Three weeks ago, Baring Asset Management received a sales license for France for the Dynamic Emerging Markets Fund, a sub-fund of its Irish-registered OEIC fund, with shares denominated in euros that have generated returns of 8.36% since launch on 20 October. The fund itself has seen inflows of GBP130m since its inception on 29 June 2011 (see Newsmanagers of 1 July), with performance converted into euros of 4.65%. The Paris office of the British asset management firm is now offering the product to French investors.Hartwig Kos, the manager, explains that the fund’s objective is to generate performance similar to that of equities, with risk corresponding to 70% of that of the asset class. In fact the fund’s risk is now no higher than 50%. The portfolio is constructed out of equities (125 positions in total), either directly, or via ETF investments, around which the management team adds bonds (25 positions), currencies, commodities (via ETCs), derivatives, money market instruments, and cash. The only constraint is that the fund must have an exposure of at least 70% to emerging markets. The fund is not allowed to be net short or to use leverage.

Prudential Real Estate Investors has announced the final closing of fundraising for its Senior Housing Partners IV fund, which has raised a total of USD568m from institutional investors. The fund is specialised in investment in residences for dependent and memory-deficient seniors.

Morgan Stanley Investment Management has announced that its affiliate, Morgan Stanley Alternative Investment Partners (Morgan Stanley AIP) has received major investment commitments, totalling USD1.3bn, for its Morgan Stanley Private Markets Fund V (PMF V), and other separate accounts. The initial objective had been USD1.25bn, a statement says. The fund will invest in the three major strategies of private equity: buyout, venture capital and special situations.

Market Vectors ETF Trust (Van Eck Global group) has announced that it has launched what it claims is the first ETF of high yield bonds issued by “fallen angels.” The product, whose acronym on NYSE Arca is ANGL, is the Market Vectors Fallen Angel High Yield Bond ETF. The fund aims to replicate the MofA Merrill Lynch U.S. Fallen Angel High Yield Index (H0FA), which covers bonds issued in US dollars by US or foreign companies on the US domestic market, as nearly as possible. These bonds include Ford, J.C. Penney and New York Times Co.The TER for the fund is capped to 0.40% until at least 1 September 2013.

According to estimates from Strategic Insight, US mutual funds (excluding ETFs and variable annuities) in March posted net subscriptions of USD13.3bn, compared with USD46bn the previous month. Overall, in first quarter, net inflows totalled USD95.8bn, and assets as of the end of March totalled USD8.8297trn.US equity funds in March saw net redemptions of USD7.5bn, their first net outflows since December.

Assets in investment funds worldwide increased 7.5% in fourth quarter to a total of EUR19.970trn as of the end of December, according to statistics from the European financial and asset management association (EFAMA). IN US dollars, assets increased by 3% to USD25.840trn. Flows became positive again in fourth quarter, which ended with a net inflow of EUR83bn, compared with net redemptions totalling EUR104bn in fourth quarter. Inflows to long-term funds (excluding money markets) and money market funds are the cause of this movement. Long-term funds posted a net inflow of EUR11bn in fourth quarter, compared with outflows of EUR58bn in the previous quarter. Bond funds increased their net inflows in fourth quarter to EUR49bn, compared with only EUR7bn in third quarter. Meanwhile, equity funds have posted further redemptions, totalling a net EUR52bn, compared with EUR79bn in third quarter. Money market funds, for their part, have posted net inflows of EUR72bn in fourth quarter, the first inflows since first quarter 2009, compared with outflows of EUR46bn in third quarter 2011. This development is due to net inflows of EUR11bn in Europe and EUR45bn in the United States. As of the end of 2011, equity funds represented 37% of total, while bond funds account for 23%, money market funds weigh in at 18%, and diversified funds 10%. Not counting non-UCITS products, net inflows to investment funds worldwide totalled EUR228bn. Long-term funds took on a net total of EUR335bn, with inflows of EUR239bn to the United States, but outflows of EUR55bn in Europe. For money market funds, the year finished with net outflows of EUR107bn, with redemptions on both sides of the Atlantic, EUR86bn in the United States, and EUR33bn in Europe.

Mubadala, the Abu Dhabi sovereign fund, lost AED4.2bn, or USD1.14bn, last year due to the decline of financial and real estate markets, the Financial Times reports.

