Foto cedidaStephen Dover, responsable del nuevo Instituto de Inversión de Franklin Templeton. . Franklin Templeton crea un centro de investigaciones y conocimiento sobre inversión liderado por Stephen Dover
Franklin Templeton has announced in a statement the launch of its new Investment Institute, “an innovative hub for research and knowledge sharing that seeks to unlock the firm’s competitive advantage as a source of global market insights”.
The institute will be led by Stephen Dover, who has also been named Chief Market Strategist. In his new roles, he will continue to provide market insights for the firm and will head the institute’s operations, facilitating the sharing of research through multiple channels, including bespoke data analysis, proprietary content and academic partnerships. Meanwhile, Terrence Murphy, CEO of ClearBridge Investments, will take on Dover’s current role as Head of Equities for Franklin Templeton.
“With these appointments and the launch of the Investment Institute, we are doubling down on what sets our firm apart: unmatched insight and research from experts on the ground in over 70 offices around the globe,” said Jenny Johnson, President and CEO of Franklin Templeton.
“In this time of significant uncertainty, we are uniquely positioned to help clients find signal amid the noise. Whatever the issue, whatever the region, we will marshal diverse perspectives and proprietary analysis to best serve our clients. I am thrilled to have Stephen Dover leading this new effort”, she added.
Johnson pointed out that Murphy has done “a phenomenal job” at ClearBridge and believes that, more broadly, this appointment demonstrates their commitment to propelling the business forward “by harnessing the great talent” across their organization.
Dover and Murphy will begin their new roles on February 1 and both will report to Johnson.
“A hub for knowledge-sharing”
The asset manager pointed out that its new institute will serve as a center of excellence to harness the firm’s global investment expertise and extensive in-house research capabilities. “The Franklin Templeton Investment Institute brings together our deep research capabilities and global insights to create a hub for knowledge-sharing across the firm’s multiple autonomous specialist investment managers,” said Dover.
He also highlighted that the ultimate mission of the institute is to provide research and data-driven insights for clients to help them navigate the financial markets, “armed with the power of our diverse investment expertise”.
Foto cedidaEuan Munro, CEO de Newton, parte de BNY Mellon IM. . Euan Munro, nombrado nuevo consejero delegado de Newton
Newton Investment Management (Newton), part of BNY Mellon Investment Management, announced in a press release the appointment of Euan Munro as its chief executive officer (CEO), subject to Financial Conduct Authority (“FCA”) approval in the UK.
Munro will join Newton on June 23 and will report to Hanneke Smits, CEO of BNY Mellon IM. With an investment career that spans three decades, most recently, he was CEO of Aviva Investors and a member of the global executive committee for seven years. Under his leadership, Aviva Investors was transformed into a leading UK asset manager with total assets under management growing significantly. Prior to this, Munro was head of global multi-asset and fixed interest investing at Standard Life Investments.
Commenting on the appointment, Smits claimed to be “delighted” that Munro is joining the firm, as he is “an exceptional leader” with a proven track record in the investment industry. “His investment credentials and extensive experience leading one of the UK’s larger asset managers with a presence in the institutional, intermediary and retail markets, are highly relevant to Newton and we look forward to warmly welcoming him soon”, she added.
Munro recognized that this is an exciting time to be joining Newton, as, in his view, it’s a global asset manager full of talented people, high quality investment solutions and a strong heritage in responsible investment. “I’m looking forward to building upon this strong foundation and continuing to enhance Newton’s investment offering to help clients achieve their goals”, he said.
Andrew Downs will continue as Newton’s interim CEO until Munro joins the company and receives approval from the FCA, and then will resume his role as chief operating officer. Downs assumed the role of interim CEO in August when Smits began her transition to CEO of BNY Mellon Investment Management.
Preqin predicts that the alternatives industry will hold 17.16 trillion dollars by the end of 2025, wich means a Compound Annual Growth Rate (CAGR) of 9.8% and an overall 60% increase.
In its research series Future of Alternatives 2025, the firm points out that private equity and private debt will be the biggest drivers of growth, respectively increasing their assets by 16% and 11% annually. In that sense, private equity will be the fastest-growing asset, coming to account for around half of the total alternatives industry by the end of 2025, increasing up to 9.11 trillion dollars. Meanwhile, private debt will go from 848 billion dollars at the end of 2020 to 1.46 trillion.
Other asset classes are predicted to see slower growth, but all are set to expand in size over the next five years. For example, real estate assets will grow from 1.05 trillion dollars to 1.24, while hedge funds will increase from 3.58 trillion dollars to 4.28 in the same period.
