With swathes of private equity funds of funds on the verge of going bust, wealth managers seem oblivious to the crisis, reports Roxane McMeeken.

PWM European Open Architecture Forum

Before achieving the high-minded ideal of offering customers the ultimate range of funds, banks must first negotiate a maze of practical and philosophical issues.

DIT dishes out larger cut to distributors

Deutscher Investment Trust (DIT) is raising the management fees on its funds. The management charge for equity products will be capped at 2 per cent, up from 1.75. The fee for bond and mixed funds will be increased by between 10 and 25 basis points, up from 0.7 to 1.5 per cent.

Traditional domestic mutual funds around Europe have long provided investors with a method to diversify their investments. For wealthier individuals, a “private” authorised unit trust is an efficient vehicle within which to run a bespoke investment strategy. It provides an investment fund in which family members, family trusts and even pension funds may hold units.

US fund suppliers might be the best regarded, but it is the products of local providers that are flying off the shelves, writes Roxane McMeeken.

Janus names Rox Hansen for Nordic market push

Janus Capital Group has launched a bid to expand distribution of its funds in northern Europe. Henrik Rox Hansen, a Dutch national previously working for the now defunct European Fund Solutions division at State Street Global Advisors (SSgA), has been named institutional sales director for the region.

The global wealth management business model has definitively assumed a new characteristic with the announcement of a global partnership between SEI Investments and HSBC Republic.

The deal signals a willingness by a major global private bank to outsource, at this stage partially, a core component of asset management to an institution which in the past could easily have been viewed as a competitor.

Yuri Bender examines the reasons behind the exit of top executives at CSAM.

France and Italy have shown increasing demand for third party funds, unlike the UK and Switzerland.

It is fast becoming clear that “open architecture” is far from the one-tablet solution for all ills as claimed by its supporters – the international fund companies. Many banks still prefer to use their in-house fund company. Some have even tried to use funds of external managers, but have subsequently changed their minds, and preferred home comforts after all.

Yuri Bender looks for patterns in the track record of BGI’s Lee Kranefus and finds him combining creative products with a traditional approach.

Lee Kranefus, chief executive of exchange-traded and individual investor business at Barclays Global Investors (BGI), may be an electrical engineer by trade, yet he has twice turned his back on the technology industry. First, when he went into investment management, and second when he told wealth management clients to diversify away from high-tech stocks.

Forced by the prolonged bear market to scale back ambitious expansion plans, CDC Ixis AM looks to strengthen some wobbly internal bridges. Yuri Bender writes.

Fund houses Dexia and Merrill Lynch have signed innovative contracts with service providers, creating a new standard. Roxane McMeeken reports.

Securities services providers are developing new technology to facilitate open product architecture models as they unfold in Europe. Two recently signed deals indicate the new lengths to which global custodians are having to stretch in order to satisfy both distributors of third party funds and those selling their own funds through third parties.

With corporate profits forecasts edging upwards, equities are likely to regain their prominence as the premier asset class.

There is an increasing conviction among professional investors that the good times are back in the equity markets. After a near three-year bear market, the fundamentals for equities are at last beginning to stack up in a more consistent, positive way.

A number of European listed companies offer dividend yields above those of 10-year government bonds, alongside potential for capital growth.

The story of growth and reform in this risky market took a dramatic turn after events in 1998.
Now, Russia’s credit rating has risen and its oil and gas sectors look particularly appealing.

The Russian equity market has shown a stunning performance following the defaults of the bonds market in 1998. The Russian RTS Price Index skyrocketed from the low of 38 to nearly 500 by end of July 2003. Even in euros the performance adds up to a staggering 800 per cent. What are the prospects for Russia now, what do we expect from the equity market and how do we deal with it?

Funds of equity hedge funds combine efficient active management with levels of accountability professional investors have come to expect.
Of all asset classes, equities offer the greatest potential reward for active investment management, and the depth and diversity of equity markets provide limitless opportunities for differentiated performance.

They are best appreciated as a hedging and asset allocation tool, particularly for private client portfolios, but USFs have a much wider potential that can be incorporated into other products.

Private investors have tended to shy away from derivatives – they are best known as vehicles for leverage, lesser known for their use as an insurance policy against market downturns.

In order to meet the goal of keeping costs down, this product is on a daily watch, writes Roxane McMeeken.

Invesco has launched a new fund designed to capture opportunities in global growth equities, while protecting investors from the worst ravages of this unforgiving market.

ETFs offer a host of advantages to the canny investor but as these instruments must first be registered in a market accessible to the investor, there are limits on selecting providers. Simon Hildrey reports.

Exchange-traded funds (ETFs), recently added to the investment world, have been recognised as one of the fastest growing products in Europe.
They have four key benefits to both retail and institutional investors:

Roxane McMeeken reports on the alternative manager selection process used by Benchmark Plus.

Morley Fund Management is the latest investment house to enter the multi-manager market. Over the summer the Ł104bn (e150bn) London-based firm launched its first multi-manager product, a fund of hedge funds called Alpha Optimum. With this vehicle up and running, Morley now has a blueprint for creating further funds of funds.

Investec’s flagship bond fund has been given a fresh ‘axis of alpha’ approach, writes Roxane McMeeken.

Global bond products tend to take the largest slices of the pie in each of the model portfolios prepared every month by PWM’s panel of fund selection experts.
The Investec Select Global Bond Fund has long been a favourite of Robert Burdett, director for multi-manager products at Credit Suisse Asset Management.
Paul Griffiths, manager of the fund and head of fixed income at Investec, the South African firm with a base in London, says he runs the product according to an “axis of alpha”.

Institutions are moving in quickly on the hedge fund territory dominated by boutique-sized operations.

The hedge fund world has changed enormously over the last few years. Not just the size but also the profile of the industry has changed. Potentially the most significant evolution has been the entry of institutions into the asset class – on both buy and sell sides.

Research firm advises taking care when investing in funds of funds, reports Roxane McMeeken.

Investing in private equity through funds of funds might not be the low risk, “no-brainer” it is frequently touted to be.

The potential for UK commercial rental growth is set to increase as the economy gains in buoyancy.

The UK property market offers some unique opportunities, but results hinge entirely on opting for the right sectors at the right times.

In this section of PWM we test the performance and volatility of two investment strategies using model portfolios. Each month we look at two separate baskets of stocks related to these strategies.