Cees van Lotringen

PGIM Investments has seen the assets under management in its UCITS fund range in Europe double from 4.8 to 9.6 billion US dollars in the past 1.5 years. This increase is mainly due to new inflow and to the fact that the American asset manager, as an active house, charges competitive fees.

Equity, bond, and mixed collective investment schemes (UCITS) have achieved annual net returns of 7.6%, 2.3%, and 3%, respectively, over the period 2010- 2019. These positive returns contrast with the 1% loss on bank deposits.

“All mutual funds become ETFs”, Detlef Glow, head of research at Lipper, wrote recently. Only passive and “real” active remain. Considering the inflow of over 500 billion dollars in the first six months into passive, that sounds plausible. But aren’t Lipper missing something? Passive and the hottest topic of the moment - ESG - do not go well together.

In the coming weeks, the question will be answered as to what fate befalls two important Dutch asset managers: both NN Investment Partners and Actiam are awaiting the Salomon judgment of their mothers, being NN Group and Athora. While NN is still vaguely talking about “a review of strategic options”, at Athora it is only a question of to whom the daughter will be given.

Investment services in the Netherlands are the cradle of a true, possibly EU-wide revolution in finance: following in the footsteps of asset owners, such as pension funds, the major banks are replacing investment funds with so-called mandate solutions in their client portfolios.

Bonds are among the best performing asset classes of the past 40 years. But it’s not unlikely the next 40 years will show a radically different picture. 2021 and 2022 could even yield negative returns as above-average economic growth and rising inflation could push bond yields up from their record-low levels.

The table below shows that bonds have done great over the past four decades. However, returns have fallen steadily from 222.7% in the period 1980-1989, to 109.9% in 1990-1999, to 84.7% in 2000-2009 and to 44.5% in the ten years from 2010-2019.

Assets under management of Luxembourg-domiciled private debt funds have risen by 36% to €108 billion in 2020, according to the KPMG/ALFI Private Debt Fund Survey 2020. Investment Officer discussed the dynamics behind the popularity of the asset class with KPMG’s Valeria Merkel and Julien Bieber.

Have hedge fund managers just lost it? More and more leading managers are returning assets to their clients. The reason is the melt-up of the market, making it ever harder for short-sellers to identify profitable trades.

For example, this summer John Paulson (photo), who earned $15 billion from the collapse of the US housing market in 2008, known as “The Greatest Trade Ever”, announced his departure from the hedge fund industry. Others, such as George Soros, Stanley Druckenmiller and David Tepper, preceded him.

In mid-July, Bloomberg published a revealing, or if you wish, shocking message: a list of the fifteen ultimate corona crisis stock market winners. The top-10 consists of ten men, almost all of them 50+ and almost all of them are American.

Fund distribution platform Allfunds recently launched a separate B2B platform for mandate solutions in Luxembourg. The new service aims to become the leading B2B sub-advisory platform in Europe and bring fiduciary knowledge to the wholesale sector.