Saker Nusseibeh, who has been serving as interim CEO since the departure of Rupert Clarke (see Newsmanagers of 24 November 2011) in addition to his responsibilities as CIO of Hermes Fund Management, has officially been appointed as CEO of the British asset management firm. He joined Hermes, which manages the pension fund for British Telecom, in 2009, from Fortis Investments; he had previously served as chief investment officer for international equities and head of marketing at SGAM UK. Nusseibeh will combine his new role with that of head of investment.

The Financial Services Authority (FSA) has decided to fine hedge fund CEO Alberto Micalizzi GBP3 million and ban him from performing any role in regulated financial services for not being fit and proper. This is the FSA’s largest fine for an individual in a non market abuse case.At the relevant time, Micalizzi was the chief executive officer and a director of Dynamic Decisions Capital Management Ltd (DDCM), a hedge fund management company based in London.The FSA has also decided to cancel the permission of DDCM to conduct regulated business. The decision notice for Micalizzi, dated 20 March 2012, states that between 1 October 2008 and 31 December 2008, the master fund managed by DDCM “suffered catastrophic losses of over USD390 million, approximately 85% of its value”. In the FSA’s opinion, in late 2008, to conceal the losses, Micalizzi lied to investors about the true position of the Fund and entered into a number of contracts, on behalf of the fund, for the purchase and resale of a bond. The FSA believes that the bond was not a genuine financial instrument and that Micalizzi was aware of this when he entered into the bond contracts.In the FSA’s view, the bond contracts were deliberately undertaken by Micalizzi to create artificial gains for the fund. And despite the losses suffered by the fund, he continued to seek new investors. “It is the FSA’s view that by providing false and misleading information he deliberately concealed the true value of the fund from one new investor who subsequently invested USD 41.8 million on 1 December 2008,” states the authority.In May 2009 the fund was placed into liquidation. The fund’s liquidator estimated that the fund’s assets on liquidation were worth approximately USD 10 million. To date, no payment has been made to any investor by the liquidator.Micalizzi and DDCM have referred this matter to the Upper Tribunal where they and the FSA will each present their case. The court will then determine the appropriate action for the FSA to take. It may uphold, vary or cancel the FSA’s decision.

Brewin Dolphin has earned pre-tax profits in the half year to 31 March of GBP12.3m, up 3.3% compared with the first half of the previous fiscal year. Assets under management increased 7.1% in the period under review to a total of GBP25.7bn, largely due to an increase of nearly 11% in discretionary funds, to GBP17.3bn.

The appetite of advisers for passive investment products is expected to increase in the next six months, according to a survey by the research agency Platforum. In second quarter 2012, investors bet 72.5% of their assets on active strategies, compared with 27.5% for passive strategies. In first quarter, the percentage was 70/30. But in the course of second quarter, exposure to passive strategies is expected to reach 36.1%, according to investment advisers. The cause of this taste for passive strategies, say advisers, is costs as a number one factor, followed far behind by performance.

Royal London Asset Management (RLAM) on 29 May announced the appointment of Azhar Hussain as head of the Global High Yield unit. In his new role, Hussain will concentrate his efforts on the development of Royal London’s capacities in the high yield segment. Hussain previously worked at Insight Investment Management, where he was responsible for high yield and leveraged loans.

A survey in first quarter undertaken by RBC Dexia and Accenture of 33 Spanish asset management firms representing 65% of total assets in the sector has found that professionals are expecting profound changes in their industry, as concentration continues, managers increasingly specialise and a growing focus on efficiency and performance. They also predict that success will depend on technological progress and that the trend to outsource will continue.The survey finds that the three major asset management firms alone account for 45% of total assets and that the average size of a fund in Spain is only EUR57m, which compares with EUR262m in the United Kingdom and EUR300m in Switzerland. In the past three years, the number of funds in Spain has contracted by about 20%, to 2,500.

The Qatar sovereign fund, Qatar Investment Authority (QIA), has applied for a qualified foreign institutional investor (QFII) license, to invest directly in the Chinese onshore market, Asian Investor reports. The initiative by the fund comes in the wake of moves by other sovereign funds from the Middle East, all of which have QFII licenses, such as the Kuwait Investment Authority, which has received a USD300m license. According to a board member, the Qatari fund may invest up to USD30bn this year.

