The French strategic investment fund (FSI) on 3 May announced that it plans to invest in the capital of Inside Contactless, a firm specialised in contactless payment systems, based in Aix-en-Provence (Bouches-du-Rhône), to assist it with a planned acquisition. The FSI will bring a EUR7.5m participation to a capital increase planned by Inside to finance an acquisition of the secure micro-controller division of the US semiconductor manufacturer Atmel, based in Rousset (Bouches-du-Rhône). The current shareholders at Inside, the private equity firm Gimv and Sofinnova Partners, will also participate, and Atmel will also invest in Inside. Gims has announced in a separate statement that it is planning to invest EUR11.2m in this round of fundraising.

LCF Rothschild has announced that Edmond de Rothschild Asset Management (EDRAM) on 23 April signed the United Nations Principles for Responsible Investment (UN-PRI). EDRAM has also decided to integrate awareness of environmental, social and governance (ESG) criteria into its voting policies, in addition to the principles of good corporate governance. The policy will apply uniformly to all shares held in portfolios in France and all global stock markets. To respect the highest standards for transparency about its SRI approach and ESG selection for investors, Edmond de Rothschild Asset Management has also brought its Saint-Honoré Europe SRI fund into compliance with AFG/FIR standards. The code is the French application of the guiding transparency principles for retail SRI funds established by Eurosif.

Kenneth Griffin, founder of Citadel Investment Group, last week asked Patrik Edsparr, head of the securities division, to leave the hedge fund management firm due to differences over business strategy and the culture of the firm more generally, the Wall Street Journal reports. Edsparr has not been replaced sof ar, but Citadel is planning to seek an external candidate for the position. The move is a further sign that Griffin has more work to do to stabilise the ranks at the firm.

«As expected, the restructuring undertaken at TCW at end-2009 resulted in a significant outflow in Q1 10,” Société Générale has announced at a presentation of results for its asset management activities. Since the departure of Jeff Gundlach and several other employees from the US firm, outflows from the asset management affiliate of SG have totalled EUR12.6bn. Accordingly, out of total withdrawals of EUR -12.6 billion, EUR -10.8 billion are attributable to the restructured MBS activity, whereas the outflow in other asset classes amounted to only EUR -1.8 billion. Going forward, the restructured MBS activity will be affected by further withdrawals, mainly by institutional clients, most of which have already been announced (EUR -4 billion). April suggests a more favourable trend for the rest of the activity scope, with a positive inflow of EUR +0.9 billion,” Société Générale says. The business line’s net banking income totalled EUR 83 million on the back of the growth in performance commissions and management fees, underpinned by improved market conditions. Operating expenses were down -3%(1) vs. Q1 09, at EUR -94 million. Gross operating income was EUR -11 million in Q1 10 vs. EUR -39 million in Q1 09. Amundi’s contribution of EUR 26 million takes the contribution to Group net income to EUR 19 million. At EUR 504 million, the Private Banking, Global Investment Management and Services division’s Q1 revenues were down -14.3% (-11.9%(1) when adjusted for changes in Group structure and at constant exchange rates) vs. Q1 09. Operating expenses were down -15.9% (-7.9%(1) when adjusted for changes in Group structure and at constant exchange rates) vs. Q1 09, reflecting the cost-cutting measures implemented under the infrastructure optimisation plan. Gross operating income totalled EUR 38 million. The division made a profitable EUR 55 million contribution to Group net income.

The husband of heiress Aerin Lauder, Eric Zinterhofer, chairman of Charter Communications, is leaving Apollo Global Management, where he is co-head of media & telecom investing, to found his own private equity firm, according to souces familiar with the matter cited by the Wall Street Journal. His new fund, which will be supported by the Lauder family, may raise USD500m to USD1bn, and will specialise in media and telecommunications. Apollo, for its part, is planning to appoint Gregory Beard, managing director of Riverstone Holdings, as head of commodities. He replaces Neal Shear, who, after a brief stint at Apollo, has moved on to become global head of securities at UBS.

