Lenneke Arts

The ongoing, rapid consolidation in asset management is exposing problems around rebranding. “Crucial” is untangling one’s own story from broader sector narratives, in this jumble of mergers and acquisitions. 

For five years, a group of students from Erasmus University in combination with three Robeco researchers scoured hundreds of financial newspapers from 1866 to 1926. They looked for prices, dividends and market capitalisations of almost 1500 American shares. Based on the entirely new dataset this led to, Robeco now concludes that the momentum, value and volatility (beta) investment factors also existed during those 61 years. 

Qontigo has already built more than ten thousand indices, commissioned by asset owners such as APG and Willis Towers Watson and asset managers such as BlackRock. Institutional investors increasingly want a customised index that is in line with their own investment objectives, according to Arun Singhal of Qontigo.

Investors have a greater need for insight, transparency and control, he explained. “That’s what “we” have in everyday life too. So why not about our investments?”

During negotiations on the fee that asset managers charge institutional investors for the management of a mandate, providers give an average discount of 5 to 15%. However there is no transparency about the average price that providers actually charge for mandate management, explained Duncan Higgs and Kathryn Saklatvala, following the publication of their research into fund house fees last week.

There is still no uniform European investor protection as envisaged by MiFID II, according to research conducted by Ronald Janssen of Ortec Finance and Tom Loonen of the Free University of Amsterdam in a survey of 25 European private banks. Their research shows that private banks in Europe have different approaches to the concept of Know Your Customer (KYC) and use different levels of detail in implementing it. Also, that none of the banks has a fully digitalised process.

One of the least invested topics of the world goals set by the United Nations is “life in the water”. With the ocean responsible for every second breath we take and more commitment from the European Commission on this SDG in the offing, things might be about to change, according to Paul Buchwitz, who manages the DWS Concept ESG Blue Economy equity fund.

The exuberance in the equity markets is a little too much for the managers of JP Morgan’s €6 billion Global Macro Opportunities Fund. “This was the reason for the investors to increase the number of short positions in shares, via options on the S&P 500 and individual short positions in a few individual titles. We’ve reduced the risk”, said Nicola Rawlinson in an interview with Fondsnieuws, Investment Officer Luxembourg’s Dutch sister publication. 

There is a mismatch between asset managers and institutional investors when it comes to ESG, according to PwC Luxembourg’s annual report on the Luxembourg banking sector, which this year places extra emphasis on developments surrounding ESG. The report explains that three-quarters of institutional investors plan to stop investing in non-ESG products next year, but only 14 per cent of fund houses plan to stop marketing non-ESG products. 

Following the integration of private banking into its banking activities in 2019, Triodos is now focusing on the next step: the introduction of an accessible service model for the different groups of investors. 

The question is whether the illiquidity of private markets is still an issue if the market becomes more volatile again. Especially when you realise that liquid markets can also become illiquid.