Hedge funds managing close to USD15bn in assets quit the United Kingdom and moved to Switzerland in the past year, following plans to increase top personal tax rates to 51%, the Wall Street Journal reports, citing lawyers. Others are expected to follow.

Keith Sloane, senior vice president of Hartford Mutual Funds, has announced that the affiliate of The Hartford has posted net subscriptions in second quarter and that assets totalled USD40.7bn as of the end of July, compared with USD28.7bn as of the end of first quarter (they were USD50bn as of the end of third quarter 2009), the Wall Street Journal reports. Hartford Mutual Funds underwent net redemptions in fourth quarter 2008 and first quarter 2009, but subscriptions increased by 37% in second quarter 2009 compared with first quarter.The Hartford’s focus on wealth management has led to a centralisation of mutual fund, retirement and variable annuities affiliates into a new investment and retirement division. The goal is to reach USD100bn in assets under management.

According to a study by S&P cited by the WSJ, about 60% of equities fund managers lagged behind their index over five years to June 30. With the exception of emerging market debt funds, at least 75% of bond fund managers trailed behind their index. The news is grist for the mill of supporters of passive, index-based management. But Jane Li of FundQuest (BNP Paribas) says that “the less efficient the market, the more potential there is for a manager to add value.”

Following a decision by the Commodities Futures Trading Commission (CFTC) to toughen regulations, Barclays Global Investors has ceased sales of new shares in its iShares fund based on the S&P GSCI Commodity index, L’Agefi reports.

According to statistics from the BVI association, German asset management firms in first half posted net subscriptions of EUR3.7bn, of which EUR2.2bn were for institutional funds and EUR1.5bn for open-ended funds, while assets increased by about 4%, to a total as of 30 June of EUR1.2627trn, compared with EUR1.2175trn as of the end of December. The Kommalpha agency points out that inflows in January=June were saved by db x-trackers (Deutsche Bank) and ETFlab (Deka), whose ETF funds alone attracted more than EUR4.8bn, while money market funds, for example, saw net redemptions of more than EUR11bn. The financial crisis is working to the advantage of Germany as a site of fund production, as German-registered open-ended funds have attracted about EUR6.5bn in assets, while Luxembourg-registered funds have seen net outflows of nearly EUR7.4bn. Kommalpha says this is due to the fact that Luxembourg funds are often more complex structures oriented to equities.

The new regional government of Pudong has signed an agreement in principle (MOU) with the Blackstone Group to create the first private equity fund denominated in Chinese yuan in the region of Shanghai-Pudong. The Blackstone Zhonghua Development Investment Fund will raise about CNY5bn, and will invest as its first priority in the Shanghai region and its surroundings.

In the first half of 2009, 1,913 funds were merged or closed, more than the 1,206 funds which were launched in the same time period, according to statistics from Lipper FMI, reported by Financial Times Fund Management. For the first time in a long time, the number of funds has declined, to a total of 33,543.

Allianz Global Investors (AGI) is planning to release a UCITS III version of its long/short Discovery Europe fund, as a sub-fund of this fund itself, Investment Week reports. The new product, Allianz RCM Discovery Europe Strategy, will be managed by the same manager as the main fund, Harold Sporleder, with Ralf Walter as co-manager. Two thirds of the profile will be invested in “strong conviction equities,” while the remainder will be invested with a more short-term outlook.In the first five months of the year, Allianz RCM Discovery Europe has posted returns of 11.91%, compared with 6.07% for the MSCI Europe index.

On 20 August, Universal Investment launched the currency fund Berenberg Currency-Alpha-Universal Investment, which is advised by Joh. Berenberg, Gossler & Co. KG. It is a German-registered product, for which State Street Bank GmbH is the depository bank. The manager may take long and short positions. Though the investment universe is not limited by a specific rule, investments will concentrate on G8 currencies. Characteristics Name Berenberg Currency-Alpha-Universal-Fonds ISIN code DE000A0RGXP9 Front-end fee 5.00% Management commission 1.28% Performance commission 15% of absolute returns with high watermark and a hurdle rate corresponding to the Euribor 3-month

The real estate asset management firm Commerz Real (EUR43bn in assets) has announced the acquisition for about EUR32.7m of the office property Espace Dumont d’Urville, in the 16th district of Paris. The vendor of the 3,100 square-metre property is Klépierre (BNP Paribas group). Espace Dumont d’Urville, which is wholly leased to SEGECE, an affiliate of Klépierre, will be added to the portfolio of the institutional real estate fund Euro Office 1.

