No sooner is one asset class flying then another is falling off a cliff
Asset managers who run investments in a wide range of asset classes run the risk of being jack of all trades, master of none, according to Katherine Garrett-Cox, chief executive of Alliance Trust. Multi-assset management is “a tall order”, she says.
“With multi-asset, no sooner is one asset class flying than another is falling off a cliff. It is a challenge to do well.”
Her recommendation is to find what you are good at and stick to that. “When you have something relatively straightforward, you can really shine and people know what you stand for.”
Party on: Linzi Stoppard from Fuse
The party atmosphere was definitely lacking in Monaco this year for Fund Forum. Numbers were down and the usual lavish entertainment had been credit crunched. Still, the organisers professed themselves pleased with the turnout, and with the numbers of chief execs who turned up to sit on panels or address the conference.
Some providers were still doing things in style, but they were mostly the asset servicing arms of the banks. I enjoyed an evening at a swanky hotel by the sea courtesy of BNY Mellon, including a performance by electric violin duo Fuse. It was just right for Monaco!
UK is bringing out its big guns
The UK is bringing out its big guns in an attempt to shoot down the European Commission’s proposed rules for alternative investment fund managers.
In Monaco, Dan Waters, asset management sector leader at the Financial Services Authority, fired broadsides at several aspects of the directive in a speech at the Fund Forum conference.
Fund Forum in Monaco: numbers are significantly down on previous years
Anecdotal evidence has it that attendance at Fund Forum in Monaco this week is significantly lower than in previous years. Some say numbers have halved. Last time I came, two years ago, it was certainly much busier. But what is lacking in quantity is made up for in quality, apparently – the CEOs are here in force.
So are the service providers. I shared a cab from the airport with a woman from SimCorp, have met today with BNY Mellon and JPMorgan, and turned down meetings with Liquidnet, Clearstream and Swift ( I prefer to focus on fund managers at a fund management conference).
There are plenty of issues to occupy the service providers. One that came up at a session today was the question of depositary bank responsibility. The European Commission has raised the possibility of making depositaries stand as guarantors for fund assets, making restitution to investors if money goes astray. This is in response to the issues raised by the Madoff affair, which in Europe focused on a few Ucits funds that invested with Madoff and awarded the sub custody of assets to Madoff as well, so the money disappeared.
One view I have heard is that there is no point even discussing the outcome of such a move as it won’t happen: the regulators are not crazy enough to expect anyone to stay in the business if they have to provide a blank cheque.
Perhaps they are right. But listening to the debate at the session I attended, it seems there is no clear view in the industry of what needs to be done to clear up the grey area in the Ucits rules the Madoff area highlighted. Is it an issue just for Luxembourg and Dublin or a wider one for Ucits?
Threatening to make major changes to the responsibilities of depositary banks has at least started a debate on the issue.
Edward Bonham Carter was happy to share his wasabi peanuts
It is Fund Forum week in Monaco and I have arrived on a wet Monday evening curious to test the atmosphere, having not attended for a couple of years.
There were plenty of conference goers on my easyJet flight over, including Edward Bonham Carter, chief executive of Jupiter Asset Management. He was happy to share his wasabi peanuts on the flight over, and offered to share a cab from the airport too. Sadly, I had a bag to wait for so had to decline.
We had arrived too late to take advantage of the free coaches the conference organisers are laying on this year for cost-consicous fund managers. Taxi fares are a steep E90 from Nice to Monaco. But the conference moved back here from a trial change of scene to Barcelona last year in response to negative feedback.
With FTfm reporting this week on a barrage of reports about the (relatively) parlous state of the fund management industry and the possibility that revenues will not recover to 2007 levels for five years, I am looking forward to networking with a chastened set of managers prepared to contemplate major change to their business models.
Perhaps, though, they are the ones who are not coming to Fund Forum this year.