Archive » 2003 » Issue 15 (November)
Pension crisis could boost German funds
03 November, 2003
There is no shortage of opportunities in Germany, with hedge funds being promoted by Schröder’s government as an alternative to pensions.
Spitzer: motivations questioned
US fund houses caught in Spitzer’s widening net
03 November, 2003
Yuri Bender reports on the NY Attorney General’s funds clean-up campaign. New York attorney general Eliot Spitzer’s mutual funds probe is gathering momentum, with the conviction of James P Connelly Jr, formerly with funds house Fred Alger. Mr Connelly tried to conceal trading arrangements with Texas hedge group Veras Investment Partners.
Sibos conference: back-office news
03 November, 2003
T+1 talks revived
Stephan Zimmermann, head of operations at UBS and Swift board member, has predicted moves towards trade and settlement in a single day (T+1) will again gather momentum, writes Roxane McMeeken from Singapore.
Company briefs
03 November, 2003
SYZ & Co gets serious about hedge funds advice
The Swiss banking group SYZ & Co has set up a unit dedicated to advising private clients on hedge funds. The Hedge Fund Advisory Group will comprise three people, including its head, SYZ & Co vice president Roberto Almaleh. The bank’s alternative investment division, Alternative Asset Advisors, has launched a multi-class leveraged fund of hedge funds called 3A Windrider. On the long-only side, SYZ has selected Bill Wilby, senior investment officer at Oppenheimer funds, to run its E125m Oyster World Opportunities Fund.
Why a co-ordinated strategy works
03 November, 2003
Wrap accounts are clearly gaining in popularity. The idea is that a client has a single co-ordinated investment portfolio employing a strategy across a variety of investment ‘pots’ or sub-accounts. These accounts might be allocated for specific purposes such as short to medium term funds, a longer term portfolio and a pension. More likely, they are divided up into different investment ‘wrappers’ that afford a variety of tax breaks.
Sarasin takes hatchet to ‘global economy myth’
03 November, 2003
Private clients are demanding local contact, says Swiss banking boss.
HSBC hands funds to Louvre
03 November, 2003
HSBC switches private banking clients in France to Louvre Gestion.
Fact-finding mission for 2inet founders
03 November, 2003
Yuri Bender reports on a network created to support wealth advisers facing a conflict of interest when deciding what is best for customers.
Swiss boutiques display healthy range of returns
03 November, 2003
A quick analysis of international merger and acquisition (M&A) activity in the wealth management market indicates that around 25 significant acquisitions have been made in the last nine months. What is more, half of the deals have included at least one Swiss partner. With large transatlantic mergers seen as the way forward for wealth managers, the Helvetic activity shows Switzerland remains at the heart of international business.
Jouard: ‘no need for third parties’
Dexia addresses ‘false freedom’ of open architecture movement
03 November, 2003
Roxane McMeeken on why Dexia’s private banking makeover embraces expansion Eastwards as well as improved service levels with an emphasis on financial planning, but doggedly sticks to its anti-open architecture stance.Private banking operations at Franco-Belgian financial services group Dexia are being beefed up, but a question mark hangs over whether the firm will embrace the use of external asset managers.
Fund demand reveals jobs to die for in 2004
03 November, 2003
Hedge fund manager in London; ETF salesman in Germany; Italian open architecture afficionado; retail marketeer (individual investor bias preferred) in Spain. Andrew Hutchings proffers a guide to Europe’s dream jobs for the coming 12 months.
Scaturro: ‘People have been burned and families prefer to focus on a few trusted advisers’
Private bank acts as gateway to Citigroup empire
03 November, 2003
Roxane McMeeken quizzes Citigroup’s private banking chief Peter Scaturro on the firm’s strategy for success in Europe. Even before the Iraq war, anti-American feeling was not uncommon in Europe. Now, as President George W. Bush attempts to mend fences with former friends across the Atlantic, the sentiment is close to rife. But US super bank Citigroup has no plans to de-Americanise its private banking proposition for Europe. Citigroup’s private banking chief Peter Scaturro believes Europe provides one of the bank’s largest opportunities and has an ambitious growth plan for the region. Yet he happily flies in the face of the entrenched idea that European clients respond best to a service minutely tailored to suit them.
Goldman Sachs takes a shine to sub-advising
03 November, 2003
US funds house explores channels besides direct distribution in an effort to tap into the European market. Roxane McMeeken writes.
‘The concept that higher risk active managers generate proportionately higher returns appears to be a myth’
David Wonn, Invesco
Time to review risk and return
03 November, 2003
Research findings are showing that there is a greater likelihood of generating robust returns from a low tracking error approach than from a higher one.
