p { margin-bottom: 0.08in; } The index provider S&P Indices on 15 November published the results of a study which reveals that small caps in emerging markets perform better than large caps in the same markets. The S&P Emerging SmallCap Index has posted an annualised growth rate of 16.6% over the ten years to 30 September 2010, compared with a rate of 13.2% for the S&P Emerging LargeMidCap. S&P says that the small cap index beat the LargeMidCap index in eight out of ten years between 2001 and 2010. The performance difference was particularly marked in the past year, with performance as of 30 September of 17.2% for the SmallCap index, compared with 10.9% for the large cap index. Despite this evolution, many investors still are not exposed to small caps in their emerging markets portfolios. As of 30 September this year, the S&P Emerging SmallCap Index included 1,648 shares from 19 countries, of which 397 were from Taiwan, 359 from China, 241 from India and 130 from Brazil.

p { margin-bottom: 0.08in; } On 15 November, GAM Holding announced that its assets under management, excluding the CHF17bn in Julius Baer funds distributed by Swiss & Global Asset Management and “sub-advised” by GAM, totalled CHF118.7bn as of the end of September, which represents an increase of CHF2.1bn, or 2%, compared with 30 June. This increase is due to net subscriptions related to the diversification of the product range. For GAM, assets as of 30 September totalled CHF53.8bn, compared with CHF53.1bn three months earlier. Net subscriptions and market effects were partially offset by the depreciation of the US dollar against the Swiss franc. Net inflows concerned the fixed income range, including the funds which GAM sub-advises for Swiss & Global Asset Management, as well as single manager absolute return funds and Asian equities strategies. For Swiss & Global Asset Management, assets increased from CHF78.3bn as of the end of June to CHF81.9bn as of 30 September, also due to net subscriptions and market effects. The negative impact of the falling dollar was partially offset by the rise of the euro against the Swiss franc.

The Securities and Exchange Commission and US Attorney’s office in Manhattan are investigating whether hedge fund Harbinger misled investors by failing to disclose in a timely fashion a USD113m personal loan it extended to its founder Philip Falcone, according to The Wall Street Journal. The authorities are also looking at whether the hedge fund asset management company allowed some clients to withdraw money after the financial crisis while barring others from doing so.

p { margin-bottom: 0.08in; } After a continual increase from 2001 to 2007, management commissions earned by portfolio management firms (SGP) last year fell for the second consecutive year, by 7%, from EUR10.34bn to EUR9.66bn, the AMF indicates in its report on third-party management in 2009, published on 15 November. Over two years, the decline represents nearly 20%. Nevertheless the proportion of management commissions for operating products has increased slightly, to 87%. Management commissions are composed 98% of mandated management commissions and mutual fund management commissions, while the remainder consists of commissions related to the management of foreign-registered funds. After a disintegration in the proportion of OPC commissions from operating products in the past three years, the AMF in 2009 observed a return to 2006 levels, with 79.4% of total operating proceeds. The proportion of mandate commissions from operating products is down slightly, to 6%, from 6.7% one year previously. Management firms with over EUR1bn in assets under management accounted for 87% of all commissions, down from 89% in 2008. They also accounted for 58% of managers (compared with 57%), and 22% (compared with 24%) of management firms. Commissions for all SGP activities, defined as the ratio of total management commissions over total assets under management, were 0.34% in 2009, compared with 0.41% in 2008, with strong disparities depending on the type of management undertaken. Generalists managing less than EUR500m charged 1.19%, compared with 1.55% in 2008, while private management firms charged a rate of only 0.13%, compared with 0.41% one year previously.

p { margin-bottom: 0.08in; } According to the most recent statistics from Europerformance-Six Telekurs, the category of equities funds shows an average variation of 3.4% to its assets, considerably more than the bond fund category (0.1%) and money market funds, which have seen their assets continue to decline (-1.1%). For equities products, internationally-invested funds have seen the strongest increase in their assets (4.7%), followed by funds composed of European equities (3.6%). At the other end of the spectrum, French equities funds posted the most moderate increase (2.6%). Once again, outflows from money market funds was strong (-4.94%), while dynamic type money market funds posted net inflows of 1.16%. For bond funds, Euro zone mutual funds posted outflows of 0.2%. However, high yield funds saw net inflows of 0.13%. A study of performance confirms that it has been a good month for equities funds, which show average gains of 2.86%, with an increase of 3.57% for French equities funds, just behind funds invested in the Euro zone, which posted the highest average gains (3.70%). International funds saw gains of 2.03%.

p { margin-bottom: 0.08in; } Hedge Week reports that in early 2011, the Austrian management firm Erste Sparinvest will launch the ESPA Alternative Diversified Fund, its first UCITS-compliant hedge fund, an Austrian-registered product which will start up with seed capital of EUR50m. The management of the fund will be entrusted to the Alternative Investment Group at Erste Bank, led by Mark Cachia, a team which manages USD650m in multi-strategy funds of hedge funds.

