Archives » 2007 » June

Despite the hype surrounding liability-driven investing, it seems all the talk is translating into little action. A recent report by SEI revealed that only 20 per cent of 226 pension funds polled in Canada, the Netherlands, UK and US were actually implementing an LDI approach while 33 per cent were not even considering it.

— Julian Knight, Global Cool’s chairman and CEO

The worlds of international entertainment events and environmentally-sustainable investing come together in a new product from Global Cool, the UK charity dedicated to a 10-year campaign to reverse global warming.

The huge volume of cash that has hit large buyout funds in recent years is the biggest risk to their performance, according to 88 per cent of the Limited Partners (LPs) surveyed for Coller Capital’s latest biannual Global Private Equity Barometer.

— Chris Taylor,DDQ

Dawnay Day Quantum has launched two structured products offering exposure across hard and soft commodities with 90 per cent capital protection, designed for institutional investors making their first investment in the asset class.

There is strong evidence that good corporate governance positively affects share value, according to a paper presented at the recent Citi Investment Research Quantitative Conference 2007 by Luc Renneboorg, professor of corporate finance at Tilburg University.

Allocating to private equity is heavy a commitment of both time and resources and there is no way around this. Jane Welsh outlines how to ensure private equity works for you.

— Alex Fletcher, GSAM’s

GSAM’s Alex Fletcher may have been a force on the sub-advisory circuit, winning over clients where others have faltered, but how will he fare in the institutional space?

When the asset management division of US bank Goldman Sachs transferred its long-term head of UK institutional business, Oliver Bolitho, to Hong Kong, to a new role running GSAM’s Asian operation, it was Alex Fletcher, previously heading an autonomous sub-advisory unit, who stepped into the breach.

The strategies pursued by Sinopia are underpinned by what its CIO Pierre Séquier refers to as the quant manager’s ‘adherence to the rules’. But, he insists, the firm is not without flexibility. Nat Mankelow reports.

Pierre Séquier, global chief investment officer at Sinopia, the quantitative asset management business of the HSBC group, is ‘quants’ through and through.

Like a number of senior investment executives resident within Paris-based fund houses, Mr Séquier hails from the classic ingénieur background, beginning his career in 1990 as a financial engineer at HSBC France, before joining Sinopia in 1994 as its global bond manager.

Fortis is aiming to boost profit share from Asia over the next three years. It may seek partnerships to enter new markets, but, as CEO Richard Wohanka claims, Asia is viewed as a long-term strategy rather than a short-term opportunity. Henry Smith reports.

People can be such spoilsports with the press. When I caught up with Richard Wohanka, CEO of Fortis Investments at a recent asset management conference in Hong Kong, he was in no mood to play ball on that most pertinent question regarding his parent company at the present time.

— Karin van der Sluijs, Arlington

Over recent years there has been significant growth in the indirect property investment market. The largest European funds own upwards of €5bn of assets, with minimum investment levels from €100,000.

— Cormac Weldon, Threadneedle Investments

Why should investors continue to back US equities when they have delivered only lacklustre performance in global terms in the last few years?

Latin American stocks have resumed their ascent in a four-year rally that has yet to run out of steam. Benchmarks in Brazil and Mexico jumped to record levels in mid-May, making them among the world’s best-performing markets so far this year.

— BP Singh, Atlantis Investment Management

As in recent years, the Indian economy ended Q1 2007 on a strong positive note, with the key macro factors of globalisation, favourable demographics and economic reform leading to buoyant economic data and strong corporate earnings.

— Todd Henry,T. Rowe Price

It’s no longer hard to find a manager offering a truly global equity fund. Even US unbelievers have been converted – and domestic markets do well from the trend too, writes Gerry O’Kane.

Lee Spelman, head of US equity client portfolio managers at JPMorgan Asset Management outlines how 130/30 can make traditional assets work harder and smarter and what attributes a good manager of the strategy should possess.

— Griff Williams, Pioneer Investments

Griff Williams, institutional product strategist at Pioneer Investments, explains how an innovative approach to 130/30 investing can bring investors the best of both worlds.

— Rick Roberts, First Quadrant

On the cusp of celebrating its 20th anniversary next year, First Quadrant is rolling out a 130/30 platform to augment the $27bn the firm manages in active long-only and long-short market neutral equity strategies as well as global macro. First Quadrant partner and director of international marketing, Rick Roberts, spoke to FT Mandate about the Extended Equity concept and about the firm’s competitive edge in the product.

— Richard Lockwood, Morgan Stanley Investment Management

The move back towards bonds could be viewed as a more cautious approach by fund managers, but the new allocations are not fixed income as we know it, writes Elizabeth Cripps.

