According to Detlef Glow, Head of EMEA research at Lipper, assets under management in the European mutual fund industry faced net outflows of €42.6 bn from long-term mutual funds during January.
The single fund markets with the highest net inflows for January were France—driven by money market products (+€21.7 bn), Switzerland (+€1.7 bn), Norway (+€1.2 bn), Germany (+€1.0 bn), and Belgium (+€1.0 bn), while Luxembourg was the single market with the highest net outflows (-€33.5 bn), bettered by Ireland (-€13.6 bn) and the United Kingdom (-€12.2 bn).
Equity Eurozone (+€1.9 bn) was the best selling sector for January among long-term funds.
In terms of asset types, Bond funds (-€20.2 bn) were the one with the highest outflows in Europe for January, bettered somewhat by equity funds (-€19.7 bn), mixed-asset funds (-€5.3 bn), and “other” funds (-€0.08 bn) as well as commodity funds (-€0.04 bn).On the other side of the table alternative UCITS funds (+€2.2 bn) saw the highest net inflows, followed by real estate products (+€1.0)
Amundi, with net sales of €8.2 bn, was the best selling fund group for January overall, ahead of Credit Mutuel (+€3.4 bn) and Natixis Global Asset Management (+€2.5 bn). Legg Mason Western As US Mor-Backed Securities Acc (+€0.7 bn) was the best selling individual long-term fund for January.
Foto: LinkedIn / Foto de Londres de Jack Torcello. Chris Justice, nuevo COO y responsable de Janus para el mercado europeo
According to Investment Europe, Janus Capital International, the international arm of Janus Capital. has appointed Chris Justice as Chief Operating Officer and head of Europe.
Based in London, Justice will develop and execute Janus Capital International’s business strategy across EMEA working with Jamie Wong and Sylvain Agar, Heads of Institutions, and of Financial Intermediaries, EMEA.
Up until now Justice was Head of Strategic Initiatives for APAC and EMEA from Hong Kong. He will continue to report to Augustus Cheh, President of Janus Capital International.
Prior to joining Janus in 2013, Justice was managing director of Quam (Hong Kong) Ltd, where he led a team of research analysts and asset managers providing non-discretionary portfolio advice to high net worth and retail investors.
As of December 31, 2015, Janus Capital International had $42.4bn (€38.6bn) in assets under management.
At the end of 2015, Janus Capital group’s global assets totalled $192.3bn (€175bn), of which Janus Capital International represented 22% of total global assets up from 8% in 2010.
Foto: Davesag, Flickr, Creative Commons. BNP Paribas IP recibe el premio de Agefi a la innovación por su ETF de empresas europeas con bajas emisiones de CO2
THEAM, BNP Paribas Investment Partners’ (BNPP IP’s) manager of index-based investment solutions), has won the 2016 Innovation Award at Agefi’s Grands Prix des ETF for its BNP Paribas Easy Low Carbon 100 Europe® UCITS ETF. It received the award, which recognises leading ETF (exchange-traded fund) innovation in the equity category, on 11 February, at the second edition of the Grands Prix des ETF. The event was organised by French business and financial periodical Agefi in tandem with TrackInsight, the ETF analysis platform.
This award recognises the pioneering role played by BNPP IP, which in 2008 became the first investment management company to launch a Low Carbon ETF. Benchmarked to the Low Carbon 100 Europe® index, BNP Paribas Easy Low Carbon 100 Europe® UCITS ETF replicates the performance of 100 major European companies with the lowest CO2 emissions in their respective sectors.
This award demonstrates the innovative capability of BNPP IP, which helped modify the methodology of the Low Carbon 100 Europe® index, alongside Euronext and Carbone4, in November 2015. It is now possible to identify companies that make a positive contribution to the energy transition, whether through their operating performance or through the products sold to clients. This Low Carbon index fund combines responsible investment and a diversified exposure to European equities. Investing in this Low Carbon ETF means investing in a portfolio with half the CO2 emissions of the companies in a traditional Europe index.
This award underscores BNPP’s long-standing commitment to a low-carbon economy. After signing the Montreal Carbon Pledge in May 2015, implementing a carbon-linked investment policy, signing up to the Portfolio Decarbonization Coalition and publishing the carbon footprint of equity funds in its Parvest line in November 2015, BNPP IP has again demonstrated its ability to innovate and play a pioneering role in low-carbon investments.
Frédéric Janbon, Chief Executive Officer of BNPP IP, comments: “We are very happy to have received this award, which illustrates our commitment to responsible investment. Our many initiatives in recent years allow us to offer our clients, both institutional and retail, a broad selection of investment solutions based on our research and innovation.”
