What’s Next for China A-Shares Inclusion in MSCI Indices

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Pixabay CC0 Public Domain. Jeremy Murden

Since 2018 China A-Shares have been included in MSCI Indices. Improvements in accessibility are expected to accelerate further inclusion of the China A-Shares in the near term. In this Q&A, Matthews Asia Portfolio Strategist Jeremy Murden offers his views on this and China’s motivation to increase accessibility.

What Changes have been made to the MSCI Indices?

With the rebalance on November 27, 2019, index provider MSCI has completed the planned increase of both the weighting and breadth of China A-shares exposure in its emerging markets index as well as its China index and other regional indices.
 
In 2019, the inclusion factor rose to 20% from 5% through a three-step implementation process of 5% increments that began in May. In addition to the increase in allocation to the existing securities, MSCI also increased the breadth of the securities by including ChiNext shares as well as mid-cap stocks. Following the rebalance, Chinese A-share securities now make up approximately 4.2% of the MSCI Emerging Markets Index, an increase from 0.72%, and China exposure including A-shares now makes up approximately 33.6%.

Why were these changes made?

The move follows the successful implementation of the initial 5% inclusion of China A-shares in 2018 and wide support for the weight increase from international institutional investors. MSCI consulted with a large number of international institutional investors, including asset owners, asset managers, broker/dealers and other market participants worldwide as part of its review process. 

Additionally, there was significant growth in the adoption of A-share investment by international investors as the number of northbound Stock Connect accounts grew from 1,700 before the June 2017 inclusion announcement to over 7,300 in February 2019. The Stock Connect programs in recent years linked the Shanghai and Shenzhen stock exchanges to the Hong Kong Stock Exchange and enabled foreign investors to buy A-shares with fewer restrictions.

Are further increases expected?

Yes. While no future increases are currently scheduled, MSCI is in regular contact with the China Securities Regulatory Commission (CSRC) regarding the proposed improvements in market accessibility that would lead to an increase in the inclusion factor. 

What are key improvements the CSRC would need to make before inclusion is increased?

A key driver of the increase to 20% from 5% inclusion was the significant advancements in accessibility, including a tightening of the trading suspension rules and a quadrupling of the daily Stock Connect quota in 2018. MSCI highlighted nine potential improvements as a road map to a potential 100% inclusion.

The four areas that MSCI views as most pertinent to increasing the inclusion factor beyond 20% are: 

  • Access to hedging and derivatives as the lack of listed futures and other derivatives products hamper investors’ ability to implement and risk-manage a large-scale inclusion
  • Change the current settlement cycle of T+0/T+1 to the emerging market standard of T+2 as the current short settlement period presents operational risk and tracking challenges
  • Align the trading holidays of onshore China and Stock Connect as the misalignment creates investment frictions
  • Create the availability of Omnibus trading mechanism in Stock Connect to better facilitate best execution and lower operational risk.

The next tier of improvements that MSCI communicated to the CSRC are:

  • Further reduce trading suspensions. There have been visible improvement lately, but trading suspensions in the China A-shares market remain unique when compared to other emerging markets
  • Improve access to the Chinese renminbi for stock settlement as direct access to the renminbi for stock settlement could represent a more-efficient foreign-exchange option for global investors
  • Improve access to IPOs and ETFs as both remain outside the scope of Stock Connect.
  • Open stock lending and borrowing. While short-selling is technically allowed, there currently is no functioning stock lending and borrowing market
  • Improve the stability of the Stock Connect universe as changes can create turnover issues in the maintenance of indexes.

What are potential next steps?

According to Sebastian Lieblich, MSCI’s Global Head of Equity Solutions, MSCI has been pleasantly surprised by the pace of accessibility improvements that have been implemented by the CSRC over the past 12 to 18 months. Beijing has indicated that access to derivatives and the alignment of holiday schedules are likely to be addressed in the near term. The change in settlement time is more complex, but still could be implemented swiftly. If the present momentum continues, “in a relatively short time frame, the launch of a public consultation on a major change could be announced.”

While the 2019 increase has been a move from 5% to 20%, Mr. Lieblich felt that given the pace of improvements, moving forward there is no need to grow the inclusion factors in 15% to 20% increments. He stated there is no prescribed path from here and the timing and extent of further inclusion will be directly driven by the timing and extent of accessibility improvements. While nearly all of the second-tier steps would need to be completed to reach 100% inclusion, incremental improvements will accelerate inclusion in the near term.

