Asset management

UK fund giant pays price for size fixation

15 Feb 2018

Newly-created manager Standard Life Aberdeen has shed nearly a fifth of its assets after losing one account. The client reckoned the combination made it a competitor. Fund groups see mergers as a way to create heft and synergies, but they can also mean disruption and conflict.

Becoming China’s KKR is even harder than it sounds

15 Feb 2018

ZZ Capital just lost its CEO, a veteran BofA dealmaker hired two years ago. With a local tycoon's backing, the private equity firm aspired to compete with the likes of Henry Kravis. China is full of buyout wannabes, but competing regionally – let alone globally – is a tall order.

Blackstone succession plan is reassuringly gray

13 Feb 2018

Naming real-estate head Jon Gray as day-to-day manager of the investment giant is logical. Big questions – like whether to remain a partnership – will still sit with CEO Steve Schwarzman. Blackstone isn’t a typical listed company; the gradual approach to change shows it.

LBO firm needs tough love for American Greetings

13 Feb 2018

Clayton, Dubilier & Rice is buying a majority of the card maker. The founding Weiss family, which took it private in 2013, has failed to grow earnings as consumers go digital. It’s not yet a Valentine’s Day Massacre, but a lack of sentiment will be needed to spark a turnaround.

L.A. Times sale blows up Tronc’s digital strategy

7 Feb 2018

Patrick Soon-Shiong is buying the badly named firm's California papers for $500 mln. It's a financially savvy deal, but means Tronc is little more than a grab bag of second-tier regional publications. Boss Michael Ferro is better off finding other vanity buyers for what's left.

Lazard joins small band of U.S. tax rejects

1 Feb 2018

Recent changes mean the Wall Street firm will pay less to Uncle Sam, but make becoming a regular corporation harder. That would have expanded Lazard’s investor base and, in theory, its valuation. But the dilemma should be a spur: Lazard has advised on tougher transformations.

BlackRock to rivals: Heads I win, tails you lose

12 Jan 2018

The world’s largest money manager swept in $103 bln of new money in the fourth quarter, with ETFs and active funds growing. A jump in performance fees fueled a big earnings beat. Whether the pendulum swings back in favor of stock and bond pickers or not, BlackRock will still come out on top.

EU’s market big bang offers clear pain, fuzzy gain

3 Jan 2018

Reforms bundled in the MiFID II directive aim to make finance fairer and safer. Rules that put a price on bank research and force trading out of opaque venues will cost over 2 bln euros to implement. Yet some exchanges face delays. In a global market, loopholes may also open up.

Passive funds will claim a CEO scalp in 2018

2 Jan 2018

Index trackers keep winning market share but companies can’t take their passivity for granted. State Street campaigns for gender diversity, Vanguard and BlackRock defied Exxon on climate change, and the latter backed Nelson Peltz at P&G. Firing a poor manager is the next step.

A Western money manager will turn Chinese in 2018

22 Dec 2017

While U.S. and European outfits battle competition and regulation, wealth is ballooning in China, and many firms are looking for growth. It’s the perfect recipe for a big cross-border deal, perhaps involving a name such as Franklin Templeton or Deutsche Bank's DWS unit.

Fidelity gets flexible in fight with index funds

29 Nov 2017

The asset manager’s UK offshoot will charge clients a variable rate depending on how managers perform. Yet even if they do a bad job, investors could still pay over four times the rate for a passive fund. Fidelity’s model is a step forward, but fees are still coming down.

Sandell asks Barnes & Noble to pick an adventure

16 Nov 2017

Flip to chapter “flimsy proposal” to see the activist try a buyout of the struggling bookstore chain without financing. Turn to chapter “worse than before” to trade liquid stock for private shares without founder backing. Stay here if you don’t want to see how this story ends.

Banks walk on eggshells in post-MiFID II world

7 Nov 2017

An EU ban on providing free research comes into force on Jan. 3 next year. Instead of bundling the cost together with trading fees, lenders will have to charge separately. Breakingviews imagines how a bank’s compliance department might finesse the issue with clients come Jan. 4.

Treasury crowns asset managers, insurers victors

27 Oct 2017

Investment and insurance firms should be regulated for systemic risk based on their activities, not by specific entities, the U.S. department said. It also rebuked the global FSB for overreach with its stricter approach. The industries got nearly everything on their wish list.

Deutsche Bank’s next problem may be excess capital

25 Oct 2017

The German lender wants to float a 25 pct stake in its asset management arm next year. An IPO could raise around 2.2 bln euros, Breakingviews calculates. Deutsche would dilute its exposure to its best business – but would once again be able to give shareholders a dividend.

Blackstone’s mass gives it gravitational pull

19 Oct 2017

Steve Schwarzman’s investment shop boosted earnings by 23 pct in the latest quarter, driven by management fees on its new $18 bln private-equity fund. With managed assets approaching $400 bln and $92 bln of dry powder, the alternatives firm has powerful momentum.

Fidelity apes hedge funds to play active defence

3 Oct 2017

The asset manager’s UK offshoot will charge clients more when funds beat their benchmarks and less when they underperform. The risk is that fees become more opaque. Yet a variation on alternative managers’ “2-and-20” model may help it resist the onslaught from cheap trackers.

Eminem IPO risks a Slim Shady rap

25 Sep 2017

An online site for buying and selling artists' royalties is floating a unit that will buy into the revenue from music catalogs, starting with the Detroit star's. The interests may be partial, though, and the revenue volatile. The financial remix sounds off-key for public markets.

EU aims torpedo at asset managers’ Brexit defence

19 Sep 2017

Europe’s market regulator may be given new powers to prevent national watchdogs from turning a blind eye to funds that outsource jobs to the UK in the hope of luring business to their shores. London-based funds could face more upheaval than expected after Britain leaves the EU.

Lure of scale drives Axa asset management union

15 Sep 2017

The insurer may seek a partner for its European fund arm, Bloomberg reports. Joining forces with French rival Natixis would create a European giant with assets of more than 1.5 trln euros. The threat to margins from low-cost passive investments makes cost savings unavoidable.