At the annual conference at the London Business School, held yesterday in the British capital, a question asked of Stephen Hester, the new head of the Royal Bank of Scotland (RBS) gave rise to energetic discussions. Hester received permission from his board of directors to receive a maximal salary of GBP9.7m (EUR11.4m), of which only GBP1.6m is set, and the rest consists of bonuses which depend on the share price of RBS. However, the newspaper reports, some in the financial sector consider the pay unjustified at a time when, “to finance the bailout of the bank, taxes have increased,” as one of them says. La Tribune goes on to report that John Kingman, director of UK Financial Investments, the government agency in charge of managing the British government’s investment in the banks, says the state owns 70% of capital in RBS, and approved the pay scale since the bank’s success “depends enormously on the success fo Stephen Hester.” But Julian Franks, a professor of finance at the London Business School, says it would be more fair if “managers had something to lose if they failed.”

According to Les Echos, the US receiver of Madoff’s assets, Irving Picard, is seeking to recuperate money withdrawn by funds and investors in the weeks preceding the broker’s arrest. He is said to have sent the liquidators of the Luxalpha Sicav a statement indicating that Luxalpha must return USD535m, corresponding to all withdrawals during autumn 2008. To defend his interests in Luxembourg, he has retained the law firm Schiltz & Schiltz. The Swiss firm UBS, depository for Luxalpha, is clearly facing a risk of legal action, and is already under pressure from French investors, who are filing a growing number of suits in Luxembourg demanding to be reimbursed.

According to the Nikkei news agency, Mitsubishi UFJ Asset Management Co is planning to launch a new ETF on the Tokyo Stock Exchange in mid-July, which will replicate the evolution of the share prices of 26 companies of the Mitsubishi group, including Tokio Marine Holdings and Mitsubishi Heavy Industries. The management commission will be about 0.50%.

The Luxembourg Sicav BlackRock Global Funds (BGF) from BlackRock since 19 June now has an additional sub-fund. The BGF Global Inflation Linked Bond Fund is aimed at subscribers with a long-term horizon, and will invest primarily in inflation-linked bonds issued anywhere in the world. The new product will be co-managed by Brian Weinstein and Adam Bowman. The fund will be denominated in US dollars, but Euro-hedged shares will be available. The average duration of bonds in the portfolio will be over 7 years, and the benchmark is the Barclays Capital World Inflation-Linked Bond Index (US hedged). Currently, BlackRock manages USD15.2bn in assets (as of the end of March) in index-based bond portfolios on behalf of institutionals, of which USD9.7bn are in mandates.

Carlyle Group announced on Tuesday that it has raised USD1.04bn for a new fund, Carlyle Asia Growth Partners IV, which will aim to invest in fast-growing Asian companies, the Wall Street Journal reports.

The Luxembourg Sicav fund from the management firm Standard Life Investments (SLI) is now available in Scandinavia via the investment fund market MFEX. According to SLI, MFEX is the largest independent fund market in Europe: 268 management firms from 15 countries offer funds for sale in countries such as Austria, Belgium, Finland, France, the Netherlands, Norway, Sweden, and Switzerland. The sub-funds in question already have licenses for retail sale in Denmark, Finland, Germany, Ireland, Luxembourg, Norway, Sweden, and the United Kingdom. The 18 sub-funds of the Standard Life Investments Sicav are already available via a number of major distributors throughout Europe, including Aktia in Finland, dwpbank and Fidelity FundsNetwork in Germany, Merrant in Sweden, and Nordea in the Scandinavian and Baltic coutnries.

In Germany, the passive management boom is not only apparent in the strong subscriptions to ETF funds. It can also be seen in subscriptions to institutional funds (Spezialfonds). Universal Investment reckons its assets in passively-managed Spezialfonds at nearly EUR8bn, the Börsen-Zeitung reports. State Street, for its part, manages about EUR12.4bn for German and Austrian institutional clients in passive mandates, which represent 65% of its assets in the region. DB Advisors, the institutional management specialist of the Deutsche Bank group, manages about EUR6.8bn in passive equities and bond mandates.

La Tribune reports that the British fund Candover has ended discussions with potential buyers. A potential sale does not offer enough “certainty and value for shareholders,” the firm stated, according to the newspaper.

La Tribune reports that the US private equity firm Blackstone has raised USD4.3bn for the Real Estate Partners Europe III fund, which will invest in European real estate.

