The Scottish asset management firm Aberdeen Asset Management, via its German affiliate Aberden Immobilien Kapitalanlagegessellschaft, this May launched a real estate fund aimed at institutional investors, with slightly over EUR100m in initial capital. It is the second real estate fund launched this year in Germany by Aberdeen. The fund, known as «Städte und Wohnen,” will initially invest in residential properties in Berlin, Frankfurt, Hamburg and Karlsruhe. Investments are also underway in Heidelberg and Munich. The objective for the fund is to invest about EUR1bn in German residential real estate.

GulfMena and SoloCapital will be launching a hedge fund in the next few days, which will be based in Dubai, and which will be only the second hedge fund accepted by the financial markets, Mena FM reports. The two firms are planning to deploy a systematic trading strategy which aims for returns of over 25% per year, with volatility of about 10%. The hedge fund, which has already been approve by the regulatory authorities, will be launched in mid-September with capital of EUR10m. The two partners are aiming for assets of EUR40m to EUR50m by the end of the year, and EUR250m to EUR350m in the next three years.

Switzerland, for the fourth consecutive year, tops the overall rankings in The Global Competitiveness Report 2012-2013, released on September 5 by the World Economic Forum. France has lost three places to 21st place, due to the declining confidence of investors in tax policies that heavily penalise investment decisions. Singapore remains in second position and Finland in third position, overtaking Sweden (4th). These and other Northern and Western European countries dominate the top 10 with the Netherlands (5th), Germany (6th) and United Kingdom (8th). The United States (7th), Hong Kong (9th) and Japan (10th) complete the ranking of the top 10 most competitive economies. The report indicates that Switzerland and countries in Northern Europe have been consolidating their strong competitiveness positions since the financial and economic downturn in 2008. On the other hand, countries in Southern Europe, i.e. Portugal (49th), Spain (36th), Italy (42nd) and particularly Greece (96th) continue to suffer from competitiveness weaknesses in terms of macroeconomic imbalances, poor access to financing, rigid labour markets and an innovation deficit. Despite growing its overall competitiveness score, the United States continues its decline for the fourth year in a row, falling two more places to seventh position. In addition to the burgeoning macroeconomic vulnerabilities, some aspects of the country’s institutional environment continue to raise concern among business leaders, particularly the low public trust in politicians and a perceived lack of government efficiency. On a more positive note, the country still remains a global innovation powerhouse and its markets work efficiently. The large emerging market economies (BRICS) display different performances. Despite a slight decline in the rankings of three places, the People’s Republic of China (29th) continues to lead the group. Of the others, only Brazil (48th) moves up this year, with South Africa (52nd), India (59th) and Russia (67th) experiencing small declines in rankings.

The number of fallen angels, or companies whose ratings have fallen from investment grade into the speculative category, totalled 30 in second quarter, compared with 6 in the previous quarter, and 25 one year earlier, according to the financial rating agency Moody’s which is offering a new quarterly review of changes in ratings for investment grade corporate issuers. Moody’s sates that 26 of the fallen angels in second quarter, 87% of the total, were based in Europe, which brings the rate of fallen angels in Europe to 3.3% compared with 0.8% in first quarter 2012. This percentage is only 0.1% in North America and 0.0% in Asia, while the global rate was 1.2%, compared with 0.2% in first quarter. Moody’s estimates, however, that the rate of fallen angels will fall to 0.8% in third quarter, with rates of 0.5% in North America, 0.2% in Asia and 1.6% in Europe. This significant improvement in the European rate is said to be related to stabilising outlooks for the financial sector due to poor results in second quarter. Only 12% of firms in the financial sector are on a negative ratings watch at the end of second quarter, compared with 55% at the end of first quarter 2012.

Following the recent manipulation of LIBOR, the European Commission on September 5 launched a consultation inviting stakeholders to comment on possible new rules for the production and use of indices serving as benchmarks in financial and other contracts.Commissioner for Internal Market and Services Michel Barnier said: «The international investigations underway into the manipulation of LIBOR have revealed yet another example of unacceptable behaviour by banks. Doubts about the accuracy and integrity of indices can undermine market confidence, cause significant losses to consumers and investors, and distort the real economy. It is therefore essential that steps are taken to ensure the integrity of benchmarks and the benchmark-setting process. The Commission has already acted quickly to amend its legislative proposals on market abuse. However, changing the sanctions regime alone may not be sufficient: wider work is required to regulate how indices and benchmarks are compiled, produced and used."The consultation is wide-ranging: it covers all benchmarks, not just interest rate benchmarks such as LIBOR but also commodities and real estate price indices for example and it seeks to identify possible shortcomings at every stage in the production and use of benchmarks.The ultimate objective is to ensure the integrity of benchmarks. All options are on the table but any solution should guarantee that benchmarks are not subject to conflicts of interest, reflect the economic reality that they are intended to measure and are used appropriately.

