Sutherland insights asset management news flash july 01, 2014

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ASSET MANAGEMENT NEWS FLASH July 01, 2014

Table of Contents Fund Flow ............................................................................................................................. 3 Performance Reporting ....................................................................................................... 10 Strategy .............................................................................................................................. 14

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Fund Flow BlackRock to hard-close European credit fund June 27, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2352479/blackrock-to-hard-closeeuropean-credit-fund BlackRock is planning to hard-close the £1.2bn BSF European Credit Strategies fund, managed by Michael Phelps to new money.

The group said it will close the fund at £1.4bn (€1.7bn) following strong inflows into the strategy.

The fund has returned 16.6% over three years to 25 June, according to FE, beating the offshore Fixed Interest sector average of 14.8%.

The group has also set a £140m (€175m) capacity limit on the European Constrained Credit Strategies fund, which Phelps co-manages with Alex Shingler; it currently holds around £110m.

In a letter to shareholders, BlackRock wrote: “We have taken this decision to control the size of the funds to help ensure that the proceeds of subscriptions can be suitably invested and that existing investments can be efficiently managed.

“From the point the net asset value of each fund reaches the applicable limit, BlackRock will initiate a process so that shares in the relevant fund will not be available for subscription to either new or existing shareholders.”

The group said there will be no difference on how investments in the current strategy is managed.

Barnett’s two remaining income funds to switch IMA sector June 27, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2352473/barnetts-last-two-ip-funds-toexit-uk-income-sector Mark Barnett’s Invesco Perpetual Income and UK Strategic Income funds are to exit the IMA UK Equity Income sector in the next few days.

The manager’s £13bn High Income fund was ejected from the UK Equity Income sector earlier this year, moving to the UK All Companies sector.

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Now the group has confirmed his other two main mandates will both move across at the end of June.

Invesco Perpetual had already flagged the possibility of the two funds moving sector when Barnett’s High Income fund exited at the end of March.

All three funds have a similar investment style, and are lagging the three-year yield requirement imposed by the IMA. A number of other income mandates have already been forced to exit the peer group.

The St James’s Place Income trust was ejected in 2013, while James Henderson’s income fund suffered a similar fate in September last year.

Ian Trevers, head of UK retail at Invesco Perpetual, said: “The long-term balance between income generation and capital growth is the hallmark of successful equity income investing.

“Over many years, our equity income funds have delivered a significant income stream to investors as well as substantially growing their capital. We believe that the interests of clients in these particular funds are best served by us continuing to focus on providing a growing level of income, balanced with the opportunity for capital growth over the long term.

“We are comfortable that these funds will have a different IMA classification and our clients, and their advisers can be confident this sector change will not impact the way their investments are managed”.

Majedie to launch global equity fund duo for new hires June 26, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2351937/majedie-to-launch-globalequity-fund-duo-for-new-hires Majedie Asset Management is ready to launch two new funds - Global Equity and Global focus - for a recently hired team as it expand into global equities.

The group is best known for its UK Equity and UK Focus funds, but last year announced its first foray into long-only global equities, following the appointment of Adrian Brass from Fidelity and Tom Record from Baillie Gifford.

The two new funds are set to launch on 30 June. The Global Equity fund will hold between 70 and 120 stocks, while Global Focus will be a more concentrated, higher risk version, containing 30-60 holdings.

The funds will be managed by a four-strong team, as the two new hires are joined by Tom Morris, comanager of Majedie’s Tortoise fund, and Yuri Khodjamirian, now co-manager of the Majedie UK Income fund.

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Each manager will be responsible for selecting stocks for a portion of the fund, looking shares with uncertain prospects and valuations, which offer significant upside potential with limited downside risk.

Charlie Huggins, analyst at Hargreaves Lansdown, noted: “Majedie has built an excellent reputation in managing UK equities. This is, however, a new-look team and it remains to be seen whether they can replicate the success of the UK funds.

“These funds are an interesting proposition, but we would like to monitor their progress before considering them for [our] Wealth 150 list.”

Neuberger Berman to launch European High Yield fund for Wilmont June 24, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2351159/neuberger-berman-to-launcheuropean-high-yield-fund-for-wilmont Neuberger Berman is to launch a European High Yield bond fund for recent hire Andrew Wilmont, as it bids to replicate the success of its $13bn (£8bn) US offering.

