Fidelity gains access to 7.5m new customers in a concentrated market.

New boss gets go-ahead to favour Ely managers over Dexia.

Insinger issues a word of caution to equity investors

Amsterdam-based private bank Insinger de Beaufort has gone against the grain with a cautious note to European equity investors. “The consensus view is built around the fact that interest rates are likely to rise in the second half of 2004. But the expectation of rate rises will have more effect on equities than the actual increase,” said Dave Williams, fund manager at Insinger. Despite this, Insinger prefers European to US markets. Oil services and equipment stocks are favoured. Insinger uses funds from Odey Asset Management, JO Hambro Capital Management and Thames River Capital.

UBS announced last month its purchase of UK private client investment manager Laing & Cruickshank Investment Management (L&C;), marking the Swiss bank’s most significant expansion in Europe to date. The deal was UBS’s third major wealth management acquisition in the past nine months. It will also bring the total amount of client assets bought by the Swiss bank in Europe to E9.5bn since May last year. Another Ł5bn (e7.5bn) will be added once the buyout of Scott Goodman Harris (SGH), UK adviser to high net worth individuals, is completed later this year.

Fund investment, particularly in equity funds, is back – or is it? There’s
more than meets the eye to European developments, as a comparative analysis with the American situation shows. Rodney Williams reports.

Its products are best-sellers at Deutsche Bank branches despite the
friction of competition from outsiders, but DWS remains keen to expand its European distribution network. Yuri Bender writes about the latest ambitions of the German funds powerhouse.

Independent research shows that customers prefer to deal with a local operator, but, as Roxane McMeeken reports, wealth managers like Fidelity and Investec are standing by their decision to outsource call services.

Investors are now better prepared to appreciate the advantages of a portfolio that mixes in alternative strategies such as hedge funds.
Three years of falling equity prices and the bounce during 2003 have dramatically strengthened the case for the inclusion of alternative investments within a traditional portfolio.
“If it’s not broken, don’t fix it.” This might describe the approach taken by traditional portfolio managers in the booming equity markets of the 1990s. But the markets did break, suffering substantial losses in the first three years of the new millennium. This period of sustained red ink caused many investors – institutional and retail – to reconsider their strategies and even to view, with some suspicion, the highly volatile recovery of 2003 when, for example, the S&P; 500 Index gained 26.38 per cent.

Among the array of products that has sprouted from the fast-growing hedge fund universe is the investable index, which, with its specific criteria for fund selection, widens the asset allocation options for investors in alternative classes.
Strong growth within the hedge fund industry continues, with the number of hedge funds rising fivefold in the past decade to amount to more than 6000 today. Hedge fund assets are now at an estimated high of $700–750bn worldwide.
The bursting of the technology bubble in 2000 highlighted the limitations of long-only investing and increased the appetite for investments that generally exhibit low correlation to equities.
As a result, institutional investors, including pension funds and endowments, are showing a growing interest in exploring the role of hedge funds in their strategic asset allocation.

Currency overlay techniques, once the province of pension funds and other institutions, are fast becoming available to HNWIs seeking diversification.
Currency management, to the uninitiated, is getting a fistful of dollars for a handful of euros to spend during a trip to New York, and using whichever booth at Paris Charles de Gaulle or Roma Leonardo da Vinci offers the best deal to make the trade. But to the sophisticated private investor, active currency management is an asset class in its own right. One, moreover, which not only may offer impressive returns but is also relatively liquid, reassuringly uncorrelated to the major equity and bond markets, and less market dependent than buy and hold strategies.

Despite the investment world’s ongoing bias in favour of equity-derived strategies, there are strong reasons for choosing fixed income hedge fund strategies instead. Here are five of the best such reasons.
All the pieces are in place today for explosive growth in fixed income hedge funds, yet this remains a minority strategy compared to, for example, equity-derived hedge fund strategies. Of the 585 funds listed in September 2003’s Eurohedge league tables, 325 are pure equity funds, yet just 83 are pure bond funds.
This partial sample illuminates the equity bias in the world of alternative investments and is surprising in view of the opportunities. Here are five reasons why investors should consider fixed income hedge fund strategies.

While European equity managers are talking up the abundance of buying opportunities, their performance can vary significantly, writes Simon Hildrey.

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.

In this section of PWM we test the performance and volatility of two investment strategies using model portfolios. Each month we look at two distinct approaches – one global and one European.