The last week has seen a mix of fund launches, manager moves and action from the regulator, so to round up the past few days’ events we’ve summarised the biggest stories below.
FCA preps for asset manager competition probe
The Financial Conduct Authority (FCA) has laid out the areas that its forthcoming review of competition in the asset management industry will focus on.
In the study, the financial regulator will examine how asset managers compete to deliver value, whether they are motivated and able to control costs along the value chain, and what effect investment consultants have on competition for institutional asset management.
Furthermore, it will consider whether they are any barriers to innovation and/or technological advances in the asset management industry.
The review will look at both retail and institutional investors to gain a view of the whole industry.
Christopher Woolard, director of strategy and competition, said: “Asset managers provide an important economic function, bringing together those with money to invest and companies and governments that need capital.”
“Given the significant role they play in the economy, it is essential that competition works effectively for these services.”
“The UK is a world leader in asset management. Our market study aims to ensure that both retail and institutional investors can get value for money when purchasing these services – which we expect to further strengthen the UK’s position as a major centre for asset management.”
The FCA announced the market study into asset management in its 2015/16 business plan. It aims to publish interim findings in summer 2016, which will highlight any areas of concern and potential ways to address them, and a final report by early 2017.
Aviva Investors hires two for GARS rival fund
Two multi-asset strategists have been hired to work on the Aviva Investors Multi Strategy (AIMS) fund range, as the asset management house continues to focus on this successful offering.
The firm launched its Aviva Investors Multi Strategy Target Return fund – the first of the range – in July 2014. Since then it has made a 10.14 per cent total return and outperformed the FTSE All Share with less than half of the volatility.
Performance of fund vs indices since launch
Source: FE Analytics
Ahmed Behdenna has now joined the team, focusing on the generation of investment ideas and working collaboratively with other strategists and fund managers across Aviva Investors. He joins from Societe Generale, where he was a senior strategist within the multi-asset research team.
Marc Semaan has also joined to provide cross-market macro strategy ideas in rates and currencies. He joins from Friends Life Investments, where he was a macro strategist and developed a global macro research structure to support the fixed income teams.
Ian Pizer, head of strategy at Aviva Investors, said: “At Aviva Investors, we believe that a team-based culture is of paramount importance in driving our investment process and strategy. Ahmed and Marc bring a wealth of experience in multi-asset strategy and analysis, which will be highly beneficial as we continue to develop the AIMS fund range and our capabilities across multi-asset investing.”
Nordea unveils multi-asset fund for UK market
Nordea Asset Management has launched a new multi-asset solution for UK investors, to be run by its 40-strong multi assets team.
The Nordea 1 GBP Diversified Return fund has been seeded at launch with more than £250m from a large UK financial group. The team running it, which is led by Asbjørn Trolle Hansen, has been working together since 2003 and has been running multi asset strategies for almost a decade.
The multi assets team runs its portfolios by focusing on risk premia, believing this approach offers more robust diversification, better downside protection and potential to deliver positive stable total returns over different economic cycles than conventional asset class investing.
Thomas Nehring, head of UK and US institutional distribution at Nordea Asset Management, said: “We believe the best way to meet the challenge of consistent long-term performance and true diversification is to control risk at all times, rather than simply targeting the highest returns. By putting risk at the heart of our investment process, our multi assets team has been able to consistently deliver stable and strong returns over time for our clients.”
“Our approach at Nordea was beneficial during the global financial crisis, when we witnessed considerably less drawdown than the market and most peers, while it similarly displayed its robust characteristics through the sharp volatility we saw this summer.”
Martin Currie hires team to run Japan long/short desk
Martin Currie has hired an investment team from boutique firm PK Investment Management to work on its Japan long/short equities desk alongside existing manager Claire Marwick.
PK Investment Management chief executive Paul Kirkby and his co-manager Paul Smith will bring their existing Cayman-domiciled $167m RIT PK Japan fund with them when they join Martin Currie.
They will work alongside Marwick, who runs the £63.2m Legg Mason IF Martin Currie Japan Alpha fund.
Performance of fund vs sector and index since launch
Source: FE Analytics
The firm says a long/short approach is a good way for investors to take advantage of the opportunities in the Japanese market, while defending against the volatility caused by its cyclical nature and inherent inefficiencies.
Willie Watt, chief executive of Martin Currie, said: “This is a specialist area of the market with very few quality offerings.”
“By combining the proven expertise of Paul Kirkby and his team along with Martin Currie we believe that we bring a product solution to clients that can help them navigate the cyclical nature of Japanese equities and capture the return opportunities available.”
Kirkby established PK Investment Management in 2002. Prior to this he was a director at GAM for nearly 16 years.
Former Aviva Investors analyst banned for ‘cherry-picking’ trades
A former analyst at Aviva Investors has been banned from the financial services industry for at least five years and fined £139,000 after he “cherry-picked” his best trades for the clients who paid the most commission.
The FCA, which fined Aviva Investors £17.6m in February for the trades, said Mothahir Miah was banned and fined for “failing to act with honest and integrity” over a period of more than two years until October 2012.
The regulator said that during this time Miah delay booking his trades during the day, then allocated the most successful ones to hedge fund clients that generated the biggest fees. This meant clients that paid lower or no commissions, such as long-only funds, would miss out on his most profitable trades.
The analyst was supposed to book trades to a specific client within 15 minutes, but he would often email the details to the record-keepers some hours later after he had seen how successful the deal had been.
“Mr Miah knew that cherry picking was wrong, but was motivated by a desire to prove his trading ability to his colleagues and increase his prospects of being promoted,” the FCA said.
“This is because the culture within the fixed income business was heavily focused on performance and promotions tended to be based on reported investment performance.”