On 24 June, MEAG Munich Ergo Asset Mangement launched the MEAG FairReturn fund, aimed primarily at charities. The product is a diversified absolute return fund investing primarily in Europe, which is managed with a sustainable development (ESG) approach. Minimal subscription is set at EUR10,000. The portfolio is largely composed of bonds, complemented by equities and derivatives. The strategy has already been in use since 2002 on behalf of Munich Re, and fund find generated returns of over 3% in 2008. MEAG is the management firm for Munich Re and the primary insurer Ergo. In this capacity it manages about EUR187bn in assets.

In the first five months of the year, the 46 open-ended real estate funds have posted net subscriptions of EUR2.28bn, of which EUR697.5m were in May. By comparison, open-ended securities funds attracted only EUR690.4m in investment in the same period. Total assets in real estate funds as of 31 May totalled EUR87.36bn. Of the 17 major asset management firms, which offer a total of 39 RE funds, only four have seen net redemptions, among them DEGI (Aberdeen group), with EUR280m, and RREEF (Deutsche Bank) with EUR256.8m. However, Commerz Real (Commerzbank) and Union Investment Real Estate (UIRE, co-operative banks) have posted net subscriptions, of EUR442.4m and EUR889.3m, respectively.

Beginning at the end of this month, the Inverco association of managemnet firms is planning to launch a “media offensive” to highlight the advantages of investment funds and pension funds, Mariano Rabadán, president of Inverco, tells El País. He says the outflows from investment funds have now let up, and that subscriptions are rebounding strongly. As to pension funds, Rabadán “has the impression” that they developed nicely in second quarter in terms of the number of members and of performance.

L’Echo reports that the Netherlands activities of the Belgian bank Degroof will be taken over by its management. “The announcement is part of a larger refocusing of the Degroof bank on the group’s strategic activities, in Belgiu, Luxembourg and in France,” says a spokesperson for Banque Degroof based in Brussels. The Degroof affiliate which previously operated in the Netherlands under the name Degroof Vermogensbeheer will change its name to becme Stroeve en Lemberger Vermogensbeheer, from the beginning of July 2009.

According to Romandie.com, the Swiss bank UBS has said in a statement reported by the German television news show “Eco” that it regrets that its behaviour exposed Switzerland to international criticism, and that the reputation of the group has suffered due to its infractions to German and United States law.

A Swiss independent financial advisor came before a judge in Madrid in late May on charges of money-laundering and tax evasion, Le Temps reports. The Swiss newspaper, which knows the name of the manager but has published only his initial, G., says he is accused of assisting the Spanish entrepreneur Francisco Correa to establish offshore financial circuits which several provincial Spanish directors were able to use to corrupt ends. The wealth management firm for which G. works has been present in Geneva for over 30 years, and manages between CHF1bn and CHF2bn, Le Temps reports.

Kyle Prechtl Legg, president since 1997 and CEO since 2006, is leaving his job at Legg Mason Capital Management (LMCM) this Tuesday, 30 June, Global Pensions reports. She will remain as a consultant until the end of the year, and will be replaced by Jennifer Murphy, currently vice president in charge of research, risk management, and new products. These responsibilities will be distributed between several heads at LMCM, a management firm with assets of USD12bn as of the end of March, compared with USD70bn at the end of June 2007.

La Tribune reports that the crisis has obliged Natixis Global Asset Management (NGAM) to part with Delafield Asset Management (DAM), an American value-style management firm owned by Reich & Tang Asset management, a 100% subsidiary of NGAM. Tocqueville Asset Management (TAM), a firm based in New York which manages about USD5bn, will take over DAM’s USD400m in assets.

JPMorgan Chase is closing a private equity fund with more than USD600m in assets, Brysam Global Partners, managed by former executives of Citigroup Robert Willumstad and Marjorie Magner, the Financial Times reports. The closure of the fund, launched in 2007 with money from JPMorgan and its founders, does not mark the end of the career of the two executives.

