Asset Managers

Chances of a real turn in short-term interest rate policy seem to have been squandered since yesterday. According to specialists at Aegon AM, PGIM and T. Rowe Price, interest rates will remain high for several more quarters. A quick reversal in interest rate policy is unlikely. So is an early return to “normal” .

While equities will remain a dominant feature of sustainable investment portfolios, multi-asset and alternative strategies are expected to gain ground in the coming years. A new survey conducted among European investors shows that they expect their allocation to equities will decrease by two percent over the next five years, while their allocation to multi-asset and alternative funds will rise by two percent.

Stefano Amato has joined M&G Investments as a senior fund manager in the multi asset team. Amato, who joins from Santander, will co-manage the 1.1 billion euro M&G (Lux)  Income Allocation Fund alongside Steven Andrew to whom he will report. 

Dutch investment bank Kempen Capital Management has reclassified three of its sustainability funds to “light green” from “dark green/most sustainable” ahead of increasingly stringent requirements that will take effect from 2023 under the EU’s Sustainable Finance Disclosure Regulation, known as the SFDR.

The European Union has reached a political agreement that brings the relaunch of European long-term investment funds, a type of investment vehicle known as Eltif, one step closer. The European marketing passports for Eltifs are regarded as a major business opportunity for Luxembourg firms. 

Driven by new technologies, consumer expectations and risks, banks are increasingly forced to think and act differently, The boldness with which they embrace change in the time ahead will determine which scenario unfolds between now and 2035. “Massive changes are on the horizon.”

Orcadia Asset Management, active in the Benelux and France, has surpassed the 1.1 billion euro mark in assets under management. This allows the asset manager to operate profitably from Luxembourg. “Mergers and acquisitions in the Belgian landscape only make sense if there is a cultural match.”

Luxembourg funds may well be too expensive. Investment fund managers of Ucits funds in Luxembourg, home to about a third of all such funds in Europe, have been ordered to review, and if necessary correct, the way they calculate the costs and fees of their investment funds and report back to their national regulator before April 1 next year. 

Funds investing in emerging market bonds lost for the third quarter in a row when measured in dollars, but made a small gain in euros. 

When it comes to ESG and sustainable investing, Luxembourg’s financial regulator is keen to ensure that investment funds will stick to their promises when they sell products that are branded as green and sustainable. More guidance is coming soon, and the regulator plans “a deep compliance check” for the third quarter of 2023.