In today’s uncertain environment, the managers who focus on low tracking error strategies and who have historically managed to a tight “risk budget” have been gaining attention from both index-oriented investors and those focused on traditional active management strategies. Given the increased level of interest and the attractive performance attributes of these approaches, we wanted to provide investors with more information on this unique corner of the market.
‘It is little surprise that some of the smaller sector ETFs have already gone to the wall’
Markus Hübscher, Credit Suisse Asset Management
Late off the blocks in Europe, but gaining ground
03 November, 2003
The market for ETFs on this side of the Atlantic may only have got going three years ago, but in 2003 it is on track to double in size yet again.
Exchange-traded funds (ETFs) have been one of the fastest growing areas in the European asset management industry in recent times. While these products have been available in the US for several years, their introduction in Europe only started in 2000. Since ETFs became available in Europe, assets under management in this new and innovative investment vehicle have risen to over $16bn (e14bn). (See Chart 1.)
‘Mid cap stocks get 30 per cent less coverage by Wall Street analysts than their large cap counterparts, leaving more pricing efficiencies to be uncovered and exploited’
David Schofield, Janus International
Hot tips on market ‘sweet spot’
03 November, 2003
Investors are beginning to notice that the under-researched mid cap asset class – especially around the $1bn–5bn mark – can offer a winning combination of upside potential and limited downside risk.
Imagine a racehorse which, for 10 years, wins more races than any of its rivals, but is hardly ever bet on by the public – seldom even by professionals – and gets only minimal coverage in the racing pages. Implausible certainly, but this is exactly what has happened in the investment world. Mid cap value beat all other US equity asset classes over the 10 years to 2002, according to Lipper statistics, and yet it accounts for only 2.9 per cent of invested equity assets. (See Charts 1 and 2.)
‘With the arrival of the euro in 1999, there has been a gradual demand for indices and products that expose investors to the performance of the eurozone’
Ade Cordell, Euronext.liffe
Alternative indices arrive at long last
03 November, 2003
Demand has been high for indices that reflect recent currency changes in the trading marketplace and the broader European landscape.
Today’s market conditions and Europe’s expanding horizons require new index products. The main European index, for example, is now over five years old – predating both the euro and the end of the 1990s bull market.
Euroclear to ‘isolate’ settlement rivals
03 November, 2003
Opinions differ on the method to remedy Europe’s hotchpotch system for clearing and settlement. Roxane McMeeken explains:
False dawn or new beginning?
03 November, 2003
Japan’s stock market has been on the threshold of recovery numerous times, but has always failed to deliver. Simon Hildrey assesses reports that this time, it’s for real:
Panel Investment
03 November, 2003
Each month in PWM, six top European asset allocators reveal how they would spend E100,000 in a fund supermarket for a fairly conservative client with a balanced strategy.
‘There is strong evidence that we
are in the very early stages of a secular gold bull market’
Andy Whelan, Liberty Ermitage
Return of the Midas touch
03 November, 2003
Andy Whelan explains why all that glitters is most certainly not the US economy nor its currency.
Gold has a proven inverse correlation to both capital markets and more importantly to the dollar. This relationship has been very profitable for those investors who had the foresight and courage to invest in gold in March 2001, when the metal was trading at $258 (e221) an ounce. While the MSCI World Index has fallen by 12 per cent, gold bullion has gained 47 per cent – an out performance of over 60 per cent.
‘Not since the early 1990s have the leasing cards been so heavily stacked in favour of the tenant’
Chris Turner, Henderson
Offices: Omens are mixed
03 November, 2003
Chris Turner assesses the risks of investing in Europe’s vacant office building stock.
Wander around the business districts of any major city of Europe and you cannot help but notice that the number of “To Let” boards attached to office buildings is a lot higher than it was two years ago. If you take a drive round any city’s outer ring road the boards will be even more numerous.
‘A fund of hedge funds manager has to be inside the prime information loop of the business’
James Jacklin, Man Investments
Shopping for a provider
03 November, 2003
James Jacklin explains why finding the right fund of hedge funds
manager is so important.
In recent years, the number of hedge fund providers as well as the variety of hedge fund investment styles available has increased significantly. While choice has expanded, the task of choosing a hedge fund product has not got any easier. In an effort to attain the attributes that hedge funds add to a portfolio many investors, both private and institutional, have chosen to minimise their exposure to any single manager or product and have opted for funds of hedge funds.
Portfolio planning
03 November, 2003
In this section of PWM we test the performance and volatility of two investment strategies using model portfolios. Each month we look at two baskets of shares – one global and one European.