Asset management

Billionaire’s Burberry sale is fashionably early

9 May 2018

The luxury brand’s top investor, a vehicle of Albert Frere, has sold its 6.6 pct stake. It’s an odd move for the typically long-term owner. But Burberry’s valuation rivals peers like LVMH, and boss Marco Gobbetti’s turnaround will be a lengthy process. It’s a good time to exit.

Decline is comfortable for U.S. asset managers

26 Apr 2018

Volatility isn’t rescuing listed money managers: most had fresh asset outflows in the first quarter. Yet the industry’s high margins, a clamp on expenses and growth in areas like so-called target-date funds kept profit flowing. The sector’s erosion is mercifully glacial.

UBS strength helped by two temporary leg-ups

23 Apr 2018

The Swiss lender’s investment bank made a 24 pct first-quarter return on equity. CEO Sergio Ermotti’s long-term downplay of fixed income looks great given recent equity volatility. But the weakness of key European peers also helps UBS look good.

China/Russia oil hug can dodge Huarong curveball

18 Apr 2018

Beijing is investigating the state-run asset manager’s chair for graft, in a copy of its probe into private group CEFC. That complicates Huarong’s support for CEFC’s acquisition of a stake in Rosneft. Yet given these are de facto state players, the deal should still survive.

BlackRock runs harder to stay in place

12 Apr 2018

Tax cuts helped the asset manager beat first-quarter estimates, but headwinds picked up too. Low-margin index products drew in most of its $57 bln in new assets, pay fueled double-digit cost growth and margins were flat. The rewards of scale may be peaking for Larry Fink’s shop.

Disarming move gives BlackRock one more weapon

5 Apr 2018

Index funds have put the $6 trln asset manager over a barrel with holdings in gunmakers. Now BlackRock is responding with new products allowing investors to avoid producers and retailers of firearms. It's more than what the NRA might call virtue signaling - it's good business.

Chancellor: Index investment riskier than it looks

22 Mar 2018

That investors are abrogating their responsibilities to allocate capital intelligently is a danger from the rapid growth of passive fund management. Less widely aired, but of greater concern, is the threat posed to financial stability by the dominance of benchmark-tracking funds.

Brexit risk looms larger as UK banks get smaller

20 Mar 2018

Shares in the 1.1 bln pound Virgin Money trade below book value despite a 14 pct return on tangible equity. Market behemoth Lloyds, meanwhile, is worth more than its net assets. Investors seem to be betting that a double whammy of funding costs and bad debts hits minnows harder.

Blackstone’s Schwarzman schools CIC on art of deal

14 Mar 2018

China’s sovereign wealth fund has sold its stake in the private equity firm. CIC only bagged a so-so return from its decade-long investment. For Blackstone’s founder and CEO, meanwhile, the partnership opened some lucrative doors to the world’s second-largest economy.

BlackRock puts gun-complex boards in crosshairs

2 Mar 2018

The $6 trln asset manager outlined steps to ensure the makers and sellers of AR-15s it owns through index funds make "a positive contribution to society." The philosophy of engagement can be more effective than divestment. For directors, their jobs are at stake.

Cox: Wall Street’s antisocial role in selling guns

15 Feb 2018

Lazard advised AR-15 maker Remington days before Wednesday’s school shooting, perpetrated with a similar rifle. Yet its asset managers talk about responsibility. So does the boss of BlackRock, the top owner of firearms shares. They could be helping reduce American carnage.

Ares tax switcheroo may attract few copycats

15 Feb 2018

The manager of $106 bln in alternative assets is going to pay U.S. corporate tax rather than elect for partnership treatment. That should boost its investment appeal – and, for Ares, the numbers add up. The likes of Blackstone, with lumpier earnings, probably have less to gain.

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.