Hedge funds gain ground in Nordics

Forty-one per cent of Nordic institutional investors are expected to increase their allocations to hedge funds, according to a survey by SEB Enskilda Prime Brokerage.

Intech, the specialist equity manager with around $39bn (€30.5bn) of assets under management, will put in place a new leadership structure by 2012 and consider offering strategies based on other asset classes, according to its investment chief.

Money market traders must beware the risks of a sovereign debt default, writes Chris Oulton.

Global fund houses should not be overly concerned about the China Investment Corporation’s (CIC) declared intention to manage more of its assets internally, according to Shanghai-based investment consultants Z-Ben Advisors.

Private equity is coming back to life, says Cynthia Duda.

Pension funds that are not prepared to lose 20 per cent of their investment should steer clear of hedge funds, according to Alexandre Col, head of the investment fund department at Banque Privee Edmond de Rothschild in Geneva.

Markets have yielded a few surprises, explains Urban Larson.

Investors could see all of the outperformance generated by their private equity fund managers eaten away by fees if they are not careful, warns a new report by consultants Towers Watson.

Strong balance sheets are boosting dividends, says Jason Pidcock.

HSBC Global Asset Management will double the number of ETFs on its books by the end of the year and offer five times as many by 2011, its funds boss told FT Mandate.

With rival central counterparties ‘competing on margin’, a leading OTC derivatives clearer warns they are putting the system at risk.

USS wants governance code extended
The Universities Superannuation Scheme (USS) has called for a newly-launched code on investor engagement to be extended to asset classes other than equities.

One of the most innovative capital-raising exercises ever undertaken by a European bank might never have happened, according to one of its senior creators.

The Greek fallout has been felt across Europe, dominating investors’ minds, writes Dean Tenerelli.

A “dramatic liquidity imbalance” in the US equity markets led to a severe fall in the value of hundreds of securities, with the S&P 500 Index losing 7 per cent at one stage, senior officials have told a US Securities & Exchange Commission (SEC) inquest into the May 6 market rout.

Activity picks up but investors watch Obama, says Phillip Davidson.

Despite showing a greater appetite for external asset managers, institutional investors in Asia are looking to expand their in-house investment management capabilities, according to recent research by Greenwich Associates.

Poorer, developing nations value economic orthodoxy more than richer countries, writes Jerome Booth.

There is no conflict between incorporating environmental, social and governance (ESG) principles into investment decision-making and generating financial returns, according to Andrew Marino, a principal on the US buyout industrial team at the Carlyle Group, a global private equity firm.

Asia’s resilience is marked by a flight to private equity and IPOs, says Khim Tan.

Trust is a huge and fundamental issue for investors and asset managers must become more client-centric if they want to survive in an uncertain, post-crisis market environment, delegates attending the recent Fund Forum conference in Monaco were warned.

Price wars and subsequent lowered funding have led routing technology providers to zero in on fund managers and brokers.

Oxford University’s managed funds outperform their Ivy League counterparts, but a merger with other endowments is ruled out.

Demand for fixed income and real estate mandates picked up significantly in 2009 as institutional investors in Australia, UK and continental Europe sought to take advantage of low corporate bond valuations and certain commercial property markets, according to Mercer’s latest investment manager search trends report.

UK property remains the leading sector for institutional investors to loan out their shares, according to a new report on securities lending by Data Explorers.

Easy money has been made on equities, but the run isn’t over yet, writes Andrew Goodwin.

Despite increased scrutiny from shareholders, company directors are continuing to award themselves generous pay packages that lack clear links to long-term performance, according to F&C Investments.

Trends will combine to give a boost to convertibles, says Justin Kass.

The European Union’s draft directive on Alternative Investment Fund Managers (AIFM) has the potential to damage the interests of institutional investors in hedge funds, according to Stephen Oxley, CEO of the $10bn (€7.4bn) fund-of-hedge funds firm Pacific Alternative Asset Management Company.

How effective is Brazil’s monetary policy? asks Floris Kleemans.

Despite, or perhaps because of a year-long recovery in the stock market, European pension funds continue to reduce strategic allocations to equities, while increasing their exposure to bonds and alternative investments, according to Mercer’s annual European Asset Allocation Survey.

Asian markets are set for a strong year, says Mark Konyn.

Russia’s equity markets are readying themselves for a wave of institutional investor and proprietary trading activity as barriers to entry begin to fall in one of the world’s least accessible venues.

Sweden’s AMF Pension fund sets its sights on Chinese real estate with a view to possible investment.

