The most dangerous flight I ever took was in a ten seater plane going to the smallest of Ireland’s Aran Islands. The danger was not so much the size of the plane as landing on Inis Meain, the last of the three islands, so there were five take-off and landing events to survive.
According to a new measure of risk proposed by Luca Anderlini and Leonardo Felli on the website Vox EU, that trip had an SVI of three. The Systemic Vulnerability Index they suggest would measure the risk of an indirect security in extreme market conditions by assuming additional risk is added with every layer. Thus if you buy a German government bond yourself, that has an SVI of 1. If you commission a bank to buy it and sell you a mirror image contract, that has an SVI of 2. A CDO squared could have an SVI of 3 or 4.
After last year’s fun and games in the world of money market funds, when it turned out they were not as stable and secure as everyone thought, there is a rush to come up with new classifications, in an attempt to make them less risky and also to make sure everyone agrees on what a money market fund is.
Just about everyone would like to make some amendments to the proposed EU regulations for the alternative investment industry, from hedge funds to governments, industry consultants and pension schemes.
The latest laments come from Mercer, the pension consultants, and their pension fund clients who agree the industry needs improvement and better supervision but call for Brussels to take a broader look outside the EU to see what is happening to the industry on a global regulation front.
It would be nice to know where Marcus Svedberg, East Capital’s chief economist, gets his spectacles. They have a beautiful rosy tint.
Admittedly he may well need them, since East Capital‘s specialist region is central and eastern Europe, which has had a tough time in the last 18 months and many parts of which are not yet out of the woods.
Octopus Investments has just passed the £1bn mark in funds under management. Simon Rogerson, the CEO, and Guy Myles, managing director, are celebrating by shaving their heads.
This traditional asset management ritual will take place in a few weeks time at Westminster Boating Base.
The question FTfm is asking itself: What will Larry Fink do when the merged Blackrock/BGI hits $3 trillion?
Mn Services was none too happy about our pointing out they had won a grand total of zero mandates since opening their London office last year. These things take time, said their UK office’s managing director Remco van Eeuwijk, pointing out it was only in March of this year that they finished sorting out the regulatory paperwork.
Perhaps he is just being modest when he says his goal for the firm’s London office is two clients worth a total of £650m by 2011, but his expectations do not depict a booming scene. This prompts the bigger question: How are asset managers finding new clients in today’s market?
Specialist pension buy-out companies will not be cheered by the latest analysis of their faltering sector.
Buy-out specialists that sprang up a few years ago to take over liabilities of defined benefit schemes got off to a strong start but the market has fallen flat in the financial crisis.
Big business slow tackle climate change issues
There has never been more campaigning to reduce carbon emissions yet progress from global companies to tackle the challenges of climate change is moving at a snail’s pace.
And so it is with a third of the 300 largest companies on the FTSE All World index – all of which are have a high impact on the climate, according to research from Eiris, the responsible investment research organisation.
Cost cutting is never far from people’s thoughts even in the hazy days of August. It seems some of those working in London’s asset management industry have redundancies on their minds this summer, with the gloomiest view coming from fund managers owned by banks.
Nearly two thirds expect more job cuts to loom on the horizon this year, according to a survey of over 200 asset managers by efinancialcareers.com Such a pessimistic outlook is not surprising given that many banks have been mulling whether to sell off their asset management arms to focus on their core business, while others have put up the “for sale” sign only to take it down again because the price is not right.
But there is a ray of hope too. Fund managers working in multi-strategy boutiques are the most bullish with the majority of them confident their headcount would remain unchanged.
Perhaps they are drawing confidence from another piece of research that Penrose Financial carried out this week where the investment industry expects multi-strategy asset management businesses that offer alternative and traditional investments to emerge as the winning model in the financial crisis.
Those in the multi-strategy part of the business were also more upbeat on future hiring prospects.
Views on hiring and firing activity in the coming six months may be mixed depending which part of the industry individuals come from. But the sense of relief of those who have survived the first six months of the year is shared and must be palpable.
First there was the product, then the book and now the movie. Well at least a film of exchange traded funds, starring ETF queen Debbie Fuhr, Andrew Clare, asset management professor at Cass Business School and Justin Urquhart-Stewart, founder of Seven Investment Management.