Julius Baer SIM has made a number of changes to its executive management in Italy. The board of directors nominated Gian Paolo Bardelli as new CEO of Julius Baer SIM S.p.A., and Giovanni Flury, member of the executive board of Julius Baer, as new vice-chairman of the board of directors of Julius Baer SIM. Since 2006, Gian Paolo Bardelli has been in charge of international Private Banking at Julius Baer in Singapore, where he was also a member of the executive board Asia. He has spent his entire career abroad; while at UBS he worked in Zurich, Geneva and London prior to managing the BDL Banco di Lugano subsidiary in Singapore. Stefano Canossa, the outgoing CEO, is returning to Zurich to assume an important position in development projects, according to a press release. These appointments will contribute to the expansion of Julius Baer in the strategically important Italian market. The Swiss bank aims to expand its client network by increasing its size and geographical spread.

p { margin-bottom: 0.08in; } In the first nine months of the year, MLP posted net profits of EUR12.5m, compared with losses of EUR2.3m the previous year, while profits for continued operations increased from EUR11.7m to EUR17m, on earnings of EUR348.8m compared with EUR345.3m. In third quarter, net profits totalled EUR6.8m, compared with EUR4.6m for the corresponding period of last year. Due to net subscriptions from retail and institutional investors, and to positive market effects, assets at MLP as of 30 September totalled a new record of EUR19.3bn, compared with EUR18.7bn as of 30 June, and EUR12.5bn one year previously. The number of clients as of the end of September totalled 771,000, compared with 767,000 as of the end of June, and 781,000 one year previously. The number of client advisers fell to 2,317 as of the end of September, from 2,359 as of the end of June.

p { margin-bottom: 0.08in; } The German-Austrian management firm C-Quadrat, in which AmpegaGerling Asset Management last month acquired a 32.6% stake (see Newsmanagers of 14 October), has announced net profits for the first nine months of the year of EUR9.3m, compared with EUR3m in the corresponding period of last year. In the period under review, assets in funds increased from EUR2.66bn to EUR3.04bn, while assets under management overall increased to EUR4.86bn from EUR4.51bn.

p { margin-bottom: 0.08in; } In 2009, the French financial regulator, the Financial Markets Authority (AMF), granted only 25 licenses to management firms, compared with 50 in 2008, a decline of 50%. In the same period, 29 licenses were cancelled. This represents a 71% increase year on year, which is due partially to difficult market conditions, and partly to a consolidation in the profession. As a result, the number of active asset management firms has fallen slightly to 567 as of 31 December 2009, the AMF reports in its report on asset management for third parties in 2009, published on Monday. This level remains high, the AMF says. This development did not prevent assets from increasing, as, following a decline in 2008, they increased by 12% both for mandated and collective management, to EUR2.533trn. This increase in assets did not directly result in an increase in earnings at portfolio management firms (-8%), as the sector was penalised by unfavourable declines in assets in second half 2008 and a product mix oriented to more prudent but less lucrative strategies, the AMF reports. After heavy declines in 2008 (-34.5%), operating results at portfolio management firms remained stable in 2009, at EUR2.2bn. Operating margins recovered, from 18% in 2008 to 20% in 2009, but nonetheless remain well below their peaks in 2006 (25%). In 2009, the number of management firms to have posted operating losses remains high, at 123 (23% of the total), compared with 137 firms in 2008, while entrepreneurial management firms represent the largest number of firms to have posted operating losses.