Dutch pension schemes post solid 2009 returns

A strong year for risk assets propelled Dutch pension schemes to a gain of 14.6 per cent in 2009, according to State Street Investment Analytics.

A dark pool to be launched this year by UBS will not go head-to-head with the current crop of multilateral trading facilities (MTFs) such as Chi- Delta or Turquoise, delegates at this year’s World Exchange Congress in Barcelona heard.

Recovery is under way, but people’s expectations have shifted, says John Gripton.

Portfolio diversification works best when investors include strategies that protect against tail risk.

Political wranglings over reforms are creating opportunities, says Helen Ford.

Since its introduction last May, the ECB’s purchase programme increased covered bond issuance from €15bn to over €100bn, with predictions for 2010 sitting at €150bn.

The Chilean quake has forced some changes in policy that could create market opportunities in the medium term, writes Urban Larson.

PFZW’s managing director Peter Borgdorff has said he is unhappy with the €86.1bn pension fund’s solvency level, despite it returning to a healthier 108 per cent.

Government policy is affecting markets more than ever, writes Jason Pidcock.

Institutional investors need to radically shake up how they diversify assets in light of the financial crisis, research of buyside habits over the past year shows.

High double-digit hedge fund returns are unlikely in 2010 because the opportunity set today is less attractive than it was a year ago, according to Guy Saintfiet, senior hedge fund researcher at Hewitt Associates.

Dark pools and MTFs are streamlining, but they serve different needs and should be treated as such, writes Will Rhode.

Guests at a recent European structured credit conference in the UK heard of the need to close the refinancing gap as the ‘elephant in the room’.

Post-MiFID spending to rise

According to new research published by Tabb group, spending by brokers and trading venues in Europe on post-MiFID trading surveillance products will increase annually by 13 per cent from 2009 to 2012, rising to €185m in 2012.

Is the time right to consider an exposure to euro high-yield bonds? asks Arif Husain.

Pension funds are increasingly looking to outsource their over-the-counter (OTC) derivatives operations to get a better idea of counterparty risk and the true value of their trading positions.

Higher quality, better value sector and stock selection are the keys to succes in 2010, says Felix Wintle.

China’s Qualified Domestic Institutional Investor (QDII) funds suffered poor performance and significant outflows in Q4 2009, giving rise to uncertainty about future prospects, according to a report from Shanghai-based consultants, Z-Ben Advisors.

A survey conducted by Greenwich Associates found that many hedge fund managers are changing to reduce counterparty risk and become more attractive to investors.

More insulated than most developed nations from economic and political turmoil, Latin America is now the world’s investment safe haven, says Jerome Booth.

Pension funds need to take on a radical new approach to their risk management structure, according to consultants.

Asian environmental firms are seeing a boost in share prices, writes Bruce Jenkyn-Jones.

Many funds-of-hedge funds have failed to tackle issues such as the quality of their manager due diligence process. Consequently, there is still a case of ‘buyer beware’ for investors, according to David Butler, founding member of investment consultancy Kinetic Partners.

American pension funds are dramatically adjusting and rethinking their strategic asset allocations and throwing out many traditional notions of diversification and investment. While many institutions around the world are staying the course with long-term investment models, US institutions are looking at new ways to meet liabilities.

The New Zealand Superannuation Fund includes transparency and lack of government interference among its strengths, but the battle is on to avert a future pensions crisis.

Despite the decline of the DB pensions sector, and the emergence of DC, managers are failing to align themselves with this shift.

Curtain closes for draper at Lyxor

Former iShares employee Dan Draper has left his role as global head of ETFs at Lyxor, the Société Générale asset management unit.

Denmark’s DKr219bn (€29.4bn) pension and insurance company PFA could expand its asset management operations abroad, according to its chief executive officer Henrik Heideby.

Disparity in countries’ recoveries leave many markets vulnerable, says Marcus Svedberg.

Investors are still in a risk reduction mentality despite growing confidence in markets, according to Kathleen Hughes, head of global liquidity EMEA at JPMorgan Asset Management.

For now, lower growth and higher prices are the order of the day, which will boost real assets, says Don Ross.

CIOs are keen to improve risk management and compliance systems as IT budgets are likely to increase following a year of technology cost-cutting measures.

Chile looks set to flourish in 2010, the overconfident Brazilian market offers opportunities in some stocks, while Peru makes a V-shaped recovery, says Urban Larson.

Proposals announced by US president Barack Obama banning banks from proprietary trading, owning hedge funds and private equity firms, will be impossible to implement and could be detrimental to asset classes relying on high levels of gearing to generate positive investment returns, according to industry observers.

