Many talented women are embracing the relationship-based private banking sector in preference to the more rigid transaction-based investment banking world, reports Elisa Trovato

“Inspiring people has always been my goal,” says Eva Castillo, the forceful Spaniard at the helm of the global wealth management business operations in EMEA at Merrill Lynch (ML) since 2006. But what is rewarding is the moral influence, not the authoritarian one, she says.

Competence, perseverance and “not taking no for an answer” are the recipes for success for Soha Nashaat, managing director and head of Middle East, North Africa and Turkey for Barclays Wealth and already the Financial Times’ leading business woman in the Arab World for two consecutive years. “You have to be always on top of developments, be adaptable to changes in an industry which changes very rapidly, and you can’t let setbacks shake your self-confidence,” says Ms Nashaat, whose Egyptian and Syrian parents raised her in Kuwait, before she studied in the US and then moved to Argentina.

Dina de Angelo, director at Pictet Investment Management in London and the driving force behind the firm’s family office business, has dedicated her career to understanding the nature of complex multi-national family structures and investments around the world, and has gained a respected reputation in the industry as a solution-oriented professional. “I was taught that you should not talk at clients, that you do not need to worry about a transaction, because wealth management is not about one transaction, and you always need to listen before saying anything, and really consider what your client, or perspective client, is saying to you,” says Ms de Angelo.

UBS is trying to turn things around with a host of new appointments and the break up of its three principal arms, writes Sebastian Dovey

Having sold its private client arm and funds platform, active equity

manager Martin Currie can now hit the wealth houses without any fear

of competition. Distribution boss Andy Sowerby talks to Yuri Bend

With many of the big wealth management businesses linked to underperforming investment banks, smaller firms are becoming increasingly attractive to private bankers, writes Elisa Trovato

Is the award of a sub-advisory investment mandate to a hedge fund by Fideuram Investmenti the shape of things to come, or is the demand from investors simply not there? Elisa Trovato reports

Despite fears of a recession, Japanese corporate fundamentals are robust and Japanese equities provide a compelling developed-market investment, writes Matt Mack

Tony Johnson of RBC Dexia Investor Services analyses the phenomenal rise of the Ucits market and the challenges and opportunities this creates for promoters, distributors and service providers

With spreads so wide, now may be the time to start looking for

potential opportunities in the high yield bond market, writes Ceri Jone

Most investors agree on what constitutes a developed market but the picture can become more hazy when it comes to emerging and frontier markets. Frontier markets carry higher levels of risk, but can also offer very high returns. A key tool for investors to use as they approach the Frontier markets is a transparent and codified system for country classification

A structuring team that can negotiate with the banks and advise the clients is vital if fund managers are not to be restricted in their asset management, writes Martin Steward

“Markets continue to be very weak. The financial crisis is worsening

following Fannie and Freddie Mac bailouts and Lehman bankruptcy. Last inflation numbers both in the US and Europe show a peak in the inflation rates in July. We kept our pretty conservative portfolio, substituting Amex Gemar emerging markets absolute return bond fund with a bigger exposure to European bonds (through the Axa WF). We also added BlackRock Euro Markets fund because of its good track record.”

“During August the downwards trend of the oil price continued driven by the first signs of a cooling global economy. Accordingly, the worldwide demand in oil decreased significantly and news of increasing oil inventories are spreading. Another important reason for the sinking oil price seems to be the speculative investment shift from long to short positions at most of the international commodity exchanges. We prefer to wait and observe until the end of the year if the ongoing, sometimes exaggerated trends in the market can really persist and therefore made only minor changes to our portfolio.”

“Earlier in the year, many investors backed the emerging market decoupling story as growth in the region remained strong despite the western downturn. More recently emerging markets as a region has underperformed as confidence in the independent growth story cooled. We now believe emerging markets offer investor value and have sold the absolute return JPM Emerging Market Alpha, which has performed well during the correction, switching to Resolution Hexam Global Emerging Markets allowing us to capture more market beta. We still believe that markets will remain volatile and a asset allocation and rotation will be vital.”