The year 2011 ended with a net decline of 722 in the number of funds available for sale in Europe, according to statistics from Lipper. This development is related to the consolidation of available fund ranges in response to the introduction of the European passport, but is also the result of a significant downturn in launches of funds, which are at their lowest in five years. Over the year as a whole, there were 2,749 fund creations and 2,028 fund closures, and 443 mergers. In the first quarter alone, only 571 funds were launched, compared with 659 closures and 237 fund mergers. As of the end of December 2011, there were 31,690 funds registered in Europe. Luxembourg continues to dominate the market, with 8,257 funds, followed by France with 4,735. Equity funds continued to occupy first place last year, representing 38% of funds available for sale, followed by diversified funds with a market share of 24%, followed by bond funds (17%), while money market funds represent only 5% of the total. The remaining 16% includes real estate funds, commodity funds, guaranteed funds and funds of hedge funds.

From a peak at EUR18.2bn in 2009, assets in environmental funds in Europe fell to EUR13.3bn in 2011, the same level as in 2008. “The wind has died down,” says Dominique Blanc, director of research at Novethic, presenting a new study of green funds, four years after the first edition. The 194 themed funds in Europe surveyed by Novethic in four years posted net subscriptions of only EUR910m, while the financial investment necessary in France to make renewable energies represent 25% of the energy mix by 2020 is estimated at EUR7bn by the Renewable Energy Union, Anne-Catherine Husson-Traore, CEO of Novethic, observes. These low inflows may be due to “handicapped financial performance,” Novethic estimates. Although green funds made 27.2% in 2009 and 6.6% in 2010, they lost 41.6% in 2008, and 19% in 2011. The other reason for investors’ comparative disinterest may be the sometimes ambiguous marketing positioning of these green funds. Novethic notes that only half of the products in the sample under study offer investments on line with the theme announced in the marketing. The choice of businesses is also sometimes debatable. Many “clean energy” or “alternative energy” funds consider natural gas and nuclear energy to be eligible, as they are less polluting than oil or coal.

In the past five or six years, State Street Global Advisors (SSgA) has seen inflows of about USD25bn in the form of funds and mandates (about 50/50) for its “advanced beta” strategy (see Newsmanagers of 24 November 2010), which aims to capture risk premia depending on either valuation, capitalisation, correlation, volatility and momentum.In the years from 1999-2011, backtesting shows that strategies equally weighted in terms of risk, capitalisation and minimum variance sould have earned outperformance of about 500 basis points per year compared with the MSCI World.Currently, SSgA is looking to release this active, quantitative management approach in France. Investors may either design custom formulas, based on their own cocktail of risks, or prefer existing funds on the market; two managed volatility products are already on the market, with about USD100m in assets, and three “Dividend Aristocrats” ETFs are available, with USD500m in assets under management.

Two former employees of the British HSBC Private Bank, Steve Whiting and Oliver Peck, have joined Deutsche Bank Private Wealth Management, InvestmentEurope reports. They will be responsible for British ultra-high net worth clients, and will aim to develop lending services in the wealth management unit. They will both be based in London.

The financial ratings agency Moody’s has announced that it has placed the alternative asset management group Man on a rating watch negative.According to Moody’s, the group is currently facing pressure on profits, margins and growth to assets under management. Man has developed its product range in the direction of lower-margin products, such as managed accounts and products acquired along with GLG.Moody’s also points out that key funds have consistently underperformed, a significant fall in the debt coverage ration in the past five years, and pressure on the hedge fund’s business model.

The head of the emerging markets debt team at the British firm Threadneedle, Richard House, is rumoured to be about to leave the firm, Citywire reports. Three other members of the team are said to be nearing departure: Agnes Belaisch, who is said to have accepted a management position at the European stability fund (FESF/MES) in Luxembourg, and two other employees, including an analyst and an investment specialist. These reports have filtered out at a time when the firm is preparing a new steering committee, which will aim to manage macro strategies for emerging and developed market debt activities.

he alternative management group Man has recruited Ravi Chari for the newly-created position of co-head of currencies for the flagship quant fund AHL, InvestmentEurope reports. Chari previously worked at Ikos Asset Management, where he managed currencies and futures funds. As of the end of 2011, currencies represented about 19% of the risk budget of the AHL fund, just behind bonds (19.4%).

