Brian Bollen's Blog

The Charming Seminars Of Others

The Association of the Luxembourg Fund Industry, ALFI, is trailing an investment fund seminar that will take place on:

Tuesday 6th September 2011;

At the Caledonian Hilton Hotel, Princes Street, Edinburgh EH1 2AB;

Registration opens at 08:30;

Seminar from 09:00 to about 12:30 followed by a buffet lunch;

Participation is free of charge;

Click here for the seminar webpage.

ALFI says the seminar will include sessions on UCITS & alternative UCITS, alternative investments and the AIFMD and corporate governance. The complete programme and registration will be available in mid-July on the webpage highlighted above.

 

 

But Where’s Iseut?

J.P. Morgan has been appointed by Tristan Capital Partners, the real estate investment management firm, to provide fund administration and reporting services. J.P. Morgan’s Worldwide Securities Services business will also provide property level data aggregation and reporting.

Tristan Capital manages three real estate investment funds with total assets under management of €2.8bn and is currently raising additional capital for its third core-plus fund, Curzon Capital Partners III. 

Hedge Fund/Prime Broker Relationship Changed For Ever

The financial crisis has changed the relationship between hedge funds and prime brokers for good. This is one of the key findings of a study by Celent, a Boston-based financial research and consulting firm, and sponsored by Broadridge. New Basis for the Hedge Fund/Prime Broker Relationship: Implementing the Right IT Infrastructure, looks at the changes in the hedge fund/prime broker relationship and how this is fostering an evolution of the IT infrastructure of the prime broker. 

Key findings of the report include:

The financial crisis has changed the relationship between hedge funds and prime brokers for good.  With the default and quasi-default of some of the leading providers in the space, funds have realised that they should diversify their prime broker relationships and require more transparency on the operational processes of their prime providers. However, as the funds industry regains momentum, they are more than ever turning to their prime brokers to provide the services that will support business expansion. Hence, prime brokers need to adapt their offering and IT infrastructure to respond to the changing market environment by:

F&C NIB: Gary Potter And The Invesco Sterling Bond Fund, Greece, EMs and Property Masterclass

Luis bides her time for the right opportunity

The problems in Greece continue to dominate fixed income markets and sentiment has not been helped by the recent disappointing economic data.

Fatima Luis, who manages the F&C Strategic Bond Fund, believes a key vote due to take place in the US on August 2 will be crucial as it approaches the ceiling for its maximum permitted level of debt.  

“Congress must vote to raise the ceiling if the US is to continue to issue new debt. I anticipate that an increase will be approved but that it could go to the wire with much political posturing along the way, leading to bouts of nervousness amongst investors. Nevertheless, this should also create short-term trading opportunities and the possibility of buying longer-term positions at attractive prices,” Luis comments. 

Allianz Going Dutch, Taking Over From…Er…Allianz...

Allianz Global Investors Investments Europe says it will expand its portfolio management activities to the Netherlands from July 1. AllianzGI Investments Europe will assume responsibility for the management of Allianz Netherlands Asset Management’s (ANAM) fixed income, equity and balanced assets totalling €6bn.

The Rotterdam-based Dutch portfolio management team will be integrated into AllianzGI Investments Europe contributing to its pan-European investment process. Mark Reinalda, Equity Portfolio Manager in Rotterdam with 27 years of experience, will co-head the AllianzGI Europe Netherlands branch overseeing the local portfolio management activities together with Hedwig Peters who is responsible for the fiduciary management business in the Netherlands.

SGSS TA Goes Global

Societe Generale Securities Services reports that it has globalised its transfer agency solution.

It says that this single platform is the latest phase in the development of its global fund distribution services offering, providing asset managers with a simpler reporting and follow up with funds domiciled both in Luxembourg and Ireland.

SGSS goes on to say that the platform combines the traditional UCITS strength of the Luxembourg platform with its own hedge fund specialisation in Ireland, providing what it describes as a powerful service platform for a broad spectrum of funds from alternative funds and alternative UCITS to traditional UCITS products.

First Choice XI For RBC Dexia

RBC Dexia Investor Services reports that it has been awarded top rated status in 11 key categories in Global Custodian's annual Mutual Fund Administration Survey. Now in its 10th year, the survey is a client-based survey that evaluates the performance of fund administrators against their peers and within separate markets.

RBC Dexia received top ratings for the survey’s Europe and North America categories as well as in nine other key ratings categories. RBC Dexia also received 79 Best in Class awards for each of the categories where top rated or commended status was achieved.

“We pay close attention to client-based surveys and the contribution from each RBC Dexia employee is crucial to maintaining the high level we achieved in this particular survey,” says Joanna Meager, global head of operations at RBC Dexia Investor Services (pictured). “We are proud, but not complacent as we will use these results as a benchmark to continually improve the service experience for RBC Dexia clients around the world.”

 

Nightmare On High Street

Richard Buxton, head of UK equities at Schroders (pictured), casts an eye over the havoc being wrought on the UK High Street. He believes that for the patient investor, there will be great opportunities on the High Street in the coming years.