Le 7 juin 1936, le gouvernement du Front populaire instaure la semaine de quarante heures et l'octroi de quinze jours de congés payés pour les salariés ayant travaillé durant six mois dans la même entreprise. Dans le bâtiment et les travaux publics (BTP), les salariés changeant fréquemment d'employeur et risquant de ne pas bénéficier de ce repos, le gouvernement, à la demande de la profession, décide de créer un système spécifique de caisses (ainsi que dans les secteurs d'activités du transport, du spectacle et de la manutention portuaire), destiné à assurer la gestion et le paiement des congés payés des salariés du BTP. En 1947, ce dispositif est complété par un régime d'indemnisation du chômage pour cause d'intempéries. Au fil du temps, d'autres missions ont été confiées au réseau.

Amaury de Warenghien, directeur financier d’Axa France dans Option Finance numéro 1172: L’immobilier et les actions conservent un intérêt du fait de leurs perspectives de rendement à long terme et de la diversification qu’ils apportent, à condition toutefois de bien en régler le poids dans nos portefeuilles. Notre patrimoine immobilier, géré par Axa Real Estate, est constitué de biens en France (habitations, bureaux, commerces, logistique...) et se développe à l'étranger. Nous avons en effet un souci de diversification au sein de ce portefeuille. Le poids des poches actions, constituées d’actions en zone euro et internationales, a été divisé environ par deux sur cinq ans. Nous conservons nos placements dans le private equity. L’allocation d’actifs d’Axa France est la suivante: sur les métiers de la vie, elle était répartie fin 2011 avec 6% d’actions, 6% d’immobilier, 43% de crédit et 45% d’obligations souveraines. En ce qui concerne l’assurance dommage fin 2011, 12% d’actions, 8% d’immobilier, 50% de crédit et 30% d’emprunts d’Etats.

Russell Investments has awarded a USD329m mandate to Strategic Fixed Income, a US fixed income and currencies specialist, Citywire Global reports. The firm becomes the fifth manager of the multi-strategy funds Global Bond and Global Bond (Euro Hedged), based in Dublin, and the Australian fund International Bond at Russell, with a total of USD4.1bn in assets.

Klaus-Peter Flosbach, spokesman for the CDU/CSU alliance in the German parliament, on Tuesday announced that the parties of the government coalition are planning to give the market regulator the power to stop high-frequency trading at any time, without waiting for any potential European regulations on the subject. An initial draft of the bill will be presented in late June, and the first bill may be released this autumn, thus before the German legislative elections in September 2013, Die Welt reports.Flosbach says it is regrettable that so far, firms which practice high-frequency trading are not required to apply for a license, and that the regulator has no resources at its disposal to interrupt trading at any time. In addition, there is not yet a limit on the proportion of orders passed to orders processed.Deutsche Börse, however, in February introduced a maximal fine of EUR20,000 for operators who put many more orders into the system than they subsequently execute.

Berenberg Bank entrusted its affiliate Universal-Investment with the launch of the German-registered bond fund Berenbarg-1590-Sicherheit-Universal, a fund of quality bonds (therefore referred to as “safe”) rated investment grade, from European issuers (government bonds, Pfandbriefe and corporate bonds, as well as money market instruments). The portfolio will focus on short to moderate maturities, and Universal is planning to conduct an “active, dynamic” management of duration. The fund is available in a distribution share class (A) and a capitalisation share class (T).CharacteristicsName: Berenberg-1590-Sicherheit-UniversalISIN codes:DE000A1JUV45 (A shares)DE000A1JUV52 (T shares)Front-end fee: 5%Management commission: 0.65%Depository bank: State Street Bank GmbH

The US bank JPMorgan Chase, which is being targeted by regulators due to colossal losses in its brokerage activities, is now the subject of a separate investigation by the Tokyo market authorities into an insider trading case, the new agency Dow Jones reported on 29 May. JPMorgan Chase was one of the two institutions tasked with underwriting an issue of new shares by the Japanese business Nippon Sheet Class in August 2010, in a process which the Tokyo Securities and Exchange Surveillance Commission (SESC) is now investigating. On Tuesday, the SESC asked its parent agency, the Japanese financial services agency (FSA) to impose a fine on an asset management firm, Asuka Asset Management, which it found guilty of insider trading in the issue. Just ahead of the capital increase by Nippon Sheet Glass, Asuka Asset Management got wind of the operation under preparation and short-sold shares in the group at a high price, ahead of the reports, and then bought them back at a cut rate once the news was out. According to Dow Jones, the SESC suspects the broker JP Morgan Chase of being the source of the leak which allowed the asset management firm to pocket JPY60.5m in the fraudulent operation (about EUR600,000 at current exchange rates).

