Multi-managers appear to be cashing in on the decline of the old style balanced mandate, growing their assets under management by an average of 28 per cent last year. SEI Investments has just hit the $100bn (e82bn) mark, up from $75bn last year.

There are signs that the hedge fund honeymoon period could be over, as the flow of money into the products slumped substantially in the past few weeks.

Hedge fund performance is also down, with the Hedge Fund Research Composite Index measuring a negative 1 per cent for the second quarter of 2004.

Newcomer UK equity specialist Majedie Asset Management is emerging as a darling of investors. Its standard UK equity product has topped performance rankings compiled by Russell/Mellon Caps, bringing in an impressive 30.2 per cent for the 12 months to June 2004. This compares with the median of 16 per cent for the period.

Exchange traded funds (ETFs) are emerging as a handy route to investment by sector.

Whereas the products have traditionally been known as vehicles for efficient exposure to global and country markets, the new use for ETFs is becoming popular, as they continue to attract increasing numbers of investors.

The Bank of New York has scooped the world’s first multi-country securities services outsourcing mandate. RCM UK, part of the Allianz Dresdner Asset Management Group, has selected BNY to run the back and middle offices of its $8.75bn (e7bn) in assets under management. The bank will combine this contract with one it was awarded by RCM’s San Francisco branch in 2003.

Indexers are celebrating increased inflows to both their passive and enhanced products thanks to the rise of specialist fund management. The total value of assets in indexed funds shot up by 38 per cent in 2003, according to the latest research from investment consultants Watson Wyatt.

Dutch pension funds could be forced to adopt a more conservative investment approach if controversial government proposals to reform retirement provision become law.

Pioneer Investments has bagged a $3.6bn (e2.9bn) brief from the Safeco Life Insurance company, in one of many deals indicating that the big money for fund managers is coming increasing from insurers.

Pioneer will run 22 mutual funds managed by Safeco Asset Management, part of the eponymous US insurer.

The UK pension fund industry looks set to be subjected to yet another shake-up, under which the trustee system may be scrapped. The powerful National Association of Pension Funds (NAPF) is reviewing both the training of trustees and, in a separate study, the employment of trustees.

Northern Trust Global Investments (NTGI) has poached Helen Macdonell from Hermes for its international active equity team. The move is part of a plan to launch a global active product in the first quarter of 2005, revealed Stephen Dowd, head of international equities at NTGI.

European securities services firm Kas Bank is boasting a rise in profits on the back of new products and clients. Kas has reported a 7 per cent increase in profits to E8.8m for the first half of 2004.

The results are due to new client wins and the expansion of existing customer relationships. The most recent custody deal came from the UK-based Ł320m (E448m) Norcross Security Plan.

“At Allianz, you could tell how well you were doing by the number of windows in your office,” said Bastian Schmedding, who has left the Munich insurer’s Geneva hedge funds arm to oversee the acquisition of new institutional assets for Union Asset Management in Frankfurt.

Gartmore, making leaps and bounds to shake-off its UK-biased brand in favour of a global remit, has taken the surprise step of merging its European bank introduced business with the UK retail offering.

This flies in the face of competitors including Schroders, Merrill Lynch and Goldman Sachs, which approach distribution and sub-advisory business with the same sales force.

Having breached the E5bn barrier in European exchange-traded funds (ETFs), Barclays Global Investors (BGI) has also squeezed in front of HVB, its key continental rival in terms of market share. BGI’s iShares franchise now runs $92.2bn (E76bn) globally.

Investment banks are taking on asset managers at their own game.

Passive managers have long competed on price and add-on services rather than performance. This commoditisation has also encroached into the active equity and bond management world. With little to differentiate between competing investment processes, trustees often make manager selection decisions on softer issues such as personalities.

Paul Manduca, head of Deutsche Bank’s asset management activities in Europe, is a big fan of English football club Wolverhampton Wanderers. He even insisted on a special “Wolves” room for his new high-tech German headquarters on Frankfurt’s Mainzer Landstrasse.

Andreas Utermann, global chief investment officer at Allianz Dresdner Asset Management, tells Henry Smith how the firm intends to boost equity business and achieve its aim of becoming one of the top three world players by the end of 2005.

The pension provider PSS/CSS is aiming for positive returns in at least four years out of every five. Among the strands of its strategy are lower equities holdings, fully hedged currency risk and its hallmark active management, writes Tim Blue.

Hugo Lasat, chairman of Dexia Asset Management, has overseen a busy period of integration. He talks to Yuri Bender about re-shaping the product range to avoid duplication while adding an ethical dimension.

For stock selectors, there has been a welcome return to normality this year, after the roller coaster of 2003 post-March 12. This year, cheap companies with improving prospects and relatively high profitability have performed well. In some ways, this is remarkable – with conflicting signals from the European economy and a volatile external environment.