Tobias Pross, director of institutional distribution, on 5 September announced that Allianz Global Investors (AGI) will be offering its clients a way to reduce counterparty risks on their over-the-counter derivatives (OTC) from December: transactions made in this area from client portfolios will go via a central counterparty. AGI will thus allow investors to benefit from the protection provided by European Market Infrastructure Regulation (EMIR), which is expected to come into force sometime in 2013.

Leslie Richman, based in Chicago, and Duncan Crawford, based in London, have been promoted to the position of co-global head, alternative investment solutions, in the prime clearing services unit at Newedge, a joint venture of Société Générale and Crédit Agricole CIB. They will report to Chris Topple, global head of prime clearing services. The former has for the past two decades been head of alternative investment solutions for the United States, while the latter was global head of the capital introuctions branch, in which position he will be replaced by Keith Johnson, based in Chicago, who had previously been head of capital introductions Americas.James Skeggs, in London, and Ryan Duncan, in Chicago, become global co-heads of the advisory group, which is responsible for analysis of hedge fund strategies. Skeggs had been head of research EMEA, wile Duncan has been head of research Americas (he is also chairman of the index committee at Newedge). In their new roles, they will report to Richman and Crawford.

Icap, the major inter-bank broker worldwide, has made technical modifications to come into effect on 17 September, which will affect its EBS electronic trading platform, due to dissatisfaction on the part of its major clients, banks, due to competition which is viewed as aggressive and disruptive from high-frequency traders, Agefi reports.Icap will modify the granularity of its listings, removing the fifth decimal point from the relative price of strategic currency pairs. The broker will also reduce the percentage of allowed orders which are not processed as transactions, since these are only used to survey the market, in order to profit from any short-term inefficiencies.

The joint venture Ping An Russell Investments is preparing to launch a multi-managed fund aimed at high net worth individual (HNWI) clients early in fourth quarter, Hedge Week reports. The new product, known as MoM, will provide access to the same local hedge funds selected by Russell Investment for US dollar investors via the future QFII fund reserved for qualified foreign institutional investors.

The 2008 financial crisis altered the behaviour of hedge funds in terms of risk management. A new study from the Managed Funds Association (MFA), BNY Mellon, and HedgeMark outlines new data showing that hedge funds are continuing to develop risk management practices that fit the needs of investors and fund managers alike.Managers of hedge funds have reinforced their internal controls with key recruitments, and considerably increased the amount of information released to investors on a regular basis. They have also made an effort to express their approach to risk management in comprehensible language, and are not hesitating to go into detail.The survey finds that 79% of firms now separate their risk manager and fund manager functions entirely to ensure independent oversight. More than 50% of participants estimate that independent verification of positions is an essential element in hedge fund surveillance.Institutional investors have welcomed the moves, and are not concealing their appetite for ongoing training in risk management. Efforts by hedge funds and professional associations are a step in the right direction, but need to be sustained in order not to be overtaken by developments in the sector.The survey finds that many hedge funds claim that practices put in place for risk management may generate alpha, and may allow them to stand out from the competition. In any case, reporting to investors will be produced on a daily or weekly basis for the next five years, compared with only 12% in 2007.

Frank Engels, CIO for fixed income, announced on 5 September that Union Investment (the central asset management firm for the German co-operative banks) has set up its own system of country ratings, because S&P, Moody’s and Fitch have demonstrated in the past few years that they continue to behave procyclically and to react too late.The system developed by Union allows for systematic, uniform and transparent judgement of the solvency of governments, on the basis of fundamental economic data and measurable social and political indicators. It is based on three basic elements: fundamental macroeconomic evaluation of the ability of governments to pay their debts, an estimate of the desire of these governments to pay, and thus to make the necessary reforms in the case of need, and lastly, an advanced warning system which detects signs of weakness in economies which had previously been solid.Compared with ratings by the established ratings agencies, the Union ratings are worse for many industrialised countries, due to weak growth, the scale of debt, and poor budgetary discipline. On the other hand, emerging countries with solid budgets and strong growth are better-rated than by the established ratings agencies.According to Engels, the country ratings system from Union has recently been able to anticipate about 80% of ratings adjustments by S&P, Moody’s and Fitch. The system will be integrated from 1 November into the basic allocation process for the UniInstitutional Global Government Bonds fund, which is focused on investment grade government bonds.