The product range from Sal. Oppenheim (France) now includes the Multi Invest OP, a reactive fund of funds which was granted a license by the French market regulator, the Autorité des Marchés Financiers, at the end of April 2009. The management process for the fund, created in 1999, was modified in 2003. Since then, the product has been a reactive fund of funds, whose allocation may vary from a 100% money market portfolio to a portfolio invested 100% in equities. Despite having the composition of a diversified portfolio, the objective of the fund is to outperform the MSCI World index on a five-year horizon. Allocation is determined by a quantitative model which analyses a number of factors, primary among them the behaviour of the markets, including intra-day volatility, based on a multi-asset class approach (geographical and sectoral). 60 different asset classes are analysed. When the model recommends investment, the allocation procedure is to select the most attractive asset classes, up to a maximum of ten, and then to invest with equal weighting in each of these asset classes, with each of them limited to 10% in order to diversify the portfolio. Characteristics (R-class shares) Name of fund: Multi Invest OP ISIN Code: LU0103598305 Subscription commissions: 5.25% maximum Management fees: Set: 1.80% Variable: 15% on annual performance exceeding 8% Value of one share: EUR42.77 (as of 31/05/09) Minimal subscription: none

Harewood Asset Management, a management firm owned 100% by BNP Paribas, is launching the Harewood Quant’ Guru Europe Equity fund, an international equities FCP fund compliant with UCITS III and eligible for PEA. The fund is available to all types of investors (institutional and retail). The FCP fund is exposed to the BNP Paribas GURU Equity Europe Long Total Return strategy index. “The strategy is inspired by the approach developed and long used by the best managers, the ‘financial gurus,’ who have shown an ability to stand out consistently in terms of performance over several decades. The rigorous approach is based on fundamental analysis of companies,” a press statement explains. “The strategy used by the fund concentrates on three essential questions, which must be asked of all investments: 1) Is the business profitable? 2) Are its outlooks favourable? And 3) Is it attractively priced?” the statement continues. The portfolio for the strategy is reviewed on a monthly basis and is composed of an average of 120 European businesses. In highly volatile markets, often characterized by periods of decline, the strategy may reduce its exposure to equities to preserve value. Characteristics Name of fund: Harewood Quant’ Guru Europe EquityISIN Code: FR0010730077 (A-class, institutional shares) Subscription commission: 3% maximum Management fees (as a percentage of net assets): 1% maximumValue of one share: EUR1,000Minimal subscription: 250 shares

Les Echos reports that the New York broker Bernard Madoff, aged 61, was sentenced yesterday to a 150-year prison term for setting up the largest Ponzi scheme of all time. His defense lawyer, Ira Sorkin, yesterday pledged that his client would cooperate with authorities. The fraud has so far caused USD13.2bn in losses for 1,341 clients. But the impact of the fraud, valued at USD65bn, may be much larger.

US federal prosecutors are opposed to grant Sir Allen Stanford freedom on bail ahead of his trial for fraud, on the grounds that there is a risk the disgraced financier would flee, the Financial Times reports. Sir Allen has pleaded not guilty to 21 charges against him.

State Street Corp has announced that its affiliate State Bank and Trust on 25 June received a Wells notice from the SEC concerning possible violations of securities legislation in relation to its disclosure policy and management of certain bond strategies in and before 2007. According to Pensions & Investments, staff at the SEC has requested permission from the Commissioners to file a civil suit.

As of 30 June, KBC Asset Management is transferring the management of the Central Europe, Eastern Europe et Turkey sub-funds of its Belgian Sicav KBC Equity Fund to KBC Group NV CSOB Asset Management, based in Prague; the investment objectives and management fees for the products will remain unchanged. The move arises from a desire to make better use of local expertise, as KBC AM has affiliates in the Czech Republic, Hungary, Slovakia and Poland. Assets in central and eastern Europe total EUR14bn.

According to official figures, the fraud perpetrated by Bernard Madoff would appear to have claimed few victims in Italy, Il Sole - 24 Ore reports. An investigation by Consob (the Italian securities commission) of asset management finds that the exposure of funds, private portfolios and insurance policies to the Ponzi plan totals only EUR187m. But the Italian newspaper estimates that the impact of Madoff in Italy is far higher, since many Italians had invested in Switzerland or other countries.