Regionally, Preqin reveals that Asia-Pacific will be a key driver of global growth: with assets under management focused on the region increasing by a CAGR of 25%, they are set to hit almost 5 trillion dollars by the end of 2025. That said, North America will still hold half of total global alternatives and in five years it will have 8.6 trillion dollars in assets.
“Private markets are a core part of the investment landscape, and have seen an incredible rate of growth in size and influence in recent years. The fundamentals are strong: alternatives funds keep offering investors strong, uncorrelated long-term returns, even through the sustained low-interest rate environment and volatile market cycles of recent years”, says David Lowery, Head of Research Insights at Preqin.
Investors in turn have been committing more and more capital to alternatives, and, in his view, this is unlikely to slow in the coming years. “In fact, our model shows that growth will continue, buoyed by an uptick in private equity activity and booming participation in Asia-Pacific. It’s a very exciting time to be a part of the industry”, he concluded.
Foto cedidaCaroline Gibert is Head of ESG at Flexstone Partners. Flexstone Partners Appoints Caroline Gibert as New Head of ESG
Flexstone Partners, an affiliate of Natixis Investment Managers, has appointed Caroline Gibert as Head of ESG to further enhance its sustainability approach. In this newly created role, Gibert will lead Flexstone Partners’ ESG strategy at both a firm and portfolio level, responsible for strategy, policies, data collection, reporting, and processes.
In a press release, the asset manager explained that they follow an inclusive approach with a diverse and value-driven team dedicated to tackling social, environmental and governance issues. “In 2020, we worked on a concrete approach to reinforce our ESG engagement and new thinking on how to use responsible investment to benefit both our clients and company as a whole”, commented Gibert.
Flexstone Partners employees has selected four Sustainable Development Goals in order to guide its role as a “citizen firm”. Above all, its aim is to continue contributing to the protection of the environment (goal 13); promote social equality and opportunity (goals 4 & 5); and enhance diversity and inclusion (goal 8).
The firm has also reshaped its proprietary ESG analytical and reporting tools to implement an active approach throughout its investment process. “Our mission is to deliver attractive risk adjusted long term performance to our clients. The objective of ESG integration is to enrich our mission by making sure all portfolio managers and underlying companies are well-placed to develop a sustainable business model”, said Eric Deram, Managing Partner at Flexstone.
Gibert will be supported by a working group with interdisciplinary responsibilities to ensure a consistent ESG integration across the firm. They have set three concrete objectives have been set: to produce dedicated ESG reports to each client and a Global ESG report; to reach a target for women to represent 40% of the investment teams by 2030; and to become a neutral carbon company by 2050. “We will also work actively and take part in initiatives in the investment industry to drive changes and find new ways of investing capital”, concludes Gibert.
The asset manager highlighted that the appointment is a new step in its “ESG journey”. Giber’s new function will come in addition to her current role of head of investor relations and business development, working hand in hand with Flexstone’s clients to adapt dedicated ESG reports to their own values and guidelines.
Wells Fargo´s Wealth & Investment Management is exiting its international segment business to focus on the resident client, as well as Americans abroad for reasons related to foreign or military service, as confirmed by the firm to Funds Society. This change affects Wells Fargo Advisors (its brokerage), Wells Fargo Private Bank, and Abbot Downing.
“We understand this is a difficult change for our international-focused advisors (located in its Miami, NY, Texas and California offices) and this business will take many months to exit,” said Shea Leordeanu, SVP of Communications at Wells Fargo.
She also mentioned that the firm “will work very directly with all affected advisors about their individual options,” adding that they will continue to focus on providing their clients excellent service during this transition, “and will work directly with advisors so they can assist their clients with a smooth transition of their accounts out of the company in a manner that is consistent with regulatory expectations.”
According to an internal memo cited by other news outlets, advisors have until next September to close accounts that do not comply with residency requirements, and they will not be able to open new accounts after January 19th.
“Wells Fargo is focused on meeting our regulatory requirements, managing risk, and simplifying operations across the company. We are also committed to focusing on our core businesses. For Wells Fargo Advisors, Wells Fargo Private Bank, and Abbot Downing, our core business focus is serving clients who primarily reside in the U.S. We will also continue to service accounts for active duty U.S. military and U.S. government employees who may be stationed abroad,” she stated.
Pixabay CC0 Public Domain. BNP Paribas manifiesta su intención por adquirir el 100% de Exane
FE fundinfo has announced in a statement the acquisition of the consulting and research house CSSP (Center for Social and Sustainable Products AG) to expand its ESG capabilities.
Specifically, the fund data and technology provider has acquired all of CSSP’s share capital, including its yourSRI.com platform which provides ESG screening and labels on thousands of funds. As part of the deal, CSSP founders Oliver Oehri and Christoph Dreher will co-head the ESG product group at FE fundinfo.