The flagship index of the Paris stock exchange may be changed at the end of this week, Les Echos reports. Peugeot may be remoed from the index, to be replaced by the chemist Solvay, according to market specialists. Arkema and Sodexo are also among the candidates to join the CAC 40, where they would join Alcatel-Lucent and STMicroelectronics. The decision may be taken later this week, this evening or tomorrow, marking the first changes to the flagship index for nearly one year.

Scottish Widows Investment Partnership (SWIP) has appointed Calum Smith to the newly-created position of head of the “Global Aggregate” unit, in the fixed income team based in Edinburgh, Investment Europe reports.Smith previously worked at BlackRock. The fixed income team at SWIP manages about GBP70bn in assets.

At a time when investors continue to prefer bonds, a survey by Neptune Investment Management finds that equities will be the preferred asset class for independent financial advisers (IFA) in 2012-2013.Neptune finds that 60% of advisers say equities will be investors’ preferred asset class, followed by fixed income (23.5%), commodities (3.5%) and real estate (2.4%). The survey also finds that investors continue to prefer British products to the detriment of international products.

The range of eight tracker funds from HSBC Global Asset Management will gain the addition of a share class that complies with RDR regulations, with a management commission of 0.10%, Fundweb has announced. The shares will be available from independent financial advisers (IFA) via a certain number of platforms, institutions and discretionary managers.Overall, with registration fees, the products will cost 0.15%, compared with 0.25% net of front-end fee currently.Total TER varies depending on the product (see attached table).

Ignis Asset Management has hired Joanna Howley as product specialist LDI and fixed income. She will be responsible for helping to grow Ignis’ fixed income and liability driven investment (LDI) business and will work closely with Ignis’investment professionals as well as clients, and will interact with all distribution channels.Jo Howley joins Ignis from BlackRock where she had worked since 1997. There, she held fixed income and LDI product specialist positions. Her responsibilities included mandateoversight, consultant liaison and client relationship management. She played a key role in helping to establish BlackRock as one of the UK’s leading providers of LDI solutions.

Hargreaves Lansdown announced on 5 September, at a release of annual results, that the co-founder of the firm, Stephen Lansdown, plans to resign from the board of directors at the next general shareholders’ meeting. Pre-tax profits at the group totalled GBP152.8m for the half-year to 30 June, compared with GBP126m the previous year, an increase of more than 20% year on year. Assets under administration as of 30 June totalled GBP26.3bn, up 7% compared with the previous year.

Last month, daily trading volumes for on-book trades of ETFs on European markets of NYSE Euronext fell 16.4% compared with the previous month, to EUR191.7m, compared with EUR239.7m in July, and EUR257.7m in June. There were no new launches in August, and at the end of the month, the number of publicly-traded ETFs totalled 676, of which 587 were primary listings, comapred with 687 and 593 at the end of July.Block trades in August totalled EUR521.2m, compared with EUR741.5m in July (-29.7%), and EUR733.4m in June. They also represented 11.8% of total trading volume, compared with 14.1% in July The median spread in August stood at 28.1 basis points, compared with 29.7 points the previous month, and 31.15 points in June.

Frédéric Luyet, most recently deputy head of private banking at Credit Suisse for the Geneva region, will be joining the Basel-based Banque Sarasin as director of the French-speaking Swiss private banking unit in Geneva.Luyet will report to Bas Rijke, head of the Geneva office, and will lead a team of more than 20 people, composed of experienced client advisers and credit specialists, investment advisers and financial planners.Sarasin business with private clients based in Switzerland will be increased considerably from Geneva.

A merger announced between the two Swiss commodity specialist groups Glencore and Xstrata appears to have suffered a major setback, the New York Times reports. Shareholders in Xstrata will on Friday vote on the proposed operation, which would create a giant valued at about USD86bn. However, Qatar Holding, which is owned by the Qatar sovereign fund, is opposed to the terms of the merger. Qatar Holding, which owns 12% of Xstrata, is said to favour a ratio of more than 3 Glencore shares to one Xstrata share, while Glencore, which controls 34% of Xstrata, is offering 2.8 shares for each one.

Partners Group and Avista Capital Partners have acquired the US medical shoe and clothing maker Strategic Partners, in partnership with management of the firm. Strategic Partners is a leader in its sector, as well as in school uniforms, a statement released on 6 September says. The acquisition price has not been disclosed.

Senait Asgede has become the next to leave the Swedish team at Aviva Investors, the Swedish website Fondbranschen reports. She has joined Credit Suisse Asset Management in Stockholm. She there joins Tove Bångstad, who has made the same move, and who is now in charge of Scandinavian markets at Credit Suisse AM.