Denis Panel, Chief Executive Officer of THEAM, adds: “The Low Carbon ETF helps fund energy transition by directing investments to companies that are the most active in reducing CO2 emissions and that make the biggest contribution to limiting global warming to less than two degrees.”
Anthony Attia, Chairman and Chief Executive Officer of Euronext Paris, comments: “We congratulate BNP Paribas Investment Partners on this award, which illustrates that the new version of the Low Carbon 100 Europe® index and its related tracker were very well received. Innovation lies at the heart of offering investors index products that measure companies’ environmental performance.”
Liquid alternatives in a UCITS format are attracting interest from a wider range of investors, including insurers and pension funds, as a way to meet the transparency edicts of Solvency ll.
Cerulli Associates‘ report entitled European Alternative Products and Strategies 2016: Opportunity Knocks in the New Era finds that institutional investors are turning to retail-style alternative products as a cost-effective means to address regulatory pressure and to bridge the yield gap created by low-performing debt holdings.
More than 86% of asset managers surveyed by the global analytics firm predict an increase in demand for alternative UCITS funds over the next two years. Products with the UCITS stamp of approval are enticing conservative institutions in France and Germany into alternatives, as well as insurers EU-wide following the introduction of Solvency II.
In addition, hedge fund managers interviewed by Cerulli said that, although there had been fewer requests for UCITS products among institutional clients in the past 12 months when compared with offshore, AIFMD-branded alternative investment funds, and segregated accounts, they expected UCITS to be, along with offshore, the most likely format for new fund launches over the next two years.
“What was once the preserve of global and regional private banks is of increasing interest to continental institutions as well as EU insurers more generally,” says Tony Griffiths, senior analyst at Cerulli and co-author of the report. “One Swiss hedge fund manager told us it was surprised to find interest in the UCITS versions of its products among Swedish and Finnish institutions–two of Europe’s bigger buyers of offshore funds,” he adds.
Alternative beta -or risk premia- productsare also being sought, and implemented, by institutional clients as a cost-effective, liquid, and flexible means of securing portfolio diversification and achieving similar returns to hedge funds; a move that is stretching the definition of “alternatives”.
“The balance of power is shifting to the investor,” says Justina Deveikyte, senior analyst at Cerulli and co-author of the report. “Lingering dissatisfaction with offshore hedge funds-sluggish performance, high fees, and minimal opacity -has influenced the rise in demand for alternative beta products,” she adds.
A number of alternative asset managers and hedge fund houses across Europe are evaluating or have already developed alternative beta strategies, while others are quite skeptical. There has been an increase in launches by alternative asset managers as they seek to meet growing demand and diversify business. This will invite greater scrutiny of performance.
It is “Super Tuesday” here in the U.S. Last week, all the talk in Europe was about “Brexit.” These newspaper buzzwords rarely figure in investors’ strategy meetings. But a new specter is haunting markets: the specter of political risk.
By Friday, February 19, the sterling-dollar exchange rate had been testing secular lows for a month. On top of policy divergence between the Bank of England and the Federal Reserve, negotiations over a new settlement between the U.K. and the European Union had introduced the risk of “Brexit”—Britain exiting the EU—into the trade. Many thought things were overcooked, and indeed the exchange rate pulled back in late trading as news of a deal trickled out from Brussels.
But then came Sunday night. Boris Johnson, the charismatic mayor of London tipped to challenge for the U.K. premiership when David Cameron leaves office, announced he would campaign to leave the EU. Sterling opened sharply lower on Monday, and as a surprising number of U.K. cabinet ministers joined the “leave” camp, it burst through resistance levels, falling almost 4% against the dollar in four days. “Brexit” was suddenly a market-moving risk.
We’ve witnessed something similar in the U.S. Even a month ago, a second-place finish in the Iowa caucuses persuaded many that Donald Trump’s bid for the Republican Party’s presidential nomination was finally choking. Trump, the Democrats’ Bernie Sanders and other “non-establishment” characters would grab the headlines. Volatility might erupt in certain sectors thanks to the rough-and-tumble of the campaign—witness biotech stocks after Hillary Clinton’s comments on drug pricing last fall. But familiar-looking figures would end up contesting the general election and no single party would get enough leverage on Capitol Hill to change current economic, and therefore market, realities.
We ourselves worked on that assumption until very recently. Three Trump victories and a Boris defection later, it no longer suffices: when these things move markets, asset allocators need to take them into account, too.
