Wealth management was the key driver in second quarter results for Swiss banking and investment giant UBS, contributing a near record SFr19.2bn to UBS’s SFr30bn (?19.3bn) in net new money.

Direct real estate investment in Europe hit ?47.9bn in the first half of this year, and the market is set to open further to individual investors.

Global custodians can look forward to a lucrative new market, thanks to the growing professionalisation and globalisation of wealthy families.

Ever since Baudouin Prot, chief executive of BNP Paribas Group, announced plans for a e5bn – e6bn spending spree in February 2004, BNP Paribas Private Bank has energetically pursued a mergers and acquisition growth strategy in a number of key markets. Over the last 15 months it has acquired over e4.47bn in assets in a significant number of private banking-related deals. More are likely to follow.

Domestically, BNP Paribas Private Bank is already a powerhouse. Its French private banking business accounts for e40bn of the private bank’s total e101.1bn in assets under management, ranking it number one in France. It is unsurprising that BNP is focusing on acquisitions in other markets.

The first of the foreshadowed deals was in March 2004 when BNP Paribas’s Miami-based subsidiary, BNP Paribas Investment Services, picked up over 900 non-US high-net-worth clients of Banca Intesa subsidiary, Banque Sudameris. This contributed some $700m (e572m) of assets under management.

The focus moved to the European market. In June 2004 BNP Paribas Private Bank (Switzerland) acquired Société Monégasque de Banque Privée, the Monte Carlo-based private bank, which added e630m in assets under management and 58 employees. That June it also acquired Bank von Ernst (Monaco), formerly part of the Coutts Group, to add a further e360m in assets under management and 24 staff.

The next deals, announced in January 2005, centred on the Swiss market. In the first, clients of Citigold International Wealth Management in Switzerland were transferred to BNP Paribas Private Bank (Switzerland), adding a further SFr2bn (e1.3bn) of assets under management as well as Citigroup relationship managers. Then the bank acquired Caixabank Banque Privée (Suisse). This brought SFr460m in assets under management, including the Luxembourg-based Caixa Funds range.

BNP then dipped a toe into the promising Turkish market with the acquisition in February of a 50 per cent stake in the holding company of Turkish bank Turk Ekonomi Bankas. The aim is to develop the Turkish bank’s wealth management, asset management, retail and investment banking businesses.

BNP then moved on to the Netherlands. In April 2005, it announced the acquisition of Nachenius, Tjeenk & Co., the Dutch private bank, with e1.3bn of assets under management. And the spending continues; the latest deal, announced at the end of June, is the acquisition of FundQuest, a US wealth manager, through Paribas Asset Management. The deal will enable BNP Paribas to move into managed accounts in the US, a segment where it has identified strong growth potential.

While the acquisitions made by BNP Paribas since 2004 have already boosted private banking assets by over 4 per cent, some believe that the group is now looking for larger global prey. BNP Paribas has been linked to possible deals with a number of Continental banks, which would be in keeping with its European onshore strategy. Germany would be a logical market for BNP’s next deal. Commerzbank is still available although competition may be fierce as a number of other large banks are thought to be interested as well.

T. Rowe Price does not pander to faddish client wants if the product will affect profitability, nor will it work with distributors who go against the ethos of the firm and threaten its reputation. Yuri Bender talks to CEO Todd Ruppert about this very selective policy

The origins of T. Rowe Price go back to 1937, when the group was formed in Baltimore, Maryland by Mr Thomas Rowe Price. Just over 40 years later, it had become a dominant force in the US domestic institutional fund market.