The Australian firm AMP Capital is planning to develop in Asia from its Hong Kong offices, which opened on 4 September, Asian Investor reports. The asset management firm has also given its international CEO, Anthony Fasso, responsibility for clients based in Australia. Assets under management at AMP Capital total about USD125bn, of which 85% come from Australian clients. Fasso says that although the Australian market remains an essential one for its activities, the most dynamic areas in terms of growth are now abroad, including Japan and parts of Europe. AMP Capital is planning to develop its fixed income activities in Asia. Organic growth remains a priority, but the firm has not ruled out acquisitions if occasions present themselves.

Agefi reports, citing information in the New York Post, that the private equity funds TPG, Leonard Green, Berksire Partners and CCMP are reportedly in the running for the last request for proposals in the next few weeks to acquire the US activities of Redcats, an affiliate of the PPR group. Eight brands are included, primarily including the plus size clothing website and catalogue company OneStopPlus.

As announced late in May by Newsmanagers (see Newsmanagers of 31 May 2012), Thomas d’Hauteville has joined M&G Investments as head of distribution in its Paris team. D’Hauteville was previously in charge of investor relations for North and South-West France at DNCA Finance. D”Hauteville will cover distribution activities in the North and South-West France regions for M&G.

La société de gestion Vivienne Investissement rejoint à compter du 1er octobre prochain le championnat amLeague. Adepte de la gestion quantitative, assurant la gestion d’un fonds «global macro» dénommé Ouessant, Vivienne Investissement interviendra de fait dans le cadre du mandat «multi asset class».Vivienne Investissement est une société de gestion quantitative indépendante issue d’un laboratoire de recherche et développement en finance quantitative fondé en 2005, et dont l’objectif a été, au moyen des mathématiques, d’innover et élaborer un processus de gestion robuste. Avec un track record obtenu en gestion pour compte propre, la société a élargi son activité à la gestion pour compte de tiers le 22 mai dernier.En rejoignant amLeague, Laurent Jaffrès, le président fondateur de la société compte ainsi accélerer le développement de son fonds en le faisant connaître auprès des investisseurs institutionnels, la gestion privée ou les family offices, etc. Le fonds, qui affiche un encours de 1,5 million d’euros, devrait cependant, dès l’année prochaine, être proposé aux particuliers via les conseillers en gestion de patrimoine.

The US hedge fund Strategic Value Partners has recruited Steve McGuinness, a former Goldman Sachs Asset Management executive, the Financial Times reports. He will be senior managing director at SVP, in charge of development, and will report to Victor Khosla, founder of the hedge fund. SVP has USD4bn in assets under management, of which USD2.2bn have been invested in distressed debt in the past 20 months.

The S&P 500 index has posted gains of 12% since the beginning of the year, of which 9.8 percentage points have been since 1 June. This movement has caught defensive fund and hedge fund managers off guard, and they have now to buy shares not to be left out, in a trend which may drive up the price of equities further, the Wall Street Journal notes. However, there is a lot of uncertainty in Europe and about the Fed’s monetary stance, and so some managers are preferring to “keep their power dry.”

The US affiliate of Julius Baer Holding, Artio Global Funds, has filed with the SEC a fall in its profits in first half, to USD6.87bn, compared with USD44.7bn in January-June 2011.Assets as of 30 June totalled USD21.16bn, compared with USD46.83bn twelve months previously. Net redemptions totalled USD10.46bn, compared with USD7.76bn, while market effects were positive by USD1.26bn in the first six months of the year (compared with USD1.19bn in first half 2011), despite a negative impact of USD1.02bn in first quarter.In the period under review, Artio laid off 25 employees, but this measure which aimed to save USD20m annually did not affect portfolio managers or analysts in the areas of international equities, high yield or high grade bonds. The asset management firm has announced that it will be liquidating its four US equity funds (Artio US Multicap Fund, Artio US Midcap Fund, Artio US Smallcap Fund and Artio US Microcap Fund).

Funds People reports that, according to Expansión, Santander is planning to merge its ten foreign asset management affiliates in a single holding company. The project is already well-advanced, as Spanish, UK, Argentinian and Luxembourg asset management firms have already been integrated, and the Mexican asset management firm of the group will soon be added as the bank in this country holds its IPO.The group will gradually transfer the Brazilian, Chilean, Polish, Puerto Rican and Swiss asset management firms to the holding company, while Santander Asset Management has recently founded a German affiliate, which will soon open in Frankfurt.