Asset management

Viewsroom: Trump’s bad prescription for Obamacare

9 Mar 2017

The U.S. president and congressional Republicans’ rush to ditch the Affordable Care Act is spawning pox-plagued legislation. Meanwhile, Deutsche Bank tries to get its financial house in order. And State Street’s fund managers are pushing to get more women on corporate boards.

Scarcity of UK chairmen is partly man-made

9 Mar 2017

Rio Tinto’s Jan du Plessis is leaving for BT. Barclays and Standard Life’s chairs will reportedly stay put for two years, with the latter likely to replace the former. The merry-go-round shows too few people can run complex boards. Increasing the supply requires lateral thinking.

Bigger is rarely more beautiful for asset managers

8 Mar 2017

Standard Life and Aberdeen’s 11 billion pound tie-up follows a similar tie-up by Henderson and Janus. Yet increased scale cuts both ways. Growth can sap returns, and clients don’t always like to see fund managers get bigger. The market isn’t assigning much value to either merger.

Board diversity is good use of passive voice

7 Mar 2017

Women in the boardroom can improve performance, but U.S. companies have been slow to adapt. State Street, where three of 11 directors are female, is threatening proxy fights if companies don't widen their gender horizons. It's a smart way for quieter fund managers to get pushy.

Scot asset managers try marriage of inconvenience

5 Mar 2017

Merging Standard Life and Aberdeen will create an 11 billion pound fund giant able to rip out costs and fight back against competition. Leaving both chief executives in charge is an unseemly fudge, though. Hopefully the clunky governance will be temporary.

Deutsche $8.5 bln equity hike would be partial fix

4 Mar 2017

The German bank may raise funds while markets look kind. The infusion would boost creditworthiness and thus Deutsche Bank's key trading and corporate lending arms. That's fine unless investment banking falters, or Deutsche turns out to have underestimated its capital needs again.

Fund cannibalism is a chewy meal for activists

27 Feb 2017

Asset manager GAM has been urged to shake up its board by an activist fund. The Swiss group’s performance and governance make it vulnerable, but fund managers are tricky targets: the industry's fee structure is challenged, costs are high, and regulators demanding.

SoftBank’s bet on Fortress is a smart acqui-hire

15 Feb 2017

SoftBank boss Masayoshi Son is following through - in a big, unexpected way - on his investment pledge to Donald Trump. Buying Fortress for $3.3 bln won't add any tech luster to SoftBank, but the $70 bln alternative-investment firm provides a platform for acquisition-led growth.

Curing myopic CEOs requires playing long game

8 Feb 2017

A new McKinsey study finds that companies that focus too much on quarterly results badly underperform rivals with more distant horizons. It's just correlation not causality, but the research is a compelling start. Persuading investors might in time convince Corporate America.

HNA buys SkyBridge to White House

18 Jan 2017

The Chinese conglomerate is taking a stake in newly minted White House adviser Anthony Scaramucci's hedge fund. The business fit is a stretch. But the rationale of deal-hungry HNA hoping to make a friend on Trump's team as it tries to expand in the United States is hard to avoid.

BlackRock makes it hard to go with the flow

13 Jan 2017

Despite attracting $200 bln last year to grow the investment firm's tally to $5.2 trln, revenue fell. Slashing expenses and buying back stock enabled BlackRock to exceed fourth-quarter estimates. Only its scale and diversity help mitigate the costly stampede into low-cost ETFs.

Regulators try to save fund lemmings from selves

12 Jan 2017

Customers of open-ended investments rely on false promises of liquidity that tend to evaporate in market panics. The Financial Stability Board has some ideas for addressing the ensuing risks. Its ideas are sound, but would be superfluous if fund managers did their jobs.

Fidelity gets first dip in China fund shark tank

5 Jan 2017

Fidelity International is the first foreign asset manager allowed to create onshore funds and sell them to select mainland buyers. It enters a brutally competitive sector hobbled by capital account controls, and it can't sell to retail investors. This is still a strategic win.

U.S. asset managers in China trade firing line

25 Nov 2016

Officials emphasized the positive after the two countries' last meeting of Obama's tenure. But the coming Trump era hung over the talks. If the trade relationship deteriorates, one of Beijing's options is to close a door only recently opened into Chinese capital markets.

UK watchdog turns screw on besieged fund managers

18 Nov 2016

The Financial Conduct Authority has criticised weak competition among asset managers. Proposed remedies including better transparency and governance could squeeze earnings and pay. It’s a knock the industry, under pressure from passive investments, didn’t want but probably needs.

Bill Gross’s firm finds investor-pleasing trade

3 Oct 2016

Janus, home of the famed bond manager, is merging with the larger UK-based Henderson to create a $6 billion group. Even friendly M&A is risky for asset managers, but industry growth is weak and scale benefits massive. The rapturous market reaction won't be lost on other groups.

Fund managers take long view by scrapping bonuses

23 Aug 2016

Star investor Neil Woodford is paying his staff fixed salaries, while former trade body head Daniel Godfrey is launching a trust on the same principle. Fund costs won't necessarily fall. But a bonus system can prompt unhelpful short-termism while ratcheting up overheads.

Brexit pops investors’ fund liquidity illusion

5 Jul 2016

Asset managers' shares were pummeled after Standard Life and Aviva halted redemptions on property funds that mix short-term funding and illiquid assets. Bond and equity funds are less vulnerable, but not immune. In dangerous times, stable long-term funding deserves a premium.