In the past few years, managers have been trimming fat from balance sheets that were bloated with leverage and unamortised goodwill. In the process, corporations built up huge hoards of cash. Since the bubble burst three years ago, sales have grown at a 3.5 per cent annual rate for companies of the S&P 500 Index. Cash on their balance sheets has compounded nearly four times as fast, at 13.4 per cent.

Latin American markets have largely recovered from the temporary dip in April and May, in turn the result of changing expectations of US interest rates. If anything, developed market equities look most vulnerable to further global shocks; and US equities, finding it difficult to gain any upward traction, look more sensitive to rising US interest rates than bonds.

After a decade of economic stagnation and frequent false dawns, renewed signs of recovery in Japan unsurprisingly brought with them a flood of foreign investors in 2003. From the spring of last year, inflows of equity capital poured into Japan, boosting the Nikkei (by around 59 per cent from trough to eventual peak) and prompting an unprecedented intervention campaign by the ministry of finance to prevent the yen from going along for the ride.

The Canada Pension Plan (CPP) Investment Board was set up in 1996 as an independent investment company to invest the funds not needed by the CPP to meet current pension payments. It also invests the proceeds from maturing bonds held by the CPP.

The Maryland State Retirement and Pension System (MSRPS) recently reported a 16.2 per cent return on investments for the 12 months to end-June, which boosted assets during the period by Ł3.5bn to Ł30.1bn.

The strong performance was led by equity returns of 23.1 per cent and returns on real estate in excess of 20 per cent.

A mighty global bond mandate has made Morgan Stanley Investment Management the number one fixed income manager when ranked by new business. Henry Smith reports.

Prudential M&G’s fixed income team uses longer and shorter-term valuation tools in their stock selection for a diversified portfolio.

To make the best of bond portfolios, trustees must give freedom to asset managers to exploit their skills in the global markets, writes Nick Horsfall.

The Environment Agency in the UK has tendered three mandates worth a total of Ł295m (E432.7m) following a strategic decision to shift the management of its Ł980m Active Pension Fund from a balanced to a specialist structure.

A disciplined investment process underlies GSAM’s growth success in global tactical asset allocation. The management team tell Elizabeth Cripps how they make investment decisions and how they attract clients.

Small allocations to non-investment grade vehicles are boosting returns for the European Strategic bond Sicav, writes Roxane McMeeken.

New products from national treasuries are spurring growth in the inflation-linked bonds market. Gerry O’Kane reports.

US Treasury inflation-protected securities are big business. Henry Smith interviews one of the key personalities overseeing their issuance and growth.

Inflation-linked securities, with their high correlation to liabilities, will play an important part in pension funds’ strategies to reduce risk while delivering returns in excess of liabilities, writes Tarik Ben-Saud .

Returns from a traditional portfolio can be further enhanced when global inflation-indexed bonds are held instead of a solely domestic inflation-indexed bond allocation.

The current economic environment makes inflation-linked bonds a suitable vehicle for investment, say Jean-François Boulier, Isabelle Vic-Philippe and Said Moualil. But what are the main sources of added value?

What is driving the increased demand for inflation-linked securities? Susanne van Dootingh discusses the drivers, focusing on the

Europe-wide trend towards liability matching.

A moderate, sustained increase in inflation could result in unwelcome capital losses for investors in conventional government bonds. Paul Grice argues the case for instruments offering returns that move in tandem with rising prices.

BNP Paribas Securities Services is migrating clients to an internal transfer agency system after its strategic partnership with BrainTrade was derailed. Yuri Bender reports.

If the G30’s plan for a cheaper, more efficient and less risky clearing and settlement system is carried through, investors will benefit. But progress is surprisingly slow, Roxane McMeeken reports.

The growth of online FX trading and settlement systems has helped institutional investors reduce costs while at the same time cutting risk, says Mark Warms.

The global custody business is tough on resources and aggressively competitive.

FT Mandate’s latest survey finds the top dogs are turning increasingly to outsourcing deals, Roxane McMeeken reports.

State Street has manoeuvred itself into becoming the world’s biggest custodian via Deutsche Bank’s custody business. But how comfortable is life at the top?

If it ain’t broke, don’t fix it. The Bank of New York intends to stick to its philosophy of growth through acquisition.

Undeterred by industry swipes at the teething problems that beset the Schroders outsourcing deal, JPMorgan targets Europe’s insurers.

Strong organic growth, particularly in Europe, gives Citigroup every reason to be cheerful, even if business could be better at home.

FT Mandate’s research on processes and performance of

pan-European bond players is analysed by Henry Smith.

Multi-factor scoring system is part of five-step investment process.

The fixed income team develops asset and liability management products paying close attention to investors’ liability objectives.

DeAM’s predicts more inflation indexing and corporate bond investment.

A proprietary quant model and bond managers’ knowledge are combined to plot fund strategy.

The global custody business is tough on resources and aggressively competitive.

FT Mandate’s latest survey finds the top dogs are turning increasingly to outsourcing deals, Roxane McMeeken reports.