China’s yuan peg has received criticism for its impact on trade and beyond, writes Greg Meier.

Hedge funds rebounded strongly in 2009 by posting the highest returns since 1999, according to Hedge Fund Research (HFR).

The trend for large firms to rebrand each of their specialisms to achieve a more personal touch shows no sign of abating, writes Yuri Bender.

APG takes advantage of the growing opportunities in Asia as it creates and expands multiple teams in Hong Kong.

Money funds get new industry guidelines

The Institutional Money Market Funds Association (IMMFA) has changed its code of practice in light of the events over the last two years, it says.

One of Europe’s biggest pension funds will continue to eschew any investments in hedge funds as long as powerful trade unions retain seats on its strategy-setting board.

Emerging Europe is aiming for the debt/GDP target with some vigour, writes Jerome Booth.

The Hong Kong Pensions Regulator appears set to relax investment rules on hedge funds and equities.

Outperformance in small and mid-cap equities can be achieved with research, writes David Wagner.

China’s Qualified Domestic Institutional Investor scheme is set to swell in 2010, and with it will bring a raft of business opportunities for sub-advisory mandates.

The Brazilian and Mexican markets are slowly picking up the pace as investors regain an interest

in Latin America, writes Dave Woolford.

The future of a real estate and infrastructure investment company run by Iceland’s pension funds could be in doubt after disputes arose from a meeting with politicians.

Appreciation of the RMB will be a key topic for 2010, writes Yang Liu.

Two of Europe’s biggest alternative trading venues – Bats Europe and Chi-X – are demanding the London Stock Exchange (LSE) and other primary exchanges set up a protocol for what to do when trading suddenly stops because of computer failure, as it did on two separate occasionvs at the LSE last month.

Icelandic pension funds are coming together to form a joint real estate investment company and help fund infrastructure projects.

Gold trounces currencies

With gold breaking through $1,000 (e668) an ounce, investors should now be looking to switch from mining companies to gold bullion to capture some of the commodities bubble and reduce exposure to currencies, according to Percival Stanion, head of asset allocation at Baring Asset Management.

Private equity giant Kohlberg Kravis and Roberts (KKR) intends to open an office in Riyadh, Saudi Arabia in the near future.

Yield rates in the UK and Europe remain static and a rise in the short term looks unlikely, writes

Dennis Gepp.

The $8.2bn (€5.4bn) State General Reserve Fund of the Sultanate of Oman, a sovereign wealth fund (SWF), has awarded a $300m Russian real estate mandate to international financing group VTB Capital.

Earnings are gathering momentum and driving the market forward, writes Seung Minn.

The rise of middle class spending is driving wealth expansion in many African nations and transforming the continent into a regional private equity investment centre.

The economic condition of Latin America, when set next to its European and US counterparts, is glowing, writes Jerome Booth.

European money market funds could be a step closer to agreeing on a definition for their flagship products, meaning better protection for buyers that don’t realise funds can hold the same credit and liquidity risks of any other investment instruments.

Domestic demand and state intervention boosted Asia’s economies, writes Khim Tan.

Hedge funds are continuing to charge high fees despite pressure from investors to lower their costs.

Pension fund trustees are “simply switching off” in the face of growing investment complexity, according to Chris Edge, chief executive at AllenbridgeEPIC Investment Advisers.

If 2008 was the year when triple A liquidity funds met rising redemptions with plain vanilla products, are we now seeing a return to risk, despite some funds claiming to be ‘asset-backed free’, as yields cling near zero per cent?

Although many institutions are looking to lower their risk, emerging market investments are still generating interest.

Deficits still have a long way to go

Pension deficits for FTSE 350 companies were reduced by £10bn (€10.7bn) last quarter, according to consultancy Hymans Robertson.

Pension schemes should steer clear of absolute return foreign exchange strategies, according to an investment consultant at Watson Wyatt.

Forecasts on the way out of a crisis are generally overpessimistic, writes Marcus Svedberg.

China is a step closer to rivalling the US as the largest provider of trade currency for Asian corporates and investors after the first ever cross-border transaction denominated entirely in renminbi (RMB).

Liquidity has restored buoyancy to asset prices,  writes Daniel C. Peirce.

Real estate opportunities in Europe have pushed one US financial services firm to expand its operations in London, which could also see a boost to its bond business.

Premiums for Latin American currencies have disappeared as markets admitted they were able to withstand the global crisis, writes Manuel Canas.