Selon Les Echos, le groupe paritaire de protection sociale multiplie les initiatives, les investissements et les partenariats. Fort de 2,9 milliards d’euros de fonds propres, il estime disposer des moyens de ses ambitions, dont la création d’un réseau de 100 boutiques d’ici à 2012. Malakoff Médéric vise les 10 millions de personnes protégées à l’horizon 2010, là où il n’en couvre aujourd’hui que 2 millions. Le groupe prévoit toujours 5 milliards d’euros de chiffre d’affaires en 2012, ce qui suppose une croissance de plus de 10 % par an. L’objectif a été atteint en 2008, avec un chiffre d’affaires de 3,3 milliards d’euros, en hausse de 10,3 %.

Selon la Tribune, la société américaine de capital-investissement Blackstone a levé 4,3 milliards de dollars pour le fonds Real Estate Partners Europe III, investi dans de l’immobilier européen.

Après l’annonce par Newsmanagers de sa vente imminente vendredi 26 juin, et la reprise de cette information dans la presse financière, la société de gestion Tocqueville Finance a été contrainte de s’expliquer auprès de ses partenaires – des conseillers en gestion de patrimoine. Dans ce communiqué dont nous avons pu nous procurer une copie, la nouvelle la plus importante figure à la fin. Elle précise que Marc Tournier, "à l’origine du développement de l’activité de gestion collective, restera, dans tous les cas de figure, présent au capital et continuera d’assurer la direction de cette activité. «Pour le reste, la société de gestion est revenue sur le film de ces dernières semaines. Elle conteste avoir été «lâchée de toutes parts» reprenant le titre d’un quotidien économique du 29 juin, mais confirme son intérêt pour «toute offre de partenariat qui [lui] est faite». En d’autres termes, la société de gestion étudie la possibilité de «développer un partenariat stratégique amenant complémentarité de l’offre et redynamisation des encours, qui ont diminué du fait de la crise financière. " Une diminution qui ressemble plus à une chute puisque les encours sur la gestion actions value, en revenant de 3,6 milliards d’euros au 31 décembre 2007 à 1,5 milliard d’euros au 1er avril 2009, affichent un recul de près de 60 %. A propos des relations avec OTC Asset Management, alors que le quotidien la Tribune annonçait le 29 juin la vente très rapide des 15 % du capital que Tocqueville Finance détient encore dans cette société, la société de gestion a rappelé s'être fait volontairement diluer au profit des salariés d’OTC AM, jusqu'à ne détenir plus que 15 % du capital. Puis, «souhaitant réduire son exposition aux actions», précise le communiqué, «OTC a, courant 2008 et au début de l’année 2009, réduit sensiblement sa position dans les fonds gérés par Tocqueville et a ainsi résilié les conventions qui liaient les deux sociétés. Tocqueville Finance ayant souhaité développer en direct une activité de «Private Equity», est-il encore précisé, il est donc naturel d’envisager la cession du solde de sa participation. Pour conclure, Tocqueville Finance a rappelé la récente surperformance de sa gamme, notamment celle du fonds Ulysse, «en hausse de plus de 12 % depuis le début de l’année». Aussi la société de gestion s’attend-t-elle à afficher,dans un environnement de marché stabilisé, des performances supérieures à celles de ses indices de référence dans la seconde moitié de l’année.

Natixis fusionne officiellement ses deux banques privées, indique la Tribune. Banque Privée Saint Dominique et Compagnie 1818 donneront naissance à Banque Privée 1818. Le nouvel établissement compte à ce jour 12 milliards d’euros d’encours contre 14 milliards d’euros à fin 2007, avant la crise financière. Les complémentarités sont indéniables, précise le quotidien. Banque Privée Saint Dominique est exclusivement spécialisée dans la gestion de fortune alors que Compagnie 1818 est plus diversifiée, notamment dans la gestion patrimoniale. Des économies de coûts devraient être réalisées via la suppression de postes dans les fonctions supports du nouvel banque privée. D’ici à la fin de l’année, il est question d’environ 70 postes supprimés, sur un total de 440.

President depuis 1997 et CEO depuis 2006, Kyle Prechtl Legg quitte ses fonctions chez Legg Mason Capital Management (LMCM) ce mardi 30 juin, rapporte Global Pensions. Elle restera comme consultant jusqu'à la fin de l’année et sera remplacée par Jennifer Murphy, actuellement vice president responsable de la recherche, de la gestion du risque et des nouveaux produits. Ces attributions seront ventilées entre plusieurs dirigeants de LMCM, une société de gestion dont l’encours se situait à 12 milliards de dollars fin mars contre 70 milliards fin juin 2007.