In addition to an increase in the inclusion factor, MSCI could continue to broaden the universe of A-shares to include the small-cap universe in indices to align China A-shares with the global standard of 85% of adjusted free float market cap. Beyond that, the securities trading on the new Shanghai Stock Exchange’s Science and Technology Innovation Board (STAR Market) could be included if they meet requirements of the MSCI GIMI Methodology and the eligibility of the stock connect programs linking the mainland markets and Hong Kong.

Finally, the exposure of Chinese A-shares in MSCI indices is still limited by the current 30% foreign ownership limit. Any opening from that limit would result in an increase to the adjusted free float market cap of all A-shares at the next index rebalance without any action by MSCI. Depending on the scale of the increase, it could have a multiplicative effect on the increase in A-share inclusion.

What is China’s motivation to increase accessibility?

China is primarily driven by a desire to draw institutional assets into its domestic market, according to our MSCI source. While many developed equity markets are 80%+ institutionally owned, China remains the inverse with only 20% institutional ownership. That has led to higher volatility as annual turnover in the A-share market in 2017 was 222% versus 116% for the U.S. Access to a larger pool of institutional capital, which tends to be more stable and long term in nature, would help reduce volatility in the market.  

What would a move to 50% inclusion and beyond mean for the MSCI emerging market index?

Holding all other factors constant, a move to 50% inclusion from 20% inclusion would increase the exposure of A-shares in the MSCI Emerging Markets Index to 9.8% from its current level of 4.2% and increase China exposure to 37.5% from 33.6%. At full inclusion, China would represent 43.1% of the benchmark, 17.8% of which would come from A-share exposure. Looking ahead further, if South Korea and Taiwan, which are already considered to be developed economies, were to graduate to developed- market status per MSCI, China would make up 48.2% of the index at 50% inclusion and 54.0% at full inclusion.

How could this benefit investors?

The current Chinese exposure within the MSCI Emerging Markets Index and other indices is heavily weighted to mega-cap internet companies and large Chinese banks. This and future  increases in A-shares exposure, and a further broadening of the universe to include small-cap stocks, will allow the indices to better reflect the opportunity set within Chinese equities.
 
Additionally, there was an estimated $1.9 trillion in assets that track the MSCI EM Index as of March 2019. While flows into A-shares from active managers are difficult to predict, the growth of the benchmark weight is likely to translate to inflows to the space and larger exposure from active managers who track the index. 

Will pressure from U.S. politicians affect A-share inclusion?

While there has been pressure from U.S. policymakers, led by Florida Senator Marco Rubio, to remove Chinese stocks from indices, MSCI remains focused on the needs of global investors. Per MSCI, all indices use a fully transparent rules-based methodology. MSCI stated it will not make changes to existing indices or delay a planned allocation due to political pressure, only to changes in market access.

Additionally, the U.S. Thrift Savings plan at the center of the political pressure recently announced its decision to maintain its current benchmarks and China exposure after its board and consultant concluded maintaining the exposure to China was in the best interest of plan participants.

How much experience does Matthews Asia have with China A-shares?

Matthews Asia has extensively studied and invested in China’s domestic A-share companies for many years. In 2014, our firm was awarded a Qualified Foreign Institutional Investor (QFII) license and quota that enabled us to invest directly into China’s domestic securities market, including the market for China A-shares. We also have participated in A-shares via the Stock Connect programs. 

We continue to be attracted by the fundamentally sound merits of many local companies listed in China. We realize that many quality A-share companies in growing industries can be priced at rich valuation multiples, however, which makes our experience of carefully vetting them critical. We believe long-term investors can benefit from exposure to A-shares.

At Matthews Asia, our focus has always been on taking a fundamental approach to finding leading A-share companies that are poised to benefit from the country’s structural shift toward its domestic economy.

Aberdeen Standard Investments Expects “An L Not a V Shaped” Recovery in Global Growth in 2020

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Pixabay CC0 Public Domain. Aberdeen Standard Investments prevé una recuperación del crecimiento global en forma de L “y no de V” en 2020

Tentative signs have emerged that a trough in global economic activity growth is beginning to form, although the strongest evidence is coming from soft rather than hard data at present, says Aberdeen Standard Investments in a recent publication. Their global growth forecasts support that sentiment, driven by the expectation that geopolitical uncertainty will moderate at the margin, while the significant monetary support delivered this year supports the real economy. However, they expect any recovery in global growth to look “much more like an L-shape than a V”.

