Funds Watch & product launches
News from Kames Capital, Morningstar, Lloyds TSB Private Banking, SEI & Greenwhich Associates, Fitch, Gaim, Pioneer Investments, Argonaut, Liquidnet, Legg Mason,Norway
AEGON AM relaunches as Kames Capital
AEGON AM has changed its name to Kames Capital to mark the start of “a new chapter for the business.”
The new name marks the next step in the evolution of the £49bn asset management company with senior management looking to build on its successes as a specialist manager for fixed income, UK equity, multi-asset and property investments.
Kames Capital will remain an integral part of the global AEGON AM group of companies. It will continue to manage insured funds on behalf of its sister company AEGON UK, while also focusing on enhancing its own growth.
Andrew Fleming, chief executive, said the new name provides a clear distinction between the role of the company’s business and that of its sister companies. “Our new name is both a sign of the tremendous progress we have made in recent years and a clear indication of our intent to maintain our reputation for delivering strong investment performance and excellence in client servicing.”
Morningstar announces new alternative fund categories
Morningstar has added 18 alternative investment categories to its classification system for UCITS funds available for sale in Europe and Asia.
The new categories are intended to provide clearer descriptions of the underlying strategies used by alternative funds.
There is particular emphasis on moving away from the term “Absolute Return”. The previous Morningstar alternative investment categories of EUR Absolute Return, Non-EUR Absolute Return, and Long-Short are all replaced with new terminology which covers more than 3,000 Ucits share classes.
Christopher Traulsen, director of European and Asian fund research for Morningstar said absolute return as a fund category definition had become too associated with a wider marketing term that made performance promises that often failed to deliver.
“To make our categories more useful and transparent to investors, we reviewed our alternative peer groups to better categorise funds by the type of strategy deployed.”
Investor confidence at lowest ebb since financial crisis
Investor confidence in the UK stock market is at its lowest ebb since the height of the financial crisis, according to Lloyds TSB Private Banking’s Investor Outlook survey.
The twice-yearly survey of 1,000 retail investors found that only 25% of investors are confident in the stock market’s prospects over the next year, down 7% in the last six months.
“Investors have been shaken by six months of negative news-flow, declining stock prices and question marks about the pace and trajectory of economic recovery,” said Ash Misra, head of investment strategy at Lloyds TSB PB.
Investors are also worried about other asset classes such as government bonds, corporate bonds and property. Only 15% say they are now more confident in government bond investments than six months ago, 17% are more confident in property and only 9% have more faith in corporate bonds.
Some 44% of investors said high inflation was their primary concern, 42% were concerned about market volatility, 34% about public spending cuts and 23% about the eurozone debt crisis.
Misra noted some positive signs with falling commodity prices and the likelihood of an ‘accommodative’ monetary policy while the wider economic recovery remains intact.
Institutional investors turning to private equity – report
Institutional investors are turning to private equity as a source of alpha returns derived from manager skill rather than market direction, according to a survey by SEI in collaboration with Greenwich Associates. Investors also expect greater transparency, reporting and risk management from managers
The survey entitled “The Logic of Fund Flows,” highlights the need for private equity managers to demonstrate better reporting and risk-management measures to retain and gain assets among an increasingly demanding institutional investor base.
The survey of more than 400 institutional investors, consultants, and fund managers, showed that more than a quarter of those surveyed planned to increase their private equity allocations over the next 12 months.
However, investors and consultants differ on their investment objectives. Some 68% of investors identified the return potential as their primary objective compared to only 10% of consultants. Fifty percent of consultants said diversification was their primary objective compared to only 18% of investors.
Fitch: Volatility hits absolute return and flexible funds
Fitch Ratings says that European Absolute Return (AR) and Multi-Asset Flexible funds did not always perform well and failed to provide investors with sufficient downside protection during the market volatility in August.
European AR funds lost 2.5% and Flexible funds lost 7.6% in the first three weeks of August, according to aggregate data from Lipper. This results in a year to date negative performance of -3.5% and -8.9%, respectively. Not all funds in the top quartile of European AR funds have managed to preserve capital. Flexible funds avoided 70% of the August market decline, but only half of them outperformed a balanced bond and equity allocation.
“Making up for the 2011 losses has become a major challenge for many Absolute Return and Flexible funds,” says Manuel Arrive, Senior Director in Fitch’s Fund and Asset Manager rating team. “As a result, the worst performers are likely to be driven out of the market, as investors discriminate based on performance.”