The Dublin-domiciled Neuberger Berman European High Yield fund will launch later this month, as a diversified portfolio of around 75 names investing primarily in European industrials. The fund will also have some flexibility to consider banks and retailers.

The fund will be managed by Wilmont, Martin Rotheram and Dan Doyle, with input from other new hires Ian Bates and Laura Maedler.

Neuberger Berman said it intends to assemble one of the largest European high yield teams in the industry, and is planning to hire two further analysts in London to complement a team of 18 in its headquarters in Chicago.

“A lot of firms currently have quite small European high yield teams, and the challenge for them once issuance increases will be to keep track of it all.

“We think the size of the team we are trying to build means we will be well-positioned when that happens,” said Wilmont.

Wilmont, who previously worked at AXA Investment Managers and Alcentra, joined as head of the European high yield team in April, while Bates was most recently at AXA IM. Maedler, the newest hire, was previously a credit analyst at HSBC. Rotheram currently co-manages the firm’s £1.2bn Global Floating Rate Income trust, while Doyle is a comanager on the group’s US high yield fund.

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“The [European] fund will adopt the same process as the US high yield fund and, over the long term, we hope to replicate its success,” Wilmont said.

“The size of the investment universe in Europe at the moment is much smaller, while companies are also more dependent on bank loans rather than issuing bonds.”

The fund will be benchmarked against the BofA Merrill Lynch European Currency Non-Financial High Yield 3% Constrained index.

Goldman Sachs AM launches European HY bond fund June 23, 2014 | Citywire Wealth Manager http://citywire.co.uk/wealth-manager/goldman-sachs-am-launches-european-hy-bond-fund/a758123 Goldman Sachs Asset Management has launched a new bond fund set to target the European high yield market, Citywire can reveal.

The Luxembourg-domiciled fund will be overseen by the firm’s corporate credit investment team.

It will invest primarily in below investment grade bonds issued by companies from across the region.

Goldman Sachs AM said the launch of the fund was designed to offer investors a fixed income fund able to weather a period of uncertain interest rates rises in Europe, as well as widespread bank deleveraging.

Commenting on the launch, Nick Phillips, head of GSAM’s international third-party distribution business, said: ‘The fund is designed to access opportunities in a rapidly growing European high yield market, where structural drivers such as bank deleveraging are expected to lead to a substantial increase in issuance over the next five years.’

The corporate credit investment team comprises 72 investment professionals, as well as 28 dedicated to leveraged credit.

This leveraged credit team is currently responsible for management of the Goldman Sachs Global High Yield portfolio, which now has $11 billion in assets under management.

In addition, this team is also responsible for managing approximately $4 billion of European-domiciled high yield assets across an array of global fixed income strategies.

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Luxembourg funds capture half Europe’s net inflows June 18, 2014 | FundWeb http://www.fundweb.co.uk/news-and-analysis/europe/luxembourg-funds-capture-half-europes-netinflows/2011446.article The value of investments held in Luxembourg-domiciled investment funds totalled €2.742trn (£2.2trn) – the highest ever – at the end of April.

The Association of the Luxembourg Fund Industry’s latest annual report shows investments held in Luxembourg continue to grow strongly with inflows making up almost half of Europe’s net total.

The €193bn raised by Luxembourg-domiciled funds represents 47 per cent of net sales. Though the year to 31 April, 129 Fund promoters set up shop in Luxembourg, with just under a third non-European.

Despite the reassuring figures, ALFI chairman Marc Saluzzi says the fund industry remains in a “challenging” environment.

“The threat of a Financial Transaction Tax, the EU hesitations on money market funds, the extension of the Markets in Financial Instrument Directive (MiFID II) still create a level of uncertainty for our industry and its investors,” he explains.

“In addition, an increasing number of jurisdictions are striving to emulate the Luxembourg model and compete with our products in the cross-border space.”

The Luxembourg parliament has passed the Alternative Investment Fund Manager Directive which will come into force on 12 July.

At the beginning of the month, 203 applications had been received by the Luxembourg regulator, with 76 approved.