The fundamental drivers of geopolitical risk are still in place, constraining business investment, and monetary policy efficacy is lower than at earlier stages of the current expansion. “Indeed, we expect the world’s two largest economies (the US and China) to actually slow further in 2020, which will lessen the scope for improvement in those economies that were much weaker in 2019″.

Although markets have priced in growth stabilisation, the asset manager doesn’t think they price in a moderate recovery in industrial output and corporate earnings. As such, it expects further gains in the price of risk assets as we roll forward into 2020.

The strategy in global markets

When it comes to global markets, ASI identifies an “upside asymmetry” for some higher carry investments. “Risk assets are rallying and diversifiers are selling off, but changes in ‘hard’ data seem too insignificant to be the catalyst yet”.

However, the direction of ‘soft’ information has been noticeably more positive as optimism is rising that US-China trade tensions will abate; monetary easing from the Federal Reserve and other central banks has been substantial; and there has been an uptick in some leading indicators.

“As investors, our perennial question is whether markets have accurately adapted to these changes or overshot economic reality”, the asset manager points out. Its “tactical asset allocation process” offers a useful way to consider this. 

Sentimiento inversorIn this respect, in August, they defined their ‘late cycle slowdown’ scenario as a world where the Global PMI was below 50, global EPS growth was somewhat negative and US core inflation was materially below target at 1.5%. “That was fairly close to the economic reality at the time and yet, under that scenario, we forecast equity returns of only a further 5% decline”.

By contrast, their ‘moderate recovery’ scenario began to reflect equity upside of 10-20%, depending on the region. This asymmetry had been widening at the same time that investors were widely considered to be bearish in mindset (AAII surveys) and positioned in quite a risk-averse way (BAML Fund Manager Survey).

“The relief rally we have seen has therefore been in line with the modest improvement in trade rhetoric, the ongoing easing in monetary policy and the apparent basing in leading indicators that catalysed an improvement in investor sentiment”.

Looking forward, ASI thinks they must assess whether asymmetry still exists or whether further momentum can only come from hard-data improvements. Their economists forecast that growth is going to trough but that the recovery may look more L-shaped than V-shaped, so, for their tactical asset allocations scenarios, their expectation is for “an environment that looks more like a ‘moderate recovery’“. This would see the global PMI rise a little further, a return to modest earnings-per-share growth (single digit) and gently rising inflation.

PMIs globales“Despite this scenario being more optimistic than a continued slowdown, the rally we have already seen leaves us forecasting only a further 5% upside in the US, Japanese and European equity markets in the near term”. If growth does improve, the asset manager sees potentially more upside in UK and EM equities (10-20%) given their more elevated risk premiums.

Importantly, ASI considers the previous asymmetry of upside-to-downside equity returns has now evaporated and, at this stage of the recovery, sees more asymmetry in their credit forecasts than for equities. In that sense, they believe spreads in high-yield and EM are still fair and their carry returns more backstopped by monetary easing. “As a result, we see these credit markets as providing better risk-adjusted returns, even though we continue to benefit from some equity exposure in particular markets”.

Charles Schwab to Buy TD Ameritrade

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Walter Bettinger, foto cedida. Walter Bettinger

Charles Schwab, which represents almost 50% of all independent RIA custody businesses, plans to buy TD Ameritrade according to CNBC sources.

Fox Business reported that Schwab would pay 26,000 million for the company.

In theory, the combined firm will be led by Schwab CEO Walter Bettinger, and TD Ameritrade chief financial officer Steve Boyle will lead his company until the agreement is completed.

It is not clear if the acquisition would face antitrust problems since Schwab and TD Ameritrade are the two largest publicly traded brokers and an agreement would create a giant with 5 trillion dollars in combined assets.

The discount brokers sector has been under pressure recently since the ‘zero commissions’ for the negotiation of shares, ETFs and options, arrived, which has caused brokers to struggle to find ways to up their profits, decision which gave Schwab an advantage, since the commissions represented only about 4% of its revenues, while for TD Ameritrade, the commissions represented more than 10% of the revenues.