Groupama Asset Management announced on Tuesday, 4 May that it has received a license from the Swiss federal market surveillance authority (FINMA) to release 8 OPCVM funds for sale in Switzerland. The operation comes as part of an international development effort at Groupama Asset Management, which is already present in Spain and Italy. In Switzerland, a dedicated team of 3 people will be in charge of development, while distribution will pass through private banks and wealth managers. The license for the 8 products is viewed as a major step for the management firm, which is planning to offer other investment strategies via its Sicav fund designed for European distribution, which will be launched in 2010, a statement from the firm says. Meanwhile, the OPCVM funds selected by the management firm are:•Groupama Avenir Euro, an equities fund dedicated to Euro zone small and midcap management•Euro Capital Durable, an SRI equities fund whose stock-picking is based on a “best in class” approach•Groupama Euro Stock, a conviction-based ufnd which invests in Euro zone large caps•Groupama Europe Stock, an opportunistic Western European equities fund•Groupama Croissance, a pure stock-picking equities fund of French equities•Groupama Japon Conviction, a conviction-based fund which invests in Japanese equities selected with the support of Nomura AM Tokyo •Groupama Asie, an equities fund which invests in large caps of the major Asian markets outside Japan in partgnership with Nomura AM Singapore for research• Monde Gan, a fund which invests in global equities, largely based on a fundamental approach

In first quarter, C-Quadrat has earned net profits of EUR4.7m, compared with losses of EUR0.2m for January-March 2009. Operating profits increased to EUR16.6m, from EUR6.2m, largely due to EUR4.5m in performance commissions and a 67% increase in commission revenues.

The US management firm State Street announced on 4 May that it has been selected by PineBridge Investments to provide outsourcing services for middle office operations, serving a total of USD53bn in assets. PineBridge Investments is a multi-strategy asset management and investment consulting firm with USD87.8bn in assets under management. State Street will provide the PineBridge operations in New York, Dublin, Hong Kong and Tokyo with global outsourcing services, particularly for transaction management, data management, investment account maintenance, system performance, and settlement. State Street will also provide fund accounting services to PineBridge in Japan.

Ameriprise Financial, which owns Threadneedle Investments and the US firm RiverSource Investments, among others, announced on Monday that it has completed its acquisition of the long-term asset management activities of Columbia Management from Bank of America. The deal was worth about USD1bn in cash, for a business with assets of USD189bn, In other words, Ameriprise paid only 0.53% of assets under management. As of 31 March, Ameriprise, with USD652bn in assets, placed eighth worldwide among long-term mutual fund management firms. The funds of RiverSource will be retained for annuities and life, health and disability insurance. In addition, the deal includes a distribution agreement which gives Ameriprise permanent access to distributors affiliated with Bank of America. Asset management activities will continue to be led by William F. “Ted” Truscott, CEO, U.S. Asset Management & President, Annuities. Michael A. Jones and Colin Moore, who will report to Truscott, will continue to serve as president and CIO of Columbia Management.

In a statement dated 4 May, CCR Asset Management, the asset management firm of the UBS group for France, has announced the appointment for Lorenzo Ballester-Barral to the position of CEO. He replaces Tim Blackwell, who will remain as president of the firm, while Jean-François Sarlat will become deputy CEO. Blackwell has been head of Europe, Middle East and Africa, excluding Switzerland, for UBS Global Asset Management since October 2009, and head of France since October 2008. Ballester-Barral has been deputy CEO and chief investment officer at CPR AM since 2009. Sarlat was previously deputy CEO of CCR AM, in charge of the products and marketing department.

Aberdeen Asset Managament has called a halt to the acquisitions that have helped assets under management grow from GBP96bn in March 2009 to GBP171bn in March 2010, says Financial Times. Instead, according to Martin Gilbert, chief executive, the asset manager would focus on organic growth and paying off debt.

