Monthly Archives: July 2009

Sophia Grene

There is a hoary old chestnut about the professor of economics walking through the City with a graduate student. They see a £20 note lying on the pavement across the street, and the student makes as if to cross the road to pick it up.

“Don’t bother,” says the professor. “It must be a fake. If it were real, someone would already have picked it up.”

Steve Johnson

Oh, how pension fund trustees must wish they could turn the clock back to the halcyon days of plump scheme surpluses, pension holidays (remember them?) and the promise that every worker could retire with a nice fat, index-linked income, guaranteed to the end of their days.

Barring the invention of the time machine, such delights are doomed to remain just a wistful memory (and in reality access to the nirvana of generous defined benefit occupational pension schemes was far from universal).

Ruth Sullivan

Protectionist stance

Protectionist stance

The European Union’s draft rules on alternative investments have drawn a storm of protest from hedge funds, equity funds and even investment trusts. Today, the global hedge fund industry association took the battle a step further.

Such a ruling will make it so difficult and expensive for non-EU funds and managers to access the EU market that it would have huge consequences, particularly in North America and Asia Pacific, the Alternative Investment Management Association warns.

Pauline Skypala

Legal & General Investment Management has commended the investment consultation paper from the Personal Accounts Delivery Authority to trustees of defined contribution pension schemes. It offers a level of insight “unparalleled in terms of quality and depth” and has the advantage of being free, says Ian Richards, head of DC strategy at LGIM.

Personal accounts will become the benchmark by which other DC schemes will be measured, he says.

It is encouraging to see life companies, which have dominated the DC market in the UK, taking an interest in Pada’s paper. There is much work to be done on designing default funds that have potential to offer reasonable return without high volatility and on the way retirement income is delivered.

Some life companies have already started down this path, but judging by a recent meeting I had with Scottish Life, have yet to work out how to communicate the benefits of their products effectively.

I was hopelessly confused by the presentation by two gents from Scottish Life, who wanted to tell me about their clever pension plans supposed to resolve the governance problems of contract-based DC plans, where no-one is looking after the interests of the members of the scheme.

The plans have some modern features, including a risk-profiling tool, multi-asset portfolios, rebalancing, and a lifestyle overlay that starts working 15 years before retirement. But they are designed to appeal to independent financial advisers rather than scheme members, and it shows.

Too many bells and whistles, I concluded, and some features that just seemed odd, such as moving the fund entirely into cash if a member wants to buy an annuity at retirement rather than draw an income from investments. Where is the protection against annuity rates moving to a member’s disadvantage in that? The aim is to maximise the real value of the pension pot at retirement, was the answer. I was none the wiser.

Maybe when IFAs have to be paid fees for their advice rather than taking commission from life companies, it will be what customers need that takes priority. Having to measure up to the personal accounts benchmark should also force a rethink.

Sophia Grene

Some people believe Africa really is the land of opportunities, despite dire warnings about its economies from the IMF and OECD. That’s the only conclusion one can draw from the fact that nearly 50 overseas investors went to Zimbabwe‘s recent International Investment Conference.

Ayo Salami, Africa fund manager at Duet Victoire, confessed he had been taken aback by the level of interest, but said he had noted investors’ interest in the continent generally had not been totally destroyed by the dramatic crash of emerging markets last year that smashed the myth of decoupling.

Sophia Grene

just like a hedgie

just like a hedgie

Why is running a hedge fund like competitive surfing? Apparently, it’s a mixture of the length of your wave and how aggressive your moves are.

That is the opinion of Pedro de Noronha, one of the few who have done both for a living. Mr de Noronha, who left surfing for the world of financial services because he wanted more intellectual stimulation, says the kind of strategic thinking that stood him in good stead while on a board helps in managing Noster Capital, his hedge fund.

Ruth Sullivan

Confidence creeping back?

Confidence creeping back?

In spite of turbulent markets, investor caution is beginning to give way to a more confident mood at least in terms of timing.

The full findings of the Investment Management Association’s biannual report show nearly half of UK private investors think it’s a good moment to put money into funds, and into equities – but that’s not to say they are ready to lay out more money than last year.

Sophia Grene

Your chance to win an Acer Aspire One netbook

Your chance to win an Acer Aspire One netbook

Without our readers, we’re nothing – so we value your feedback. Please fill in the new FTfm online survey to let us know what we’re doing right and what we could do better.

As a further inducement, we are offering the chance to win one ACER AOA150-BB 9.8″ Netbook to all eligible respondents who complete the questionnaire by September, Friday 4th, 2009.

Sophia Grene

A future client?

A future client?

“Global Australians” can now avail themselves of a specially tailored service from Standard Chartered Private Bank. Not, as you might think from the sound of it, ultra-obese Aussies, “global Australians” are what other people might call ex-pat or non-resident.

Aussie cricket legend Steve Waugh was in London to promote the new service, as well as a specialist offering for “elite international sportspeople”, which will initially target those from the Southern hemisphere.

The private bank, which has grown from a standing start two years ago to employ over 1,500 today, offers services to a list of ‘global nationalities’ on the assumption they each have sufficient commonalties to justify it. Perhaps more compelling from a marketing point of view, it allows the bank to pair like with like – an Australian relationship manager for Australians, a Korean relationship manager for Koreans, and so on.

Steve Johnson

The Wolsley

The Wolseley, a favourite of London's financial powerbrokers

Signs of a slowdown are rarer than hen’s teeth at posh eaterie The Wolseley, a favourite of London’s financial powerbrokers, nestled next to The Ritz, where your humble correspondent had the pleasure of engaging in an enjoyable breakfast meeting.

The only downside was struggling to hear one’s dining companion over the hubbub of a myriad rival conversations; every table was taken by sober looking business people engaged in no doubt far less exciting discussions.

Come the end of one’s feast, many of the original cast had sidled off to do whatever important tasks it was that paid for their meal tickets.

In their stead came a coterie of what can only be described as Women Who Lunch, fortifying themselves with the finest espresso before a spot of light (or not so light) retail therapy in the nearby boutiques.

Once again not a spare table was to be had and, if anything, the hubbub had moved a notch higher.

If we are marooned in the depths of the worst recession since the 1930′s, one would not wish to be tasked with securing a table at said cafe when the good times roll once again.

About the blog

FTfm is no longer updated but it remains open as an archive.

FTfm's specialist writing team offer their insights into the global fund management industry.

About the authors

Pauline Skypala has been editor of FTfm for four years having previously been deputy personal finance editor. She joined the FT in 1999 and has been writing on savings and investment issues throughout her career.

Steve Johnson, FTfm deputy editor, has been a journalist for 17 years, 10 of which have been with the FT.

Sophia Grene, reporter on FTfm, has been a financial journalist in print and online for 12 years.

Ruth Sullivan has worked as a financial/business journalist and foreign correspondent and for the past 10 years has been at the FT.

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