At the same time one shouldn’t lose sight of an important truth: politics makes for great blogs and cocktail-party talk, but the vast majority of it does not affect economic realities for the longer term. The market volatility it generates is often just noise. To put it another way, at this point we do not see any of these things as identifiable investment themes for the longer term, in the way that, say, the election of Shinzo Abe in 2012 has been. But they are risks that need to be managed.
How might asset allocators frame this problem? We see three potential courses of action:
Hedge specific risks, or make specific trades related to expected outcomes.
Reduce whole-portfolio risk exposure to take account of additional, generalized volatility.
Take contrarian positions when you believe pricing has gone too far.
When political risks begin to move markets, we believe it makes sense to do at least one of these things, but possibly to do all three at once, in different markets. Right now, we would suggest that so many risk factors are resonating—from “Brexit,” Trump and Sanders, through the rise of populism in Europe and the faltering of “Abenomics” in Japan, to loss of confidence in central banks—that identifying specific hedges is difficult. Alongside the oil price, concerns about China’s growth and flagging U.S. corporate earnings, these things add up to make us favor the second option, managing whole-portfolio risk until we get more clarity.
When there is more clarity, we may favor option one or three, double-down on option two—or possibly revert to a medium-term strategy of adding risk assets at appealing valuations. The important thing is the thought process, which we think provides a frame of reference for asset allocators who need to acknowledge the recent elevation of political risk in markets without being tugged this way and that by the daily headlines.
Erste AM has announced the appointment of Winfried Buchbauer as new Board Member. The management board of EAM will now consist of Heinz Bednar, CEO, Christian Schön and Winfried Buchbauer.
Buchbauer, who is 51, will be in charge of the areas of Risk Management and Back Office. As an executive director he will cover the market support functions of the company. Hehas a proven track record as a legal counselor in the financial service industry. In his last position as division head with EAM, he was in charge of the Legal department, Human Resources, Network & Project Management, and the Communications department. Furthermore, since January 2016 Winfried Buchbauer is a member of the management board of RINGTURM KAG, a subsidiary of EAM.
EAM coordinates and is responsible for the asset management activities within Erste Group. In Austria, Croatia, Czech Republic, Germany, Hungary, Romania, and Slovakia EAM manages assets of 55.8 billion Euros (as of Dec 2015).
Foto: Phillip Pessar
. Nanette Aguirre se une al consejo de Florida Alternative Investment Association
Veteran attorney Nanette Aguirre of Greenberg Traurig, who focuses her practice on derivatives and structured financial products, has joined the board of the Florida Alternative Investment Association (FAIA), announced Michael Corcelli, chairman and founder of the Miami-based organization.
“Nanette brings years of experience in negotiating all forms of international derivatives, trading and prime brokerage deals with global institutions,” said Corcelli, who is chief investment officer of Alexander Alternative Capital of Miami. “She is a frequent adviser on regulatory issues affecting the market, including cross-border regulations and Dodd-Frank.”
Prior to joining Greenberg Traurig’s office in New York as a shareholder, Aguirre worked for a major New York law firm in its structured products and derivatives department. She worked closely with some of the industry’s largest hedge funds, mutual fund and pension plans.
Over the years, she has structured and negotiated finance and derivative transactions, including Indian and Chinese swaps, and credit and fund-linked derivatives, loan, credit default and equity swaps. She also negotiates exchange traded derivative agreements, repurchase, securities lending and electronic trading agreements, and tri-party and give-up arrangements.
She works throughout Latin America, including Mexico and Colombia, where she advised banks, endowments, clearing organizations and other financial institutions.
Admitted to practice in New York and New Jersey, Aguirre earned her J.D. from Rutgers Law School and her B.A. from New York University Stern School of Business.
Prior to entering the legal field, she developed expertise in derivatives with Deutsche Bank, Merrill Lynch and Lehman Bros.
The German receivables exchange Debitos is now offering a new trading segment on its online auction portal: From now on it’s even easier to sell claims against insolvent companies to the highest bidder. On the site creditors and investors have a direct overview of current company insolvencies whose receivables are being searched or traded on the Debitos online exchange. At Debitos alone some €1.3 billion of private capital from German and international investors is waiting for offers from sellers.
In most insolvencies the creditors have to wait for several years before finding out how much their claims are still really worth. So it often makes sense to sell claims to the highest bidder as quickly as possible, rather than leaving non-performing capital on the books. But how to find the best price and a solvent buyer? At the receivables exchange claims against insolvent companies can be auctioned off to the highest bidder. Since the online exchange started up in late 2012 more than 1,000 creditors, including several Landesbanks, have sold non-performing loans (NPL) valued at more than one billion euros via Debitos.
Claims against insolvent companies are one type of what are known as “distressed assets”. There is a large international market for this kind of investment – a market with risks, but interesting prospects too.