A global investor services company will add sovereign wealth funds and other state-owned investors to its books as the scramble for custody business in Asia intensifies.

A global economic upturn will also allow China’s export markets to recover, writes Anh Lu.

Laerernes Pension (LP), the DKr26bn (€3.5bn) Danish teachers’ pension fund, has indefinitely postponed its planned Eastern European timber investments.

Despite suffering steep losses on the stock market last year, institutional investors in America have largely stuck with the same investment policies they were adopting prior to the credit crunch, according to a report by the Conference Board, a US-based non-profit management organisation.

There are deep concerns that the global financial system has yet to fully assess the structural imbalances that have led to the worse economic downturn for 50 years, senior officials told a gathering of banks and financial technology vendors in Hong Kong recently.

Settlement firm clears the way

Transaction settlement firm Euroclear will introduce its fund clearing platforms to the UK this month.

Pension funds have been warned against trying to capture an asset bubble by looking to buy into a market at the bottom and sell out at the top.

Recent events will mean a return to the simple life, believes Simon Thorpe.

Forestry investment looks likely to have an active remainder of the year as the asset’s performance through the credit crisis has caught the attention of many, particularly in Europe and the UK.

There is at last enthusiasm for an economic rebound, writes Peter Anderson.

Fifty per cent of defined benefit (DB) pension funds in the UK have not formulated a long-term strategy to reduce risk, according to a survey of pension scheme trustees by consultants Hymans Robertson in conjunction with the PensionChair Network and Winmark Research.

With global trade volumes at a cliff edge, are letters of credit experiencing a boom in Latin America? John Ladany investigates.

Fund managers remain cautious despite more optimism that the global economy is back on track.

There are several indicators that the Japanese economy could have a new lease on life, writes Kenichi Kubo.

Active management’s role within pension funds is under scrutiny, and it appears the bar of ‘reasonable expectation’ is shifting. By Henry Smith.

Asset boom Global hedge fund assets will rise at a compound annual growth rate of approximately 12.1 per cent between 2009 and 2013 to return to 2007 levels of $2,900bn (€2,077bn), according to research from Cerulli Associates and HedgeFund.net.

Hedge funds are not expected by Goldman Sachs Asset Management (GSAM) to flee the UK should tougher regulations be passed by the European Union. By Spencer Anderson.

Equities have witnessed a rally of late, and a cautious approach will yield results, writes Dean Tenerelli.

ATP, the DKr355.6bn (€47.7bn) pension scheme, could double its exposure to credit in the coming year, according to its chief investment officer Bjarne Graven Larsen. By Spencer Anderson.

The shape of the recovery will affect long-term stability, writes Peter Anderson.

Stellar performance by overseas investing funds in Q2 has opened up further opportunities for China’s investors as fund managers plan new product launches. By Henry Smith.

Latin America has suffered indirect hits from the credit crunch. But ironically, the global crisis will eventually help propel its economy, writes Jerome Booth.

The regulatory overhaul of investment services in Europe through MiFID has been far reaching, though its impact on competition for exchanges remains uneven two years after its introduction, according to a new report. By Nat Nankelow.

Japanese equities are favourably priced, writes Yoshihisa Nakagawa.

Pimco, the $750bn bond investor. He pointed to traditional sources of demand such as credit funds receiving a boost from alternatives sources of liquidity like gilt and equity investors. By Nat Mankelow.

The investment industry’s herd mentality is damaging many pension funds’ chances of survival over the long term. By Henry Smith.

Diversity still drives US investors

The impact of the financial crisis has not deflected US institutional investors from their pursuit of portfolio diversification.

Opinion is divided on whether BlackRock’s $13.5bn (€9.7bn) acquisition of Barclays Global Investors (BGI) will benefit clients. By Spencer Anderson.

The UK property market looks favourable against other countries, writes Andrew Allen.

Asset managers have a massive mountain to climb if they are to repair the significant loss of confidence from customers who have seen their savings and investments “destroyed” in recent months, one of the industry’s most influential figures has said. By Nat Mankelow.

A lack of credit is proving challenging for fund managers and investors, writes Katharina Lichtner.

Keva, the €20bn Finnish local government pensions institution, has moved an estimated €1bn of its emerging market equities from passive to active management. By Spencer Anderson.

ECA financing is being implemented across the region to boost Latin American economies hit by the global recession, writes Valentino Gallo.

The alternative exchanges marketplace is on the verge of a price war as many of the trading platforms that have sprung up this year fight for survival. By Nat Mankelow.