Saluzzi concludes: “Considering the achievements of our fund centre over the last three decades, I am confident that together we can overcome the challenges to ensure that Luxembourg remains the leading global fund distribution and servicing platform.”

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Threadneedle launches global corporate bond fund for Ross June 18, 2014 | Citywire Wealth Manager http://citywire.co.uk/wealth-manager/threadneedle-launches-global-corporate-bond-fund-for-arated-ross/a757549 Threadneedle Investments has launched a global corporate bond fund for Citywire A-rated manager Alasdair Ross, the asset manager has announced.

The Threadneedle (Lux) Global Corporate Bond fund will operate on a total return basis investing across a range of bond sectors.

It will primarily focus on diversified investment grade bonds, money market instruments and cash, either directly or indirectly through derivatives.

The fund may invest up to one third of its assets in debt securities other than investment grade corporates including, but not limited to, government and high yield bonds.

Commenting on the launch, Ross said: ‘In a low-yield environment, exposure to corporate credit can provide an effective way for investors to preserve capital and generate income whilst diversifying their portfolio away from the volatility of equity markets.’

‘The fund aims to generate positive return over and above the market return through active management of issuer selection, industry exposure and fixed income asset allocation.’

Ross will be supported on the fund by the collective efforts of 15 investment analysts, who are spread across Threadneedle and Columbia Management offices in London, Boston, Minneapolis and Singapore.

It will follow a three-pronged investment process, which combines issuer selection with top down industry and asset allocation insights.

The fund’s benchmark is the Barclays Capital Global Aggregate Corporates Index hedged to US Dollars and the fund’s performance target is +150 to 175 bps over the index (gross) over rolling three-year periods.

The fund is initially registered in Luxembourg but Threadneedle said it has plans to expand its distribution to the UK, Austria, Belgium, France, Germany, Italy, the Netherlands, Portugal, Singapore, Spain, Switzerland and Sweden.

This is pending the respective regulatory approval/notification in each country.

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J.P. Morgan launching its first exchange-traded fund June 17, 2014 | Reuters http://www.reuters.com/article/2014/06/17/jpmorgan-chase-etf-idUSL2N0OU1H320140617 J.P. Morgan Chase & Co is launching its first exchange-traded fund on Tuesday as the Wall Street bank’s asset management business makes its debut in the $1.8 trillion U.S. exchange-traded fund arena.

The JPMorgan Diversified Return Global Equity ETF is set to start trading Tuesday on the NYSE Arca under the ticker “JPGE.” The launch brings J.P. Morgan Asset Management, a long-time mutual fund provider, into a fast-growing ETF market dominated by asset managers including BlackRock Inc, State Street Corp and Vanguard Group.

While J.P. Morgan has exchange-traded notes, JPGE is the firm’s first ETF - funds that hold a basket of securities and trade on an exchange like stocks.

Bob Deutsch, Global Head of ETFs for J.P. Morgan Asset Management, said he sees the ETF as an extension of the firm’s mutual fund business.

“First and foremost, it’s part of our mutual fund product line,” Deutsch said in an interview.

The firm’s long-term focus is to build out an active ETF business that builds on its background as an active manager. While the first slated ETFs are in equities, Deutsch said the firm plans to expand into other asset classes. “We’re working on a broad pipeline that does cut across asset classes,” he said. true The new ETF will track the FTSE Developed Diversified Factor Index, a part of FTSE’s broader Global Diversified Factor Index Series, which the firm developed with FTSE. The index uses a “multi-factor” approach that selects securities based on relative valuation, price momentum, low volatility and size, rather than traditional weighting by market-capitalization.

Such strategies, which straddle the line between active and passive management, have been dubbed “strategic” or “smart” beta by the industry.

Deutsch said he expects financial advisers, as well as institutional clients to use the ETF. J.P. Morgan has also filed for plans to develop a Diversified Return International Ex-North America Equity ETF and a Diversified Return Emerging Markets Equity ETF.

9|Sutherland Insights Asset Management News Flash Jul 01, 2014

Performance Reporting Polar Capital seeks to expand ‘by a third’ as AUM doubles June 20, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2351186/polar-capital-to-expand-by-athird-as-aum-doubles Polar Capital is looking to expand its number of investment teams, adding it has been encouraged by “unsolicited approaches”, after nearly doubling assets under management in its last financial year.

