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Sub-Advisory

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Evolution and innovation in the ousourcing arena

PWM’s second annual European Sub-Advisory Summit, held in Paris in November, invited many of the leading players in the industry to discuss what is driving the growth of the business. Elisa Trovato reports

Finding the best talent at an acceptable price

Elisa Trovato directs a discussion on the developing issues in the sub-advisory arena. Eight leading players reveal the factors driving outsourcing, the importance of cost in the decison to sub-advise and opportunities in the Ucits III hedge fund space.

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Private banks seek help as they follow alternative path

 
Nick Phillips, Goldman Sachs Asset Management

Goldman Sachs Asset Management’s Nick Phillips tells Elisa Trovato why private banks moving into hedge funds are looking to form partnerships with companies armed with well-resourced research teams

The search for specialist partners

Investec: finding bespoke solutions

The desire for greater transparency, control over investments and bespoke solutions in the hedge fund space drove private bank Investec to sign sub-advisory agreements with two large firms, Goldman Sachs Asset Management and JP Morgan Asset Management, explains Andrew Summers, global head of product and research at Investec private bank in London. The two firms will each run a hedge fund multi-strategy mandate.

New mandates hint at a bright future

In this seventh annual PWM sub-advisory survey, 50 decision makers at private banks, life insurers, wealth managers and asset management companies were asked to give their insights into the European sub-advisory business.

Risk management gains even more prominence

The impact of the financial crisis on the criteria employed to select external fund management companies is one of the key themes emerging from the seventh annual sub-advisory study conducted by PWM.

Credit offers compelling value

Risk premiums on corporate credit entered 2009 at near-record levels and show little sign of a reversal in the near term. These risk premiums certainly appear attractive, although the outlook is clouded by a bleak economic backdrop, rising defaults and a global financial system in the throes of recapitalisation. The question of whether now is the time to raise allocations to credit versus other asset classes is certainly pre-occupying many investors. After all, the historically high risk premiums, and relatively ‘cheap’ price of securities are clearly a reflection of a high-risk environment.

The next step for equities

The events of the past several months have been unsettling for investors. With mounting concerns about a global recession and a near shutdown of the capital markets, the FTSE 100 has delivered its worst YTD return since 1931. The market has been characterised by fear, panic and forced selling, as mutual funds and levered hedge funds face record redemptions. For those that remain in equities, the top objective has been safety, as cash-rich companies have outperformed those with arguably better growth prospects.

Are hedge funds to blame for the financial crisis?

In the past fortnight hedge funds have been tarnished with a critical brush by investors and the media. On the one hand due to “disappointing returns” and also the downward spiral in equity prices as well as commodity speculation. These wide sweeping statements are not completely accurate and the activities of a few should not unjustly implicate the industry as a whole.

The fall-out from subprime – challenge or opportunity?

A year on from the credit crunch it is time to evaluate where portfolios are standing. At first glance it certainly appears to be a gloomy picture. We believe tighter credit conditions, increased defaults on loans and mortgages by consumers and bank write-downs will continue to create a challenging environment in the year ahead.

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