AMC Intelligence - December 2014

  • 2014 and 2015: the big stories.
  • People Moves – October & November 2014.
  • One Final Thought…

2014 and 2015: the big stories

With 2014 nearing an end, we’re looking back on some of the big stories of this year and taking a look ahead to what is in store for 2015.

2014

  1. AIFMD came into full force
    One of the big changes this year was the introduction of the Alternative Investment Fund Managers Directive, which came into full force in July after a year-long grandfathering period. The Association of the Luxembourg Fund Industry, better known as Alfi, says the directive has fuelled strong growth in Europe’s alternative industry. “Whilst many were against [AIFMD] when it was first introduced because of the fear of high compliance costs and additional complexity, this piece of regulation has brought significant benefits, allowing EU domiciled managers to market authorised funds across the EU,” says Marc Saluzzi, chairman of Alfi.

  2. Bill Gross and PIMCO dominated news headlines
    PIMCO and Bill Gross were barely out of the news this year, thanks to a combination of outflows, lacklustre performance, reports of infighting and the departure of chief executive Mohamed El-Erian. After a tense few months, Bill Gross, the firm’s co-founder, Chief Investment Officer and Manager of its flagship Total Return fund, left the firm to join Janus Capital. PIMCO has since made a raft of new promotions, in a bid to stem outflows.

  3. RDR spread its wings
    A year after the UK banned rebates to financial advisers under the Retail Distribution Review, the Netherlands followed its example and put a stop to kickbacks last January. Other EU countries are considering similar measures. Meanwhile, the UK extended the rebate ban to platforms in April. Although the industry has faced price pressure in the wake of RDR, asset managers such as M&G have shunned so-called super-clean share classes – discounted share classes with a lower annual management charge than the rebate-free share class. “Strong brands, or those with outperforming funds, will have more success charging higher fund fees as there will be an underlying demand for their product,” says Andrew Power, lead RDR partner at Deloitte.

  4. Asset managers put the financial crisis behind them
    Several captive asset managers have undergone big changes this year, with many being spun off from their parent companies. This included Dexia Asset Management, which was bought by New York Life Group from Dexia Group and rebranded Candriam in February. Meanwhile, in July, Dutch bank ING floated its insurance and asset management arm, which will operate under the NN name next year. Unicredito and Santander announced talks to merge their 2 asset management businesses Pioneer and Santander AM. And Aberdeen Asset Management also completed its £550m purchase of Scottish Widows Investment Partnership, owned by insurer Scottish Widows in April, creating Europe’s largest listed fund house in the process.

  5. Everyone was talking about multi-asset funds
    After a strong year in 2013, multi-asset funds retained their popularity in 2014. The likes of Invesco, Amundi, Lombard Odier, Credit Suisse, Kames, Aegon, Legal & General Investment Management and Pictet have all ramped up their efforts in this space in recent months. The interest comes amid strong flows into the sector. Asset allocation funds were the best-selling product during the first seven months of 2014, while JPMorgan Asset Management’s Global Income was the best-selling fund in Europe in September.

2015

  1. Mifid II – expect to dedicate time and money
    The second instalment of the Markets in Financial Instruments Directive is not expected to come into full force until 2017, but firms are likely to be very busy preparing for it in 2015. Experts say large firms should expect to spend at least €6m on the directive, which introduces new conduct of business requirements and transaction reporting obligations. It also includes measures to enhance investor protection, including a ban on inducements across Europe for independent financial advisers.

  2. Managers divided on interest rate rises
    Managers are divided about whether interest rates will rise next year – and what this means for the industry. Stephanie Flanders, UK and Europe Chief Market Strategist at JPMorgan Asset Management, says she expects both the US Federal Reserve and the Bank of England to raise interest rates next year. However, James Lydotes, Infrastructure Portfolio Manager at BNY Mellon Investment Management boutique the Boston Company Asset Management, disagrees with the general consensus that the Fed will increase US interest rates next year. Invesco, meanwhile, is predicting a year of increased volatility and one in which investors will benefit from active management, thanks to the relatively low-yield environment and expected interest rate rises. “The team now believes fixed income market valuations are relatively full,” says Invesco.

  3. Digital to become more important
    A KPMG report, Investing in the Future, warns that asset managers are failing to invest in the technology needed to meet changing investor demand. The report predicts the decline of intermediaries, with new investors looking to their own networks and online for advice – and to buy products. A number of asset managers are already building up their capabilities online, including JPMorgan Asset Management and ING Investment Management. Meanwhile, Deutsche Asset & Wealth Management is reportedly planning to launch an online investment manager in the near future. Expect others to follow suit.