Global macro strategies will outperform in 2012
Hedge fund managers say global macro strategies will deliver the best returns in 2012 and that Brazil, China and India are the most rewarding regions for investing, according to a GAIM survey of hedge fund managers.
Respondents were concerned that the eurozone crisis, the global monetary policy uncertainty and the US deficit could derail the global recovery.
The fund managers in the GAIM survey currently manage assets ranging between less than $100m to more than $5bn. GAIM conducted the survey in mid-August as financial markets fluctuated in response to growing investor fears of a second recession and mounting economic woes in Europe.
Pioneer to sell Russian funds
UniCredit’s fund management arm is selling its Russian funds as a part of a general review of its business.
Pioneer Investments, the asset management arm of Italian banking group UniCredit, has confirmed it is reviewing options for its Russian business.
The review of its Russia funds division is part of a broader, strategic review announced in April. Pioneer oversees three open investment funds in Russia with assets of just above €32m.
Russian business newspaper Kommersant has reported that UniCredit had put its open investment funds in Russia up for sale.
In a statement, Pioneer stressed Russia remains a strategic market for its parent UniCredit.
The bank will present its new business plan by the end of this year, said Federico Ghizzoni, UniCredit’s chief executive.
UniCredit also announced plans to merge ZAO Unicredit Bank (formerly International Moscow Bank) and CJSC UniCredit Securities (Aton), four years after acquiring them.
Argonaut restructures as Ignis cuts stake
Argonaut Capital Partners and Ignis Asset Management have agreed to restructure their joint venture with Argonaut taking management control with 60% of the company and Ignis reducing its stake from 50% to 40%.
The change was foreseen when the joint venture was founded in 2005 and is designed to support the next phase of Argonaut’s growth and development.
Argonaut, a European equity specialist boutique, has £1.1bn of funds under management.
The change will enable the company to develop as an independent business, under a single brand with its own management. Argonaut will expand its investment team and management resources and develop its own UK distribution capability, a joint statement said.
As a major shareholder, Ignis will retain a seat on the board, giving it a say in the future direction of the business, an Ignis spokesman said. Ignis also will also continue to distribute the company’s funds in Europe.
Legg Mason launch US equity income fund on UK market
Legg Mason plans to launch an Investment Company with Variable Capital (ICVC) version of its $4bn US equity income strategy fund as part of a major drive to expand its retail fund offering in the UK.
The launch is planned for mid-October 2011. The Legg Mason US Equity Income Fund will be managed by New York-based ClearBridge Advisors, Legg Mason’s largest US equity subsidiary with $58bn under management.
The team managing the fund consists of Hersh Cohen, ClearBridge CIO, Peter Vanderlee, managing director and portfolio manager, and Michael Clarfeld, managing director and portfolio manager.
The fund will use ClearBridge’s ‘US Equity Income Builder’ strategy whose composite has delivered an average annual return of 11.08% since its inception in September 2008 with volatility of 13.16%. The fund will focus on companies with higher margins and returns on investment than their peers.
Legg Mason and ClearBridge believe there are significant income opportunities for UK investors in the US market, where a growing numbers of companies are paying constant and rising dividends.
“The UK retail market will be a key focus for us in the coming years and the launch of this fund on our onshore ICVC platform demonstrates our commitment to offering UK investors access to our leading strategies in the format they demand.
Liquidnet appoints cubit Consulting
Cubitt Consulting has been appointed corporate and financial communications adviser for Liquidnet, the global institutional equities marketplace. Cubitt will provide communications consultancy and media relations advice to support the growth and development of Liquidnet’s business in Europe.
The Cubitt team will be led by Simon Brocklebank-Fowler, managing partner, and will work closely with Liquidnet’s marketing and communications team in Europe and the U.S.
Norway government confirms oil fund guru resignation
Norway’s finance ministry has confirmed that Martin Skancke has resigned his position as head of the department charged with overseeing the so-called ‘Oil Fund’.
Officially named the Government Pension Fund Global, Norway’s sovereign wealth fund has an estimated $600bn under management by Norges Bank Investment Management.
NBIM is answerable to the Norwegian parliament through the country’s finance ministry where Skancke headed the relevant department. The ministry’s role is not only oversight and it takes an active role in determining investment strategy.