Sutherland insights asset management news flash oct 01, 2014

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Fund Flow

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Report

Performance Reporting

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Technology

Strategy

ASSET MANAGEMENT NEWS FLASH October 01, 2014


Table of Contents Fund Flow ............................................................................................................................. 3 Performance Reporting ....................................................................................................... 11 Technology .......................................................................................................................... 16 Strategy .............................................................................................................................. 17

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Fund Flow State Street cuts fees on 15 ETFs to continue passive price pressure September 30, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2372933/state-street-cuts-fees-on-15etfs-to-continue-passive-price-pressure State Street Global Advisors (SSgA) is the latest ETF provider to slash fees on a range of its European products, as passive fees continue to come under pressure. The group has cut fees across 15 of its core equity and fixed income ETFs by an average of 20%, with the largest cut to its S&P 500 ETF. The US index tracker will see its fee cut from 15 bps to just 9 bps on 1 October. The move follows similar cuts made by rivals such as UBS, HSBC and BlackRock, as they strive to take market share from Vanguard and its low-cost range of ETFs. Alexis Marinof, head of SPDR ETFs for Europe, Middle East and Africa (EMEA), said: “Our objective is to be at the forefront of change and innovation in the ETF market and use our wealth of expertise and experience in this industry to add value to our clients. “The changes are aimed at providing our clients with an enhanced offering that matches their needs as well as the needs of a maturing European marketplace.” The group has also proposed to merger its 13 French-domiciled ETFs onto one centralised structure in Ireland to reduce operational costs and risks, improved liquidity and tightened bid-ask spreads.

Current Fee (bps)

Fee from 01/10/2014 (bps)

SPDR MSCI Emerging Markets UCITS ETF

65

42

SPDR MSCI EM Asia UCITS ETF

65

55

SPDR MSCI EM Latin America UCITS ETF

65

55

SPDR MSCI EM Europe UCITS ETF

65

55

SPDR S&P Emerging Markets Dividend UCITS ETF

65

55

SPDR MSCI Emerging Markets Small Cap UCITS ETF

65

55

Fund

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Current Fee (bps)

Fee from 01/10/2014 (bps)

SPDR MSCI EM Beyond BRIC UCITS ETF

65

55

SPDR MSCI ACWI UCITS ETF

50

40

SPDR MSCI ACWI IMI UCITS ETF

55

40

SPDR FTSE UK All Share UCITS ETF

30

20

SPDR Barclays Euro High Yield Bond UCITS ETF

45

40

SPDR Barclays Euro Aggregate Bond UCITS ETF

20

17

SPDR Barclays US Aggregate Bond UCITS ETF

20

17

SPDR MSCI EMU UCITS ETF

30

25

SPDR S&P 500 UCITS ETF

15

9

Fund

Aberdeen to launch China A-shares fund September 29, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2372511/aberdeen-to-launch-china-ashares-fund Aberdeen Asset Management is planning to launch a China A-Share fund after being granted its first Chinese RQFII licence. The group applied for a RMB600m (£60m) investment quota and is expecting confirmation in November. Once 80% of the allocation is invested, it may apply for an additional quota. The award will be the group’s first RQFII licence and follows the award of a QFII licence in July 2010, which now amounts to a total quota of $255m, invested in equities and fixed income. The launch of an A-share fund reflects a shift in the firm’s view on Chinese equities. The investment team is beginning to see more opportunities outside the traditionally popular Hong Kong market in advance of rule changes which will give more freedom to foreign investors. The A-share market offers exposure to sectors that may not be accessible in the smaller H share market, including consumer, travel, healthcare and financial services, where state-owned enterprises are less dominant.

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Hugh Young (pictured), manager director of Aberdeen Asset Management Asia, said: “Although China is a huge and exciting market, we are instinctively cautious and have shunned stocks that do not protect minorities or whose structures do not give investors proper legal ownership of the underlying assets. “In the past it has been tough to find quality companies we like. That has been changing gradually and we could now pull together a portfolio of 20-25 stocks with which we would be comfortable, and with low cross-over with our existing fund.”