For RIAs, whose custody business is an activity that generates 40% to 50% of the operating income of most discount brokers, the acquisition would eliminate an important option among custodians. Schwab is the leading custodian for RIAs, while Fidelity and TD occupy second and third place, followed by Pershing Advisory Services and E * Trade.

Data Theft at Cayman Bank

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Cayman National Bank, together with its sister company Cayman National Trust Company, confirmed that it has experienced a data hack. Responsibility for the data theft was claimed on Sunday 17 November 2019 by the hacker or hackers known as Phineas Fisher, which is offering other hackers $100,000 to carry out politically motivated hacks. The bank reported it as soon as it was made aware and is in the process of notifying their customers of the data breach. It has also set up an email to deal with client inquiries.

“It is known that Cayman National Bank (Isle of Man) Limited was amongst a number of banks targeted and subject to the same hacking activity. A criminal investigation is ongoing and Cayman National is co-operating with the relevant law enforcement authorities to identify the perpetrators of the data theft. Cayman National takes any breach of data security very seriously and a specialist IT forensic investigation is underway, with appropriate actions being taken to ensure that the clients of Cayman National’s Isle of Man bank and trust companies are protected” the bank said in a statement.

The Isle of Man Financial Services Authority and Information Commissioner’s Office, along with the Cayman Islands Monetary Authority, have been informed and are working with Cayman National in the Isle of Man.

Any customers with questions in the meantime should email dataenquiry@caymannational.im. Periodic updates will also be available at www.caymannational.im

“Cayman National, along with virtually every other international banking group, is not immune from the constant attempts by hackers to gain access to confidential data”, stated Cayman National Bank (Isle of Man) Limited’s Managing Director, Nigel Gautrey. “In this instance, and despite the best efforts of leading data security consultants, this criminal hacking group has breached our system – although to date we have detected no evidence of financial loss to either our customers or Cayman National”.

Cayman National Bank (Isle of Man) Limited is a subsidiary of Cayman National Corporation Ltd (“CNC”). CNC, and its main banking subsidiary, Cayman National Bank Ltd. (“CNB”), are located in and operate from the Cayman Islands. All of Cayman National’s operations within the Cayman Islands, including CNB, are separate and distinct operations from the bank in Isle of Man. The two banks do not share common systems, databases, client information, or email platforms. CNC is confident that the theft is contained within Cayman National Bank (Isle of Man) Limited and Cayman National Trust Company (Isle of Man) Limited only, and does not affect CNB or any other operation in the Cayman Islands.

 

Neuberger Berman Launches New Japanese Equity Team with Focus on ESG Engagement

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Pixabay CC0 Public Domain. Neuberger Berman crea un nuevo equipo de renta variable en Japón

Neuberger Berman announced its first Japan-based equities team, to be led by Keita Kubota, who joins as a Managing Director and Senior Portfolio Manager. The team will manage a “Japan Equity Engagement Strategy” seeking attractive returns through active engagement and constructive dialog with Japanese small/mid-cap companies in which the team invests. The strategy will be offered to both institutional and high-net-worth clients.

Kubota joins from Aberdeen Standard Investments, where he started his career over 13 years ago and most recently served as Deputy Head of Japan Equities. He was the investment director on Aberdeen Standard Investments’ Japan large cap strategy and small cap strategy, both of which were managed with an engagement strategy and offered to large institutional clients across Europe, Asia and Latin America.

Two analysts, one of whom will specialize in ESG investing, will support Kubota. Naoto Saito, joined Neuberger Berman in September as a Senior Research Analyst and has a generalist focus. Saito previously served in research roles and covered a broad range of companies across the Japanese equity market at Balyasny Asset Management, CLSA Securities and T. Rowe Price. With diverse experience as well as deep knowledge in ESG engagement, the team will seek to generate additional value by offering insights and knowledge sharing on ESG investing with portfolio companies.

“We look forward to the further expansion of ESG investing in Japan as companies have increased their awareness of corporate governance and other material factors. We think encouraging Japanese companies to improve their ESG factors through our active engagement can generate superior returns. Mr. Kubota and his team are bottom-up stock pickers with a focus on in-depth proprietary research,” said Ryo Ohira, Head of Neuberger Berman East Asia. “They are active, long-term investors who engage deeply and frequently with company management. Most importantly, Mr. Kubota has helped deliver long-term performance for his clients – which is our firm’s mission.”