The trustee in charge of recuperating money for victims of the fraud perpetrated by Bernard Madoff has so far made more money for himself and his law firm in the three and a half years since the former fund manager went bankrupt than he has distributed to the victims. According to a report published on the website of the trustee, Irving Picard, the liquidation of the investment fund managed by Madoff, who is serving a 150-year prison sentence, has so far cost over USD554m. This total includes commissions to the director himself (USd5.1m), but mostly consists of the paychecks of the lawyers at work on the case, which total about USD300m, as well as the costs for special consultants (about USD220m) and investment bankers (USD1m). Meanwhile, money which was theoretically regained by Picard and his teams total USD9.1bn, but most of this money is not available at the moment, as it is still subject to appeals or legal actions related to the validity of the distribution system chosen. Overall, only USD329.6m has been paid out so far, while the pyramid scheme orchestrated by Madoff, the largest stock market fraudster to date, cost between USD17.3bn and USd65bn, depending on whether you count only the principal or principal with interest. At USD850 per hour, Picard and his law firm, Baker & Hostetler, are beginning to look more like “full-time princes” than Robin Hoods in the forest, the New York Times claimed on 29 May.

Fearghal Woods, senior vice president of the global fund services unit at Northern Trust, says that net subscriptions to Irish-registered, UCITS-compliant funds represented EUR31.1bn in first quarter. Ireland is the country with the fastest growth in UCITS-compliant retail funds, with 50)% growth in the past 11 years, Investment Europe reports. Meanwhile, Ireland is also the world’s number one in hedge fund services, and has recently topped USD2trn in assets under administration.

The single currency is not enjoying its finest hour. European citizens on the whole are unsatisfied with the euro, but they are not likely to abandon it and return to their previous currencies, according to a survey undertaken by the Pew Research Center in eight countries. Strong majorities are in favour of keeping the euro in Greece (71%), France (69%) and Germany (66%). The Spanish population is still 60% in support of the euro, and 52% of Italians are in favour of retaining the single currency. In this environment, the euro on the evening of 29 May fell to its lowest level since early 2010 against the US dollar, at USD1.2503, compared with USD1.2541 the previuos evening. The euro was also penalised by a ratings downgrade for Spain by a small US ratings agency, Egan-Jones, to BB- from B previously.

Pioneer, the asset management firm of the Italian Unicredit group, is planning to take the occasion of the UCITS IV directive to launch French-registered funds. The new European regulations allow the manager to do so without opening a local asset management firm, with a European passport for products. The Paris office of Pioneer, led by Fabien Madar, will be able to create dedicated funds for French institutional investors, which had previously been impossible, costing the firm “some opportunities.” The application for the European passport, which is underway, will take some time – at least a year. That will help the firm to achieve its objective of EUR2bn in the next two years in the region covered by Madar, which also includes Belgium, Monaco, Switzerland and the Netherlands. Assets now total EUR1.6bn, after inflows of EUR120m since the beginning of the year. In 2011, Pioneer France posted net subscriptions of EUR200m, and saw an increase in its assets from EUR1.35bn to EUR1.5bn. This came even though the firm worldwide saw a decline in its assets of 13.2% to EUR162.1bn, largely due to difficulties on the Italian market. In the next five years, Pioneer is planning to increase its assets by 15% per year, under a strategic plan launched six months ago.The plan, which represents an investment of 20% of earnings, aims to increase the percentage of assets managed for clients outside Pioneer, which are now on a par with assets coming from the parent company. “We would like this share to represent the majority of our assets,” explains Sandro Pierri, the new head of asset management at UniCredit and the next CEO of Pioneer, on a visit to Paris. This will involve stepping up the firm’s presence abroad, particularly in Asia and Latin America, and strengthening its investment capacities. In terms of geographical development, Pierri points out that an office in Mexico will soon be opened, and that a country head will soon be recruited for it. In terms of investment teams, several people have already been recruited, particularly for the emerging market investment hub being created in London, and for global equities in Boston. Others are to come. Lastly, an appointment will probably be made to replace Pierri in his role as head of Western Europe and international activities at Pioneer Investments, following his promotion to CEO of Pioneer.

