Asset management

Stock-pickers will join endangered species list

27 May 2020

Active fund managers failed to outperform as the pandemic struck. A Covid-19 legacy of corporate disruption and central bank support will make gaining an edge even harder. As the shift towards passive investments accelerates, fees will be compressed and mergers may be necessary.

Corona Capital: Natural gas, Disney, Brazil

19 May 2020

Concise views on the pandemic’s corporate and financial fallout: Investors are too optimistic about natural gas; theme-park veterans take key roles at Disney; and Sao Paulo’s idea of bringing forward holidays to improve social distancing proves confusing.

Sustainable investing’s virus halo is premature

18 May 2020

Environmental, social and governance-focused funds outperformed peers in the first quarter, new BlackRock research suggests. Steady inflows are encouraging given the fear investors would ditch ESG in a crisis. But one quarter alone is not enough to judge the sector.

New normal will demand new gold-standard portfolio

6 May 2020

Parking 60% in equities and 40% in fixed income is the traditional balanced approach. That’s off kilter if bonds are going to offer less and less income and are sometimes almost as volatile as shares. The solution may be to hold more stocks and cash, and possibly gold, too.

Blackstone becomes Wall Street’s deals backstop

23 Apr 2020

Advisory boutiques like Evercore and Moelis are putting their faith in private-equity firms to end the virus-induced merger drought. With $150 bln to invest, Steve Schwarzman’s outfit is the biggest, and ready to pounce. The juicy fees from big buyouts are a way off yet, though.

Private banks’ loan push will survive virus scare

23 Apr 2020

Plunging markets triggered margin calls on lending to rich clients. Yet Credit Suisse’s modest first-quarter provisions on such loans show big wealth managers can manage the pain. The promise of quick credit should ensure billionaires like SoftBank’s Masayoshi Son keep borrowing.

BlackRock could be crowned a crisis winner

16 Apr 2020

Larry Fink’s investment giant just shed $1 trln of client assets, but its ETFs survived their first big test and tech investment paid dividends. A gig helping the Fed will further increase its influence. BlackRock could emerge from Covid-19 stronger – if also more scrutinized.

Shadow lenders may get their day in the sun

31 Mar 2020

Private debt providers have more than doubled their assets since 2010 to over $800 bln. They also have over $270 bln in dry powder. Newer lenders may struggle as defaults mount. But this will create even more bargains for the winners. The Covid-19 crisis is their moment to shine.

Pre-virus era rule book will lead investors astray

31 Mar 2020

The market rout means Norway’s wealth fund and other money managers are less exposed to stocks than their ideal purely because shares fell so much relative to bonds. Rectifying the imbalance would unleash equity buying of $500 bln or more. But a return to old norms will be risky.

Green investing loses star player at bad time

31 Mar 2020

Hiro Mizuno is leaving Japan’s $1.5 trln pension fund. The chief investment officer led the way in focusing more on environmental, social and governance factors. Asset management can ill afford the exit of such a figurehead just as Covid-19 pushes these issues to the backburner.

Corona Capital: Bailout fees, Distressed junk

25 Mar 2020

Concise views on the pandemic’s corporate and financial fallout: Wall Street brushes off its bailout pitchbooks. And high-yield debt suggests a deluge of defaults.

Lebanon gives Lazard bankers a brainteaser

28 Feb 2020

The debt-strapped nation has selected the firm to advise on a restructuring. But principal haircuts could imperil local banks, austerity would upset ordinary Lebanese, and Hezbollah’s growing power complicates everything. Lazard will be worth its fees if it can solve the puzzle.

Blackstone bets big on Boris British housing hedge

26 Feb 2020

The private equity giant is buying iQ Student Accommodation for $6 bln from Goldman Sachs in what it calls the biggest private UK real estate deal ever. It’s a play not on whether Brexit is a boom or a bust – but rather the continuing global allure of a proper English education.

Julius Baer gets off lightly for dirty money sins

20 Feb 2020

The Swiss finance watchdog demanded better controls and barred the bank from embarking on major deals for now. That’s mild punishment given the systematic failings that were uncovered but reflects limits on what the supervisor can do. The regulator could really use sharper teeth.

GAM does just enough to become a takeover target

20 Feb 2020

The Swiss asset manager saw profits fall 92% as a compliance scandal caused clients to pull funds. New CEO Peter Sanderson is pledging to cut costs and boost margins, but his targets look optimistic. Still, if Sanderson can steady the ship, GAM could look appealing to a buyer.

New UBS CEO is best answer to a difficult question

20 Feb 2020

The $50 bln group’s ideal successor to Sergio Ermotti would have experience running a big lender along with wealth management and investment banking chops. That’s a rarity. ING’s Ralph Hamers brings cost-cutting and tech savvy. Holland’s pay rules made him an affordable asset.

Merger of active asset managers looks too passive

18 Feb 2020

Franklin Templeton is acquiring Legg Mason for $4.5 bln. The deal beats the status quo with heavy pressure on industry margins, and both groups’ stocks got a boost. But it’s a defensive move that neither prioritizes aggressive cost cuts nor offers a clear path to growth.

Spain tweaks the odds on Blackstone’s property bet

18 Feb 2020

The left-wing coalition led by Pedro Sanchez wants to control rents on residential property. The move may depress house prices, up by one-quarter since 2014 thanks to a booming economy. Investors like Steve Schwarzman’s firm may be tempted to take some chips off the table.

Central banks help widen Brookfield’s moat of cash

13 Feb 2020

The Canadian asset manager’s client funds rose to $545 bln. Ultra-low interest rates help two ways: by pushing investors into alternative investments and inflating the value of assets like real estate. Its advantage will be tough for most rivals to overcome.

Europe’s baby BlackRock reaps Darwinian success

12 Feb 2020

Paris-listed money manager Amundi reported bumper 2019 profits as assets under management swelled to $1.8 trln. Its scale, broad business mix and savvy dealmaking should help CEO Yves Perrier leave rivals further behind. A valuation premium to peers is likely to grow.