  4. ETF industry to grow quickly
    The exchange traded fund industry is set for strong growth in 2015, EY is predicting. It says the ETF sector will grow faster than in 2014, as institutional investors increase allocations and ETF providers take market share from traditional asset managers. “Stable financial markets and strong equity performance have given a tailwind to ETF growth during the first three quarters of 2014 and we expect the low costs, flexibility, convenience and transparency of ETFs to push asset levels to new highs over the coming year,” says Lisa Kealy, EY’s EMEIA wealth and asset management ETF leader.

  5. Non-EU managers will learn if they can access the AIFMD passport
    Non-EU managers should learn in 2015 whether they will be able to access the Alternative Investment Fund Managers Directive’s passport. The passport allows alternative managers to market funds on a cross-border basis in Europe. Currently, non-EU firms have to use each country’s private placement regime to market funds. The European Securities and Markets Authority has asked firms whether extending the passport to non-EU managers would create “market disruptions” or put EU managers “at a disadvantage”.

 

People Moves – October & November

Investment

Stephen Ma has joined LGM Investments as Head of Greater China Equities from Fidelity, where he was Portfolio Manager.

Munish Varma has joined Deutsche Asset & Wealth Management as Head of Structured Solutions in the Loans and Deposits group. He moves from Nomura, where he was Head of Structured Credit.

Craig Bonthron has joined Kames Capital as an Investment Manager from Scottish Widows Investment Partnership, where he was an Investment Director.

Hermes has appointed Vincent Nobel to lead its Real Estate Debt business. He will also manage the Hermes Real Estate Senior Debt Fund. He joins from M&G, where he worked as a Senior Member of the Real Estate Debt Team.

Nomura Asset Management has appointed Richard Hodges and Ben Bugg to run a new Global Dynamic Bond fund for the firm. They join from Legal & General Investment Management where they were Head of High Alpha Fixed Income and Assistant Fund Manager - High Alpha Fixed Income respectively.

Ross Teverson is to lead the Emerging Markets Equities team at Jupiter after taking up a newly created role as Head of Strategy for Global Emerging Markets. He moves from Standard Life, where he specialized in Asian and Emerging Market Equities.

GAM has hired Lars Jaeger, founder of Alternative Beta Partners along with colleagues Pierre-Yves Moix and Stephan Müller to expand the range of Liquid Alternative solutions aimed at Institutional clients.

Glen Finegan is to move to Henderson Global Investors as Head of Emerging Markets, from First State, where he was Senior Portfolio Manager.

Julie Dean will join Sanditon, the London-based asset management boutique launched in 2013, in Spring 2015 following her departure from Schroders last month, where she was Manager.

Paul Abberley is to take over as CEO of Charles Stanley from Sir David Howard who will remain as Non-Executive Chairman. He joined Charles Stanley as CIO-designate in June after serving as Interim CEO of Aviva Investors.

Hilmar Schaumann has joined Brevan Howard, as Head of Risk for Brevan Howard US Investment Management. He moved from Fortress Investment, where he was Chief Risk Officer.

Castle Harbour has hired Damien Regnier to co-manage a new Global Convertible Bond fund. He previously ran one of the world’s largest convertible bond funds at Deutsche Asset & Wealth Management.

David Wilton is joining Morgan Stanley Alternative Investment Partners as a Managing Director to help develop a Private Equity Impact Investing programme. He was previously CIO of the International Finance Corporation and Manager of the IFC’s Private Equity portfolio.

Peter Horrell, the former CEO of Barclays' Wealth Management unit, is to join Fidelity Worldwide Investment as Managing Director, UK in April 2015.

Jeremy Allcock is to join Standard Life Investments, where he will lead a new Infrastructure Debt team, where he will be responsible for providing long-term senior debt to core Transport, Energy and Social Infrastructure projects in the UK and Europe. He was previously Head of Project Finance (Public Sector) at Nationwide Building Society.

Ian Ormiston has joined Old Mutual Global Investors as a Fund Manager where he will launch a new European Smaller Companies fund. He joins from Ignis Asset Management, where he was European Equities Portfolio Manager.

Obe Ejikeme has joined Carmignac as a Quantitative Equity Analyst from Bank of America Merrill Lynch, where he was Head of European Equity and Quantitative Strategy.

Christopher Buck has joined Finisterre Capital as Head of Credit Research from Barclays Capital, where he was the Head of LatAm Corporate Credit Research.