The long-term investment specialist Meridiam Infrastructure on 12 April announced that it has raised EUR935m, or USD1.225bn, for its Meridiam II Europe vehicle, closed on 15 March 2012, and a total of over USD2bn counting the Méridiam II Amérique du Nord vehicle, which is still raising funds. Meanwhile, the investment firm has inaugurated a new governance framework, with the creation of a supervisory board composed of eight members, including an employee representative. On the board are Hervé de Carmoy (chairman), Former Hungarian prime minister Gordon Bajnai, and Ian Thomas, chairman and CEO of Fluor Europe. The firm has also introduced a new shareholder structure, in which Thierry Déau, chairman and founder of Meridiam Infrastructure, and other partners, remain majority shareholders. With nearly EUR2.4bn (USD3bn) in assets under management, Meridiam is now the largest private invetsor in public infrastructure in Europe and North America.

Fimalac has completed its sale of a 10% stake in Fitch Group to Hearst, as announced on 9 February. The two partners now control 50% each of the capital in Fitch Group, while Marc Ladreit de Lacharrière remains chairman. As planned, Fimalac received a total of USD177m for the sale, equivalent to about EUR135m. The 50% stake held by Fimalac will now be balanced out over the consolidated accounts of the Group, each of which will receive a net capital gain estimated at at least EUR80m.

Socially responsible investment (SRI) assets from French institutional investors have increased by EUR47.6bn between 2010 and 2011, to EUR81.1bn in 2011, an increase of 41.3%, according to the most recent statistics from Novethic. This growth was driven by outsourced management, which has leapt 150% to EUR36.9bn, largely due to several mandates from insurers. Private insurance companies have become the largest institutional SRI investors in 2011. They now represent 60% of dedicated management, which now has assets totalling EUR48.8bn as of 2011 (EUR36.9bn in outsourced management and the remainder under internal management), compared with 17% in 2010, while public funds have fallen from 41% to 24%, with nearly stable assets at EUR11.8bn. The dynamism of institutional management was one of the drivers of growth on the French SRI market in 2011, which grew by 69% to EUR115.3bn. The other reason is a rise in assets held by retail investors in open-ended funds, of 89% to EUR21bn, but this was nearly entirely the effect of fund conversions. Among the notable developments in 2011, Novethic also reports that there has been an “explosion” in normative exclusionary approaches. These approaches involve barring from a portfolio any businesses and/or governments which are guilty of severe violations of international conventions, and represents 69% of SRI assets. It is also used by non-SRI actors. Novethic counted 10 French asset management firms or institutional investors in 2011 who have deployed policies of this type for all of their assets, totalling EUR1.823trn. Looking exclusively at exclusion of controversial weapons, the assets concerned get even more considerable: EUR2.142trn. Meanwhile, Novethic also notes that there has been growth of the “best-in-universe” approach, which potentially eliminates or underweights sectors, while at the same time, “best in class” approaches are on the decline.

According to sources familiar with the matter, Guggenheim Partners would pay about USD2bn for the asset management unit of Deutsche Bank, slightly less than the USD2.15bn it spent to buy the LA Dodgers baseball team, Handelsblatt reports. Negotiations are expected to be completed somewhere between mid-April and mid-May. If this occurs, Guggenheim would at a stroke quintuple its assets under management (currently USD164bn), and its headcount would rise from 1,700 to 3,200. Apparently, Guggenheim would also hire Kevin Parker, the present head of asset management at the German bank.

The supervisory board at Assya, compagnie financière, meeting under the chairmanship of Jean-Philippe Lahana on 27 March 2012, has approved the signature of an agreement to sell the private equity, insurance and international private management units (except in France and Graeece), to a group of investors represented by M. Tierry Leyne, Assya says in a statement. The operation, which was announced in a statement on 7 March 2012, includes precisely the sale of the following assets: The private equity unit (Assya Capital Luxembourg), with all shares in the firm totalling EUR12.16m; The insurance unit, including the Firstcaution SA company, located in Geneva (total sale price included the price of the private equity unit, as Assya Capital owns 87.04% of shares in Firstcaution SA); The private management unit, including asset management companies locate din Belgium, Israel, Luxembourg Monaco, Romania and Switzerland, for a total sale price of EUR10.74m. Assya Asset Management France (owned by Assya Asset Management Luxembourg) will be taken over by Assya, compagnie financière. The total sale price is EUR23,595,000, (of which EUR22,900,000 is for the assets stated above, and EUR695,000 is for payment of existing debts). As of 31 December 2011, the net banking proceeds from the assets sold represented 7.3% of Assya, compagnie financière’s consolidated net banking proceeds. In addition, in terms of elements on the balance sheet, these assets made a negative contribution of EUR600,000 to Assya, compagnie financière’s consolidated owners’ equity. The deconsolidation of these assets will have a positive impact on owners’ equity at the group in the 2012 fiscal year.