p { margin-bottom: 0.08in; } On Tuesday, 16 November, Barclays France launched Bmarkets, the listed structured products platform from Barclays Capital. About 200 certificates are on offer to French private investors on Euronext Paris, including 100% Open-End certificates and leveraged certificates known as Turbos Infinis. The certificates are based on a wide range of underlying assets, including CAC 30, French large caps, European and American shares, international indices. Barclays will also offer stock-picking based on specific themes, sectors or regions via exclusive indices. The first available series, the Chips indices (a reference to “blue chips”), aim to provide access to selections of quality shares (China Chips, Euro Chips, Green Chips, etc). As investors are tending to avoid more complex products, Bmarkets does not aim to revolutionise the product range for structured products, but merely to offer investors solutions which will allow them to imagine and deploy their strategies. ‘The current situation does not lend itself to fantasy or to experimentation. Bmarkets aims to simplify investors’ lives as much as possible,” explained Estelle Elbaz, head of the Euronext-listed structured products at Barclays Capital, at a press conference on 15 November. With this in mind, Bmarkets offers several informational resources for pedagogical purposes, a quarterly magazine, SimpliCity, a weekly newsletter, SimplyFi, and video and radio programs. The objective of Bmarkets in France is to gradually enrich the product offerings to achieve about 1,000 products during the year 2011. Bmarkets, created in 2009, is now active in several European countries, including Germany, where it has over 4,000 products, and where it is aiming for 20,000 by the second half of 2011, and in Asia (Hong Kong, Singapore). The next steps are Spain, the Netherlands, and the United Kingdom in Europe, and China and India in Asia.

p { margin-bottom: 0.08in; } Invesco Ltd and Morgan Stanley announced at the end of last week that the 30.89 million ordinary shares being placed on the market by an affiliate of Morgan Stanley (see Newsmanagers of 12 November) will be offered as part of a secondary placement at USD21.48 each, which will bring in revenues for the vendor of USD664m. On Friday, the closing price of the shares was USD22.13, down 1.43% from the previous day.

p { margin-bottom: 0.08in; } Pershing, an affiliate of BNY Mellon, has announced its acquisition of the custody and clearance activities of Jeffereies & Company. The sale price has not been disclosed. By the terms of the agreement, Jefferies will gradually transfer its broker-dealer clients to Pershing, which will offer them its full range of services.

p { margin-bottom: 0.08in; } The Chinese management firm Harvest Global Investment (HGI), in which Deutsche Asset Management (Asia) owns a 30% stake, has signed an outsourcing deal with State Street, Asian Investor reports. By the terms of the agreement, State Street will provide middle office services, which will allow HGI to reduce its costs. This is the first time that State Street has won a mandate of this type from a Chinese management firm.

p { margin-bottom: 0.08in; } For its institutional real estate fund WestInvest TargetSelect Hotels, Deka Immobilien has acquired the Atlantic Congress Hotel in Essen from Zech Group GmbH. The sale price has not been disclosed. The property is a four-story hotel with 248 rooms and measuring 18,000 square metres.

p { margin-bottom: 0.08in; } The Spanish RMBS Fund from Renta 4 will be absorbed into the Spanish-registered fund of hedge funds Minerva from the same management firm, Funds People reports. The Spanish RMBS, launches slightly over one year ago, was never actively promoted, and its assets essentially consist of the seed capital. Renta 4 retains two other hedge funds, Accurate Global Assets and Mosaic Iberia.

Calpers has signed an agreement to license proprietary portfolio management software from Ermitage – one of Europe’s oldest quantitative hedge fund managers, according to the Financial Times. The pension fund is now going to roll out the trading software, known as Optics, across its long-only and absolute return portfolios.

The California pension fund CalPERS on 15 November announced that it has adopted a new strategy of engagement with underperforming businesses. Rather than publicly denounce them in its “Focus List,” as it has done each spring for 20 years, CalPERS will now make direct contact with firms, and propose resolutions at general shareholders’ meetings.The change is inspired by the observation that name and shame tactics, though still effective a few years ago, no longer bring the desired results. According to a study by Wilshire Consulting of 155 businesses between 1999 and 2008, the 96 firms which were not on the Focus List but which were closely monitored by CalPERS instead far outperformed the 59 businesses which were placed on the Focus List for five-year periods.At its 2011 general shareholders’ meetings, CalPERS will deploy a new selection process, based on financial and extra-financial criteria, which will aim to propose resolutions at firms which had previously been consigned to the Focus List.

p { margin-bottom: 0.08in; } According to Hedge Fund.net, the hedge fund industry in October posted the highest net subscriptions since November 2009, as investors regained confidence in signs of economic stabilisation and strong increases on the markets, The Wall Street Journal reports. These net subscriptions totalled USD18.4bn, compared with USD12.2bn in September, USD6.73bn in August, USD7.72bn in July, and net redemptions of USD2.54bn in June.Average performance was 2.23% for October, bringing the total for the first ten months of the year to 7.42%. Assets as of the end of October totalled USD2.41trn, including USD52.7bn in market effects and USD18.4bn in net subscriptions.