Last year already saw the first auctions on the site involving significant volumes of claims against companies like Prokon and KirchMedia. “We are seeing great interest in this segment”, says Timur Peters, managing director of Debitos, explaining why it is being expanded. “In Germany it takes an average of four years to wind up an insolvent company. The outcome is often uncertain and capital is tied up all the time”, says Peters. “So it is logical that we are paying more attention to this segment, because it provides much-needed liquidity directly.”
Sellers at Debitos can set a minimum price and then watch how investors place bids for the receivables in the online marketplace – the highest bid wins. All that is required to register a seller are the contact details of an authorised representative, a valid company address, VAT ID and a valid email address. Then the company details are verified to ensure that the information provided is correct. The competent Debitos team takes care of preparing the documentation for the auction. For banks and other companies the presence of currently some 350 specialised investors from all over Europe represents a real incentive to offer their outstanding receivables from a range of insolvencies for sale. Investors registered on the exchange consist mainly of banks, funds, debt collection agencies and lawyers.
Foto: m.shattock
. Los gestores activos están más amenazados por el potencial de crecimiento de las estrategias de beta estratégica que los pasivos
The growth of strategic beta assets will continue to strain active managers’ ability to retain assets, according to new research “U.S. Evolution of Passive and Strategic Beta Investing 2016: Opportunities for Asset Managers and Indexers” from Cerulli Associates.
“Strategic beta represents the middle ground on the active to passive spectrum-it can be viewed as a hybrid approach,” states Jennifer Muzerall, associate director at the firm. “The subjective assumptions made about the investment strategy lend itself more to an active strategy, but its rules-based and transparent implementation exhibits characteristics similar to those of passive.”
Growth of strategic beta assets will continue as more investors begin to understand the benefits of implementing strategic beta products into their portfolios, such as the potential to reduce portfolio risk and enhance returns while benefitting from a cost savings compared to active management.
“Over the next decade, strategic beta may influence a new way of thinking about the baseline for passive investing,” Muzerall explains. “Strategic beta development raises the bar for active managers and their ability to generate alpha. Active asset managers are begrudgingly moving into strategic beta because they continue to see outflows from active products. While new money may feed strategic beta products, asset managers express concerns that offering strategic beta may cannibalize assets from existing active products.”
“On the other hand, passive managers see strategic beta as an opportunity to offer differentiated, higher-fee products, a departure from the highly competitive commoditized passive business,” Muzerall continues. This leads to the question, who should be more concerned-active or passive managers? “Cerulli believes active managers are more threatened by the potential growth of strategic beta compared to most passive managers.”
Signs of economic slowdown are increasing worldwide. This is the view of Guy Wagner, Chief Investment Officer at Banque de Luxembourg, and his team, published in their monthly analysis, ‘Highlights’.
Apart from weakness in the manufacturing sector, services activities are also starting to be affected, despite the favorable effects of falling oil prices on consumer purchasing power. “According to official advance estimates, US GDP slowed to 0.7% in the fourth quarter of 2015, due to a dearth of corporate investments and a slowdown in consumer spending. Most economic indicators also tended to deteriorate in other regions,” Guy Wagner adds.
January was a particularly difficult month for equity markets
January was a particularly difficult month for equity markets. The ongoing weakness of oil prices and increasing signs of economic slowdown heightened investors’ aversion to risk. The S&P 500 in the United States, the Stoxx 600 in Europe, the Topix in Japan and the MSCI Emerging Markets (in USD) all lost ground. “The financial sector was particularly shaky due to prospects of deterioration in companies’ capacities to service their debt following the slump in commodity prices and the economic slowdown,” says Guy Wagner. “Given current zero interest rates, the difficulty the central banks would have in responding to a major economic downturn makes equity markets vulnerable.”
Key interest rates unchanged in the United States and Europe
Having raised the fed funds interest rate by 25 basis points in December, the US Federal Reserve left interest rates unchanged at its January meeting. According to Guy Wagner, “Higher volatility on the financial markets and increasing signs of economic slowdown worldwide have reduced the probability of further monetary tightening in the coming months.” In Europe, ECB president Mario Draghi hinted at the introduction of further monetary stimulus at the Bank’s next meeting in March to combat low inflation.
No concessions on company quality
“In Europe, economic statistics continue to surpass low expectations, but in absolute terms the pace of growth is flagging.” Active management within asset classes, especially equities, is therefore all the more vital. “While the economic and financial environment remains weak, it is particularly important not to make concessions in terms of the quality of the companies in which you invest,” concludes Guy Wagner.