Global diversification in equities is common but its advantages have yet to be fully realised in most fixed income portfolios, writes Loomis, Sayles and Company L.P.

Investment classes once deemed the route of the brave are now gaining

acceptance in traditional investment houses, fuelled by LDI. And where this approach is popular, portable alpha follows, writes Christine Senior.

Gianluca Oderda and Stephen Barber of Pictet Asset Management outline the theory of an atomised approach, which combines alpha generation plus a set of risk premium contributions.

So-called ETCs are opening up access to a headline-making asset class. What are their advantages? And how might they change commodity markets? Martin Steward reports.

— Sebastien Buczek,ING Investment Funds

Poland is still attractive to western investors, with turmoil in the country’s largest bank opening opportunities, but shake-ups in Ukraine make it an exciting prospect, writes Yuri Bender.

— Jerome Booth, Ashmore

Two leading managers in long-short equity and emerging-market debt see a wealth of opportunity in Eastern Europe – but a passive ‘convergence’ play doesn’t cut it, writes Martin Steward.

The Edinburgh Partners European Opportunities fund is shunning emerging Europe and believes the American wobble could produce some under-valued stocks in Europe, writes Gerry O’Kane.

— Stavros Siokos, Citi

The onset of MiFID and the rapid adoption of electronic trading has left both the buy-side and the sell-side dealing with a raft of changes. Industry players got together at the TradeTech summit to discuss these issues. Nat Mankelow reports.

— Philippe Teilhard, Fimat

Prime services is no longer the duopoly it was. Martin Steward finds out how newer entrants distinguish their offering and move from niche to core provider in a competitive market.

— Dr John Bates, Progress Software

Customised algorithms can provide the edge that traders need to compete effectively in the FX market and can offer them access to multiple liqduity pools, writes Dr John Bates.

— Gary Janaway, Schroder Fund Services Luxembourg

It is amazing that around 50 per cent of all transactions still involve manual intervention via a phone or a fax when there are automated systems that are more accurate and could save costs.

— Pierre Oger, Caceis Bank Luxembourg

Caceis has developed an IT tool called Cloning which allows for the globalisation of management and administration of assets belonging to varied legal entities. Pierre Oger explains.

— Bernard Hanratty, Citi

It has, claim industry players, once again been a stellar year for the fund administration business. But with the larger firms all clamouring for M&A activity to gain much-needed scale, and increasing demands fuelling offshoring, is it really all that rosy? Gerry O’Kane reports.

— Frédéric Pérard, head of Global Fund Services at BNPPSS

Flying in the face of tighter margins and increased competition, Frédéric Pérard at BNP Paribas Securities Services believes that the opportunities in fund administration in Europe are far more prolific than those in the US. Gerry O’Kane reports.

— José Santamaria, RBC Dexia Investor Services Trust

Consolidation has seen many fund administrators unwilling to take on smaller hedge funds. However, the pressure is not one-sided, as hedge funds build NAV calculation infrastructures, administrators must deliver, writes Ceri Jones.

With increasing numbers of mergers and acquisitions in the fund administration space and a more global focus, how can players in the industry keep pace with demands for technology, talent retention and good service? Industry experts give their view in our latest roundtable discussion.

Henry Smith: In terms of number of players and their capabilities, what is the fund administration landscape going to look like three-to-five years hence?

Barry Carroll: There is going to be a polarisation. What everyone has talked about here is quality and yet these big acquisitions tend not to be highly successful. Indeed, because big organisations look upon them as an EBITDA curve, a cash cow – they rarely anticipate the opportunities and inject what is really required.

Increasing consolidation of global custody and fund administration have left niche players without the resources to compete with the bigger firms. Alan Dundon, global head of product, fund administration and middle office outsourcing, BNP Paribas Securities Services speaks to FT Mandate.

— Jervis Smith, Citi

Jervis Smith is the head of managed funds and insurance sector – for Europe, Middle East and Africa – within Citi’s Global Transaction Services business. He discusses the major trends in asset management and how securities services providers can help asset managers meet their clients’ changing needs.

— David Claus, Bank of New York

New opportunities abound in the fund administration world with the onset of Ucits III, with clients interested in seeing what it offers. However, with greater regulatory demands being placed on them, many smaller players are falling by the wayside, writes Gerry O’Kane.

— Susan Ebenston, JPMorgan Worldwide Securities Services

As more and more demands are placed on asset managers, such as regulatory requirements and the increasing uptake of alternative investments, many are outsourcing non-core competancies. Third-parties must make sure they aid rather than inhibit their clients’ development, writes Ceri Jones.