Piers Hillier will join Royal London Asset Management (RLAM) as CIO in January 2015. He was Head of International Equities at Kames Capital.

Philip Ehrmann and Kathryn Langridge are to leave Jupiter Asset Management.

Solomon Soquar has joined Barclays Wealth and Investment Management as new Head of Global Investments and Solutions (GI&S).

BNP Paribas Investment Partners has appointed Colin Harte as a Portfolio Manager within its Multi-Asset Solutions group. He joins from Barings, where he was a Multi-Asset Manager.

Simon Brazier has joined Investec UK as Portfolio Manager of the Alpha Fund and Offshore GSF UK Equity Fund. He was previously Head of UK Equities at Threadneedle. Blake Hutchins joins him to become the funds’ Alternate Manager.

Andrew Stephens stepped down as Managing Director from Artisan Partners.

Standard Life Investments has hired Jonathan Gibbs, Adam Skerry and Chris Fellingham to take on the Alternative Ucits fund following the resignation of Russ Oxley, Paul Shanta and Adam Purzitksy.

Daniel Lacalle, Mark Richards, Chris Legg, Megan Kulick and Akash Giya all joined PIMCO under Virginie Maisonneuve in the Equity Investment unit.

Richard Pease left Henderson where he was a European Equity veteran and joined newly-formed investment boutique Crux Asset Management, taking his €1.4 billion Henderson European Special Situations fund with him, subject to regulatory approval.

Jupiter Group has appointed Stephen Mitchell in the newly created position of Head of Strategy Global Equities, as of 2015. He joins from Caledonia Investments plc, where he held the position of Associate Director.

UniCredit and Pioneer Investments have announced that Sandro Pierri will be stepping down from his post as CEO of Pioneer Investments effective January 31, 2015.

Percival Stanion, Andrew Cole and Shaniel Ramjee have joined Pictet Asset Management to launch a new Multi Asset fund aimed at UK Institutional Investors. All three join from Barings Asset Management, where Stanion was in charge of the Multi Asset team.

AXA Investment Management has announced the appointment of Gregory Venizelos as Senior Credit Strategist to its Research and Investment Strategy team. He joins from BNP Paribas, where he worked as Senior Credit Strategist.

Distribution

Michael Hart has joined Amundi as Deputy CEO and Global Head of Business Development. He joins from Aberdeen Asset Management, where he was Global Head of Business Development.

Isla Mackenzie has joined Aviva Investors, as Global Head of Marketing, from Aberdeen Asset Management, where she was previously Head of Marketing.

John Howland-Jackson has joined Nikko Asset Management as Vice-Chairman of the European arm of the firm. He joined from ING Bank, where he was Senior Managing Director.

Franklin Templeton has appointed Clive Paine to the UK Institutional team to focus on new business generation. He was formerly Head of UK Institutional Sales at Lyxor. Also appointed is Steven Gardner as a Client Relationship Manager, joining from TopQ Software where he was Business Development Director.

Legal & General Investment Management has appointed Honor Solomon as Head of Retail Distribution for Europe and the Middle East. She was previously a Managing Director at BlackRock.

BNP Paribas Investment Partners has appointed Susan Gostick as Head of the Pension Fund Segment for its Institutional Business line. She was previously Head of Institutional Relationship Management at Newton Investment Management.

Lombard Odier Investment Managers has appointed Andrea Argenti to be Country Head for Italy. He joins from BlackRock, where he was Head of Retail - Italy.

Max Nardulli has joined Dexion Capital as Head of International Sales from Cheyne Capital, where he was previously Head of International Sales and Distribution.

Lombard Odier Investment Managers has appointed Mats Langensjö to grow its advisory offering to clients in the insurance and pensions industry, with a focus on the Nordic region. He was CEO of Brummer Life Insurance Company and Head of Clients at Brummer & Partners in Stockholm.

Old Mutual Global Investors has appointed Allan MacLeod to the newly created role of Head International Distribution. He joins from Ignis Asset Management, where he was as Head of Global Accounts.

 

And one final thought...

Europe’s top universities for fund staff revealed

The UK’s Oxford and Cambridge topped a ranking of European universities that have produced the largest number of asset management professionals, a study by eVestment revealed during the summer. The top 10 European schools, ranked by total number of alumni working globally as key professionals at asset management firms, are:

  1. University of Oxford
  2. University of Cambridge
  3. London School of Economics
  4. University of Edinburgh
  5. University of Bristol
  6. Durham University
  7. Université Paris-Dauphine
  8. Imperial College London
  9. University of Warwick
  10. University of Manchester