The asset manager reported a healthy set of results for its financial year, with net inflows every quarter over the financial year to 31 March 2014. In total, net inflows leapt 83%, to $13.2bn.

However, that trend reversed over the subsequent three month period, Polar said, with net outflows of roughly $300m reported for the first quarter of the 2014-15 financial year.

Despite the outflows, chief executive Tim Woolley (pictured) said the fund manager now aims to expand once more- particularly given the number of teams actually fell last year due to the closure of its UK equity desk.

“Our strategy set a limit of twelve investment teams, so we still have scope to increase our team count by a third and remain true to the original strategy.”

He added: “After an eighteen month period of consolidation in terms of team numbers, we are now actively looking to make additions again. We are encouraged by the number and quality of unsolicited approaches we are now receiving from managers across a variety of strategies as our profile continues to increase within the industry.”

The fund manager reported a pre-tax profit of £32.7m, compared to £15.3m in 2013. It attributed the strong year to the strength in most major global equity markets, as well as the popularity of its Japanese funds.

Chairman Tom Bartlam said: “By the end of our financial year, the Japanese team was managing assets in excess of $5bn - this was the first time in our history that a team has reached $5bn in assets.

“This is testimony not only to the team and its approach and performance record but also the success of our investment into distribution and client service over the last five years.”

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Multi-asset acquisition drives profits and AUM at Liontrust June 19, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2350919/multi-asset-acquisition-drivesprofits-and-aum-at-liotrust Liontrust has seen a rise in assets under management and a jump in pre-tax profits, after its acquisition of multi-asset business North Investment Partners last October.

The acquisition of North’s multi-asset team, led by John Husselbee and Paul Kim, has been one of the firm’s key growth drivers.

Total inflows for the year ending 31 March amounted to £381m, down from the previous year’s result of £514m.

However, assets under management jumped 19% from £3bn to £3.6bn in another positive year for the company, while adjusted profit before tax more than doubled to £8.4bn from £3.8bn the previous year.

The strong figures will result in Liontrust returning to the FTSE All Share index on 23 June, as it has hiked its dividend to 3p for the financial year, up 200% from the 1p offered last year.

John Ions (pictured), chief executive, said: “It has been a very successful year for Liontrust. A key contributor to the growth of the business has been our continued excellent long-term performance across the fund management teams.”

He said the firm’s UK equity proposition was one of its key strengths. Its Special Situations fund is ranked fourth out of 194 funds in the IMA UK All Companies sector since launch, he said.

The new multi-asset and multi-manager propositions, as well as its existing income products, position the business well to take advantage of the changes in annuity rules announced in the latest Budget, the CEO added.

“We believe demand for multi-asset and multi-manager will continue to grow, especially among the post-retirement market. These pension changes could lead to fund managers attracting billions of pounds in extra flows every year,” he said.

The group also expects to see “significant opportunities for distribution internationally”, which until now has only contributed around 5% to sales, and has been building its Dublin range of funds in anticipation of this expansion.

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Charles Stanley’s profits slump by 33% after year of ‘significant cost’ June 19, 2014 | Citywire Wealth http://citywire.co.uk/wealth-manager/charles-stanleys-profits-slump-by-33-after-year-of-significantcost/a757743?ref=wealth-manager-latest-news-list Charles Stanley saw profits slump by 33% over the year to the end of March due to transaction and other ‘exceptional’ costs.

The wealth manager told the stock market in April that it was set to miss analyst expectations and today it announced that pre-tax profit fell from £9.1 million to £6.1 million, a 32.9% slump, in what the group called a year of building for the future.

Total funds under management rose by 14% from £17.7 billion to £20.1 billion with discretionary funds up 28% from £6.4 billion to £8.2 billion. Revenue rose by 17% from £127.6 million to a record high of £149 million.

The group reported that its direct to consumer arm, Charles Stanley Direct, now has over 16,000 clients and £840 million of assets under administration.

However, its profits were impacted by the £1.4 million cost of acquiring Evercore Pan Asset, with up to another £1 million payable over the next five years, with the hiring of new teams also representing a significant outflow.