p { margin-bottom: 0.08in; } Investors are flocking to ETFs specialised in precious metals, and assets in the SPDR Gold Shares fund from State Street total nearly USD60bn, The Wall Street Journal reports, adding that the fund owns more gold than all the central banks in the world save five. The iShares Gold Trust (BlackRock), with USD4.8bn, has gained a lot of assets since it split its shares on a 10-to-1 basis, which appears to prove that retail investors are flocking to the previous metals ETF segment at a time when there is a major risk of a correction.The iShares Silver Trust, for its part, has seen a 15% increase in the number of shares since 1 September, and has USD9.6bn in assets. Among the other ETFs with less than USD1bn in assets are the ETFS Physical Gold Shares from ETF Securities and the Sprott Physical Gold Trust. For silver, there are also the ETFS Silver Trust and the Powershares DB Silver Shares (Invesco).The ETFS Physical Platinum Shares and Physical Palladium Shares were launched this year, and made a very good start in terms of inflows.

p { margin-bottom: 0.08in; } After recruiting four managers for its real estate team in early September (see Newsmanagers of 9 September), Scottish Widows Investment Partnership (SWIP) has announced the recruitment of Peter Macpherson as director of sales for the team, to begin at the end of January. Macpherson is head of client services at ING Real Estate Investment Management. He will be in charge of institutional sales.

p { margin-bottom: 0.08in; } Stephanie Maier, who was most recently at the helm of a team of 30 analysts and six research partners focused on corporate ESG (environmental, social and governance) performance in developed and emerging countries at Ethical Investment Research Services (EIRIS), has been recruited as corporate responsibility manager at Aviva Investors. She will report directly to Steve Waygood, head of sustainability, research and engagement, and will work in close collaboration with Nigel Clemson, director of human resources, who is in charge of social responsibility worldwide.

p { margin-bottom: 0.08in; } Fundstrategy reports that Axa Investment Managers has launched a Sterling Credit Short Duration Bond fund, aimed at the British retail market, which aims to reduce its sensitivity to interest rates. The launch of the product closely follows the launch of the US Short Duration High Yield fund, aimed at institutional investors, which was in great demand from discretionary managers and funds of funds. The new fund, managed by Julie Lamirel, invests in investment grade corporate bonds which will mature less than five years after their acquisition date. The fund hopes thus to reduce the potential impact of potential increases to the interest rate by the Bank of England.

p { margin-bottom: 0.08in; } Fundstrategy reports that a survey by Fidelity FundsNetwork of major management firms finds that 32% of them estimate that the FSA will be required to delay the deployment of the new RDR regulations for retail investment markets, beyond the planned date of 31 December 2012. However, they all predict that it will be effectively put into force. 32% of management firms surveyed estimate that the RDR will undertake a reduction of the size of platforms, while 37% think the opposite, and 26% are predicting a continuation of the status quo.

p { margin-bottom: 0.08in; } Richard Phillips, co-head of British retail at GLG Partners, has been appointed head of British retail at the group resulting from the merger, following the recent completion of its acquisition of GLG Partners.Phillips’ alter ego at GLG, Andrew Thatcher, will be in charge of ex-GLG activities in Asia, and will report to Tim Rainsford, who since 2007 has been managing director of Man Investments for the Asia-Pacific region.

La Société Générale vient d’annoncer la création d’un département, au sein de Société Générale Private Banking, dédié aux particuliers fortunés travaillant dans le secteur des matières premières, rapporte l’Agefi. L'équipe basée à Genève sera dirigée par Jean-Paul Rame, directeur du département Natural Resources & Africa.

Le 15 novembre, GAM Holding a indiqué que ses actifs sous gestion, hors les 17 milliards de francs suisses de fonds Julius Baer distribués par Swiss & Global Asset Management et «sous-conseillés» par GAM, se montaient fin septembre à 118,7 milliards de francs suisses, ce qui représente une progression de 2,1 milliards de francs ou de 2 % par rapport au 30 juin. Cet accroissement est attribué à des souscriptions nettes liées à la diversification de la gamme.En ce qui concerne GAM, l’encours se situait au 30 septembre à 53,8 milliards de francs suisses contre 53,1 milliards trois mois plus tôt. Les souscriptions nettes et l’effet de marché ont été partiellement compensés par la dépréciation du dollar contre franc suisse. Les rentrées nettes ont surtout concerné la gamme obligataire, dont les fonds que GAM sous-conseille pour Swiss & Global Asset Management, ainsi que les fonds «single manager» de performance absolue et les stratégies actions asiatiques.A l'échelon de Swiss & Global Asset Management, l’encours est passé de 78,3 milliards de francs fin juin à 81,9 milliards au 30 septembre, là aussi grâce aux souscriptions nettes et à l’effet de marché. L’impact négatif de la baisse du dollar a été en partie compensé par la hausse de l’euro contre franc suisse.GAM Group précise qu’au 12 novembre le programme de rachat d’actions lancé le 26 août avait déjà permis d’acquérir 3,1 % des actions en circulation à un prix moyen de 14,79 francs suisses par action. D’ici à l’assemblée générale du 19 avril 2011, la société compte avoir racheté environ 5 % de son capital ; les actionnaires auront à se prononcer sur l’annulation des titres correspondants. Cette opération vient compléter la politique de GAM Holding, qui s’est engagé à distribuer environ 50 % de son bénéfice net.Enfin, le gestionnaire indique qu’il va ajuster à la baisse la valeur de la participation de 28 % qu’il conserve dans Artio Global Investors Inc pour tenir compte de l'évolution des résultats de cette société ainsi que de la baisse du cours boursier sur les six derniers mois.