In Europe, corporate investment grade credit funds are being used as refuge investments, according to the financial ratings agency Fitch Ratings (“Sector Update – Corporate Credit and High Yield Funds.” In the period from December 2010 to April 2012, corporate bond funds outperformed equity fiunds by 11.2%, Fitch Ratings finds. Since the beginning of the year, inflows to corporate credit funds have totalled about EUR8.3bn, as subscriptions to investment grade assets have topped subscriptions to high yield by about EUR4.3bn. However, in the past ten years, inflows to high yield funds have been nearly the same as for investment grade funds. Fitch remarks that inflows to credit funds reflect an appetite on the part of investors for this asset class, rather than their conviction in the ability of managers to actively manage exposure to the market. In the past few years, the performacne of corporate credit funds has not seemed to follow any pattern: no credit fund which ranked in the top quartile between 2006 and 2009 has managed to retain that level since 2009. Meanwhile, the funds which performed worst between 2006 and 2009 have often ranked in the top two quartiles in 2009-2012. As of the end of March 2012, corporate investment grade bond funds represent about EUR200bn in assets, while high yield funds have a total of about EUR35bn.

Difficulties in refinancing un-rated leveraged buyout (LBO) debt in Europe is continuing, Moody’s says in a report published on 29 May. The agency states that 254 businesses are facing a need to refinance EUR133bn in debt which will mature by 2015. At least one quarter of them may be facing default, and this figure may double if high yield bond markets remain closed for a long time due to external factors. “More than half of debt maturing in 2015 is concentrated at 36 businesses, each of which has issued over EUR1bn in debt,” says Chetan Modi, head of leveraged financing for Europe at Moody’s and author of the report. “Although this debt is widely distributed over several sectors, the majority of debt requiring refinancing will mature in 2014.” The results of the Moody’s study are in line with the previous analyses of the ratings agency, but these businesses now have one less year to wait until the refinancing crunch of 2014-2015. This refinancing peak is an issue to worry about, due to macroeconomic conjuncture and the poor quality of this debt.

The sale of Dexia AM is fast approaching, Agefi reports. The submission of binding offers is scheduled for mid-June, and the final choice will be made in July. Dexia AM has received 40 expressions of interst, 20 non-binding offers, and has appointed six final candidates, Pierre Mariani, deputy director of Dexia bank, told Les Echos yesterday. No names have been released, but rumours put investment funds including Permira and Bain Capital up against the Australian bank Macquarie. A bid by the latter would make sense: “A major part of the value of Dexia AM is in Australia via Ausbil Dexia,” a business banker tells the newspaper. However, he notes, no bids are said to be coming from any European actors.

The Nyon-based asset management firm EIM, in the person of its founder and chairman Arpad Busson, is currently said to be in talks with potential acquirers, Agefi Switzerland reports, citing sources contacted by Bloomberg. In the past few weeks, the two hedge fund firms UBP, with the acquisition of the French Nexar Capital Group, and Gottex, which is seeking to grow its business in Asia Pacific with the acquisition of Penjing Asset Management of Hong Kong, have opted for expansion. However, FRM (Financial Risk Management) has preferred to join the Man Investments group. EIM had previously acted primarily as a consolidator, and it plans to retain this role, says its spokesman, Neil Bennett. Total assets under management of USD6.2bn as of the end of 2011 strictly limit the circle of potential buyers, even though it is half what it was before the crisis, the newspaper estimates.