Two major pension funds join hedge fund pullback September 29, 2014 | Efinancialnews http://www.efinancialnews.com/story/2014-09-29/two-major-pension-funds-railpen-bt-pensionscheme-join-hedge-fund-pullback Two of the largest pension funds in the UK are cutting their exposure to hedge funds as the reaction to high fees and lacklustre performance gains pace. The £20 billion Railways Pension Scheme currently has £1 billion invested in hedge funds but investment director Paul Bishop said it was looking to reduce this “significantly”. Bishop said: “We believe that hedge funds in aggregate offer a poor trade-off between expected returns and cost.” The £39.6 billion BT Pension Scheme has also been reassessing its position, according to several people familiar with its thinking. These people say the scheme’s weighting in hedge funds, which it does not disclose, is set to fall following a restructuring of BPK Partners, the hedge fund arm of its own fund manager Hermes, which plans to diversify into multi-asset funds. A BT spokeswoman declined to comment on its investment in BPK, but stressed it had no current plans to stop investing in hedge funds completely. The issue came to the foreground after Calpers, the $295 billion Californian pension fund which was one of the first big funds to place large sums with the sector, said it would sell its $4 billion hedge fund portfolio. Pension funds do not make hurried investment decisions so the disinvestments coming to light have not been triggered by Calpers’ decision. Over five years, the HFR hedge fund index has risen by an annualised 5.9%, against a rise of 8.2% for the MSCI All Country World equity index. Over three years it has risen by 5.4%, against 15.1%.

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Financial News reported last week that investment consultants were steering their clients away from hedge funds. One, Towers Watson, reckons that 66% of the returns generated by skill – as opposed to leverage or market movements – are retained by the hedge fund managers through the fees they receive. It called for the ending of the traditional “two and 20” fee structure which sees managers take fees of 2% of assets plus 20% of investment returns. Santander’s £8 billion UK pension scheme terminated its hedge funds last year. Tony Barker, head of pensions, said: “I don’t have an issue paying performance fees, the challenge is paying for skill rather than luck.” However, hedge funds have long been conceding ground on fees. Donald Steinbrugge, managing partner of US consulting firm Agecroft Partners, said: “There’s a strong trend towards lower fees being negotiated with public pension funds.” Hedge fund managers maintain that they provide portfolio diversification and studies have shown that, in aggregate, they can outperform equities and bonds even after fees are taken into account on a riskadjusted basis. Jack Inglis, chief executive of the Alternative Investment Management Association, said sophisticated investors did not back hedge funds to beat the index: “They want capital preservation, reduced volatility, heightened diversification and strong risk-adjusted returns.”

Sarasin switches to emerging markets and cash September 24, 2014 | FT Adviser http://www.ftadviser.com/2014/09/24/investments/multi-manager/sarasin-switches-to-emergingmarkets-and-cash-mfkz6c8Wk5L8eS4Hyziy2H/article.html Sarasin fund of funds manager Lucy Walker has slashed her position in the US in order to buy into emerging markets and rack up the highest cash levels ever on her funds. Ms Walker has established her first ever emerging market country-specific positions in China and India within the Sarasin Global Equity Fund of Funds and the Sarasin Global Diversified Fund of Funds. But, she cautioned, such moves did not mean she was becoming more bullish on equities. The overall equity weighting on the two funds, which Ms Walker co-manages with Sam Jeffries, has been reduced from overweight to neutral as the manager said there were now “risks across the board”. The cash level on the Global Equity Fund of Funds has been hiked to approximately 7.5 per cent, having been 0.4 per cent at the end of June, and the Global Diversified Fund of Funds now has 10 per cent in cash, as opposed to 1.4 per cent at the end of June.

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The cash weighting has been generated largely by selling down exposure to the US, but Ms Walker said she had also been buying into emerging markets, where there is still some value. The exposure to China was bought in April, when the Sarasin managers invested in the iShares China Large-Cap exchange-traded fund (ETF). Ms Walker said she thought there was a lot of value available from the larger companies in China, such as the banks, and thought the ETF was the best way to gain access to this. She pointed out that since she had bought the ETF in the middle of April, the market had gone up by 25 per cent, which she acknowledged was “far better than we expected”. While the China purchase was the first emerging market country-specific investment made by the Sarasin team, another quickly followed as they bought into the Ocean Dial Gateway to India fund. Ms Walker said that the fund, run by former Henderson manager David Cornell, was relatively small, but that she and the Ocean Dial management were “completely aligned” in viewing new prime minister Narendra Modi’s reforms as a long-term positive for India. While the China ETF has been added to both fund of funds, Ms Walker said the India position had not been included in the Global Diversified Fund of Funds because its volatility was too high. As well as the two country-specific investments, Ms Walker said she had also been adding to the funds’ positions in global emerging markets. This includes the South African-based Coronation Global Emerging Market fund, her top choice for global emerging market exposure. Managed by Gavin Joubert and Suhail Suleman, the Coronation fund is run with a value bias and a focus on long-term cash flow generation. Ms Walker said the team was “incredibly high calibre”. The Global Equity fund has returned 41.5 per cent since launch in June 2012 – well above the average return of 29.3 per cent from peers in the IMA Flexible Investment sector, according to FE Analytics. Global Diversified has also performed strongly and is top quartile in the past year in the IMA Mixed Investment 20-60% Shares sector, the data provider added.

