Milan, Frankfurt and London step up the private banking ladder.

“Zurich, where carved-stone lions still guard the swan-filled harbour and Zwingli still stands in bronze, Bible and sword in-hand, beside Gross-Munster, is a city of big banks.”

Global custody is increasingly being presented as a viable alternative to portfolio aggregation, reports Yuri Bender.

Pictet, one of Switzerland’s largest private banks, makes no secret of using its institutional expertise in global custody to attract wealth management clients.

Christopher Preston is fine-tuning European operations at Citigroup Private Bank in Geneva. Yuri Bender asks him about ‘fire-proof’ portfolios, open architecture, and how the competition matches up.

Citigroup Private Bank, the Geneva-headquartered wealth management operation which employs 1000 staff across Europe and manages assets worth $31bn, is standardising the selection of external managers.

Which of SEI’s four models will make it in Europe? Yuri Bender finds that it is the broader approach, offering administration as well as asset selection, that most pleases the US company’s managing director, Joe Ujobai.

How well is the wealth management sector servicing the needs of high net worth investors? Cap Gemini Ernst & Young provides some answers with the results of three surveys focusing on the use of technology, customer relationship management and financial planning tools. Adam Courtenay reports.

The dramatic increase in the use of the credit derivative market has created a watershed in credit risk management for investors and hedgers.

A credit derivative is a bilateral financial contract that isolates the credit risk of a reference credit and transfers that risk from one party to another. In doing so, credit derivatives separate the ownership and management of credit risk from other qualitative and quantitative aspects of ownership of financial assets.

Some European investors fear Exchange-Traded Funds because the full advantages have not been explained.

Exchange-Traded Funds (ETF) are index-linked products that are continuously priced on an exchange. The first ETF or tracker fund was created in 1993. The S&P; 500 SPDR, managed by State Street Global Advisors (SSgA), is the number one ETF worldwide with more than $30bn in assets under management. There is a large array of ETFs covering several of the best-known indices. From large cap to small cap, from country indices to MSCI World, these tools are available to offer a proper allocation depending on the chosen investment goal and risk tolerance. In Europe, the growth has been impressive: in 2001, 70 ETFs have been listed across Europe for a total of E4bn.

The market in warrants is growing and high net worth investors are benefiting from their accessibility and simplicity.

During the past 16 years, covered warrants have become a key way for investors in general to fine-tune their portfolios and for high net worth investors in particular to experience the advantages of the derivatives markets. The success behind this product lies in three main factors: risk/return profile, accessibility and simplicity.

Long/short, also known as equity hedge or directional equity, is one of the best known hedge fund strategies. It represents nearly 45 per cent of the hedge fund universe and is the most widely used strategy in the hedge fund world.

While asset flows into the sector were strong in 2001, as markets fell and uncertainty about market direction heightened, many long/short managers focused on capital preservation. In 2001, this resulted in rather lacklustre returns, with long/short managers generally underperforming cash but significantly outperforming their relevant equity market.

There was a time when the only avenue for institutions such as corporates and financials to access cash was in the form of bilateral loans from large financial institutions which considered these to be their “bread and butter” relationship business. As a result, a handful of banks were left holding concentrated credit risk to the loan borrowers.

The global convertibles market has grown at an extraordinary pace: last year there was $160bn of issuance. More than anything, this has been driven by structural innovations and last year the so-called contingency revolution powered the growth of the US convertible market. But what are the implications of the Contingent Payment (CoPay) and Contingent Conversion (CoCo) structures for European investors?

Wealth managers need specialist tools for investment selection and analysis. Brainpower has developed an analytics platform and off-the-shelf products to meet these needs.

Investors, both professional and private, are not only demanding accurate information but also sophisticated tools that can analyse vast quantities of data and help them improve investment advice and decisions.

German funds supermarkets are signing deals with intermediaries in an effort to boost their share of the market. Elizabeth Cripps reports on a rising trend.

Poste Italiane plans web-based funds supermarket with wide coverage.

Poste Italiane, the post office turned fund distributor, looks set to exploit the Internet age, and a burgeoning marketplace, through a fund supermarket.

We asked three European experts how they would spend E500,000 in a funds supermarket for a fairly conservative investor with a balanced strategy.

The returns posted by some hedge fund of funds are not to be sniffed at, writes Henry Smith.

The search for added investment return amid uncertain stock markets is fuelling interest in hedge funds. Investors, keen to diversify their portfolios away from poor-performing equities, have been forced to re-examine their attitudes to risk and return.

There is still staunch support for this troubled asset class, writes Elizabeth Cripps.

Private equity, one of the many casualties of the tech bubble explosion, is still paying the price. Research from the National Venture Capital Association and Venture Economics in the US shows a continued downward trend in private equity returns, thanks to on-going volatility in public markets and falling valuations for technology companies.

For the best access to the best property, affluent investors should group together, writes Roxane McMeeken.

Property has gained a “safe as houses” reputation in the current spate of market turbulence, racking up average returns of around 8 per cent in the past year in Europe. As a result, the question for high net worth individuals has become not whether to invest in the asset class, but how to do it. One approach with much to recommend itself is to form a limited partnership or “club”.

Corporate tax rates worldwide continue to fall and there have been some significant reductions in European countries. But for those who travel regularly, taxes on individuals are an important consideration. For people moving within the European Union (EU), the UK’s membership in the EU guarantees the freedom to live and to work anywhere within the member states. More and more individuals are now finding that they need to spend some period of their careers working outside their home country, and it is not uncommon to have investments or properties in other countries. Such cross-frontier activities inevitably raise tax issues which can be quite complex.

In the near future, returns are likely to be lower than investors are accustomed to, says William Russell, and many fund managers are responding by launching aggressive focus funds which reward greater risk with greater returns.

Market volatility always helps to concentrate the mind. When everything is moving steadily upward, the average investor works on the sound principle: “If it’s not broken, don’t fix it.” The problem, with markets as they are, is that too many investors are thinking in terms of the quick fix. If you do not know what is broken, how can you start to fix it?

The so-called Riester reforms, along with poorly performing individual stocks, have inspired a new style of portfolio design, writes Anna Bawden .

German investment portfolios have changed considerably over the last decade. Until the mid-90s, portfolios were usually constructed using a mix of passbook savings accounts and life insurance for personal pension provision. Mutual fund and direct equity investments were rare among private investors.