. Lazard Asset Management Hires Léopold Arminjon as European Long/Short Equity Portfolio Manager
Lazard Asset Management announced that Léopold Arminjon has joined the Firm as a portfolio manager/analyst. Based in London, Mr Arminjon will be responsible for running a new European long/short equity strategy to be launched later this year.
“Léopold brings with him over 18 years of investment experience in European equities, which will benefit both our clients and our investment platform,” said Bill Smith, CEO of Lazard Asset Management London. “This new strategy will complement our strong European equity capabilities and will broaden our already robust expertise in long/short equities, a core focus of our investment offerings for clients.”
As of 31 March 2015, LAM has $180 billion of assets under management, including $7.6 billion globally across a number of alternative investment strategies, investing in global long/short equity, emerging market debt and hedged credit strategies.
Prior to joining LAM, Mr Arminjon was a lead portfolio manager at Henderson Global Investors for both the Henderson Horizon Pan-European Alpha Fund and the Alphagen Tucana Fund. Previously, he was a senior analyst at Gartmore as well as being one of the five members of the Continental Europe equities team running both long-only and long/short funds.
LAM offers a range of equity, fixed-income, and alternative investment products worldwide. As of 31 March 2015, LAM and affiliated asset management companies in the Lazard Group manage $199 billion of client assets.
Photo: José Maria Silveira Neto. U.S. Asset Managers are Devoting more Resources to Develop their Global Equities Capabilities
A recent study by Cerulli Associates about asset managers’ retail and institutional product strategy and innovation across different asset classes (e.g., fixed income, alternatives) concludes that the industry is turning into the development of products centered on Global Equities.
“Aside from focusing on offering income-producing products and alternative investments, asset managers have been busy building out their international and global capabilities. U.S. investors have typically turned to international and global investment products for further diversification,” Pamela DeBolt, associate director at Cerulli, explains. “Retail managers are allocating more of their product development resources over the next year to international/global equity.”
“These funds are now attracting U.S. investors because they are considered cheaper than domestic equities,” DeBolt adds.
CC-BY-SA-2.0, FlickrPhoto: Dennis Jarvis. UK Treasury Planning for ‘Grexit’ Turbulence
Downing Street and the Treasury have been drawing up measures to control the “serious economic risks” to Britain should Greece default on its debts, or exit the eurozone – or both.
The Prime Minister’s official spokeswoman told reporters at Westminster that the Government was taking “all steps to prepare” for such eventualities.
Treasury officials declined to give details of the plans, but confirmed that Chancellor George Osborne regards a “Grexit” as “a very serious risk” to the economy of both Britain and the wider world.
Central bank warning
The comments came as Greece’s central bank warned for the first time that the country could be on a “painful course” to a debt default and an exit from both the eurozone and the European Union.
According to the most recent figures from the Bank of England, British banks are exposed to Greece to the tune of $12.2 billion (£7.7 billion) on an “ultimate risk basis”. In other words, this is the sum they would lose were the country to go bust completely.
The figure is not large by comparison with UK banks’ exposures to other eurozone countries that have experienced recent difficulties such as Italy, at $40 billion (£25.2 billion) or Spain at $50 billion (£31.5 billion).
But the knock-on effects from a Greek collapse could hammer confidence across the eurozone and beyond.
The British Chambers of Commerce warned that market upheavals caused by “a messy Grexit” could hit many UK businesses and called on central banks and governments to take action to limit disruption “through all means possible”.
Bailout talks continue
Talks continue between the Athens government and its international creditors over an economic reform deal which has held up more than £5 billion in bailout payments needed to allow Greece to continue servicing its debts.
Eurozone finance ministers are meeting in Luxembourg today to try to find a way forward, and the crisis is expected to dominate a European Council summit of EU leaders – including David Cameron – in Brussels next week.
Meanwhile, it has emerged that the Republic of Ireland is making its own plans in the event that the UK votes in an in/out referendum to leave the EU.
Irish foreign minister Dara Murphy told BBC Radio 4’s World At One: “It would be remiss of us [not to], given the possibility that our largest trading partner may be exiting the European Union. That is something we, of course, are looking at.”
Rotterdam-headquartered asset manager Robeco has announced the launch of a multi-factor credit fund, aimed at offering investors access to a factor-based investment strategy.
The fund will be managed by Robeco’s Credit Team, with Patrick Houweling as portfolio manager. Houweling joined Robeco in 2003 and has also been managing Robeco’s conservative credits strategy since 2012, which exploits the low-risk anomaly in credit markets.
The fund will have 150 to 200 names in its portfolio. Although it mainly consists of investment grade credits, it can hold a maximum of 10 percent in BB in order to benefit from the attractive characteristics of fallen angels and rising stars.