Aberdeen Asset Management has reported underlying pre-tax profits of GBP92.6m for the six months to the end of March 2010, compared with GBP33m for the corresponding half of last year. Between 30 September 2009 and 31 March 2010, assets increased by 16.2% to GBP170.9bn, largely due to the acquisition of the multi-management activities of RBS (GBP13.5bn), and positive market effects. Net inflows were limited to GBP0.1bn. However, these were concentrated on high-margin activities, which resulted in an increase of GBP26m per year in revenues from commissions. These revenues totalled GBP294.9m, compared with GBP192.2m one year earlier.

F&C Asset Management confirmed at the beginning of this week that it will retain the Thames River Capital brand. The management firm will operate autonomously within the F&C group, which is seeking to do what is necessary to retain the management of Thames River. If the deal is approved by shareholders, the transaction announced last week would be completed by the end of third quarter 2010.

Swisscanto (CHF60.4bn in assets) has signed up to the United Nations Principles for Responsible Investment (UN-PRI), in an “engagement to entrepreneurial sustainable development in asset management.” The management firm for the Swiss cantonal banks “pledges to systematically integrate aspects of sustainable development (ESG) into its investment process for all clients.”

In first quarter, pre-tax profits for the Wealth Management & Swiss Bank unit of the UBS group totalled CHF1.16bn, a 5% increase compared with fourth quarter 2009. Pre-tax profits for the Wealth Management unit totalled CHF696m, a 3% increase compared with the previous quarter, while the Retail and Corporate unit earned pre-tax profits of CHF465m (+7%). Wealth Management Americas posted pre-tax profits of CHF15m for first quarter, compared with CHF178m in fourth quarter 2009. Global Asset Management finished the quarter with pre-tax profits of CHF137m, compared with CHF284m in fourth quarter, due to a slight reduction in revenues and an increase in personnel costs. In first quarter, net outflows of capital contracted in net terms compared with fourth quarter 2009, though they remained significant at about CHF18bn. These outflows, however, totalled CHF65.2bn in fourth quarter. For Wealth Management outside the Americas, capital outflows totalled CHF8.2bn, of which CHF1.4bn were in Switzerland, including the retail bank, compared with CHF33.2bn three months previously. The bank on Tuesday explained this heavy decrease as a result of external factors such as the Italian tax amnesty offer. For the Americas, net capital outflows totalled CHF7.2bn, compared with CHF12bn in fourth quarter 2009. Though net inflows to funds remained negative in this region, outflows related to the departure of financial advisers declined. In the Global Asset Management segment, net capital outflows totalled CHF2.6bn, following a total of CHF11bn three months earlier. Profits for the UBS group totalled CHF2.2bn in first quarter, an 83% increase compared with the previous quarter. In a letter to shareholders, UBS predicts “a gradual improvement in results for wealth management and asset management, depending on market conditions.” Net capital outflows “will be relatively moderate” in the next few months.

Carmignac Gestion on Tuesday, 4 May announced the arrival of Nicolás Llinas as head of fund sales at its Madrid office, opened in 2008. He joins the sales team at Carmignac Gestion, which already includes six people. Llinas was previously head of analysis and fund selection at Skandia, where he spent nine years. Llinas will officially concentrate his efforts on the growth of the management firm, which experienced some difficulties in Spain in 2009, following the decision of Quality Funds, an affiliate of BBVA, to withdraw six funds bearing the Carmignac Gestion brand name from its list of recommended products (see Newsmanagers of 16 October 2009). Soon after, the French management firm appointed a second account commissioner (KPMG), and BBVA returned Carmignac to its recommended list.

In first quarter 2010, the financial services provider AWD, an affiliate of the German Swiss Life group, earned operating profits of EUR9.8m, on earnings which remained stable at EUR133.8m. Compared with fourth quarter 2009, the numner of advisers increased by 1% in the first three months of this year, to a total of 5411. Restructuring costs at AWD totalled EUR53.7m, which gave the group a gap of EUR64m to make up. The group earned net profits of CHF277m (slightly over EUR193m), compared with CHF345m previously.