Axa IM looks to broaden equity income range September 24, 2014 | FundWeb http://www.fundweb.co.uk/news-and-analysis/news/axa-im-looks-to-broaden-equity-incomerange/2014582.article Axa Investment Managers is looking to broaden out its equity income fund proposition.

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Head of UK wholesale distribution at Axa IM Rob Bailey says owing to bond funds – notably high yield – losing favour with investors on the expectation of a near-term interest rate rise, investors are searching for an alternative source of income. “It has been a funny year; our net sales have been flat through the year. Clients have moved away from high yield as people expect interest rates to rise. Although it won’t happen until after the general election,” Bailey says. The group currently has three UK equity income funds in its Axa Framlington stable; George Luckraft’s £143m Equity Income fund and Jamie Forbes-Wilson’s £84m Blue Chip Equity Income fund, as well as Luckraft’s £137m Monthly Income fund which invests in both equities and fixed income. “Our income proposition needs to improve,” Bailey says. “We need more in the way of income funds, either in global, European or US equities. As the population ages people want more income assets and if people cannot get that from fixed income the next place to look is equity income.” However the group has a global equity offering in its offshore range; the Axa WF Framlington Global High Income fund, a sicav run by William Howard. “William does a good job of running the fund and it is £100m now which you need before clients will look at it,” Bailey says. “But lots of the support for income comes from fund platforms and it is not easy to get an offshore fund on there. Over half of our sales come through platforms now so it is crucial to be on platforms. And clients want the UK-domiciled funds first.”

State Street Global Advisors Expands Multi-Factor Advanced Beta ETFs Giving Investors Additional Options for Active Exposure September 18, 2014 | State Street Global Advisors http://www.statestreet.com/wps/portal/internet/corporate/home/aboutstatestreet/newsmedia/pr essreleases/pressreleasedetail/!ut/p/c4/RY1LD4IwEIR_iwdOHHZXoPaqB9CYDZRLs0WKjZCMdJo_PfiIzFzmcl8mYEcejm-24q9bR3XcIBcqMVg3JCY5SrDHE2l5gm6zRCMYQj5KN_v1ysRd_PNvMomyJmBLv3YtE6b5xfsT_DMcBH0dRWqbiVXfmmynVDwiwtHfbfZ5DdmV4M9U3_ICws94EWLTNld0z7DjAqm51D7ytJEEkEONEJkQJSX0yWpM56 SIaxrGGrXFqv4XrhbUcDwYvlZiCmA!!/ State Street Global Advisors (SSGA), the asset management arm of State Street Corporation (NYSE:STT) today announced the launch of three single-country advanced beta SPDR ETFs. These ETFs aim to represent the performance of a combination of three factors, quality, value and low volatility, with the objective of giving investors improved risk-adjusted return potential when investing in single-country markets. The new ETFs add to the existing nine multi-factor SPDR MSCI Quality Mix ETFs that were launched in June 2014.

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The three new ETFs, which began trading on the NYSE Arca as of September 18, 2014, include: •

SPDR MSCI Mexico Quality Mix ETF (QMEX)

SPDR MSCI South Korea Quality Mix ETF (QKOR)

SPDR MSCI Taiwan Quality Mix ETF (QTWN)

“Our new SPDR MSCI Quality Mix ETFs provide investors with an opportunity to fine-tune their international exposure with a single-country portfolio that captures multiple investment themes,” said James Ross, executive vice president and global head of SPDR Exchange Traded Funds at State Street Global Advisors. “Multi-factor advanced beta strategies combine factor tilts that can help achieve diversification by using factors that have shown negative or low correlation. These exposures are appealing to investors as they can behave differently in similar market environments in terms of risk and return.” Investors may look to each of the recently launched Quality Mix ETFs to add strategic elements to their core portfolio. The selection of exposures available range from international with the SPDR MSCI EAFE Quality Mix ETF (QEFA), which includes 22 markets in Europe, Australaisa and Far East countries, to emerging markets, with the SPDR MSCI Emerging Markets Quality Mix ETF (QEMM), which captures large- and mid-cap representation across 21 emerging markets countries and global with the SPDR MSCI World Quality Mix ETF (QWLD). Additional country specific funds include Australia (QAUS), Canada (QCAN), Germany (QDEU), Japan (QJPN), Spain (QESP) and the United Kingdom (QGBR). The funds give investors opportunities to consider access to precise multi-factor investment across markets. Advanced beta, also known as alternative or smart beta, refers to a set of approaches that deviate from the traditional cap-weighted model and instead weight indices or securities based on alternative rulesbased methodologies. Designed to represent the performance of quality, value and low volatility factor strategies across global markets in a single composite index, the MSCI Quality Mix A-Series Indexes are an equal weighted combination of the MSCI Value Weighted, MSCI Minimum Volatility and MSCI Quality Indexes. The MSCI Minimum Volatility Index may be replaced with its corresponding MSCI Risk Weighted Index in the event that there is too much concentration or too few stocks in the index. The three new SPDR MSCI Quality Mix ETFs feature an expense ratio of 0.40 percent.