Patrick Houweling comments on the launch: “At Robeco, we have been closely studying the possibilities of bringing our factor investing offering beyond the traditional equity markets. I am delighted that we have put theory into practice by introducing this factor investing fund to credit investors. This fund is driven by our proprietary quantitative multi-factor model, which offers balanced exposure to the low-risk, value and momentum factors.”
Foto cedidaAndreas Wosol, gestor del Amundi Funds European Equity Value. Andreas Wosol: "Es el mejor momento para participar en una inversión value en años"
Crédit Agricole and Société Générale are announcing their decision to launch a project for the initial public offering of their joint subsidiary Amundi, created in 2010, with a view to obtaining a listing before the end of the year, subject to market conditions.
With EUR 954bn of assets under management as of the end of March 2015, Amundi is the leading asset manager in Europe and ranks among the ten largest players in the world.
Amundi is 80% owned by Crédit Agricole Group and 20% by Société Générale.
The purpose of the flotation is to underpin the continuing development of Amundi and provide liquidity to Société Générale, which could sell up to its entire stake, as set out in the shareholder pact that was agreed at the creation of Amundi1.
Amundi and Société Générale will continue their industrial partnership following the initial public offering. Amundi will remain the provider of reference for savings and investment solutions for Société Générale’s retail and insurance networks for a period of five years, renewable.
Crédit Agricole S.A. intends to retain a majority stake in Amundi, which plays a key role in its development strategy. This project will be submitted to the employee representative bodies.
As an indication, Société Générale specifies that the sale of its entire stake would have a positive impact of around 20bps on the CET1 ratio of Société Générale group at the end of 2015.
This project will be submitted to the employee representative bodies.
CC-BY-SA-2.0, FlickrPhoto: Dennis Jarvis. Are Dividends from Emerging Markets Worth The Risk?
Lyxor has been recently awarded by S&P Dow Jones Indices a license on the S&P China Sovereign Bond 1-10 Year Spread Adjusted Index, that will allow the manager to launch and list a China government bond ETF in Europe.
The S&P index includes Chinese government bonds with a maturity of one to ten years traded on the Shanghai or Shenzen stock exchanges as well as on the Chinese Interbank Market.
It currently represents a yield to maturity of 3.2% in renminbi for an average duration of 4.2 years, according to Bloomberg figures as of 29 May 2015.
Heather McArdle, Director of Fixed Income Indices at S&P Dow Jones Indices, commented : “The progressive liberalisation of China’s financial market has offered greater accessibility and flexibility to international investors looking to invest in the world’s second largest economy.
“As European investors increasingly look for China exposure beyond equities, we are excited to license the S&P China Sovereign Bond 1-10 Year Spread Adjusted Index to Lyxor to help bring China government bonds into their toolkit and facilitate portfolio diversification for investors.”
Lyxor’s ETF will be sub-managed by the Hong-Kong arm of the firm’s Chinese joint-venture Fortune SG.
Lyxor has €113.7bn in assets under management and advisory as of 30 April 2015.
CC-BY-SA-2.0, FlickrPhoto: Kcalculator. Threadneedle Remains Bullish on the Dollar Given the Likelihood of Superior US Economic Performance
Columbia Threadneedle Investments has held a bullish view of the outlook for the dollar for some time. This is supported by its belief that the US economy will outperform other advanced economies because:
it has fewer structural rigidities than, for example, the eurozone
it will enjoy greater long-term productivity gains than comparable economies
it will become less vulnerable to external energy shocks as its oil production potential increases following the shale energy revolution. Increasing oil output will also reduce the structural current account deficit.
But earlier this year the firm became concerned that the currency was strengthening beyond what was warranted by the United States’ fundamentals and it positioned itself accordingly with a tactical short position against a range of currencies. “A raft of weaker than- predicted US data dimmed speculation the Federal Reserve (the Fed) was about to raise interest rates. At the same time, the launch of QE in Europe caused investors to revise their expectations of deflation in Europe”, explains Matt Cobon, Head of Government and FX at Columbia Threadneedle Investments.
Dollar correction creates opportunity
The markets have now seen a sizeable fall in the dollar and the currency is now much more fairly valued. “The size of the correction is similar to that experienced in comparable structural dollar bull cycles and we do not believe that it should be a matter of concern or indeed a surprise. However, we continue to believe that the upward trajectory of the dollar will resume over the longer term, reflecting the country’s aforementioned economic advantages. Consequently, we remain dollar bulls, believing that the recent weakness in the US economy will prove temporary in part because we anticipate that consumers will start spending some of the windfall gains reaped from low energy prices”, says Cobon.