As planned, Credit Suisse is changing the name of its ETF product range. Xmtch will now be replaced by Credit Suisse ETF, in a move which comes as part of a strategy to position the new brand as one of the major ETF providers on the European markets. The global ETF activities of Credit Suisse are led by Dan Draper, who was previously global head of ETFs at Lyxor Asset Management (see Newsmanagers of 9 February).Currently, Credit Suisse manages about EUR50bn in tracker products, and is the leading ETF provider in Switzerland, with assets of CHF12bn, or EUR8bn. The Credit Suisse ETF range includes 40 funds, 26 of which are dedicated to equities, 11 to European bonds, and three to physical gold.Since the beginning of this year, assets have increased by CHF2bn, of which CHF465m have gone to the CS ETF (Lux) on MSCI Emerging Markets, and CHF337m to the CS ETF (IE) on MSCI Japan Large Cap. In addition to this, the CS ETF II (CH) on Gold, launched in October 2009, saw inflows in one month of CHF1.25bn; its asset currently total CHF1.6bn.

The European asset management sector will remain under pressure in 2010 and beyond, due to a need for restructuring and market conditions, Fitch Ratings predicts in a special report published on 4 May. Profits in the sector will not return to their pre-crisis levels in the short term, due to lower growth in assets under management and fewer opportunities to reduce costs. These factors all make the sector more vulnerable to the effects of any new phase of poor market conditions. Profits are lower in the sector, though average operating margins are still in good shape, at 27%, compared with 35% in 2007. The report points to regulatory changes on the horizon (UCITs IV, WIFM, Basel 3, Solvency II), which are a cause for uncertainty in the sector. The first effects of these developments are already apparent in the launch of hedge fund vehicles in OPCVM format and the move to European domiciles of offshore funds. “Changes in the longer term, including Basel 3 and Solvency II, represent a more considerable challenge for the financial industry, which may lead major investors such as banks, insurers and pension funds to pull out of some higher-risk assets,” says Aymeric Poizot, head of the Fund and Asset Manager group for the EMEA region at Fitch.

According to a report recently published by Aite Group, high-frequency trading already represents 25% of volumes on futures markets. Aite says this percentage may rise to as much as 40% by 2015.

Morningstar has placed four Rosenberg funds under review, following an error in the investment process at the management firm for Axa Investment Managers detected a few weeks ago (see Newsmanagers of 19 April), fundstrategy reported on Tuesday. The funds concerned are Axa Rosenberg America, Axa Rosenberg Europe, Axa Rosenberg Japan and Axa Rosenberg Asia Pacific ex-Japan, all of which are rated “standard” due to mediocre returns for the funds since their management has been provided by Rosenberg.

According to statistics from Mercer (Pension Investment Performance Service), Spanish pension funds lost an average of 0.8% in April, with losses of 3.6% for equities funds denominated in Euros, while in the first four months of the year, these funds gained 1.5%. Funds specialised in equities from outside the Euro zone posted gains of 14.6%, but funds focused on Euro zone equities saw losses of 4.4%, while funds specialised in bonds gained 1.7%. In twelve months, pension funds posted returns of 10.6%; funds invested in bonds gained 5.6%, while funds positioned on equities posted gains of 24.1% for funds in Euros, and 37.7% for those denominated in other currencies.

HSBC has registered ETFs in Spain which replicate the CAC 40, FTSE 100 and DJ Euro Stoxx 50 indices, Expansión reports. The asset manager will soon launch ETFs on international markets which track the FTSE Xinhua China 25 and the FTSE 250, which will also soon be made available in Spain.

Ivan Rancic has been appointed head of IFA-sales at DWS in Frankfurt. With his team, he will be in charge of client relationship management serving brokers and small management firms in Germany. He was previously in charge of distribution for Austria and Eastern Europe at DWS Austria.