The Evercore deal plus the poaching of teams for new offices in Cardiff and Leicester resulted in total acquisition costs of £2.4 million over the year with a further £1.3 million spent on building Charles Stanley Direct and other ‘investment one-off costs’. The wealth manager is locked in a bitter legal wrangle with Brewin Dolphin after it lured the bulk of its rival’s Leicester team over to open a branch for it in the city.

Other significant costs included a Financial Services Compensation Scheme levy of £1.2 million, albeit this was down from £1.9 million the previous year.

Charles Stanley’s chair Sir David Howard (pictured) said: ‘This has been a year of significant cost and investment in our future. In particular our profitability has been impacted by the acquisition of further teams of high-quality investment managers, the continuing roll-out of our direct-to-client web-based service Charles Stanley Direct, and a major programme of up-grading the quality of service of our principal business of discretionary and advisory investment management.

‘Our underlying profit for the year, before tax, which excludes a number of adjusting items, was £13.5 million, the same as last year’s figure of £13.5 million. When the adjusting items are deducted the reported profit before tax has decreased by 33% from £9.1 million (in 2012-13) to £6.1 million.

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‘We believe margin compression will also cause our sector to develop increasingly integrated business models to protect margins: vertical integration to access more value across the supply chain and horizontal integration, to offer a wider set of services.’

B.C.’s pension management arm racks up solid 14.7% return June 19, 2014 | The Globe and Mail http://www.theglobeandmail.com/report-on-business/bcs-pension-management-arm-racks-up-solid147-return/article19249774/?cmpid=rss1 British Columbia’s pension management arm saw its assets grow by over $11-billion last year after a timely adjustment to its portfolio to favour global stocks.

British Columbia Investment Management Corp., which manages money for public sector pension plans and public trusts in B.C., said its assets climbed to $114-billion as of March 31 from $102.8-billion a year earlier, due to strong 14.7-per-cent returns that outpaced passive benchmarks. BCIMC is Canada’s fourth-largest pension fund manager.

Chief executive officer Doug Pearce said the fund reduced the percentage of the fund invested in bonds while increasing its non-Canadian stock portfolio last year, which paid off as long-term interest rates rose and global stock markets soared.

“Overweighting global equities and underweighting fixed income were the main drivers of the doubledigit returns,” Mr. Pearce said in a release Thursday. “We feel the global economy will continue to improve and we are optimistic about our portfolio in the year ahead.”

BCIMC said it has just 22 per cent of its assets in fixed-income holdings such as bonds, while public equities account for 47.6 per cent of the portfolio. The fund has 2.6 per cent of its money invested in mortgages, 4.8 per cent in private placements, 17.4 per cent in real estate and 5.6 per cent in renewable resources and infrastructure.

BCIMC previously announced plans to set up its first foreign offices in London and Singapore to further expand its global investment portfolio.

The pension manager said it has earned a 15-year annualized return for pension clients of 7 per cent, and a five-year return of 11.4 per cent.

BCIMC said its 14.70-per-cent return in fiscal 2014, ended March 31, exceeded its passive benchmark of 12.5 per cent last year, which means it earned returns above basic market levels that could be achieved without active asset management.

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Strategy Henderson U.S. Assets Hit $18.3 Billion After Purchase June 30, 2014 | Bloomberg http://www.bloomberg.com/news/2014-06-30/henderson-u-s-assets-hit-18-3-billion-afterpurchase.html Henderson Group Plc (HGG) agreed to buy U.S.-based Geneva Capital Management Ltd. from its founders, boosting the London money manager’s North American assets to $18.3 billion.

Henderson will pay as much as $200 million for the Milwaukee-based Geneva Capital, the U.K. company said in a statement today. The price includes an initial outlay of $130 million, a deferred revenue-linked payment of as much as $45 million and a final tranche of $25 million if Geneva meets its earnings targets over the next five years, Henderson said.

“We have been looking for a long time for the right partner on the ground in the U.S.,” Chief Executive Officer Andrew Formica said on a conference call with analysts. The acquisition will “take the U.S. to almost 15 percent of our total business, up from 10 percent today.”

