

In private banking, my positions in the Indosuez Group enabled me to see how the diversification of investment instruments went hand in hand with an improvement in the quality of processes. A private client now has access to techniques that 30 years ago were reserved for institutional clients and large corporations.

“A retail client now has access to techniques that 30 years ago were reserved for institutional clients and large corporations.”

Why did you choose Orea Capital? What do you see as the strength of an independent asset manager?

Orea Capital is a firm that focuses on wealth management for mainly Luxembourg and Belgian retail clients, but it is also able to meet the requirements of institutional clients.

It brings together experienced professionals, including former employees of Indosuez. For me, it is essential that portfolio managers have experienced a full stock market cycle and at least one financial crisis in their professional lives. That ensures a healthy distance from the market madness, both during rises and falls.

“I think it is essential that portfolio managers have experienced a full stock market cycle and at least one financial crisis in their professional lives.”

A feature of Orea Capital is its predominantly direct investment, without the use of structured products or derivatives. Our independence also plays to the client's advantage, which it means we do not have to sell 'proprietary' products and can concentrate on our job as managers. This allows portfolio managers, for instance, to use mutual funds for distant or specialised markets, only when this offers a real advantage over European and US exchanges.

I believe there is a place for personalised, direct management for private portfolios that may not be large enough with large bankers. Indeed, these banks are obliged to offer a more international approach, as their customers are geographically dispersed, and standardised terms and conditions, which only allow effective control for a large number of customers.

“I believe there is a place for personalised, direct management for private portfolios that may not be large enough at large bankers.”

I think Orea Capital can grow significantly in this client segment and attract new associates who offer personalised portfolios that are understandable to clients, and take into account their needs within strictly controlled quality and risk management.

We live in an uncertain world. How can you offer peace of mind to your clients?

There are several factors at play that I would like to highlight here.

First, a listed company is not a bank: it does not extend credit and is not exposed to the many risks of banking activities in terms of operations or cash management.

In addition, strict compliance with selection and monitoring standards ensures that securities depositors and brokers meet the highest security criteria.

So the risk is mainly in asset management. In my view, the peace of mind for clients stems from Orea Capital's management philosophy, both for pure discretionary management and institutional management for clients who are required to invest within pre-established contractual limits.

As indicated, Ora Capital rarely, if ever, invests from low-transparency or leveraged instruments. We prefer simple and transparent investment instruments.

The quality of issuers, diversification of investments (geographical, sectoral, etc.) and alignment with the client's risk profile and investment horizon form a strong basis for portfolio construction. When choosing stocks, one of the most important criteria is the company's relatively low level of debt. Experience has shown that this strengthens the stock's ability to withstand economic fluctuations and interest rate rises, and to generate dividends. This is one reason why our performance was in line with markets in good years and outperformed many competitors in bad years.

“Low debt in equities increases resilience to economic fluctuations and interest rate rises, and increases the ability to generate dividends.”

Peace of mind is also generated by an additional, more psychological factor, which comes from the fact that the client understands the portfolio, is well-informed about each line, and is often "culturally" familiar with the companies we invest in.

What do you do to relax?

I love classical antiquity immensely. I find relaxation in managing my coin collections: the Roman and Lyonese coins of Nero, and the bilingual coins of the Indo-Greek dynasties in Bactria.

I also enjoy reading first-century Latin literature and art history of the Julio-Claudian and Flavian periods.

What is the last book you have read, or what book would you recommend?

I often read several books at once. I have just finished a series of studies, The Cambridge Companion to the Age of Nero, but it may also be lighter, with Les folles enquêtes de Magritte et Georgette à Knokke-le-Zoute by Nadine Monfils. I am currently halfway through a book about women in Ancient Rome, Le grandi donne di Roma Antica by Sara Prossomariti.

I can happily recommend the book Les yeux de Mona by Thomas Schlesser, an introduction to beauty and life in 52 masterpieces, similar to The World of Sophie, but for painting. And for those who want to refresh their memory about classical antiquity, the book Comment faire tenir toute la Grèce antique dans un ascenseur by Théodore Papakostas is a good idea. It provides a lively overview full of anecdotes about the development of ancient civilisation, presented as a dialogue between an archaeologist and modern man stuck in a faulty lift for a few hours.

Thanks for this conversation!

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