L&G merges away underperforming UK equity funds September 17, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2370768/l-g-merges-awayunderperforming-uk-equity-funds L&G is to merge away its underperforming L&G Equity and L&G UK Active Opportunities funds in midNovember.

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The £193m L&G Equity fund, managed by Richard Black, will be merged into the L&G UK Equity fund. The fund has returned 2.3% over the year to 16 September versus a sector average of 4.8%. Meanwhile Richard Penny’s (pictured) £156m L&G UK Active Opportunities fund will be merged into L&G UK Special Situations. This has returned 1.1% over the year to 16 September, versus a sector average of 4.8% according to FE. In both cases, the original funds will be closed to buy and sells as of 7 November. The new fund mergers will take place on 14 November. The mergers follow the group’s move earlier this year to reduce its range of active funds. In July, the L&G North American fund was merged into the L&G US Index while the L&G Pacific Growth was merged into L&G Asian Income.

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Performance Reporting Aberdeen’s outflows slow sharply as SWIP retains majority of AUM September 29, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2372604/aberdeens-outflows-slowsharply-as-swip-retains-majority-of-aum Aberdeen Asset Management today said outflows from its business had slowed significantly following a sustained period of redemptions, with the group also seeing better than expected flows from recent acquisition SWIP. The group has seen its share price come back 20% from its peak at the start of the year as ongoing outflows across its emerging markets mandates prompted brokers to cut price targets. But this morning Aberdeen delivered the clearest sign this trend may be at an end, with net outflows just £1.7bn in the following two months, improving significantly from £8.8bn of outflows in the three months to end of June. The group said net business flows had “stabilised” in the last two months prior to September’s more volatile spell which is not included in its update. Ahead of its close period chief executive Martin Gilbert (pictured) said the group’s equity capabilities are recovering, both in terms of performance and flows following a “tough 2013”. “With the SWIP integration on track we remain confident that the increased scale and breadth of the Group’s business provides a solid foundation to weather what are likely to remain volatile markets,” he said. Climbing share prices for emerging markets helped the group’s AUM in equities rise from £105.4bn to £111.3bn, with its equities business seeing net inflows of £100m over the two-month period. Outflows continued at its fixed income and solutions arms, while the recently acquired SWIP also saw £700m of outflows, but this was below estimates. Overall, with markets and FX providing a boost, total group AUM rose from £322.5bn to £331.2bn.

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UK Fund Management Hits Record £6.2tn in 2013 September 29, 2014 | International Business Times http://www.ibtimes.co.uk/uk-fund-management-hits-record-6-2tn-2013-1467396 The UK’s fund management sector was responsible for a staggering £6.2tn of funds in 2013 – a record for the sector. TheCityUK’s Fund Management 2014 report shows that the sector has picked up from the fall experienced during the recession and is now 50% higher than those experienced during the pre-crisis peak. The report says that the UK was the worldwide leader in managing foreign client’s money, with over a third, £2.2tn, of it coming from overseas clients. Last year was the fifth consecutive year of growth, increasing by 14%. TheCityUK also forecasts that assets jumped by around 5% in the first half of 2014, which is expected to rise by 9% in total over the course of the year. “The UK is one of the leading international centres for fund management and by far the largest European centre,” said Chris Cummings, chief executive of TheCityUK. “The fund management sector is also one that consistently generates a significant trade surplus for the UK economy. “The strength of these latest figures also demonstrates the attractiveness of the UK as place in which, and from which, to do business. “While London is central to the UK’s strong international position, other cities such as Edinburgh, Glasgow, Aberdeen, Manchester, Liverpool, Cardiff and Birmingham are also important centres for fund management. In fact one third of the 50,000 people directly employed in the sector are based outside of London.” The £6.2tn is broken down into three sectors with £999bn coming from retail clients, £4tn coming from institutional clients and the rest from international clients.