Henderson joins a number of U.K.-based firms that have looked to North America for growth. Schroders Plc (SDR) bought STW Fixed Income Management LLC last year, and Legal & General Group Plc’s investment unit made its first U.S. acquisition in February, buying Global Index Advisors Inc. Formica said the London-based firm had been looking to build up its U.S. institutional clients for some time, which today stands at about 12. Geneva Capital, which oversees about $6.3 billion in assets, has 20 to 30 institutional clients, he said.

Bill Priebe and Amy Croen co-founded the firm, which invests in mid- and small-capitalization U.S. equities, in 1987. Both signed long-term contracts to remain, according to the statement.

The acquisition is expected to add to earnings in the first full year and will be completed by October, Henderson said. The shares rose 0.3 percent to 237.3 pence at 12:20 p.m. in London, extending its gain this year to 3.8 percent.

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APFA urges FCA to cut regulation costs June 27, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2352455/apfa-urges-fca-to-cutregulation-costs Advisory firms have successfully adapted to the Retail Distribution Review (RDR) but the cost of regulation remains a massive barrier to development, the Association of Professional Financial Advisers (APFA) has said.

The organisation released a report on the impact of the RDR ahead of the Financial Conduct Authority’s (FCA) post-implementation review.

It concluded while some progress had been made the watchdog must stop tinkering and avoid further regulatory change to reduce costs.

Director general Chris Hannant (pictured) said: “While there has been a small drop in adviser numbers, this report shows that the majority of firms have adapted successfully to the post-RDR world. However, there are still a number of advisers with serious concerns about whether they will be able to continue with their current business model given the significant costs of running an advice firm, and particularly the increasing cost of regulation.

“Further regulatory change, such as that planned for platforms and capital adequacy measures, will also have a major impact on firms’ financial sustainability.”

The report said there are now two distinct groups of people seeking advice on investments or pensions.

The first, who can afford to pay and are willing to do so, have benefitted from RDR in that they now have access to a “more professional and more transparent service from better qualified advisers”.

However, there is also a group of consumers for whom advice is not economic APFA said. It warned these people are increasingly reliant on using the internet to find information and invest direct and may not realise the reduced protection that entails.

Hannant added: “RDR has had a positive impact in some areas, for instance improving transparency and providing the catalyst for advisers to become better qualified. However, there are still a number of areas where it seems to be less successful.

“For instance, while there is more disclosure by advisers, it is not yet clear whether consumers really understand the different types of services and related costs and levels of protection available.

“In addition, the independent and restricted definitions do not seem to be working. We believe a simpler, more instinctive definition of independence along the lines being adopted by Europe would be useful.”

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APFA is calling on the FCA to focus on two things to help adviser firms and ensure consumers get the best possible outcomes: not make any further regulatory changes beyond those already planned and reduce regulatory costs.

Hannant said: “New rules need time to bed down, and advisers need a period of stability to allow them to develop their business models in the light of their experience post RDR, ensure they are compliant with all existing regulatory requirements and prepare for the further rule changes already in the pipeline.

“Fees, levies and indirect costs such as regulatory reporting are a significant percentage of firms’ costs, especially for smaller firms where they can account for up to 20% of revenue.

“The regulator needs to be more focused on finding ways to reduce the burden on firms, rather than increasing it.”

APFA is urging the FCA to: •

make further changes to the RMAR reporting requirements;

•

simplify the rule book;

•

introduce a longstop to help reduce firms’ PI costs;

•

reconsider its decision not to review how its costs are allocated, given advisers are currently paying a bigger share than either banks or insurance firms;

•

significantly reduce the fees adviser firms have to pay for consumer credit authorisation; and

•

reverse the increase in the FSCS threshold for investment intermediaries.

“The RDR has been successful in achieving a number of its objectives, but there is still more work to be done to get the balance right between consumer protection and a thriving, competitive and innovative marketplace that provides consumers with access to advice at a price they can pay,” the APFA boss said.

London Stock Exchange to acquire entire Russell Investments business June 26, 2014 | The New York Times http://dealbook.nytimes.com/2014/06/26/london-stock-exchange-to-buy-russell-investments-for-27-billion/?_php=true&_type=blogs&_r=0 The London Stock Exchange said on Thursday that it had agreed to pay $2.7 billion in cash for Russell Investments, the owner of the Russell 2000 stock market index.