In the absence of decisive action by European policymakers, investors continued cutting their exposure to riskier asset classes. During the week ending May 23 Emerging Markets Equity, Commodities and Energy Sector Funds and Europe Equity Funds all experienced redemptions in excess of USD1 billion while High Yield Bond Funds posted their biggest outflows in over nine months, according to the most recent statistics from EPFR Global. Overall, EPFR Global-tracked Bond Funds posted net inflows of USD3.5 billion and Equity Funds outflows of USD7.4 billion -- both six week lows -- while Money Market Funds took in a net USD11.5 billion. «Comparisons are already being drawn to last August’s sell-off,» notes EPFR Global Research Director Cameron Brandt. «But, for the moment, redemptions are not of the magnitude we saw then. In addition to the Eurozone’s troubles, investors nine months ago were digesting the US ratings downgrade, stubbornly high oil prices tied to widespread turmoil in the Middle East, serious talk of a pre-emptive strike on Iran’s nuclear facilities and the aftermath of Japan’s trial by earthquake and tsunami.»

The alternative asset management firm Armajaro Asset Management (AAM), a specialist in commodities, is planning to diversify into equities in order to double the size of its fund portfolio in the next seven years, the news agency Reuters reports. The head of the firm, Harry Morley, says that this year he is planning to launch a hedge fund dedicated to international finance sector stocks, a long/short fund which will be the asset management firm’s first vehicle dedicated exclusively to equities. The long-term objective for the asset management firm is to increase its assets under management, which currently total USD1.6bn in six funds, to USD10bn in 10 to 15 funds.

The Irish financial services group Davy Stockbrokers (brokerage, wealth management and advising) has acquired the Irish asset management firm Bloxham Asset Management, following a recent enquiry found accounting irregularities at the business, Investment Week reports. The investment team, led by Pramit Ghose, who manages funds for Bloxham AM, will be transferred to Davy Stockholders effective immediately. Assets under management by the team total over EUR700m. In March this year, Davy Stockbrokers acquired the private banking activities of the Bloxham group, which had assets under management of EUR1.2bn.

Two of the best-known dynasties in Europe and the United States will be joining forces with the acquisition by RIT Capital Partners, an investment trust led by Lord Jacob Rothschild, of a 37% stake in the wealth management advising and asset management activities of the Rockefeller family (USD34bn in assets under management), the Financial Times reports. The total price of the acquisition has not been disclosed. The partnership will be focused on the creation of investment funds which will aim to make joint acquisitions in the asset management industry.

According to an annual report on public debt in 2011, assets of investment funds placed in Spanish debt, largely Spanish government or government-guaranteed debt, as of the end of December represented 60.7% of the total portfolio, 6 percentage points more than one year previously, Cotizalia reports.

For an undisclosed amount, Hauck & Aufhäuser Privatbankiers (H&A), which has its own affiliate in Luxembourg, has sold its stake in the asset management firm Universal-Investment (EUR138bn in assets under management or administration) to two other shareholders, the private banks Berenberg and Lampe, whose stakes increase from 26.6% to 37.5% each. The other shareholder, the Landesbank Baden-Württemberg (LBBW), retains its 26.6% stake in Universal.

In an ad hoc statement on 29 May, Kabel Deutschland Holding announced that it had received information from BlackRock Hodco and BlackRock Financial Management that the US asset management firm controls over 10% of its capital, with 10.02% of voting rights as of 17 May.

Fidelity Worldwide Investments has recruited three people in Italy, Bluerating reports. Matteo Buonomini, formerly of Banca Esperia and BNP Paribas, is appointed as senior manager – fund selection units. Alessandro Furrer (formerly of Aviva Investors and Aletti Gestielle) and Gianluca Cerone (formerly of Société Générale and Morgan Stanley Investment) join the commercial structure dedicated to seeking out financial advisers and private banks. They will be senior sales manager and sales manager, respectively.

Like Abante and its Smart-ISH, launched a year ago (see Newsmanagers of 7 June 2011), Gesconsult has launched a fund of funds on the market with Banco Inversis which will select 10 to 12 products from the best managers, mostly Spanish, entitled Gesconsult Talento, whose benchmark index is currently the Euribor 12 month (the index may be replaced by another one if the portfolio changes greatly).The fund, which will be diversified with the majority of its assets theoretically in equities, was registered by the CNMV on 25 May.CharacteristicsName: Gesconsult Talento FIISIN code: ES0141991002Management commission: 1.35%Performance commission: 9%