“At a time when ESG investing and reporting is rapidly becoming the major consideration for the investment industry, our acquisition of CSSP will enable us to expand upon our driving principle of connecting and supporting the global fund industry, through both a deep understanding of the market and the provision of clear, accurate and transparent data and reporting“, said Philipp Portmann, Head of Business Development & Strategy at FE fundinfo.
In his view, Oehri’s and Dreher’s vision of how important ESG investing will become, alongside their ambition to support investors to make better informed decisions, “clearly matches” their own.
The transaction will bring another important capability to FE fundinfo’s existing range of services, which help fund managers and distributors access accurate data and fulfill their regulatory obligations. The firm highlights that, as ESG due diligence requirements and reporting standards become more formalized in 2021, including the forthcoming introduction of the sustainable finance disclosure regulations (SFDR) across Europe from March 2021, they will continue to work with clients to meet these changes.
Meanwhile, Oehri and Dreher claimed to be “delighted” to be joining the FE fundinfo team at a pivotal moment in the evolution of ESG investing. “The reporting on extra-financial criteria has gained in importance in recent years and investors are rightfully asking for multi-dimensional risk assessments at portfolio level to effectively measure the corresponding exposure. Our services and bespoke solutions, that have been trusted by hundreds of clients, provide a holistic overview of the ESG profile”, they added.
Foto cedidaGuy Wagner, director general de BLI.. Banque de Luxembourg unifica sus unidades de gestión de activos
BLI – Banque de Luxembourg Investments, the asset manager of Banque de Luxembourg, and Conventum Asset Management, fund management company for third-party fund initiators and also subsidiary of the bank, have announced in a press release that they are combining their activities with effect from 1 January 2021.
This operation means that BLI will manage the 60 employees that constitute the workforce of the two entities, under the leadership of Guy Wagner, its Managing Director. Services to third-party fund initiators will be offered by BLI under the Conventum TPS (Third Party Solutions) brand.
“The merger of the two companies will enable us to enhance our expertise as a portfolio management company and provider of services for third-party funds, and share the necessary investments to strengthen our operational, technical and control systems,” explained Wagner.
The asset manager pointed out that this merger will strengthen its positioning by “capitalizing on the combined skills, expertise and systems of Conventum Asset Management and BLI”. It also revealed that their ambition is to continue to develop a full range of offers within two key business lines: portfolio management services and investment fund management company services for third-party initiators.
Michèle Biel, Director of Conventum Asset Management, highlighted that by pooling the resources of both companies, the new entity will enable them to combine their respective expertise in the best interests of or current and future clients. “The teams’ formidable experience will be the foundation for the development of our business in a constantly-evolving market and regulatory environment”, she added.
Pixabay CC0 Public Domain. Morningstar Indexes lanza un nuevo índice de género para mercados desarrollados
Morningstar announced the launch of the Morningstar® Developed Markets ex-Japan Gender Diversity Index℠, designed to provide exposure to developed market companies exhibiting strong gender diversity policy and practices.
In a press release, the firm pointed out that investor demand for ESG has increased drastically in the last decade, driving the need for these types of indexes. In this case, it will be powered by the data and scoring methodology of Equileap, a global provider of data and insights on gender equality for investors. More specifically, the constituents of the new index are weighted according to 19 gender equality criteria, including gender balance across the workforce, the gender pay gap, paid parental leave, and anti-sexual harassment policies.
The Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund with approximately 1.5 trillion dollars in assets under management as of June 2020, has adopted the index as its benchmark to invest.
“During a tumultuous year consumed by a global health and economic crisis in which research shows working women pay a disproportional toll, transparent practices and policies that advance gender representation should be top of mind for companies. We are thrilled to be working with Equileap and GPIF on a meaningful endeavor that we believe will have the potential to not only act as a catalyst to shape corporate behavior but also help investors achieve their financial goals”, said Ron Bundy, president of Morningstar Indexes.
This launch is in line with the white paper published by Morningstar and Equileap “Investing Inclusively: Building Shareholder Value Through Gender Diversity.” The report highlights that companies that foster gender diversity and create inclusive cultures are tapping into the potential of the full population and are positioned to benefit from the effects of cognitive diversity. In this sense, “they are not only advancing the cause of human rights but also have the potential to maximize shareholder value”.
The index is derived from the Morningstar Developed Markets ex-Japan Large-Mid Index, which includes large and mid-capitalization equities from the U.S., Canada, Western Europe, Israel, Australia, Hong Kong, New Zealand, and Singapore. “In addition to providing a similar risk/return profile to the broad market, it is built to provide exposure to publicly traded companies with strong gender diversity policies embedded in their corporate culture and that ensure equal opportunities to employees, irrespective of their gender”, Morningstar concluded.