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The acquisition, according to the exchange, will build upon the L.S.E.’s strategy to diversify and expand its intellectual property platform. The deal also gives the exchange a presence in the United States, the world’s largest financial services market.

The exchange already owns FTSE Group, the operator of indexes including the FTSE 100, which tracks the top 100 stocks traded in London.

The L.S.E. first confirmed in May that it was in discussions with Northwestern Mutual, Russell’s majority owner, about a possible sale. The exchange would acquire all of Russell’s share capital from Northwestern Mutual and minority shareholders.

Northwestern Mutual said in January that it was exploring options for its stake in Russell Investments.

Xavier Rolet, chief executive of the L.S.E., said in a statement on Thursday, “With this acquisition we are strongly positioned for the changing dynamics in the global indices market with a best in class offering, which we believe will help deliver outstanding returns for our shareholders.”

Russell Investments, based in Seattle, operates an asset management business and a stock market indexing business. The company has about $256 billion in assets under management. It says that about $5.2 trillion in assets are referenced against its United States indexes, the best known of which is the Russell 2000 for small-cap stocks.

The L.S.E. said it would undertake a “comprehensive review” of Russell’s investment management business to see how it fits in the group.

The exchange said it was “committed to maintaining a clear focus on client service, fund performance and management and employee stability, whilst ensuring appropriate standalone governance.”

The transaction requires shareholder approval, which is expected in September, the exchange said. It expects to issue additional shares in order to raise about $1.6 billion to help finance the transaction. The L.S.E. also will use existing and new debt to complete the transaction.

Once the deal is completed, Len Brennan, the president and chief executive of Russell investments, is to join the exchange’s executive committee.

The L.S.E. said it expected to achieve $78 million in annual cost savings within three years following the deal.

“The combination of our index business with FTSE creates a truly global index leader, with a highly complementary fit of products and distribution capabilities and a unique position as a leader in major domestic market benchmarks as well as international equities,” Mr. Brennan said.

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Stafford Capital Partners Buys Funds Management Units From Macquarie June 25, 2014 | The Wall Street http://blogs.wsj.com/privateequity/2014/06/25/stafford-capital-partners-buys-funds-managementunits-from-macquarie/ Alternative investment manager Stafford Capital Partners has acquired funds management businesses that oversee $700 million from Australia’s Macquarie Group Ltd.MQG.AU -1.07% The acquisition of the three businesses, which hold investments in infrastructure, venture capital, private equity and clean-tech funds, will enable Stafford to grow its funds under management to $3.3 billion from $2.6 billion.

Senior Macquarie staff, including Managing Director Rick Fratus, Head of North American Clean Technology Kurt Faulhaber and Head of European Clean Technology Ingo Marten, are joining Stafford as part of the transaction.

“The acquisition brings highly capable subject-matter experts in the areas of infrastructure, sustainable investments and venture capital,” Stafford Private Equity Chief Executive Angus Whiteley said.

Macquarie Investment Management’s global head Ben Bruck said the Australian bank’s fund-of-funds businesses compete in specialized niches which “sit best” with a dedicated private equity fund-of-funds manager.

The deal with Stafford underscores Macquarie’s retreat from private equity funds management. Earlier this year, the bank agreed to sell Macquarie Investment Management Private Markets, which has around $5 billion under management, to its Australia-based management team.

Schroders buys stake in Nutmeg June 25, 2014 | Citywire Wealth Manager http://citywire.co.uk/wealth-manager/schroders-buys-stake-in-nutmeg/a758703 Fund manager Schroders is the latest high profile investor in online wealth manager Nutmeg.

Schroders is part of a group of high-profile backers who have invested a combined £18.9 million in the simplified discretionary service.The group also includes Carphone Warehouse founder Charles Dunstone and Icap chief executive Michael Spencer.

Schroders executive chairman Massimo Tosato will take a seat on Nutmeg’s board.

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Nutmeg is aiming to transform the wealth management industry by offering access to portfolio managment services to anyone with as little as £1,000 to invest.

