Key executives of the Citigroup empire form a ‘European Advisory Board’. Roxane McMeeken reports.

Citigroup Private Bank is plotting a renewed assault on the European market. Peter Scaturro, chief executive of the bank, revealed that a new European Advisory Board has been formed to lead the charge. The board brings together key personalities across the Citigroup empire and aims to bring the group’s wider capabilities, such as investment banking, to the private bank’s European clientele. The members will research the needs of European clients and develop new products based on their findings.

Euroclear devotes team to across-the-board integration

BGI to replace Merrill as sponsor of ETF Stoxx funds

Merrill Lynch, which initiated the European exchange-traded fund (ETF) market in 2000, has stepped down as investment manager and sponsor of the Stoxx 50 LDRS and Euro Stoxx 50 LDRS funds. Merrill’s original role will now be filled by Barclays Global Investors (BGI), which becomes Europe’s largest ETF provider, running E4bn, up from E2bn before the switch.

The recent flood of fixed interest and corporate bond fund advertisements urging the general public to buy into the bonds market has all of the feel of the late technology boom. Investors are lured with amazing historic returns, without reference to what the future may have in store. It is understandable that after three years of negative equity returns, the prospect of buying into a regular income producing asset has its attractions.

With the help of a major contract from Skandia, GSAM aims to bring its European sub-advisory business to the same level as direct sales. Roxane McMeeken reports.

Once bitten, twice shy Janus announces it is to adopt a less vulnerable investment style, writes Roxane McMeeken.

The international arm of US funds house Janus is undergoing a strategy shift that will see it switch its core competency from asset management to product distribution. The distribution strategy will focus exclusively on institutions, in particular private banks, multi-managers and pension schemes.

HSBC provides one-source service for offshore clients

The HSBC Group has integrated two offshore operations aimed at intermediaries catering to the needs of wealthy individuals.

As the battle for both winning and retaining accounts in private banking intensifies, the role of the brand is becoming central to strategy.

Trying to figure out the state of the funds industry? Watching how the funds get to the buyers is a good place to start.

With a view to doubling his company’s assets, Frédéric Jolly is working towards deepening relations with existing partners, writes Yuri Bender. Frédéric Jolly, exuberant Frenchman and European chief executive of the Frank Russell Company for the past three years, is not always complimentary about the three Ps: politicians, pen-pushers and private bankers. Yet he recognises that all three categories have a huge impact on the development of his business. It is his job to know and understand these people.

Yuri Bender looks at Pictet Funds’ tentative moves to be more transparent by using a business model that targets the biggest institutions. Pictet Funds has just celebrated five years as a semi-autonomous strategic business line of the highly secretive Geneva-based private banking group, Pictet & Cie, established in 1805. Its mission is to become a leading fund wholesaler in Europe, hiring out the same expertise used to manage money for Pictet’s wealthy private clients to other private banks and fund of funds managers.

It might seem as though fund managers are just playing a numbers game, but quantitative methods help them to spot the lucrative trends. Quantitative techniques were once reserved for a handful of players in the marketplace. But things have changed. These days, most fund managers would claim to use some form of quantitative analysis as part of their investment process. Their growing acceptance and use is no accident. Using these techniques brings many advantages, in particular when dealing with large amounts of data or when looking to exercise discipline.

There’s no mystery involved: computers have not taken over the investment process, and it still takes a creative and efficient human portfolio manager to make the most of quantitative data. Many imagine quantitative investment managers as rather mysterious boffins working under the direction of an all-powerful computer model. This “black-box” stereotype has little in common with reality and offers no insight into the factors that differentiate the best “quant” managers from the mediocre.

Style investment strategies, which revolve around the monitoring of distinct market segments, depend on quantitative analysis of the underlying stocks. The continuing recovery of European stock markets is increasing investors’ appetite for equities, but a residual uncertainty is preventing a herd-like rush back into stocks. Style investment strategies, where managers swap from “value” to “growth” companies depending on market conditions, are gaining in popularity in line with this renewed interest towards stock markets.

Quantitative analysis provides a powerful tool for identifying investment opportunities and for suggesting how to best structure a global portfolio: it’s all about picking the winners across countries and across industries.

Naturally distributors will look at performance before picking a fund, but Simon Hildrey says they should also keep in mind the style of the fund manager, as well as the fund’s size and its cost.

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.

Roxane McMeeken explains some unorthodox pricing methods for the Global Emerging Markets product. The price of beer is among the numerous indicators that First State Investments uses to assess the value of stocks considered for its Global Emerging Markets product. The fund is a recent addition to the range of vehicles selected each month by PWM’s panel of fund selection experts.

Expensive goods like paintings and wines are indulgent portfolio additions, writes Roxane McMeeken.

Property has been good to investors and new tax rules could make it even better. European property shares have outperformed equity on a one, three and five year basis. So far this year property has also had a strong return in absolute terms. The main question is: will it last?

Exposure to hedge funds through multi-manager products might be more expensive, but the extra investment stands to pay off.

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.