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Close Bros operating profit up 20% September 23, 2014 | Citywire Wealth Manager http://citywire.co.uk/wealth-manager/news/close-bros-operating-profit-up-20/a773993 Close Bros operating profit rose 20% over the year to the end of July to £200 million as assets under management in its fund management division rose 7% to £9.7 billion. The company upped its dividend 10% to 49p. Driven by a return of IPOs to the London markets in the last year, small cap broker Winterfloods reported a 57% increase in profit to £26.6 million. Adjusted operating income within the asset management division rose 8% to £84.4 million income on assets under management rose 10% to £83.8 million. ‘Validating the quality of our investment management, the strongest inflows have been from third party IFAs, where we are benefiting from a growing distribution network,’ Close said in a statement. ‘We have also seen good inflows both from our high net worth business, where we have recruited a number of bespoke portfolio managers, and from our private client advisers.’ ‘We are continuing to build scale and are establishing ourselves as a leading provider of wealth management services to the UK private client market.’ The company said it was continuing to focus on ‘improving the operational capacity’ of its financial advisers as total advisory funds rose 2%.

Investec W&I assets pass £45 billion as it expands in Scotland September 19, 2014 | Citywire Wealth Manager http://citywire.co.uk/wealth-manager/news/investec-wandi-assets-pass-45-billion-as-it-expands-inscotland/a773466 Investec Wealth & Investment has grown its assets under management by £3.7 billion over the past six months. That represents growth of 9% since the end of March, and takes the division’s assets to £45.2 billion. In a market update, Investec confirmed that the wealth business’s operating margins had also continued to rise through the period and therefore its results were ‘expected to increase substantially’ year-onyear.

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The group highlighted recent recruitment in its Glasgow and Edinburgh branches as drivers of this success. In Investec’s asset management arm, total assets also rose 9% since March to £74 billion. London-listed shares in Investec, headed by chief executive Stephen Koseff (pictured), gained 0.3% in early trading to £5.59.

Neptune profits tumble 40% in 2013 as headwinds impact global approach September 18, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2370911/neptune-profits-tumble-42-onturbulent-2013 Neptune Investment Management’s profits before tax fell by over 40% in 2013, against a backdrop of falling assets under management, after a difficult year for its global investment approach. Profit before tax was £7.4m, according to the company’s accounts, down 42% compared to the £12.8m profit it reported in 2012. Group revenue for the year fell 14% from £85m to £72.9m. Assets under management also fell by 7.8%, to £5.4bn, with the group blaming both “abnormal” central bank policy and the company’s much greater emphasis on international investment - in particular its greater exposure to the US dollar - for the falls. Chairman Jonathan Punter said: “Neptune is much more internationally positioned than most of its UKcentric competitors and this strategic strength has had a short-term negative impact, exacerbated by the current overvaluation of sterling.” The business remains “robustly healthy and profitable”, he added. Globally-exposed Neptune funds include the Global Equity fund, which returned 16% over the three years to 17 September 2014, compared to a 38.6% sector average, according to FE, and the Global Special Situations fund. The firm also runs a number of specialist international strategies including the Neptune Russia & Greater Russia fund, which has struggled against the backdrop of increased geopolitical tension. Over the year to 17 September 2014, it has returned -17.4% compared to a global sector average of 5%, according to FE. However, in terms of the UK market, the group’s UK Mid Cap fund has outperformed with returns of 101.6% over the three years to 17 September 2014, compared to a sector average of 47.7%, according to FE. Neptune - which also reported a fall in profits in 2012 - has made inroads into cutting staff costs, with the spend on employees falling by 16.5% to £15m. This reflected a lower level of bonuses. The firm said 2013 had represented the beginning of a move back into equities, with investors becoming

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more positive on the outlook for global growth. Its gross sales were up 6% compared to 2012. Chief executive Robin Geffen (pictured) said: “This is in no small part down to the relationships that members of the team have forged in the UK intermediated market, which remains at the core of the Neptune client base. “Unfortunately, these efforts were more than outweighed by the increased volume of redemptions, which rose markedly as funds flowed out of emerging market equities.” The accounts mark a second challenging year for the privately-owned company. Neptune’s profits before tax fell nearly 40% in 2012, with assets under management down 7.5%, after what the group called an “extremely difficult year for equity investors”.