Selon L’Agefi suisse, Merrill Lynch Bank (Suisse) a annoncé la nomination de Peter Schmid au poste de directeur général et CEO de la banque. Basé à Genève, il est rattaché à David Jervis, directeur, chef de Merrill Lynch Wealth Management EMEA. Dans ses nouvelles fonctions, Peter Schmid sera amené à collaborer étroitement avec les autres directeurs généraux en Europe, Asie pacifique et dans les pays émergents (hors Asie). Outre la responsabilité de la plate-forme de Wealth Management et du marché suisse, Peter Schmid assumera le domaine de l’acquisition de nouveaux clients et les investissements de même que l'élaboration de nouveaux instruments de placement. Avant de rejoindre Merrill Lynch Wealth Management, il était responsable du pôle Allemagne et de la relation avec les clients allemands basés en Allemagne, en Suisse, au Luxembourg, à Hongkong et à Singapour chez UBS.

Banque Privée 1818 et Rothschild & Cie Gestion ont annoncé lundi 15 novembre la signature d’un protocole d’accord définissant les modalités de rapprochement de Sélection R et 1818 Partenaires, leurs plateformes respectives dédiées aux conseillers en gestion de patrimoine indépendants (CGPI) – lire Newsmanagers du 28/07/2010. Alors que les deux établissements avaient affiché leur souhait fin juillet de conclure les accords définitifs avant le mois d’octobre, la réalisation de l’opération a finalement exigé plus de temps qu’attendu car elle imposait la filialisation de Sélection R et la séparation d’une société de courtage d’assurances, avec, de facto, l’accord du régulateur. Interrogé par Newsmanagers, Jean-Louis Laurens, associé gérant de Rothschild & Cie Gestion, a précisé les modalités de l’accord. Concrètement, le nouvel ensemble sera détenu à 66 % par la Banque Privée 1818 qui en prendra le contrôle opérationnel tandis qu’avec les 34 % restants, Rothschild & Cie Gestion disposera d’une minorité de blocage. «Au terme du processus de rapprochement, qui sera réalisé au cours du premier semestre 2011, Sélection R deviendra la marque unique du nouvel ensemble, a rappelé le responsable de Rothschild & Cie Gestion, qui a insisté sur le fait que le projet de développement de la plateforme était ambitieux... et que sa maison y restait associée.Dans l’organisation, Cyril Chapelle, le directeur général de 1818 Partenaires, dirigera le nouvel ensemble et Jean-Louis Laurens en sera le président non exécutif. De son côté, Philippe Chevrier, qui était jusque là le directeur de Sélection R, conseillera Cyril Chapelle et doit apporter son expertise au projet de rapprochement. Les dirigeants de la plateforme pourront s’appuyer sur une équipe mixte, associant des collaborateurs des deux entités partenaires sachant que l’ensemble sera regroupé chez 1818, et ce dans le courant du premier semestre 2011. Dès le mois de janvier de l’année prochaine, Cyril Chapelle doit présenter le «business plan» de la nouvelle plateforme. «Avec deux objectifs principaux», a rappelé Jean-Louis Laurens, qui consistent tout d’abord à enrichir l’offre de la plateforme et à y réaliser des investissements informatiques lui permettant d'être au meilleur niveau.»

Selon l’Agefi qui cite une source proche du dossier, Axa Private Equity (PE) commercialise son cinquième fonds de fonds secondaire Axa Secondary Fund V (ASF V) depuis quelques semaines. L’objectif d’ASF V est de collecter entre 3,5 et 4 milliards de dollars (soit entre 2,6 et 3 milliards d’euros). Il privilégiera les segments du LBO et du capital-développement.