“Jane Norman and Habitat have joined the growing list of UK retailers going into administration. HMV has sold its Canadian operations and is selling Waterstone’s to reduce its debts against a background of collapsing sales. Carpetright has announced that against the backdrop not only of weak demand, but also of growing internet usage (even for researching the purchase of carpets) they need to rethink the number of stores from which they operate. Marks & Spencer has started its summer sale early.”

“Clearly all is not well on the High Street. After a boost to clothing sales from the early summer sunshine in April, trade has slowed through May and the return of rain in June has accelerated the decline. Erratic shopping patterns over a late Easter and the Royal Wedding bank holiday can no longer disguise the return of a very subdued consumer. It is tough out there.”

 

SCPE Buys Into DIV

Standard Chartered Private Equity (SCPE) reports that it has made an investment in Doosan Industrial Vehicle (DIV), the largest forklift manufacturer in Korea, and a spin-off from leading construction equipment manufacturer, Doosan Infracore. SCPE says it will acquire 49% of the company for an undisclosed amount.  

DIV has held the pole position as the number one forklift manufacturer in Korea for over 10 years. The company has also established itself as a leading global player with a diverse presence in 93 countries, and a strong local presence with more than 50% market share.

With the fast pace of economic growth and ongoing modernisation in emerging markets, DIV expects demand for forklifts to grow in order to optimise distribution and warehousing processes. The company plans to serve the growing market needs in Southeast Asia, India, the Middle East and South America. (rest of story plus overview of recent private equity activity in Asia to follow...)

Dash For Gas

Steve Shafer, chief investment officer for Covenant Financial Services, sees a bullish scenario for Oklahoma City-based energy companies Chesapeake Energy Corp, Devon Energy Corporation and SandRidge Energy, Inc, based on a visit to China in June.

Natural gas is a core element of China’s newly adopted five-year plan, and as a result, China more than doubled its imports of natural gas in 2010 over 2009.  About half of the imported gas was delivered by pipeline from central Asia and the other half in the form of liquefied natural gas, or LNG.

China and other emerging market countries are expected to become buyers of cheaper LNG from Canada when its new LNG export terminal is completed in British Columbia in 2015. If that happens, it could siphon off a significant source of natural gas that normally goes to the U.S., thus driving up domestic natural gas prices that have been depressed by excess supplies in the market. 

The View From Barings: Too Cautious On China, Too Soon For Greece, Korea Strong

Roberto Lampl, Baring Asset Management's head of emerging market equities says of his current investment outlook: “We are very positive on China and are confident that the Chinese economy will continue to grow at a rapid rate. Valuations at this level are particularly compelling as we think the market is much too cautious about the outlook for inflation. We are also positive on Indonesia which seems like a classic re-rating story – the economy has a healthy current account surplus, inflation is dropping, corporate profits are rising and valuations remain very attractive.

“We see space for the South African Rand to weaken from its current elevated level and are reasonably cautious on the outlook for the South African market. We have also become somewhat cautious on the outlook for the Turkish market. We have some reservations on the effectiveness of the Central Bank’s unorthodox monetary policy and are unhappy about rising inflation. Although the outcome of the Turkish election was positive from an investor’s point of view, the effect on the market was limited and we think most of the good news is reflected already.”

State Street Launches Research Centre

State Street reports that it has launched a centre for applied research to provide clients with strategic insights into the current and future state of the investment management industry.

It says the centre will conduct primary research and works with resources within the financial services industry and across State Street to produce timely research on topics important to investors worldwide. Building on State Street’s established Vision programme, the Centre will, we hear, publish primary research that delivers insights on the future of financial markets and the global asset management industry.

Leading the new initiative are Kelly McKenna, senior vice president and Suzanne Duncan, who has been appointed the centre’s global head of research. 

“As a leader in the global financial services industry, State Street has established a strong track record of providing insights into the key themes impacting investors worldwide,” said Jack Klinck, executive vice president and global head of corporate development and global relationship management at State Street.

Liar, Liar

One in five people polled in a recent survey carried out by Inventium admitted to lying in an interview and on an application form to get the job of their dreams. The lies told range from age and qualifications to giving false information about previous jobs held and the reasons for leaving, and taking in supporting documents that don’t belong to the job applicant.

Inventium says that the biggest surprise was people’s willingness to lie, with 68% having been tempted to tell a fib. Only 10% claim that lying in an interview or on a job application has never crossed their minds.

Graduates are the least likely to lie believing their qualifications will speak for themselves, with the recently unemployed most likely to tell an untruth to get back into the world of work.

Inalytics Rustles Up New Client

Inalytics, a specialist in identifying investment skill, reports proudly that it has been hired by Russell Investments, the global investment services firm. It will provide analytical services in support of Russell’s evaluation, due diligence and monitoring of managers within selected Russell multi-manager funds. 