Brooks Macdonald asset surge helped by acquisitions September 17, 2014 | FT Advisor http://www.ftadviser.com/2014/09/17/investments/uk/brooks-macdonald-asset-surge-helped-byacquisitions-YswcCwCrG0lHJM0wySfmpM/article.html Brooks Macdonald’s total funds under managment surged 28 per cent in the past year thanks in part to deals it has sealed to buy rivals. The discretionary manager’s assets grew from £5.1bn to £6.5bn to the end of June 2014, driven by acquistions, according to its final results released today. It expects to pay a final dividend of 19p per share. This will take the total dividends for the year to 26p per share. Elsewhere, the wealth manager’s pre-tax profits grew 2 per cent to £10.6m in line with expectations. Chris Macdonald, chief executive officer, said: “After the considerable changes within the industry in recent years, this has been a year where the business has continued to evolve, invest in the future and grow funds under management and administration. “We will continue to invest in systems development and remain optimistic for new business flows. New business has started the year well and the board remains confident for the future of the group.” Last month the group said it would acquire Levitas Investment Management Services “imminently” as part of plans to expand its range of risk-adjusted funds and add further exposure to the pensions market. During the year, the group also entered into a partnership, North Row Capital, which launched the IFSL North Row Liquid Property fund in February this year. In April, the wealth manager confirmed the acquisition of Jersey-based wealth management business DPZ Capital, which it expects to be earnings enhancing in the year ending June 30 2015.

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Technology SkyBitz introduces new asset management and tracking solution September 29, 2014 | Fleet Owner http://fleetowner.com/technology/skybitz-introduces-new-asset-management-and-tracking-solution SkyBitz has introduced a new asset management and tracking solution for unpowered assets, including trailers. The Falcon Series GXT2000 is a custom built global positioning satellite (GPS) asset tracking solution for 3G/4G cellular networks with seamless North American coverage. The system tracks the location and status of assets without an external power source throughout the entire chain of events – including arrival and departure from customer sites and all events occurring in between. The low-cost system features long battery life and can be combined with SkyBitz’s SkyBitz as a Service platform. It is ideal for operations requiring reporting for years at a time on the status of unpowered assets such as intermodal containers, chassis, and trailers for increased visibility, security and utilization management, SkyBitz said. The Falcon GXT2000 was built upon the same platform as the Falcon GXT3000 and delivers accurate location and status information. “We are committed to revolutionizing the way businesses optimize, manage and protect their assets,” said Henry Popplewell, senior vice president and general manager, SkyBitz. “Through offering the broadest portfolio of industry leading products, combined with the SkyBitz as a Service subscription platform, customers can more quickly deploy the best solution fitted to their unique needs without any upfront investment.” The Falcon GXT2000 was designed to provide ultimate ease and flexibility in installation and operation, taking less than 30 minutes on average to install. The product is energy efficient and can be programmed to shut off when in a specific geographic zone or for periods of time to conserve power, for example when a container is on rail. The Falcon GXT2000 also allows for cargo status data via sensors and more intelligent and responsive self-diagnostics, allowing for over the air troubleshooting. Information from the GXT2000 is delivered to end-users via SkyBitz InSight, a management tool for tracking, monitoring and managing a broad range of assets for multiple industries. SkyBitz InSight has an adaptable application program interface (API) that can accept data feeds from any other system.

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Strategy Sanlam takes controlling stake in FOUR Capital September 30, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2372879/sanlam-takes-controllingstake-in-four-capital Sanlam International Investments is to significantly increase its stake in boutique FOUR Capital in order to work more closely with the business. The renamed Sanlam FOUR business marks the culmination of a process that begin in 2009, when Sanlam took an initial 29.9% stake in the firm. Sanlam Group will now hold a 89.7% stake in the company, though the investment teams within the existing FOUR business will retain 30% equity stakes in their specific business areas. The transaction, which is subject to FCA approval, will have no impact on the existing investment team at FOUR. The team manages UK, Europe, Global and multi-strategy funds. Lukas van der Walt, chief executive of Sanlam, said: “We have been busy in recent years building the infrastructure and resources to create market-leading asset and wealth management offerings in the UK. This is another important milestone on that journey.” Derrick Dunne, founder and director of FOUR, said: “In positioning Sanlam and FOUR closer together, we create a more diversified business with a significant increase in AUM. “We are very optimistic for the future. We have the perfect marriage of the strength and resource of the Sanlam Group and the focus and expertise of an investment boutique.”

HSBC Life outsources £1.8bn DC pension assets to Fidelity September 29, 2014 | Money Marketing http://www.moneymarketing.co.uk/news-and-analysis/wraps-and-platforms/hsbc-life-outsources18bn-dc-pension-assets-to-fidelity/2014701.article HSBC Life has taken steps to outsource £1.8bn from its defined contribution pension plan to the Fidelity investment platform, the FT reports. The bank’s in-house pension provider revealed back in June that it was pulling out of the workplace pensions market as part of plans to sell its UK third-party pensions business to ReAssure in 2015.