The Wall Street Journal reports that the European Parliament is preparing to pass regulations which woudl ban hedge funds based in some offshore tax havens from raising money from EU investors. The proposed rule would require European authorities to create a blacklist. To avoid being put on the list, countries would be required to satisfy five criteria, the reporter on the legislation, Jean-Paul Gauzès, says.

On Tuesday, Vanguard announced that it will cancel transaction commissions for 46 funds of its low-cost ETF range. It is reducing fees to USD7 and USD2 on transactions on equities and ETFs which do not belong to its product range. The changes apply to transactions at Vanguard.com as well as to trades made with the assistance of a broker affiliated with Vanguard. The average management commission for Vanguard ETFs now totals 0.18%, compared with a market average of 0.52% as of 31 December 2009, according to estimates from Lipper. The management firm has posted net subscriptions of USD11.7bn for its ETFs from the beginning of this year to 29 April. Assets in its ETF funds total over USD100bn; the largest products are the Vanguard Emerging Markets ETF (VWO), with USD24bn, and the Vanguard Total Stock Market ETF (VTI), with USD15bn.

The investor defence association Aktionsbund Aktiver Anlegerschutz (AAA) is planning a lawsuit against Commerz Real over its plans to merge the open-ended real estate fund hausinvest Europa (EUR10.89bn in assets) with the hausinvest Global fund (EUR1.58bn) on 30 September, Das Investment reports. The AAA claims that the deal could disadvantage subscribers in the hausinvest Europa fund as half of the portfolio of the hausinvest Global fund is composed of properties located in Singapore, Canada and Japan, many of which are under leases which will expire this year or in 2011. Fees for the hausinvest Global are also higher, and would be charged to shareholders in the hausinvest Europa if the funds were merged.

On 17 May, db x-trackers (Deutsche Bank group) is planning to launch a UCITS-compliant ETF fund which replicates the S&P 500 TR index (dividends reinvested) on Deutsche Börse and the London Stock Exchange. The db xtrackers S&P 500 ETF fund will subsequently be launched on other European stock markets (Borsa Italiana, SIX Swiss Exchange, Nasdaq OMX Stockholm, NYSE Euronext Paris), and in Asia (Singapore Exchange SGX and Hong Kong Stock Exchange). Management commissions total 0.20%. Institutional investors will be allowed to make over-the-counter (OTC) transactions directly with Deutsche Bank, even before the product is released on the stock markets.

Deutsche Börse has announced that on Thursday it admitted 10 ETC and 5 ETN funds from the Royal Bank of Scotland (RBS) based on the Rogers International Commodity Indexfamilie Enhances (RICI Enhanced) family of indices to trading. The ETC products replicate the evolution of indices for oil (Brent Crude Oil, WTI Crude Oil), natural gas, soft commodities, industrial metals, grains and oil seeds, and a basket of 37 commodities. The other three products replicate the S&P Goldman Sachs commodity indices for oil (Brent and WTI) and natural gas. The four ETN products replicate MSCI indices, they include the MSCI FM (Frontier Markets) Daily Net Total Return Index, the MSCI AC South East Asia Net TR USD Index, the MSCI Gulf Cooperation Council ex SA Top 50 Net TR USD Index and the MSCI Daily TR Net Emerging Markets USD Index. Deutsche Börse states that its ETP segment now includes 171 ETC and 19 ETN products, with monthly trading volumes for ETC products of about EUR440m.

The new MSCI Emerging Markets Source ETF, launched by Source UK Services on the London Stock Exchange (LSE), replicates the MSCI Emerging Markets Total Return (net) index. The Irish-registered product (IE00B3DWVS88), denominated in US dollars, uses several counterparties to ensure a faithful replication of the evolution of the underlying index. The precaution is not trivial, as according to Source, performance tracking error for other ETFs which replicate the MSCI EM index ranges from 1% to 5.2%. The management commission for the fund is 0.65%.