Neuberger Berman has been in Japan for 15 years and currently manages over $53 billion in client assets locally having grown from $13 billion in 2015. For largely an institutional client base, the firm manages fixed income, alternatives and equity portfolios. Neuberger Berman is recognized in Japan as a leader in the ESG investing space, reflected in the firm winning the first ever Tokyo Financial Award for ESG Investing.

“We’re happy to welcome Mr. Kubota and team and know they are a fit our firm’s culture and core strengths. The group expands our global platform, bringing another long-term market perspective with a focus on active/ESG engagement in Japan, the third largest equity market in the world. We look forward to their capabilities helping client globally,” said Joseph Amato, President and Chief Investment Officer, Neuberger Berman.

 

J.P. Morgan Asset Management Launches its First Machine Learning Active Equity Thematic Fund

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Pixabay CC0 Public Domain. J.P. Morgan lanza un fondo sobre terapias genéticas que aprovecha el aprendizaje automático

J.P. Morgan Asset Management (JPMAM) is pleased to announce the launch of JPMorgan Funds – Thematics – Genetic Therapies in Europe, JPMAM’s first actively managed fund which combines both machine learning and active equity insights. The new fund leverages research carried out by UBS Global Wealth Management’s Chief Investment Office (UBS CIO) within its Longer Term Investments framework, and is being distributed by UBS initially.

Genetic therapies represent a once-in-a-generation breakthrough in the world of medicine. These treatments offer the hope of a cure for patients with serious inherited diseases, by modifying genetic information to address the underlying causes of disease. Today they are at an inflection point, moving from the clinic to commercial reality. This should generate high growth rates for companies operating in the space, and could prove highly disruptive for incumbent companies in the pharmaceutical industry if the technology proves to have wider applications.  JPMAM’s Genetic Therapies fund provides the opportunity to investors to gain diversified exposure to this new and exciting theme, and can help to hedge the risk of disruption to existing healthcare portfolios.

The fund will be co-managed by Yazann Romahi, Berkan Sesen and Aijaz Hussein. The portfolio management team sit within JPMAM’s Quantitative Beta Strategies (QBS) team, a team that specializes in quantitative portfolio management and are experts in developing innovative machine learning based technology solutions. Several members of the team hold PhD’s in Artificial Intelligence.

The fund has been designed to combine the strength and reach of JPMAM’s proprietary thematic engine, ThemeBot, with the portfolio management and research capabilities of JPMAM’s global equity platform. ThemeBot can efficiently identify stocks exposed to a range of investment themes including genetic therapies.

Using natural language processing, ThemeBot will screen more than 10,000 stocks globally, rapidly analysing hundreds of millions of data sources, such as news articles, company profiles, research notes and regulatory filings to identify stocks with the highest exposure to the theme and generate a high relevance portfolio, accounting for liquidity, market capitalisation and profitability. The portfolio will invest across the market capitalisation spectrum and provide diversified exposure to both innovative pioneers and established healthcare players. ThemeBot dynamically ensures only the most relevant stocks based on textual and revenue metrics are flagged for inclusion in the portfolio.

Once ThemeBot has selected the stocks it thinks are most applicable to the genetic therapies theme, the QBS team will work with experienced industry career analysts from JPMAM’s global equity platform to vet and validate ThemeBot’s output, to ensure stocks most relevant to the theme secure a spot in the portfolio. The portfolio management team will have access to five dedicated healthcare analysts with an average experience of 19 years. Additionally, the portfolio managers will be able to call upon the expertise of JPMAM’s broader equity analyst community, made up of 51 sector specialists.

Yazann Romahi, Chief Investment Officer of Quantitative Beta Strategies at J.P. Morgan Asset Management, said: “In seeking to create data driven portfolios which brings together human and artificial intelligence, we’re able to offer investors thematic solutions which enable them to tap into some of the central investment themes shaping our world today.”

Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, said: “Genetic therapies could develop into a profoundly disruptive technology for the pharmaceutical and biotechnology industry. Positioning portfolios to capture the economic benefits of disruption, while hedging or mitigating its effects on other assets, supports our goal to help our clients protect and grow their wealth over generations.”

George Gatch, CEO, J.P. Morgan Asset Management, said: “We’re delighted to partner with UBS in developing this new fund. We’re deploying our best Artificial Intelligence (AI) and Big Data capabilities combined with our global research expertise for this investment theme. Innovating jointly with our clients is an important priority for us.”