The Asian markets are showing positive signs, writes Joseph Wat.

Now is the perfect time for asset managers looking to gain a foothold in China to buy into or establish a Sino-foreign joint venture (JV) fund management company, according to Shanghai-based investment consultants, Z-Ben Advisors. By Henry Smith.

Investors continue to flee the rapidly-sinking asset class following last year’s financial meltdown, as a US group calls for funds to offer greater resilience to redemptions. By Nat Mankelow.

Irish and UK pensions will allocate more to alternative investments as a result of 2008, according to Goldman Sachs. By Spencer Anderson.

Hedge funds are on shaky ground as principal reveals failed business models are scattered throughout the sector. By Henry Smith.

The flight by FTSE 100 pension funds out of equities and into bonds appears to be accelerating, according to research by defined benefit scheme consultants, Pension Capital Strategies (PCS).

Sovereign wealth funds (SWFs) around the world will be gathering in the Azerbaijani capital Baku to draw up a set of ‘principles of best practice’. By Spencer Anderson.

Analysts have missed the point when it comes to eastern Europe, writes Marcus Svedberg.

The European Commission’s draft directive on alternative investment fund managers does not go far enough in how it proposes to regulate the hedge fund industry. By Henry Smith.

While the US markets start to revive, job losses continue to hamper their recovery, writes William H. Cunningham.

Exchange traded funds have been insulated from the market downturn, but more so in Europe than the US, where net sales fell rapidly at the beginning of 2009. By Spencer Anderson.

Prudent policies and debt sustainability means many Latin American countries have warded off the worst of the financial downturn, writes Floris Kleemans.

With buyout deals on the increase, emerging Asia is gaining prominence in the private equity arena, writes Khim Tan.

The European Federation for Retirement Provision (EFRP) is hoping to add the Czech Republic, the Baltic states and Bulgaria as members to the organisation. By Spencer Anderson.

The €900m defined benefit KBC Pension Fund is considering an investment in insurance-linked securities (ILS). By Spencer Anderson.

iShares will continue to focus on client relationships and delivering new products despite uncertainty over its ownership. By Nat Mankelow.

Christopher Alderson has been appointed president and CEO of T.Rowe Price International (TRPI) following the retirement of David Warren. Mr Alderson, who has been with TRPI for 22 years, has led the firm’s Global Emerging Markets equity investment strategies since 1997.

Crédit Agricole Asset Management – Real Estate (CAAM RE), intends to expand its business and investments into Germany and the UK this year.

Investing in bonds may become a very risky strategy in these unprecedented market conditions, writes Chris Oulton.

Several foreign private equity firms are opening offices in Brazil, according to ABVCAP, the country’s private equity association.

Fund managers have started finding value in equities by trying to identify who will emerge from the current turmoil on top, writes Alison Cratchley.

Europe’s securitisation market declined throughout 2008, and recovery is dependent on investors’ regaining their confidence and stability returning to financial markets. By Henry Smith.

The core markets of Brazil, Mexico and Chile are well placed to benefit from a turnaround in the global economy, write Stefan Herz and Ian Simmons.

Asset managers appear to be paying mere lip service to the importance of creating a risk management process that reports all the way to the top of their organisations.

Regional central banks now need to reduce the levels of foreign currency reserves that they have built up over the past decade, writes Jerome Booth.

Denmark’s pension funds are positioned to increase their allocations to real estate in the coming year.

A new committee will ensure the Irish National Pensions Reserve Fund invests in a socially and environmentally responsible manner. By Henry Smith.

Muzinich & Co has launched a socially responsible high yield bond fund. The fund will invest in US dollar denominated bonds issued by companies with strong environmental, sustainable and governance policies as well as solid creditworthiness and quantitative attractiveness. Josh Hughes, director of institutional sales at the firm, said the fund would offer attractive returns with the added benefit of having a positive impact on the environment.

The absence of a domestic pension fund base and the collapsing wealth of Russia’s oligarchs have left serious liquidity shortages in both long-only and alternative investments, according to Moscow-based money managers.

Now may be a good time to start investing in private equity, writes Dr Katharina Lichtner.

The appetite for government debt from investors is as strong ever, despite fears that a huge rise in issuance could swamp the market after new plans to rescue banks was announced.

Before any meaningful economic recovery can take place in the US, housing prices must stabilise, writes Scott Simon.

Investors remain nervous about equity and bond funds preferring the safety of money market funds, though financials have enjoyed their first inflows in months. By Spencer Anderson.