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The move by HSBC marks the largest shift of any DC pension plan in the UK. The HSBC pension scheme currently has 38,000 members. HSBC Bank Pension Trust chief operating officer Phillip Bretnall told the newspaper that existing members on the HSBC life DC pension plan had experienced minimal disruption and risk during the transition. Fidelity head of DC and workplace savings Julian Webb added that the assets had been transferred over to the platform at zero cost. Webb also reassured that members would continue have the same service thanks to a replication of the funds on offer on the existing HSBC DC pension scheme. Watson Technology and Administration Solutions are set to continue administering member accounts following the transition.

Thomas Miller buys Broadstone Wealth Management September 25, 2014 | Citywire Wealth Manager http://citywire.co.uk/wealth-manager/news/thomas-miller-buys-broadstone-wealthmanagement/a774417 Thomas Miller Investment has acquired Broadstone’s wealth management business. Broadstone provides wealth management services to private clients, pension funds, charities and companies. It manages and advises on approximately £400 million of assets from offices in Glasgow, Southampton, Birmingham, Chelmsford and London. When combined, 128 year-old Thomas Miller Investment will manage and advise on around £2.8 billion of assets with around 90 staff across seven locations. Broadstone’s managing director, private clients, Matthew Phillips, will take responsibility for Thomas Miller Investment’s wealth management operation in the UK. He will report to Thomas Miller chief executive Mike Balfour. The deal, which was struck for an undisclosed sum, is part of a wider growth strategy to build Thomas Miller Investment into a leading investment management business, both organically and through acquisition. Balfour said: ‘The team at Broadstone share our philosophy and culture of providing a highly professional service for clients.

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He added: ‘They will be a valuable addition to our investment capability and provide a national wealth management offering in addition to our other offices. ‘This is a clear demonstration of our ambition in the provision of private client wealth management.’

UniCredit, Santander in talks to merge asset management units September 23, 2014 | Reuters http://uk.reuters.com/article/2014/09/23/uk-unicredit-santander-pioneer-idUKKCN0HI0OG20140923 Italian bank UniCredit SpA (CRDI.MI) and Spain’s Santander SA (SAN.MC) are in talks to merge their fund management businesses and create a European powerhouse overseeing some 350 billion euros (275.26 billion pounds) of assets. Under the proposed deal, Santander Asset Management will combine with UniCredit’s Pioneer unit, with both banks owning about a third each of the new company, UniCredit CEO Federico Ghizzoni told reporters on Tuesday. Private equity funds Warburg Pincus and General Atlantic, which are already partners in Santander Asset Management, will together take the remaining third of the merged entity, before exiting the venture in a few years when it will likely be listed on the stock market, Ghizzoni said. He gave no financial details about the planned tie-up, only saying Santander had offered a “better price” than the two other bidders for Pioneer - a consortium comprising private equity fund CVC Capital Partners [CVC.UL] with Singapore sovereign fund GIC, and U.S. fund Advent. At least one of the proposals put to UniCredit valued the whole of Pioneer at between 2.4 billion euros and 2.7 billion, or 9 to 10 times earnings before interest, tax, depreciation and amortisation of 270 million euros, sources familiar with the matter previously said. Ghizzoni said the new asset managing company will be among the top 15 fund managers in Europe and the top 30 in the world, with a strong presence in Latin America and the United States, that can fully exploit the two banks’ network of 21,000 branches. “We decided to opt for an industrial partner. The geographic and business fit is enviable, and the strategic objective is further growth for the business,” Ghizzoni said. Santander said it had no comment. For UniCredit, Italy’s biggest bank by assets, ceding control of Pioneer - which manages assets worth 186 billion euros - is the latest in a string of disposals.

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ASSET SALES Like other European lenders seeking to shore up their capital base ahead of a health check of euro zone banks, whose outcome is set to be made public next month, UniCredit has been shedding assets, cutting jobs and closing branches. Santander, the euro zone’s biggest bank, last year sold a 50 percent stake in its own asset management arm to Warburg Pincus and General Atlantic. The unit managed about 154 billion euros in assets as of March. “It makes sense for Santander to keep growing the asset management business in collaboration with other partners at a moment when growth rates are steadily picking up,” said Nuria Alvarez, financial analyst at Madrid-based brokerage Renta 4. Details of the proposed deal were still sketchy, but the tie-up would add some 20 to 25 basis points to UniCredit’s core capital ratio, a measure of financial strength, Ghizzoni said. UniCredit’s best-quality capital stood at 10.4 percent of risk-weighted assets at the end of June, well below the 12.9 percent level of domestic rival Intesa Sanpaolo SpA (ISP.MI). Over the past few months, UniCredit has listed a 34.5 percent stake in online bank Fineco and sold an 81 percent holding in web broker DAB. It is also in talks to sell its bad loans management unit UCCMB. These moves allowed the bank to bolster its capital in the face of a prolonged recession in Italy and European sanctions against Russia, amid rising political tensions in central and eastern Europe, a key profit generating area for UniCredit. UniCredit had considered the sale of Pioneer in 2011 but dropped the idea after failing to conclude a tieup with Eurizon, the fund management arm of domestic rival Intesa Sanpaolo (ISP.MI).