Christian Wiesendanger, Head of Investment Platforms and Solutions at UBS Global Wealth Management, said: “Developing new solutions with our partners is critical to implementing innovative ideas in clients’ portfolios. Machine learning is an exciting new tool for those looking to be at the cutting edge of investment management and will likely play a greater role in the years ahead.”

The fund’s C share class will have a Total Expense Ratio of 56 basis points.

 

Azimut Enters the US Private Markets Industry with Azimut Alternative Capital Partners

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Pixabay CC0 Public Domain. Azimut se constituye en los Estados Unidos

Azimut, Italy’s leading independent asset manager with €58 billion in AUM, established a US based newco named Azimut Alternative Capital Partners, with the purpose of investing in GP stakes of alternative managers specialized in the private markets space, including private equity, private credit, infrastructure and real estate. At the same time, Azimut signed an investment and shareholder agreement with AACP’s new CEO, Jeffry Brown, to execute the business plan, which, among other things, aims at building the leading private markets strategic permanent capital solutions provider and business operator.

AACP was established to build a next generation, diversified, multi-affiliate investment firm by acquiring initially minority stakes in alternative asset managers and providing strategic value-added services. AACP’s focus is on the large and growing, yet underserved segment of sub $ 3bn AUM alternative asset management businesses. Alternatives industry veteran Jeff Brown has over two decades of investing, due diligence and operating management experience in the alternatives asset management industry. Jeff was previously a Managing Director at Dyal Capital Partners (one of the leading minority stake investors in the alternatives asset management businesses globally, part of Neuberger Berman), and joined in its early days of formation. He founded and for five years led Dyal’s Business Services Platform which drove value creation in the Dyal portfolio companies across three private equity funds totalling $ 9bn in AUM. Prior to Dyal, Jeff was a Senior Managing Director at Bear Stearns Asset Management (“BSAM”). During his tenure at BSAM, he was Chief Development Officer and led the strategic expansion of the firm from $ 23bn AUM to $ 55bn AUM in four years. Prior to joining BSAM, Jeff held senior roles at Morgan Stanley Asset Management.

Jeffry Brown, CEO of AACP commented: “I am delighted to join the global Azimut family and look forward to building a next-generation multi-affiliate alternatives business leveraging the Azimut brand and my combined capabilities. Azimut’s strong reputation as a committed and steadfast long-term partner give me confidence that we will achieve the business goals targeted in the plan”.

Pietro Giuliani, Chairman of Azimut Holding, commented: “We are excited to have a top-notch professional such as Jeff on board with us in this long-term initiative. We strongly believe in the opportunity of investing into alternative managers in the US with a long-term approach and commitment, very much in line with our Group DNA. We are convinced that this partnership will be successful and will allow an important step forward in the alternative sector, complementary to what we are doing in Italy with the Azimut Libera Impresa project. The alternative asset managers in which we’ll invest will have a stable and trustworthy partner at their side, helping them to achieve their goals and growth targets.”

AZ US Holding, Azimut US sub-holding company, will carry out the transaction, involving a 10-year business plan with call/put option rights aimed at partnering with alternatives asset management businesses in the sub $ 3bn AUM space, helping them achieve their greatest business potential. In the base case of all the envisaged acquisitions, Azimut anticipates an investment of capital sufficient to achieve over $ 7 bn of pro-rata AUM (in excess of ca. $ 20 billion of affiliated AUM) in the next 10 years. The business plan also entails the entrance of further key senior managers over time, who have already been identified. Azimut and the management of AACP will cooperate to grow the business in the long term.

Oppenheimer & Co. acted as advisor in the creation of Azimut Alternative Capital Partners.

 

Allfunds Strengthens its Presence in the Nordics as the Acquisition of Nordic Fund Market is Finalized

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CC-BY-SA-2.0, FlickrFoto: mariano mantel. estocolmo

Allfunds, the largest investment fund distribution network in Europe and a leading wealthtech platform, has successfully finalized the acquisition of the Nordic Fund Market (NFM), from Nasdaq. The acquisition was announced in March 2019 and has been pending regulatory approvals and customary procedures.