The financial ratings agency Fitch Ratings has confirmed its asset manager rating of M2+ for BNP Paribas Investment Partners (BNPP IP). The rating covers activities of BNP Paribas Asset Management (BNPP AM), Fischer Francis Trees & Watts (FFTW), FundQuest and THEAM. The confirmation of the rating reflects the persistence of well-established characteristics of this asset management firm, which continues to have a wide range of management expertise, a diverse client base, international penetration, and extensive and expert teams, despite recent equity buybacks, an ongoing reorganisation, and personnel movements. The confirmed rating is also based on the completion of a migration to a target operational and IT platform, which offers a high-performance, integrated and consistent environment, and an independent, multi-level control framework. The major challenges for BNPP IP will be to adjust its organisation to a difficult context in the asset management and banking sectors, particularly in France, to retain its key management expertise, and to strengthen its positioning in growth regions.

French residential real estate prices may fell 15% by the end of 2013, to their levels at the beginning of 2001, the ratings agency Standard & Poor’s reports. This is a unique phenomenon in Europe, as the French real estate market has continued to rise for nearly 5 years, except for a brief correction following the financial crisis of 2007-2008. In 2011, prices reached record levels. According to estimates by Standard & Poor’s, household borrowing capacity explains a large part of the growth in prices since 2000. If past experience in this area proves a good predictor, the French market is approaching its correction point. Between September 2007 and March 2009, the borrowing capacity of French households fell by about 7%, and prices fell by 10% between March 2008 and June 2009. In the next 18 months, analysts at Standard & Poor’s predict a comparable decline in borrowing capacity, or larger if interest rates increase. Meanwhile, a contraction in new real estate credit may reach 20% in 2012 compared with 2011.

Despite a highly difficult environment and a general mistrust of European equities, Mandarine Gestion, which has not yet had five full years in existence, appears to be well-positioned to make it through the crisis in good form.Last year, the asset management firm had net inflows of EUR200m, despite a slide in fourth quarter. Mandarine has also reported a negative market effect of about EUR500m. After peaking at slightly over EUR2bn in assets under management last year, and then falling back to slightly under EUR1.4bn at the end of the year, as of the end of March 2012 the firm had assets under management of EUR1.52bn, the head of Mandarine Gestion, Marc Renaud, announced on 12 April at a press conference.In addition to the inconvenience in the current economic environment of having a product range which is virtually 100% directional, Mandarine has not yet seen the international growth it had hoped for. Assets under management from foreign sources now represent 22% of assets, largely thanks to two dedicated mandates from the United Kingdom, the private bank in Geneva, and clients in Austria, Italy and Portugal, and last but not least, to Germany, which represents assets of about EUR50m.“We are not raising questions about our physical presence in Germany, but it is true that the development of those activities is not our highest hope,” admits Renaud. “However, we are highly confident in our ability to develop our international activities,” Renaud continues. He is planning to follow up the firm’s sales conquests on all European fronts where it is already present with the help of a new multilingual website, launched two months ago.In 2012, Mandarine is hoping for inflows of about EUR400m. “That is ambitious, but possible,” Renaud claims, pointing out the importance of following the major London consultants, whose recommendations can have a considerable impact. In terms of products, Mandarine is planning to diversify the range, but without upsetting its traditional expertise in equities, or its investment philosophy, which is to offer products in phase with the needs of the real economy.“There is no question of doing long/short or volatility arbitrage. But we would like to be able to offer a fund of European large caps,” says Renaud. But for that, the firm will need to find a manager in harmony with Mandarine’s strategy, if possible this year. An emerging markets equities product which could “stand out” is also under study.