There are some very attractive valuations among Latin American companies for investors with a long-term view, writes José Costa Buck.

Baring Asset Management has called for an immediate suspension of pensions accounting standard, FRS17, following the Bank of England's announcement that it is going to buy up to £150bn (€167bn) of government and corporate debt in a bid to stimulate the UK economy through “quantitative easing”.

Asia ex Japan economies are in strong fiscal positions and should be among the first to recover, writes Hiroshi Yoh.

Allianz Global Investors has postponed part of its expansion into Scandinavia, despite a profitable year.

Merging the asset management arms of Crédit Agricole and Société Générale should benefit their institutional and retail clients. By Nat Mankelow.

A one-page paper from UBS Global Asset Management has urged investors to avoid holding large amounts of cash during a difficult investment and economic environment. The reasoning was that investors would miss out on a recovery and fail to take advantage of low risk opportunities.

Iceland is looking to private equity to help resuscitate its beleaguered domestic companies.

Two new ventures are underway, one from the country’s pension funds, and the other from financial services firm Audur Capital.

Low equity prices offer great value to investors with a long-term view, writes Justin Thomson.

Even if banks heal and profits recover, a sense of disillusionment may limit enthusiasm for equities, writes Daniel C. Peirce.

The covered bond market could be heading for a reversal in fortunes following a series of deals where the bond rating is less dependent from the issuer’s.

Funds of hedge funds are demanding customised accounts in order to gain an accurate picture of the liquidity of the underlying securities they are investing in. By Henry Smith.

Stronger fundamentals mean governments have greater freedom to implement policies to combat the downturn than in the past, writes Marcelo Assalin.

China should prove a great investment opportunity for those with a medium-term view, writes Yang Liu.

Bernard Madoff’s Ponzi scheme was a porcupine of red flags, and yet several institutional investors bought in. By Martin Steward.

Many corporate bonds offer great value but investors must choose their credits carefully to avoid defaults in a tough market. By Henry Smith.

Irish funds were opened to the Chinese market via the Qualified Domestic Institutional Investor (QDII) regime for the first time on October 23, following a memorandum of understanding between the respective regulators.

The next 12 months look set to be turbulent for private equity funds as credit markets remain seized-up even as bargain multiples come to market. Many are warning that institutional investors faced with problems elsewhere will have to reduce their commitments. By Martin Steward.

European equities are good value for investors with a long-term view, writes Arvind Sabharwal.

Strategic diversification – and governance constraints – has offered little protection over recent months and could get in the way of exploiting opportunity, according to two leading consultants. By Martin Steward.

Private sector exposure to mortgage-related securities must be reduced to bring about the end of the credit crisis, writes Christopher Probyn.

Money market funds hope that having central bank funds to fall back on will calm investors' fears and therefore avoid the need to draw on the reserves. By Nat Mankelow.

In light of the recent depreciation of the real, it is time to reassess Brazil's monetary stability, writes Floris Kleemans.

Despite fears of a recession, many of Asia's emerging markets have strong economic fundamentals, writes Yong Moon Kim.

Hedge funds have been cast as the villains who caused the market to collapse when in reality they are the victims of the credit crunch. By Henry Smith.

Many fund managers still believe that emerging economies have, at least partially decoupled and will continue to drive global growth. By Martin steward.

European institutional investors have slowed diversification into other regions’ equity and bond markets, but are ready to continue in less volatile times, according to Greenwich Associates. Twenty per cent will allocate substantially more to other regions, while only 7 per cent plan to pull back; and nearly a third will significantly increase emerging markets exposure by 2011.

FT Mandate readers are invited to attend the Hedge Fund Insights Series 2008, which will address the future of an industry rocked by a wave of redemptions, reduced leverage and heightened liquidity and counterparty risks.

As Barack Obama waits to be inaugurated as the forty-fourth president of the US, some fund managers fear he will enact protectionist measures which could hit the fortunes of companies which trade with America.

Market volatility is set to continue, but now may be the time for medium to longer term investors to start buying equities again, writes Cesar Perez.

A fall in the cost of financing is necessary for a sustainable rally in the equity markets to occur, writes Andrew Tunks.

Increased concerns about counterparty risk may mean that the threatened staff reductions at investment houses will not affect the operational side. By Henry Smith.

The Argentine government’s decision to merge private pension funds into the state system has created an unnecessary financial crisis, writes Daniel Eustaquio.

The economic world is undergoing a seismic shift which will secure China’s growing importance writes John Cleary.