With this operation, Allfunds total assets under distribution (AUD) increase to more than €530 billion and further strengthens its presence in the Nordic region. The Nordic Fund Market client portfolio will boost Allfunds’ presence in the Nordics at the same time as benefiting existing NFM distributors and fund managers with added value solutions, increased efficiency and advanced technology. Current NFM distributors and fund managers will become part of Allfunds’ distribution network in the region which already compromise more than 20 entities in Sweden, Norway, Finland, Denmark, Iceland and the Baltic countries.

Allfunds now has an established office in Stockholm which will provide services to the distributors and fund managers throughout the Nordic region. All employees working with NFM at Nasdaq in Stockholm were recruited, one being the former CEO of Nasdaq Broker Services Mattias Hammarqvist who is the Head of Allfunds Sweden.

“I am very excited that we, with new office will be able to leverage on the technology, services and benefits Allfunds global platform provides. It enables us to improve our offerings to current distributors and fund managers as well as to attract additional,“ said Mattias Hammarqvist, Head of Allfunds Sweden.

With the new office, distributors and fund managers are able to leverage the technology and know-how of experts in the region while accessing a cost-efficient way to distribute funds and reducing operational risk.  This agreement and access to the global platform will benefit local financial institutions who can take advantage of the global scale and specialisation within Allfunds as well as to benefit from state-of-the-art technology and increased service offering to meet challenges in the industry.

Juan Alcaraz, CEO of Allfunds, said: “We are very excited to close this acquisition that allows us to increase our presence in the Nordics by bringing our leading fund and wealthtech platform to the region while strengthening our global position. The Nordic markets deserve a trusted and global B2B partner to boost and support local financial institutions. The integration of NFM’s business and infrastructure into our company and our solutions further enhances our innovative offering, disruptive and value-added services that will now be made available to Nordic entities and help them achieve their objectives.”

Tikehau Capital Appoints Olga Kosters as Head of Private Debt Secondaries

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Tikahu Capital - Olga Kosters
Foto cedidaOlga Kosters, directora de Private Debt Secondaries. Tikehau Capital ficha a Olga Kosters como nueva directora de Private Debt Secondaries

Tikehau Capital, an alternative asset management and investment group, appointed Olga Kosters as Head of Private Debt Secondaries.

Kosters’ role will be to launch the firm’s private debt secondaries business. She will be based in New York and report locally to Tim Grell, Head of Tikehau Capital North America, and to Cécile Mayer-Lévi, Head of Private Debt activity.

Olga Kosters (47) has twenty years of investment and structuring experience in private and public capital markets. Prior to joining Tikehau Capital Kosters advised large institutional investors on the US private credit strategies while at StepStone Global, and led the execution of corporate private debt strategy at Zurich Insurance Group. Prior to this Kosters has held several positions at the European Bank for Reconstruction and Development (EBRD) in London.

“Over the last fifteen years Tikehau Capital has grown to become one of the most well-capitalised asset management firms globally and has developed a deep network of institutional investors and strategic partners. The firm keeps its focus on underwriting, and continues to invest a large portion of its own capital alongside its investors,” said Olga. “In a context of fast growth, the team has successfully maintained its entrepreneurial spirit and a strong set of core values. I am delighted to join the team to build the new private debt strategy.”

Cécile Mayer-Lévi, Head of Private Debt activity, commented: “We are delighted to welcome Olga to our team and expand our offer to the secondaries market in private debt. We see that this market is emerging and we believe it could develop significantly in the coming months.”

Kosters received an MBA in finance from Hofstra University, and is a CFA charterholder.

Pictet AM to Open a New York Office

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Pictet Asset Management plans to open an office in New York by mid-2020, according to Mutual Fund Wire, which cited Laurent Ramsey,  CIO of the European firm, during an internal meeting. A Pictet spokesmen did not immediately respond to requests for comments from Funds Society.

In theory, Liz Dillon, Head of Sales for US Sub-Advisory and Intermediaries of Pictet, will leave her current residence in London to head the new office, where about 12 people would be employed.

The office will cover  Pictet’s institutional, offshore and subadvisory businesses.

Pictet Asset Management is an independent asset manager, overseeing over USD 192 billion (CHF 191 billion/EUR 176 billion/GBP 156 billion as at 30th September 2019) for their clients across a range of equity, fixed income, alternative and multi asset products. They provide specialist investment services through segregated accounts and investment funds to some of the world’s largest pension funds, financial institutions, sovereign wealth funds, intermediaries and their clients.