AXA last year strongly increased its support for scientific research into environmental and socioeconomic risks that may impact human life, the group says in a statement. Under its global sponsorship programme, the AXA research fund selected 83 new academic teams, which receive total financial support of EUR22m.Three new AXA research chairs have been endowed, including the AXA-NTU chair at Nanyang Technical University in Singapore, on natural disasters.14 new research projects have been funded, including a project by professor Peter Carmeliet at the Catholic University of Louvain in Belgium. This researcher is analysing the growth of tumor cells in order to discover mechanisms that may open up new potential cancer treatments. This project has received EUR1m.66 post-doctoral and doctoral scholarships have been awarded, in order to contribute to the emergence of a new generation of scientific excellence (EUR120,000 per scholarship). Among those receiving support, Asuka Komiya, a post-doctoral fellow at the University of Kobe, Japan, is researching the way in which making excuses maintains the social fabric and allows for individual risk to be taken.The scientific community of the AXA research fund now includes 289 teams and researchers of 47 nationalities. The support provided by AXA since 2008 totals EUR76m.

The Singapore-based Aberdeen Asset Management Asia Ltd (Aberdeen Asia) has announced the first closing of its third closed-end Asia Pacific-focused property fund of funds, Aberdeen Asia III Property Fund of Fund.Asia III has raised a total of USD242 million of equity at its first closing, from a mix of existing and new clients. In addition, a number of the first close investors have committed a further USD230 million in non-discretionary co-investment capital, taking the total potential spending power to USD472 million.Asia III will seek to create a well-diversified portfolio of best-in class property funds investing across the region. It intends to invest in mature markets such as Australia and Japan, as well as emerging markets such as China and India. The fund will invest across the risk spectrum, from core to opportunistic strategies, and is targeting returns of 13-17% per annum.

In March, balanced funds on sale in Sweden recorded net inflows of SEK2.2bn (EUR0.25bn), according to the most recent statistics from Fondbolagens Förening, the Swedish investment fund association. The equity and bond fund categories attracted SEK1.5bn (EUR0.17bn) each. However, money markets saw outflows of SEK4.3bn (EUR0.49bn), and hedge funds, SEK0.5bn (EUR0.06bn). Overall, in March, funds on sale in Sweden posted a positive balance of subscriptions to recemptions of SEK0.4bn. Since the beginning of the year, this balance stands at +SEK6.8bn (EUR0.76bn), while equity funds alone have seen inflows of SEK27bn (EUR3.03bn). They now represent SEK1.068trn (EUR120.165bn) as of the end of March, out of total assets of SEK1.947trn (EUR219.065bn).

As of the end of March, total AUM of ETPs in Europe totalled USD334.1bn, of which USD298.8bn were in ETF funds (USD183.8bn in physical and USD115bn in synthetic replication funds). Assets under management increased by USD35.5bn in first quarter, of which USD7.1bn were due to net subscriptions, according to statistics from the BlackRock Institute.Of net inflows of USD7.1bn, iShares attracted USD4bn, Source, USD1.3bn, db x-trackers, USD0.6bn, and Lyxor Asset Management, USD0.5bn. Assets increased by USD14.4bn, to USD120.3bn, as of the end of March for iShares, with increases of USD4.8bn, to USD47.9bn, for db x-trackers, and of USD3.7bn, to USD41.8bn, for Lyxor.

BlackRock and Vanguard, two of the largest issuers of ETF funds, are calling for clearer discrimination between their products and notes offered by investment banks, which promise similar returns but would leave investors with a loss if the bank went bankrupt, the Financial Times reports. “We are concerned by the fact that the end investor would not have a clear idea of the types of products in which he or she is investing,” Jennifer Grancia, managing director of iShares, tells the FT.

« Plus on sort des sentiers battus, plus il faut être rigoureux, confie aux Echos, Pierre-Maxime Duminil, directeur général de la Cavamac (en charge de la protection sociale des agents généraux de l’assurance) qui a fait, l’an passé, un appel d’offres pour deux fonds de fonds flexibles. Par exemple, et parmi de nombreuses contraintes, nous avons limité le pourcentage détenu dans des fonds maisons. Nous n’avons pas particulièrement durci les règles à cause de la crise. » Pour les inscrire dans la durée, la Cavamac confie des mandats identiques à deux gérants. « Nous avons choisi de les challenger ainsi sur des fonds purs. Depuis quatre ans, cela fonctionne très bien tant sur la performance qu’au niveau du reporting. Mais il faut aller jusqu’au bout et parfois procéder à de douloureuses révisions ! », rapporte Pierre-Maxime Duminil.

Bloomberg croit savoir que Deutsche Bank, Barclays, Credit Suisse et Goldman Sachs préparent des offres pour le rachat auprès de la Réserve fédérale de ce portefeuille de dettes d’une valeur faciale de 7,5 milliards de dollars hérité du sauvetage d’AIG en 2008.