As hedge funds continue to suffer large-scale capital redemptions, asset managers are confident that much of this cash outflow will find its way into long-only equity funds.

Institutional investors have called for greater transparency, increased standardisation and more accurate valuation for over-the-counter (OTC) derivatives as they begin confirming their liability-driven investment strategies for 2009.

The economic climate may be ‘ferocious’, but investors should keep a cool head and avoid counter-productive diversification. By Yuri Bender.

1-in-10 hedge fund managers are not covering their costs with management fees, according to a survey by KPMG for PCE Investors. The average fund spends 45 per cent of management fees are spent on costs – even excluding front office salaries and bonuses.

With the credit crunch having wiped out almost an entire community of investment bank broker-dealers, is a new prime brokerage model emerging from the wreckage? By Henry Smith.

Property investors should not shelter in their domestic markets, writes Alice Breheny.

Systemic solutions are required to address both the current credit crisis and the long-term financial future, writes John M. Balder.

The Alternative Investment Management Association (AIMA) reacted critically to the temporary short-selling bans introduced by finance regulators from September 17. By Martin Steward.

A Fitch Ratings report has found that the management of money market funds may have to be significantly altered to ensure liquidity after underlying investments failed. By Nat Mankelow.

Those emerging economies that are able to control inflation may actually benefit from the credit crisis, writes Jerome Booth.

Asia’s strong fundamentals should see continued growth writes James Wier.

As recession drags on the public sector purse it could provide new opportunities for private infrastructure investors, according to two leading fund managers. By Martin Steward.

The auction to determine the final payout on $400bn (€291bn) of defaulted credit default trades referencing failed investment bank Lehman Brothers could see a net $6bn transferred from sellers to buyers of credit protection. By Nat Mankelow.

The crisis in banking has called into question the swaps-based LDI structures bought by pension funds and whether it is time for a return to cash and government bonds. By Martin Steward.

US Treasury initiatives prompt the four largest American banks to launch covered bond programmes, and more may follow. By Nat Mankelow.

The State Street Private Equity Index posted its first quarterly contraction of IRR growth during the second quarter for 2008, confirming that the ongoing financial crisis is starting to affect the valuations of portfolio companies.

The ECB’s approach to rising inflation should ensure a swifter economic recovery than for the US and UK, writes Tom Beevers.

Investec Asset Management re-domiciled the 26 sub-funds in its Global Strategy Fund range from Guernsey to Luxembourg on July 1, as part of its bid to take its brand to European institutional investors. The move comes hot on the heels of a major mandate from the heart of Europe – a deal to run €1bn of global equities for Raiffeisen Capital Management.

A rising dollar and resurgent equities leaves the US in a better position than Europe, writes Andrew Tunks.

Pioneer Investments has belatedly entered the Irish institutional investment market, and aims to offer “solutions-led” mandates to pension funds. By Henry Smith.

Argentina may have got a bad press recently, but the country could offer a prime investment opportunity, writes Raphael Kassin.

Corporate bond managers have become cautiously bullish again – after getting caught out by central bank hawkishness over spring and summer. Investors are once again predicting loosening policy and a correction from spreads that are pricing-in unrealistic corporate default rates. By Martin Steward.

Despite current worries, Chinese equities look healthy over the long-term, writes William Fong.

The rapidly growing popularity of global equity mandates, particularly among UK pension funds, is contributing to a steady decline in the volume of UK equities under management.

The Universities Superannuation Scheme the second largest pension fund in the UK, has committed $600m (€425m) to Boston, MA-based buyout firm Constitution Capital Partners to invest in North American mid-market private equity funds and direct co-investments. The pension fund will take a stake of around 10 per cent in CCP as part of the deal.

Europe’s securitisation market celebrates a successful transaction and the promise of beneficial law changes in France. By Nat Mankelow.

After a dismal few months for structured finance, a number of deals have come to the marketplace spurred on by the recent injection of central bank liquidity into the financial system.

International Asset Management, the specialist fund of hedge fund manager, has undergone a management buyout to take it out of Fortis Investments. The Belgian group acquired IAM when it merged with ABN Amro’s asset management business in April. By Peter Quest.

The ECB is right to raise interest rates, ensuring inflation expectations do not take off, writes Raj Shant.

The European private equity industry defied the worst of the credit crunch last year, raising €79bn and returning 11.8 per cent on a pooled average basis, net of management fees and carried interest, according to newly-released figures from the European Private Equity and Venture Capital Association (EVCA), Perep Analytics and Thomson Reuters. By Martin Steward.