The international association of the hedge fund industry, AIMA (Alternative Investment Management Authority), has welcomes a decision this past weekend by the FSA (Financial Services Authority) to commission a study of the impact the planned hedge fund directive would have on the United Kingdom. The British financial market authority has asked the research firm CRA International to study the costs and benefits of the legislation, focusing on the impact of the project on investment portfolios, costs to companies and investors, on the functioning of the market and on systemic risk, and finally, to study the effects of the legislation on financing for small businesses and European competitiveness. The findings of the study will be presented by the end of the year. The Association favours a revision of the draft directive in its current form. Though it approves of some planned measures such as systematic reporting of appropriate data to national supervisory authorities, the Association argues that some areas of the planned legislation, such as those concerning leverage, depositories, and marketing, need to be revised and corrected to avoid counter-productive effects. The AIMA, which has already called on the European Commission to order a pan-European impact study, hopes that the FSA’s initiative will inspire the Commission to take that step. “We hope that the European Commission will follow suit on the pan-European level. It would be extraordinary if there were not an appropriate evaluation on the European level of the impact of a directive which could have very serious consequences.” Like the AIMA, the FSA, whose annual conference for asset management, to be held on 17 September in London, will be dedicated to the subject of the planned European directive, is said to be favourable to a revision of the Commission’s draft directive, which it considers too constraining for the hedge fund industry. The British government is concerned about the impact of the draft directive on the competitiveness of an industry which in European terms is largely centred in London. The United Kingdom’s efforts to produce a revised version of the text will be likely to provoke some debate in Europe. France, among others, is widely known to favour increased surveillance of the activities of hedge funds.

HSBC Global Asset Management will launch its first ETF, based on the FTSE 100, this Monday, Financial Times Fund Management reports. In total, the firm is planning to launch 30 to 50 ETFs in the next three years.

The Korean firm Mirae Asset Global Investments has appointed Myung Joo Park as managing director of its European activities, the British press reports. Park, who will be based in London, joined Mirae Asset in 2005. He previously worked in the international division of the firm in Korea. Recently, Mirae told Newsmanagers that it would soon register several funds for sale in France.

Assets in the private wealth management department of Saxo Bank as of the end of first half totalled EUR1.88bn. The bank specialised in online trading of investments says in a statement that wealth management activities are in a phase of “rapid growth,” and that since the end of first half, assets under management have increased to EUR2.15bn.Saxo Bank earned pre-tax profits in first half of EUR7.39m, vs EUR21.77m . Three factors contributed to this decrease, according to the bank: increased costs related to the opening of international offices; investment in products; and the bank’s contribution to the Danish state guarantee plan.

La Tribune reports that, with the exception of the United States and Switzerland, governments which have provided assistance to banks in the past twelve months by buying a stake in their capital have made potential losses totalling USD10.8bn (EUR7.54bn), according to figures from the Financial Times. Great Britain has come out of it worst, with losses of EUR3.8bn. Due to interest on the loans provided to banks, France has made a profit of EUR1.16bn.

For a United Nations conference on climate change to be held in December in Copenhagen, the EIRIS agency has analysed the 300 largest publicly-traded companies in the FTSE All World Index to determine what actions they are taking to confront climate change.The study (“Climate Change Compass: The Road to Copenhagen”) is that the activities of 35.6% of these companies highly or very highly influence climate change. But 33% of them are not making any effort to reduce the risks related to climate change which affect them. The survey also finds that 99% of businesses which have a high or very high impact on climate change have published documents explaining how they plan to address this challenge, compared with 84% in 2008. This increase is due to increase awareness both within businesses and at the instigation of investors.Lastly, EIRIS points out that nearly three quarters of the businesses concerned, compared with 61% in 2008, say they wish to respect objectives and international regulations to combat climate change.

Les Echos reports that shareholders in the two largest alternative stock market operators in Europe, Chi-X and Turquoise, are undergoing changes. Turquoise has retained the Swiss bank UBS to find potential buyers for the business. Shareholders in Chi-X, for their part, are being openly wooed by Chi-X Global, an entity owned by the Japanese bank Nomura, which already controls more than half of capital in the operator via the broker Instinet. Falling volumes and competitition have accelerated the maturity of this young segment.

L’Agefi Switzerland reports that the international rankings of the “Individual Income Tax Rate Survey 2009,” published yesterday by KPMG, reveal that the impact of the financial recession on taxation have made Switzerland more attractive compared to other countries. Compared with 2008, it has gained five places, putting it in 13thplace in the rankings, revealing that tax pressure is mounting in the worst-affected countries, such as Ireland, Iceland, and Great Britain. Since Switzerland has not seen any increase in the maximal income tax rate, “developments in the four corners of the globe may make the country even more attractive in terms of taxation,” KPMG says.

