After years of seeing their wealth increase exponentially, the world’s richest individuals are now measuring success in terms of who has lost the least, writes Stephen Wall

Elisa Trovato talks to Global Wealth Management’s Peter Sartogo, who believes that multi-family offices are well placed to benefit from the damaged reputation of the private banking industry

Prominent figures in the investment industry have been paying tribute to Gilles Glicenstein, head of asset management at French bank BNP Paribas, who built the group through acquisition and organic growth to become a major global funds player.

Farley Thomas tells Yuri Bender about the growing demand for passive instruments and why he believes that asset allocation will be the key consideration over the coming months

Boris Collardi, the new CEO at Bank Julius Baer, breaks the mould for a senior Swiss private banker, writes Yuri Bender, and under his stewardship the bank plans to continue its cautious expansion process

It is clear that private banks and asset managers must act now to respond to the challenges thrown up by the financial crisis, but, as Yuri Bender reports, opinion differs on how best to react

Investors looking to benefit from global developments can access an expanding range of themes, in either multi- or single-themed approaches. But both are a long-term investment, writes Elisa Trovato

Neil Dwane, CIO Europe of RCM, the equity managers of Allianz Global Investors, outlines the six global investment themes he believes are reshaping our world

Not many asset classes show as clear an upward trend as agriculture. With the world’s population steadily increasing, rising demand for food is inevitable, and Pictet’s Agriculture Fund is looking to take advantage of the considerable opportunities in this sector, reports Ceri Jones

Real estate valuations may not have reached the bottom yet, but some investors believe there are bargains to be had, writes Ceri Jones

Structured products offering capital protection are an attractive option in turbulent markets, but volatility itself has developed into an asset class, and benefits from a negative correlation to equities, writes Ceri Jones

There is a whole range of structured products avilable to investors who are looking to access the opportunities in equity markets, but care needs to be taken on the marketing side, writes Elisa Trovato

“In April we sold some quantitative equity funds and reduced exposure to gold and energy related products. We substituted them with actively managed funds on Euroland equities (HSBC) and US equities (World Express US Equities managed by W.Scott). We are not changing our core bond positions on euro markets and absolute return funds such as JB Absolute. We maintain our exposure to the corporate bond market which we started at the beginning of the year.”

“During March, international stock markets recovered quite substantially. One reason for the rise of global stocks was the announcement of the Federal Reserve to buy up to $300bn of US Treasury bonds and around $850bn of mortgage-backed securities. In addition, Barack Obama signed a $787bn economic stimulus bill. In Europe, monetary policy also shows clear signs of loosening. In our portfolio, which is allocated according to C-Quadrat Best Fonds Strategy, bonds and cash were reduced in favour of equities and commodities bonds.”

“Our overweight Japanese equity position has been beneficial over the last year mainly due to our underlying fund selection and yen exposure. While we still believe the Japanese market is attractive from a valuation stance, we are starting to see evidence of yen weakening and deteriorating economic fundamental, so we feel it’s prudent to lock in some of our profits. The UK market was a strong underperformer last year and our non beta allocation stance also generated relative gains. Given the current levels of both the equity market and sterling we feel more comfortable adding beta and increasing our UK weight.”

“Because of the better technical situation of many equity indices, we now have a higher tactical exposure to equity. We bought Euroland equities because we believe that Europe, next to the emerging markets, should benefit most from the world-wide recovery story. Sentiment indicators and some real economic data indicate that the worst might be over. We still see a high potential for corporate bonds this year. For German government bonds we see the risk of a rising yield in direction to 3.4-3.5 per cent for 10 year-bonds so we reduced our position in Government-bond funds.”

“During last month we didn’t change the composition of our portfolio, keeping both sector and geographic allocation unchanged. We also made no changes to the allocation between equity funds and bond funds. The performance of the portfolio suffered last month, mainly because of the great rise of stocks in the financials sector, in which our portfolio is currently underweight because of active management choice of selected fund managers. With regard to the bond portion of the portfolio, we are keeping a conservative approach by using low tracking error funds.”

“The international equity markets staged something of a rally from March 10th, after sinking below their November 2008 low in the early part of the month. There was no shortage of bad news on the macroeconomic front, however, casting an even darker shadow over growth prospects for the current year. This did not prevent equities from rallying in March. Returns on our portfolio benefited from the rebound on global markets especially through our Asian exposure. Considering lower risk aversion, we implemented credit exposure on high grade via the Bluebay Funds Investment Grade.”

“As we compare our investments to a balanced benchmark we are comfortable with our portfolio. The recent market rally could have been a reason for us to increase the equity part of the portfolio. However we believe that both our allocation to convertible bonds and the active exposure to equity markets via the BGF Global Allocation Fund are providing sufficient sensitivity to a potential equity market rebound at this moment in time. We would certainly need to see additional proves of the sustainability of any rally before starting to increase the beta of the portfolio.”

“The best performing fund last month was the Nevsky Global Emerging Markets fund, which returned over 10 per cent in euro terms. The major under-performer was the Invesco Perpetual UK Equity High Income Fund with a loss of 6 per cent in euro terms. We have made no manager changes during March, following the changes towards the end of February. The Bluebay High Yield Bond fund delivered a return of +2 per cent since our investment. With some 37 per cent of the portfolio invested in equities, we are participating in this equity rally, which could well continue longer than many market participants believe.”

“With major markets somewhat stabilising for the most part of March, the risk profile of our balanced portfolio has been slightly increased, both on the equity and the fixed income sides. Whereas no new holding has been added, we have increased exposure to more growth fund managers, whereas exposure to the more conservative ones remained unchanged, despite their strong underperformance for March. The high yield corporate position initiated in February has been increased to seize the re-opening of the market. Going forward, new markets scenarios may imply some switches in our fund managers selection.”

“Equity markets staged a strong rally based on a more credible support plan for the US banks which coincided with extremely negative sentiment among consumers, corporates and investors. We believe it to be a bear market rally. Neither economic fundamentals nor market technical indicators lead us to believe in a sustainable uptrend in equities. Our allocation is strongly focused on credit markets, where high yield, emerging market and convertible bonds offer appealing credit risk premiums. We recommend to sell the iShares Listed Private Equity Fund after a strong run in March and keep the proceeds (2 per cent) in cash.”

“March was a better month for portfolio constituents overall, as investors, broadly speaking, became a little less risk averse. Therefore it was not a surprise to see such funds as the JPM Emerging Markets leading the way. Another notable performer was the Schroder UK Alpha Plus. Manager Richard Buxton has been happy to continue dabbling in the financial and resource sectors, despite the downturn. The major detractor was our hedge fund of funds, Dexion Absolute IT. This fund is struggling with its price discount to net asset value but there is a certain amount of pressure on the board to resolve matters.”

“March witnessed a sharp about-turn in equity markets. Conversely, bonds found it generally heavy going, the exception being riskier assets reflected in good returns from Thames River High Income. It was a good month for our fund selections, with stand-out returns from Nevsky Global Emerging Markets. UK equities were a drag in absolute terms, as were European equities in relative terms. Our strategy remains one of diversification by manager skill in the face of high levels of asset correlation. We believe the managers we have chosen are more flexible than the average and their returns this month generally back this up.”

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

PWM invited eight senior representatives of wealth management institutions and a major technology provider to the industry to FT headquarters in London. The purpose of this roundtable event was to examine the impact of the financial crisis on business models, to look at latest thinking in asset allocation and determine how operating efficiency can be best achieved, while offering a good-value proposition to private clients. Yuri Bender directs the discussion