Nordea Investment Funds’ new MD, Bjørn Barbesgaard, has found himself in a ‘stick or twist’ scenario – looking to make his mark, but not wanting to shake up a successful model. He unveils his plans to Roxane McMeeken

As the world’s wealthy investors become more and more demanding, banks need to re-invent their client service models through the smart use of latest technology in relationship management advice and investment modelling. But support systems for reporting, accounting and portfolio administration must also be integrated, writes Roxane McMeeken

Thomas Wolfsenberger, CEO of Swissrisk forecasts the future of private banking technology: “In five years time, front office solutions will start to be proactive and quite a few obstacles will have been overcome. Data availability will improve and multi channel services will experience a major break through. Not only will private banks start to rely upon online services in order to cope with the ever-increasing needs of private banking clients, but they will be viewed as a high quality supplement to physical interaction with clients. Collaboration via the internet will increase.

By tracking the history of enhanced cash strategies and looking at the drivers of the current popularity, we can gain an insight into whether they have developed or interest has re-surfaced

Retail investors use cash management products differently from institutional investors. Andrew Dickinson examines the various strategies that can be adopted

Alain Richier outlines the benefits of using triple-A rated floating rate tranches of securitisation over the money market index

Risk averse investors spread their bets on news of the Ford/GM crisis, but emerging market debt’s bounce back shows a maturity in the opportunity-laden asset class that is attracting the institutions, writes Simon Hildrey

“Our balanced portfolio keeps favouring the equity market over the fixed income, and Europe over the rest of the world. The one theme still enhanced in the asset allocation is the natural resources area, with a forte on energy. Outside the sector funds, Carmignac also massively overweights energy and finds growth at a reasonable price in European countries, mid- and large-caps, regardless of country or sector weights in the benchmark. The other European stock-picker in the portfolio, Franklin, finds value in under-researched stocks.”

“Risk remained in favour in July, with Asia, the emerging markets and high beta areas such as tech and biotech leading. Currency became less of an issue for Euro-based investors. We are inclined to run with our more bullish managers in the short term – Legg Mason in the US, Atlantis in Japan, JO Hambro in the UK. New manager of Schroder ISF Euro Alpha Gary Clarke takes over in Q4. We are currently reviewing this position against other possible investments.”

“Equities advanced further as quarterly earnings reports were reassuring and economic releases indicate that the growth ‘air pocket’ is over. The UK economy looks relatively weak but offers an attractively valued source of overseas earners. Bonds remain unattractive, offering little margin of safety against adverse inflation surprises. Although high, oil prices are a headwind, and equity markets look reasonably rated, with more upside potential if corporate profits continue to rise into 2006.”

“The only major change we made to our portfolio, aimed at increasing the diversification in our bond segment, was the substitution of the Invesco Global Corporate Bond fund with the BondPortfolio Preferred Securities, which is managed by Spectrum Asset Management. In addition, we reduced the weighting of the AMEX Global Emerging Market Short Term Bond by 5 percentage points and initiated a holding of the Henderson HF Global Property fund, due to our positive outlook on real estate.”

“Low inflation and a moderate slowdown in growth create the conditions for a benign outlook, but it is difficult to call this a ‘Goldilocks’ environment due to too many imbalances. Equity markets have posted performances superior to those anticipated, driven by stronger than expected equity returns. Slowing profit growth and a tightening monetary policy in the US may weight on the upside. We take some benefits on our equity exposure and increase our position in multi-strategy alternative investments through L Multi Hedge.”

“We continue to reduce our equity exposure to US managers and increase our allocation to Europe, Asia and emerging markets. In order to diversify our UK equity exposure, we decided to halve our investment in Jeremy Lang of Liontrust and allocate that portion to Anthony Nutt of Jupiter Income. We expect markets to be challenging over the coming period, and therefore prefer managers who have delivered consistent outperformance over a long time period. This will also reduce our small-cap exposure and increase our allocation to blue chip UK equities.”

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.

Volumes in open architecture are swelling, which means that the delays and errors in current manual systems are also increasing. As automation is more widely adopted, those platforms who listen to the individual needs of consumers are gaining the edge, says Paula Garrido

It may be difficult to envisage a need for any solutions in the current funds market, but the operations problems that many investment groups refuse to acknowledge could cause a commercial accident in the future if they are not addressed now. The first stage is a mature debate to establish what changes are needed, says Bruno Zutterling