Despite over EUR9bn in subscriptions, assets in funds of funds on sale in Germany fell by 19% in second half 2008 to a total of EUR44.9bn as of the end of December. A study by Fidelity International has found that open architecture is continuing to progress, as funds which invest in products from third-party promoters now represent 62% of total assets, compared with 56% one year previously (see Newsmanagers of 27 August 2008). However, Andreas Schmid, head of distribution for private banks and wealth managers at Fidelity International for Germany, agrees that funds of funds have probably been the winners out of the introduction of withholding flat tax in Germany on 1 January 2009, as the transfers from one product to the other within a fund of funds are now not taxable.The study also finds that diversified funds of funds as of the end of December represented 77% of total assets, compared with 70% twelve months previously. Equities and bond funds of funds represented 14% and 5% of total assets, respectively, compared with 23% and 7%.

The FSA, the British financial market regulator, has launched an investigation into trading operations on credit default swaps (CDS) from Pernod-Ricard undertaken by the investment bank Calyon. The subject of the investigation is several very large transactions undertaken just before the group laucnehd a capital increase in April.

La Tribune reports that two former bank directors, Erastus Akingbola and Cecilia Bru, who were dismissed on 14 August for poor management, including fraudulent use of credit facilities, insider trading, market manipulation and money-laundering, are being sought in Nigeria by the economic and financial crimes commission.

L’activité sur le marché primaire devrait en revanche ralentir, la plupart des émetteurs ayant déjà couvert leurs besoins de financement

The British pension fund for Barclays (BUKRF) has appointed Andre Konstantinow as head of manager selection, a newly-created position. Konstantinow joins the firm from Morgan Stanley Investment Management, where he was senior manager, largely in charge of hedge fund managers in Europe and emerging markets.

The private bank Close Brothers, advised by Greenhill, has made an offer to acquire Kleinwort Benson from Commerzbank, which is seeking up to GBP300m for the firm, The Sunday Times reports. Among the other potential buyers are the management of Kleinwort Benson, supported by Simon Robertson, the chairman of Rolls Royce, and by Sir John Bond, chairman of Vodafone.The new CEO of Close Brothers, Preben Prebenson, is seeking to strengthen the group’s private banking activities; he is planning to create an online fund management tool for high net worth clients, like those available from Fidelity and Hargreaves Lansdown.

The Frankfurter Allgemeine Zeitung reports that Bradley Birkenfeld has been sentenced to three years and four months of imprisonment by a US court in Fort Lauderdale, Florida. The former wealth management advisor from UBS helped a billionaire US real estate magnate to evade more than USD200m in US taxes through a number of fictitious businesses.

L’allemand DEGI, filiale d’Aberdeen Property Investors, a annoncé l’acquisition pour 110 millions d’euros du siège italien de Procter & Gamble (P&G). Cet actif de 20.000 mètres carrés, dont l’achat avait été conclu dans son principe en juillet 2007, est affecté au portefeuille du fonds offert au public DEGI International. Le patrimoine immobilier géré par DEGI en Italie se monte à environ 860 millions d’euros.

Après une année 2008 désastreuse, le secteur des fonds alternatifs cotés (dont la plupart sont enregistrés sur le London Stock Exchange) a continué à sous-performer malgré une reprise dans les hedge funds et le private equity ces 7 derniers mois, rapporte le Financial Times. Les fonds de fonds cotés sont ceux qui souffrent le plus. En moyenne, les fonds de hedge funds se négocient actuellement avec une décote de 18,2 % par rapport à la valeur de ses actifs, selon une étude de RBS citée par le FT.

Le fonds de pension britannique de Barclays (Bukrf) a nommé Andre Konstantinow en tant que directeur de la sélection de gérants, un poste nouvellement créé.Il vient de Morgan Stanley Investment Management où il était gérant senior, notamment responsable des gestionnaires de hedge funds Europe et marchés émergents.

Conseillée par Greenhill, la banque privée Close Brothers aurait présenté une offre pour acquérir Kleinwort Benson auprès de la Commerzbank, qui souhaiterait en tirer jusqu'à 300 millions de livres, rapporte The Sunday Times. Parmi les autres candidats repreneurs figure le management de Kleinwort Benson, soutenu par Simon Robertson, le chairman de Rolls Royce, et par sir John Bond, celui de Vodafone.Le nouveau directeur général de Close Brothers, Preben Prebensen, cherche à renforcer les activités de banque privée du groupe ; il aurait aussi l’intention de mettre sur pied un outil en ligne de gestion de fonds pour le compte de clients fortunés, comme Fidelity et Hargreaves Lansdown.

Au 31 juillet, la liquidité nette du fonds immobilier offert au public Axa Immoselect, qui demeure fermé aux remboursements depuis fin octobre 2008, ressortait à 493 millions d’euros contre 380 millions au 30 juin (lire notre article du 24 juillet). Cela tient entre autres à la vente au-dessus de la valeur de marché d’un immeuble sur la «Kö" de Düsseldorf, après celles de l’immeuble de magasins O 7 de Mannheim et d’un immeuble d’habitations et de commerces à Cologne.Actuellement, par ailleurs, le taux d’occupation des immeubles appartenant au fonds se situe à 96,4 %.