Commenting on the appointment, Rick Di Mascio (pictured), chief executive and founder of Inalytics, said: “Securing a client of the calibre of Russell Investments is a great boost for our business. The mandate is also evidence of a wider trend we are seeing across the industry for rigorous and evidence-based evaluation of fund manager skill. The manager-of-managers model is built upon identifying the most skilful managers to look after clients’ money. It is therefore natural that Russell should want to monitor manager skill more closely.”

James Barber, senior portfolio manager at Russell Investments, added: “We are confident that Inalytics will  augment Russell’s existing array of global tools and systems deployed to monitor managers in order to help identify their specific strengths and weaknesses; thereby giving us an additional tool to further monitor the behaviour of existing managers.”

Under The Bonnet Of The SGSS/CSAM Partnership

In 2010, Societe Generale Securities Services and Credit Suisse Asset Management formed a fund administration partnership in Germany. The two partners have together now produced a White Paper: The Societe Generale Securities Services Partnership with Credit Suisse Asset Management: A Case Study.

This looks at the combination of regulatory and operational factors which provided the impetus for creating this innovative partnership.

Specifically, the White Paper looks at:

Why Credit Suisse Asset Management decided to outsource its fund administration activity;

The benefits of outsourcing;

The choice of Societe Generale Securities Services as partner;

The migration process.

Download 11-06 CSAM White Paper

 

Mobile Payments Users To Jump 40%

The world would seem to be approaching an inflection point in the use of mobile payments, if a new report by analyst firm Juniper Research is accurate. It forecasts that the number of mobile phone users making payments for digital goods will reach 2.5bn worldwide by 2015, up from 1.8bn forecast for 2011. This represents a growth of 40%.

Mobile tickets for transport and entertainment were found to be two of the key sectors influencing growth although new service and application adoption will also be very important.

Senior analyst David Snow gave more details: “Whilst the mobile payments sector offers substantial growth opportunities, it needs to be seen by innovative players as a platform from which to develop new value added applications and services such as personalised mobile coupons, loyalty schemes, and novel augmented reality offerings.”

However, the Juniper report also warned that fraud levels with certain types of payments such as PSMS and direct billing are on the increase with mobile security becoming a key issue in the not too distant future.

Allianz Global: Focus On High Yield Bonds, Selective European Equities

The strength of the global economy continues to provide support, says Allianz Global in its preview of the second half of 2011.

In the US, despite numerous obstacles (an overly weak upturn in job creation, and the continued worsening in the real-estate market), growth continues to be driven by exports, which themselves are being supported by a strong global economy and a competitive dollar.

In the eurozone, macroeconomic gaps are widening. On the one hand, core countries, Germany in particular, are benefiting from demand from emerging markets. On the other hand, growth in southern European countries is being undermined by unprecedented fiscal austerity measures. 

The eurozone crisis is likely to drag on. It continues to cast a shadow over interest-rate markets, which are once again tightly correlated to sovereign risk, while risk aversion to government debt is rising.

Inflation Spooks DB Sponsors: RBC Dexia Quick Poll

RBC Dexia Investor Services says that 84% of defined benefit plan sponsors are concerned about the threat of inflation and the potential impact it can have on plan assets.  RBC Dexia’s latest survey of Canadian pension plan sponsors also found that the largest plans are increasing their allocations to infrastructure assets and other alternatives to act as natural hedge against inflationary pressure and to take advantage of this growing asset class.

 “The threat of inflation is not just a concern of the every day consumer, but it is front and centre in the minds of Canadian pension plan sponsors,” says Scott MacDonald, head, pensions, insurance, financial institutions product for RBC Dexia. “It’s also particularly interesting to note the disparity between public and private plans, both in identifying what risks are most relevant and the differences in asset allocation strategies.”

The threat of inflation

Momentum and performance in Canadian markets has been strong over the last several months but inflation speculation, combined with the ongoing low interest rate environment and a strong Canadian dollar, is generating some unease.

Simon Bennett: Binney Resurfaces At Broadridge

From Lake Success in New York Broadridge Financial Solutions reports the appointment of two new executives to expand and grow its business in line with industry demand. Broadridge has hired Simon Bennett as managing director, sales, for Broadridge City Networks (BCN).

It has also hired industry stalwart Robert Binney, whom I personally thought long retired, as a senior business development director to expand its European team and take advantage of new global market opportunities.

Bennett will focus on growing the business in EMEA, bringing the BCN product suite, which includes reconciliation and operational risk management solutions, to buy- and sell-side clients. Binney will work in a business advisory capacity to increase the Broadridge footprint across its international solution and service range.

ARX Equity To Manage Manag

ARX Equity Partners (ARX) has completed a management buy-in of a majority shareholding in Manag a.s.

It describes Manag (www.manag.com) as a leading Czech company focused on design, manufacturing and assembly of electrical equipment, and related regulatory and control systems. The company is particularly strong in serving clients from refinery, chemical and pharmaceutical industries. Manag is also active in Slovakia through its local subsidiary.