Pixabay CC0 Public Domain. El departamento Federal de Finanzas de Suiza (FDF) levanta las restricciones al Reino Unido
Polar Capital has reached an agreement to acquire 100% of Dalton Capital, the parent company of Dalton Strategic Partnership, for 15.6 million pounds (around 20.85 million dollars). This UK based boutique asset manager had 1.24 billion pounds (1.68 million dollars) in assets under management as at 15 December 2020.
In a press release, Polar Capital stated that the acquisition has “a strong strategic rationale” with its growth and diversification strategy and adds “a leading European investment team” to its existing European Income team. It also provides the group with broader wholesale and institutional distribution into Europe, particularly in the German market.
The deal excludes the Velox Fund, which is on the Dalton platform, but includes the Melchior European Opportunities Fund and the existing Luxembourg SICAV umbrella which will aid the group’s product range for international distribution.
The transaction reaches 15.6 million pounds split between the initial consideration of 8.3 million of which 7.8 million will be paid in cash from Polar Capital’s existing resources and half a million pounds in Polar Capital shares. Afterwards, there will be a deferred cash consideration of 7.3 million pounds, payable 12 months after completion, with the amount being linked to the value of assets under management at the time.
A strategic fit for 2021
“The acquisition of Dalton Strategic Partnership is further delivery of our growth and diversification strategy and is an excellent strategic, geographic and cultural fit with our existing business. It delivers greater scale, new capabilities and an expanded distribution reach in Europe, as well as highly experienced investment teams with a good track record. This acquisition will also provide Polar Capital with its first Luxembourg SICAV”, said Gavin Rochussen, CEO of Polar Capital.
Meanwhile, Nick Mottram, CEO at Dalton, claimed to be “delighted” to be joining the group and pointed out that they have long been impressed by their strong client focus, proposition and growth aspirations. “It is a good cultural fit for us and that was important when we were looking to join a larger group, as we wanted to ensure we retained investment autonomy over our funds”, he commented.
Also, he pointed out that the managers of their two key investment strategies, David Robinson and Leonard Charlton, are “committed and enthusiastic” about the acquisition and the opportunity it will provide “to further develop their investment propositions to the benefit of their investors”.
The transaction is expected to complete in Q1 2021 with a transition of the DSP business onto the Polar Capital platform during Q2 2021.
Has it all worked out for you? Wake up, take stock, be honest.
Are you a gambler? Do you own real estate funds with office and hotel portfolios that were exposed to the Covid-19 lockdowns? Too bad. Do you own private equity funds that use leverage exceeding 7x cashflows for companies struggling during this crisis? Too bad. Are you invested in early-stage venture backed companies with no sure path to liquidity? Too bad! It really is too bad when investors gamble with risk.
The Covid-19 crisis exposed risk most investors never anticipated in owning leveraged office and hotel portfolios that will take years to recover, if they survive the financial pressures imposed by the crisis. Most investors never anticipated that their highly leveraged portfolio companies would see their revenues disappear during such a time. Investors never imagined that early-stage venture backed companies they liked would be scrambling for cash to survive over the last 12 months.
Conversely, those investors who cared about risk management and chose strategies that minimized use of leverage are feeling much more secure and hopeful. While GDP driven investment themes are cyclical and struggle during recessions, downturns, and global pandemics, we advised our clients to ignore temptations and instead commit to disciplined managers who create real value, avoiding unnecessary risk.
Over the last two years, we shared the following with our clients and these themes have served them well. Why? Because all of them have one thing in common. That is, they are all strategies that consider risk first and are mitigated.
Do you think proven, innovative biotech treatments will lead us to revolutionary outcomes? We do.
Do you think demographically driven real estate opportunities present less cyclical risk? We do.
Do you think proven pre-IPO growth companies have a chance to capture value that leveraged buyout transactions can’t? We do.
Do you think niche, sector specific, high quality private credit without much competition deserves our attention? We do.
Do you think a highly disruptive alternative to secondary liquidity providers deserve investment? We do.
Do you think owning minority stakes in a portfolio of large and growing private investment management firms is a good thing? We do.
So, we hope it has worked out for you! We hope you discovered a better way to invest in private investment funds by thoroughly understanding their risk profiles and choosing lower risk options. How many more shocks do we need to experience before we wake up and start taking risk considerations more seriously? Hopefully we are all aware now of how to invest by paying more attention to underlying risk because 2020 has been a needed wake up call for many private equity investors.
Column by Alex Gregory, founder of Better Way, LLC