Old Mutual to float US asset management subsidiary September 23, 2014 | Investment Week http://www.investmentweek.co.uk/investment-week/news/2371616/old-mutual-to-float-us-assetmanagement-subsidiary Old Mutual is launching an initial public offering for its US subsidiary Old Mutual Asset Management. The group said today it intends to sell 22 million, or 18.3%, of OM Asset Management ordinary shares at a price per share ranging from $15 to $17. OM Asset Management is the holding company for Old Mutual’s US-based $215bn institutional asset management business. It is a separate entity from Old Mutual Global Investors, the insurer’s UK asset management arm.

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The book for the IPO will be run by Bank of America Merrill Lynch, Morgan Stanley, Citigroup and Credit Suisse Securities. Old Mutual has also granted the underwriters a 30-day over-allotment option to purchase up to an additional 3.3 million shares.

Aberdeen gets approval to buy 80 pct of Indonesia’s NISP Asset Management – source September 22, 2014 | Reuters http://www.reuters.com/article/2014/09/22/aberdeen-asset-nisp-idUSL3N0RN1R220140922 British firm Aberdeen Asset Management PLC’s Asian arm has obtained regulatory approval to buy 80 percent of Indonesia’s PT NISP Asset Management, a person with direct knowledge of the matter said on Monday. Aberdeen Asset Management Asia obtained the go-ahead from the Indonesian financial services authority on Monday and the deal is expected to be closed by the end of this year, the person said, declining to be identified because the information is not public. A spokeswoman for Aberdeen Asset Management Asia declined to comment. NISP Asset Management is currently majority-owned by PT NISP Sekuritas, which is in turn controlled by Indonesia’s Surjaudaja family. It managed about 3.5 trillion rupiah ($292.6 million) as of February. Britain’s Aberdeen Asset Management PLC managed $551.4 billion of assets globally as of June.

Are you willing to pay up for fund research? September 18, 2014 | FT Adviser http://www.ftadviser.com/2014/09/18/opinion/blogs/are-you-willing-to-pay-up-for-fund-researchsCWafXO07TZcDMiSWn1vkO/article.html New regulations could see active management fund costs rising while passive fund fees are falling. How much are you willing to pay for active fund management? Incoming regulation on payment for research, proposed by the European Securities and Markets Association (Esma), has got the asset management industry worried.

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The rules would ban fund managers from the current widespread practice of buying research from brokers by paying those brokers a slightly higher dealing commission than they would otherwise have done. European regulators see this as an inducement and not in the best interest of customers, though asset managers argue it is a ‘conflict of interest’ that can be monitored. Asset managers have pointed out that banning such a method of payment will cause the firms to have to put together their own research teams, raising costs. There are some firms that barely use broker research at all, but it seems the vast majority do, to some extent or another. However, where the managers seem to be split is over whether these costs will be passed on to investors. One option is for the fund groups to assume the cost of research themselves, which will undoubtedly affect their bottom lines. Various studies have offered wildly different estimates of how much it will cost firms, but some smaller asset managers are fearful it may put them out of business, or at least seriously curtail what they are capable of doing. The only other option being proposed at present is to add the costs into fund annual charges, probably as an extra portion of the ongoing charges figure rather than bundled into the annual management charge. But it seems hard to believe, in the current environment of heavy downward pressure on fund prices, that investors will be eager to see the fee they are paying for funds rising. One reader has commented that fund managers are already “being well paid for managing the fund” from the AMC and questioned why research couldn’t be funded from that fee. Of course, investors are already separately paying for research from the funds’ dealing costs, but it is a case of ‘out of sight, out of mind’. There is a well-documented history of people suddenly baulking at paying up for something when it becomes explicitly chargeable, even if they have always been paying for it without realising - just witness some reactions to paying a fee for financial advice. In the battle against passive funds, which are getting cheaper and cheaper, it may not be in the best interests for active fund managers to suddenly increase their charges. But it looks likely that, if this ban comes into force, which will not be until the start of 2017, fund management groups will look to pass at least a portion of the costs on to investors. And then it will come down to how strongly people believe in the ability of active management to add value, and how much they are willing to pay for that belief.

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