A US recession now seems inevitable; the question is just how bad things will get. But there are bargains to be had in every bear market, writes Angus Campbell.

Asset managers have to ensure that the default fund option in defined contribution pension schemes must be simple to understand but not simplistic in approach. By Henry Smith.

Brazil has been a success story for investors, but vast improvements could still be made to the country’s economy, writes John Cleary.

Pension funds are prepared to put their weight behind ethically active managers according to a new survey commissioned by KPMG into attitudes towards the Hedge Fund Standards Board (HFSB) best practice standards. By Martin Steward.

Indian growth may slow in the short to medium term, but the long term picture is a healthy one, writes Vinay Gairola.

US institutions surveyed by Greenwich Associates and Global Custodian in October 2007 found 23 per cent planning to increase their hedge fund allocations by 2010 and only 2 per cent set to reduce them. By Martin Steward.

New provisions introduced by the Financial Services Aurthority in their Code of Market Conduct are seen as a response to “bear raids”. By Martin Steward.

Institutional investors and investment banks had inadequate risk models and internal controls to understand and address the risks contained in structured finance products, a report into last year’s credit crisis has found.By Nat Mankelow.

The European Central Bank remains fully focused on the threat of inflation, writes Tony Dolphin.

F&C Investments has opened a new office in Hong Kong with a view to targeting institutional investors and mutual fund distributors in the Asia-Pacific region.By Henry Smith.

Stocks must overcome a wide variety of issues before they can start a

meaningful recovery, writes Daniel Farley.

A new poll by SEI has found that the current market conditions mean pension fund managers would rather decrease portfolio volatility than increase returns.By Martin Steward.

Some countries are squandering the windfall export revenues that they have been enjoying, writes Gorky Urquieta.

June 2008 may turn out to have been a key month for oil prices. June 6 saw a rise of almost $11 (€7)/bbl, the biggest ever single-day increase, and prices nudged a new record at just under $140/bbl on June 16. By Martin Steward.

Intra-regional trade and domestic demand offers some protection against the US slowdown, but the threat of inflation continues, writes Vanessa Donegan.

No evidence has emerged to support fears that the investment behaviour of sovereign wealth funds is politically motivated.By Henry Smith.

The liquidity mismatch developing between funds of hedge funds and the underlying funds could be exposed if investors withdraw. By Martin Steward.

The buyout by Paternoster of the Lonmin Superannuation Scheme and buy-in by Norwich Union of Friends Provident’s DB scheme are indicative of the current scramble for business which, according to a new report from Lane, Clark & Peacock (LCP), has pushed pricing below the typical UK scheme’s funding reserves. But Pension Buyouts 2008 suggests that today’s bargains may represent a “window of opportunity” for sponsors considering the market. By Martin Steward.

Central European currencies have seen massive appreciation against both the Euro and the dollar, writes Jerome Booth.

Middle Eastern fund manager EFG Hermes is looking to exploit the inefficiencies of the Gulf’s largest market with its new Saudi Equity Fund, which is currently raising funds from European and North American investors. By Peter Guest.

Volatility in equity markets means that quality stocks can be picked up at bargain prices, writes Neil Michael.

Institutional investors could have significantly less money available to allocate to private equity, and may be much choosier where they put it. By Martin Steward.

Emerging local currency strategies may provide interesting investment opportunities, writes John Cleary.

A new report from the Tabb Group has found that, despite the credit crunch, the average size of hedge funds has increased significantly in the last two years. By Peter Guest.

Despite struggling so far this year, the future looks brighter for Asian equities, writes Yong Moon Kim.

Sovereign wealth funds should invest through asset managers rather than directly to avoid political repercussions. By Henry Smith.

The multi-boutique operating model must recognise the benefits of passion, persuasion and persistence to get the best out of staff. By Henry Smith.

While the giant American pension systems are refuting South Korean claims and keeping faith with US treasuries, European schemes are keeping their own counsel, reports Nat Mankelow.

Credit spread products and large-cap equities are looking particularly attractive, according to an optimitstic prognosis from the US supergroup. Martin Steward reports.

Intech, the specialist quantitative equity manager for institutional investors, presented research at the NAPF [UK National Association of Pension Funds] Investment Conference in Edinburgh that challenges the widely accepted view that average active managers consistently underperform equity indices.

The investment options under Personal Accounts, the government’s complementary pension scheme due for launch in 2012, are likely to be dominated by passive strategies in order to keep costs down, according to Paul Myners, chair of the Personal Accounts Delivery Authority (Pada).