“The portfolio was down in August mainly due to the exposure to Asia and Russia, which detracted from return. The best performing fund this month was Robeco Lux-o-Rente, which rose 2.1 per cent in August. The fund invests in government bonds and is driven by a quantitative model, which combines various inputs to assess the attractiveness of the bond markets. As a consequence the duration varies between 1 and 10 years. On the equity side, the best performing fund was Danske Fund Europe. This fund has a five star Morningstar rating and during the past five years, it has provided a return of 67 per cent versus a benchmark return of approximately 50 per cent.”

“During the last month we didn’t modify the asset allocation of our portfolio. We made one change in fund selection, adding Gartmore Emerging Markets Equities and removing Pictet Emerging Markets Equities. Low turnover in the portfolio is a goal of our activity, especially considering the present conditions of financial markets, marked by persisting high volatility. In spite of unsatisfying results in the short term, we believe that the portfolio is built to return a good performance over the medium-long term.”

“Returns on our portfolio were positive overall, supported by European equities and Euro fixed income investments. We fared particularly well from our defensive position in Uniglobal Minimum Variance Europe. However, Asian equities dropped dramatically due to increasing fears of a slowdown in the economy, and the Threadneedle Asia Growth fund contributed negatively to performance. We trimmed our position on volatility from 4 per cent to 2 per cent: this was invested in Centrale Long Vol. This enabled us to finance an increased position in Ecofi Quant Trésorerie Dynamique, which has recently slightly underperformed the cash market.”

“In the current highly volatile market environment we start our fund

portfolio with a mixed allocation to global bond and equity funds. All funds selected have a quite defensive approach. The additional equity funds are regionally focused. As an active allocation overlay we also initiated a position in an asset allocation product from Blackrock. The current cautious positioning of the Blackrock manager enhances the defensive profile of our portfolio. At the same time the exposure to this actively managed allocation fund provides us with an opportunity to gain exposure to risky assets as soon as markets return to normality.”

“The best performing equity managers were Wellington & Axa Rosenberg in the US, both returning approximately 7 per cent. The emerging markets did poorly as the decoupling thesis faced the reality of a global integrated economy. Our European managers substantially outperformed, returning 4.6 per cent (IdB Equity Income) and 3.2 per cent (Odey) compared to a market return of approximately 1.5 per cent. These are also the two best performing equity managers, year to date, underlining the importance of having a willingness to make changes as market circumstances dictate. Hedge funds disappointed.”

“Managing a portfolio always comes down to stock-picking and asset allocation. This column is dedicated to the former. But, more than ever, both are closely linked to each other. Thus, conservativeness is a common feature to every fund in the portfolio. This can be simply reached by pure money market, without any credit risk, or it can be reached by hedging the portfolio against the inflation. On the equity side, conservative strategies as well as visible growth strategies must be favoured. The most battered sectors and themes are, at some point, becoming bargains (eg energy stocks).”

“In our opinion, current market uncertainties are more driven by financial newsflows than by macroeconomics figures. Crude oil under $100 had no positive effects, especially for emerging markets. On the other hand, fears of bankruptcies impacted negatively equities, and multiple interventions of central banks don’t attenuate bearish view of the investors. In this context, we maintain our slightly cautious bias and keep a 40 per cent exposure to alternative investments, through multi-strategy funds of hedge funds. In terms of geographic exposure, we continue to favour US and Japanese stocks. We are still less confident concerning Europe.”

“During August the strength of the US dollar had a major impact on portfolio performance with Blackrock US flexible and Findlay Park US Smaller Companies racing ahead in absolute terms. Two of the laggards are familiar ones in recent times: Artemis European and Atlantis Japan.The former has a quant driven investment process and it does tend to underperform at inflection points for the markets. Nevertheless it probably deserves greater attention given the scale of its lacklustre period. The latter is more of a niche play but overall Japan looks to be one of the contrarian plays at present.”

“August saw further volatility in equity markets, but this time the currencies joined in too. This made for interesting times for Euro thinkers with the US leading the way and corresponding good returns from Findlay Park US Smaller Cos, and Thames River Global Bond which is structured to benefit from USD weakness at present and rose by 4.6 per cent during August. Our selections in Asia and the Emerging Markets could only fare well on a relative basis as the oil price fall and Russia issues hit sentiment.”

Each month in PWM, 12 top European asset allocators reveal how they would spend €100,000 in a fund supermarket for a fairly conservative client with a balanced strategy