Since its launch in 2012 it has registered 35,000 users and customer acquisition in the first quarter of 2014 was 350% higher on the previous year.

Earlier this year Nigel Wray, the serial entrepreneur and chairman of Saracens rugby club, acquired a significant stake in Nutmeg.

The latest fund raising means the firm has attracted £30 million from investors since its launch.

Nutmeg is the brainchild of former Wealth Manager cover star Nick Hungerford (pictured), previously an investment manager at Brewin Dolphin.

‘Today’s announcement is hugely exciting and goes to show that if you put the customer at the centre of the business, you will prosper. We believe our digital model epitomises the future of investment management,’ Hungerford said.

‘We’ve built an award-winning service from the ground up, one that delivers brilliant portfolio management at an incredibly low cost, in a way that is secure, transparent and above all convenient for the customer.’

Tosato added: ‘We are delighted to participate in funding Nutmeg’s next stage of growth. For over 200 years, Schroders has been at the forefront of innovation and this financial investment in an innovative and rapidly growing on-line wealth management business will allow us to engage in the digital changes that are influencing the asset management industry for years to come.’

Natixis Global Asset outlines new Canadian business expansion initiative June 24, 2014 | Banking Business Review http://assetmanagement.banking-business-review.com/news/natixis-global-asset-outlines-newcanadian-business-expansion-initiative-240614-4300778 Natixis Global Asset Management announced the kick-off of a new business development initiative in Canada.

The expansion will focus on tapping the steadily growing Canadian institutional market by forging and strengthening Natixis relationships with institutional and subadvisory clients throughout the region.

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“We are confident that our proven ability to help manage risk through our Durable Portfolio Construction approach will resonate with pension funds, endowments and foundations seeking ways to protect their clients from volatility,” said John Hailer, chief executive officer of Natixis Global Asset Management in the Americas and Asia. “The current Canadian institutional market, estimated to be $1.5 trillion and growing, is a diverse market that pairs well with the investment solutions available through our worldwide network of affiliated investment managers.”

Natixis manages more than $899 billion in assets through its affiliates and was selected as the top U.S. mutual fund family based on an evaluation of 2013 performance, according to the annual Barron’s/Lipper ranking of U.S. mutual fund families.1 The firm’s business development effort will initially focus on the institutional markets in Ontario and Quebec. Montreal-based Roxane St.-Martin, senior vice president, institutional services, and Bostonbased Ian Macduff, senior vice president, institutional services, will co-manage the Natixis Canadian distribution efforts.

St.-Martin brings more than 16 years in asset management experience to the position, and has served with Natixis in the U.S., Paris and her native Canada. She joined Natixis Asset Management in Paris in 2009, becoming head of wholesale in 2010. She is a CFA® charterholder.

Macduff is a 20-year veteran in the financial services industry, having previously worked in retirement sales at Fidelity Investments. He is a Certified Investment Management Consultant. Both managers hold FINRA Series 7 and 63 licenses.

The team reports to Robert Hussey, executive vice president of institutional services for Natixis Global Asset Management - U.S.

Man Group acquires majority stake in Numeric Holdings June 19, 2014 | Reuters http://uk.reuters.com/article/2014/06/19/us-numeric-mangroup-idUKKBN0EU0L720140619 Man Group has bought U.S. asset manager Numeric Holdings for an initial $219 million to broaden the British hedge fund’s U.S. and computer-driven fund activities.

Privately-owned Boston-based Numeric has been up for sale since early 2013 and Man Group confirmed last month it was in talks to buy the company, which has $14.7 billion of assets under management, mostly owned by institutional investors.

Numeric is majority owned by TA Associates, a private equity group.

Man Group Chief Executive Manny Roman said the deal meant the company could advance with two of its core objectives.

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“First, to build a diversified quantitative fund management business with significant assets in fundamentally based quantitative strategies, and second, to develop further our presence in the U.S. market,� Roman said in a statement on Thursday.

Numeric’s management will keep an 18.3 percent stake in the business, but Man Group will have the right to buy them out five years after completion of the deal under an arrangement capped at $275 million.

The acquisition will need approval from Man Group shareholders and completion is expected in September.

As at March 31 2014, Man managed $55 billion.

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