The likelihood that monetary policy in the US and the rest of the world will begin to diverge reinforces Threadneedle´s positive view that the dollar should strengthen. “We anticipate that while the eurozone delivers its massive QE programme and Japan continues to inject liquidity into its economy, the Federal Reserve (the Fed) will start to increase rates as the economy regains momentum. We are certainly more sceptical than the market that we will see such a reflationary bounce in the eurozone or that it will outperform in the longer term given the structural rigidities within the euro area” points out the expert.
Investors with long dollar positions are being squeezed at the moment and Threadneedle is using this opportunity to start to build back into its dollar risk position. “We certainly believe that the dollar is now trading at levels, which, particularly against the euro, appear compelling again from a long-term perspective – we still believe that the euro will reach parity with the dollar”, says the Head of Government and FX.
The main risk to this strategy is that the US economy is unable to gain further momentum and that as a result expectations of when the Fed begins to hike interest rates are pushed out to 2016. However, monetary policy in the US and the rest of the world would only converge if markets began to anticipate that the US was entering a prolonged downturn. “We do not think this is likely. Indeed, we believe that we are approaching a point in the US labour cycle where wage pressures are beginning to build and that this factor will start to influence monetary policy. There is little slack left in terms of unemployment and the output gap. Certainly, both have reached levels that in previous cycles were accompanied by a tightening of monetary policy”, concludes Cobon.
. Amundi Names Vincent Mortier as Deputy CIO and Member of Executive Committee
Amundi announces the appointment of Vincent Mortier as Deputy Chief Investment Officer (Deputy CIO). He will also become a member of the Executive Committee.
Mortier joins Amundi from Société Générale Group, where he started his career in 1996. He has occupied a number of senior roles at the Group during his career, culiminating in the position of Chief Financial Officer of the Global Banking and Investor Solutions (GBIS) division in 2013.
He was previously CFO of Société Générale Corporate and Investment Banking, Co-Head of Equity Finance, Deputy Head of Equity Finance and Head of Strategy and Development – Global Equities and Derivatives Solutions. Mr Mortier also sits on the SG GBIS Executive Committee.
Global investors have moved out of equities into cash ahead of an expected U.S. Fed rate hike, according to June’s BofA Merrill Lynch Fund Manager Survey (FMS). Investors have also shown concern about a Greek default and a possible bubble in Chinese equities as they have scaled back risk.
Cash levels rise to 4.9 percent of portfolios, up from 4.5 percent in May; proportion of investors overweight equities falls to net 38 percent from 47 percent.
Expectations of higher rates are the highest since May 2011, with a net 80 percent of the panel forecasting a rise in short-term rates.
The majority of the FMS panel sees a negative resolution of Greece talks: 15 percent predict Grexit, and 42 percent predict default without exit.
China worries: seven out of 10 investors say China’s equity market is in a “bubble.” A net 50 percent see China economy weakening.
The proportion of investors expecting to underweight global emerging markets surges to a net 21 percent from net 6 percent in May.
Corporate operating margins will fall in the coming 12 months, say a net 17 percent of investors – up from net 5 percent in May.
The U.S. dollar is the most crowded trade as Fed tightening looms; 72 percent predict the euro will weaken vs. the dollar in coming year.
“Higher cash levels show how caution is in the air, with 65 trading days until we expect the Fed to tighten,” said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research.
“Investors remain bullish on European equities but are increasingly concerned about Greece and higher yields,” said James Barty, head of European equity strategy.
New board of directors at ALFI. The Association of the Luxembourg Fund Industry Appoints Denise Voss as Chairman
The Association of the Luxembourg Fund Industry (ALFI) today announced the appointment of Denise Voss as chairman of ALFI. Ms Voss takes up the position, which will initially run for two years, with immediate effect.
“I am very excited about this appointment,” said Ms Voss. “The asset management industry in Europe has gone through dramatic change over the past few years, with extensive regulation that has been put in place following the crisis, and ALFI has played a key role in working through the implementation of this regulation.”
”Going forward, we face different challenges, for instance, from the greying of the population and more and more individuals being responsible for funding their own retirement, to the growth of digital technology, which means that buying habits are changing dramatically. My role is to inspire the industry to focus on these issues and to ensure that the Luxembourg Fund Industry continues to play a key role in driving the development of the industry worldwide, encouraging economic growth and providing long-term financial security for individuals.”
Denise Voss has played a key role in ALFI for many years. She has been Vice Chairman for International Affairs of ALFI since 2011 and has been a member of the ALFI board of directors since 2007. She is also Chairman of the European Fund and Asset Management Association (EFAMA) Investor Education working group.
Denise is Conducting Officer of Franklin Templeton Investments and has worked in the financial industry in Luxembourg since 1990.
