Executive Briefings

NEWS SCAN

Franklin Buys Remaining Stake in Alt Shop

Franklin Resources has acquired the remaining 80% stake of alternative investments specialist Pelagos Capital Management. Franklin Templeton acquired its initial 20% equity stake in the Boston-based alternative investment shop in 2010.

ICI: SEC's Floating NAV Proposals Don't Hold Water

It's no secret that the Investment Company Institute is opposed to proposals by the Securities and Exchange Commission to float the net asset value of money market funds, and ICI President and CEO Paul Schott Stevens recently reiterated the group's stance on the SEC's proposal.

Stevens, speaking at a symposium in Baltimore, said that: "Simply put, forcing funds to float their NAVs doesn't address the problem that most preoccupies many regulators-how to avert heavy redemptions out of money market funds."

Simple Alternatives Adds More L/S Managers

Ridgefield, Conn.-based Simple Alternatives, has added two more long/short managers to its flagship S1 Fund (SONEX), a multi-manager, long/short equity mutual fund.

Boston-based Garelick Capital Partners, and New York-based Sonica Capital, joins the fund's growing list of long/short sub-advisors including Starwood Real Estate Securities, Lauren Templeton Capital Management, Blue Lion Capital Management, Courage Capital Management, and Maerisland Capital.

PRODUCTS

Bond Fund Redemptions Top $13 Billion

Investors pulled $13.34 billion from mutual funds for the week ended Wednesday, June 12, according to data from the Investment Company Institute.

Bond funds redeemed $13.46 billion, compared to estimated outflows of $10.87 billion during the previous week.

New ETF Trust Debuts

Portland, Maine-based Forum Investment Advisors has launched the Forum ETF Trust, a series trust designed for independent investment advisors to launch and operate actively managed exchange-traded funds.

FIA will serve as investment manager to the Trust and has responsibility for certain compliance and oversight functions and the Trust's advisors have sole responsibility for investment decisions. Merk Investments, the Palo Alto, Calif.-based currency manager, is the first investment advisor to sign up for Forum's ETF structure.

RESEARCH

DST: Data Management Key Priority for Global Asset Managers

Global asset managers are looking to get their investment data management house in order, according to a study released by DST Global Solutions.

The report reveals that while the drivers pushing asset managers and wealth managers to consider new support structures for investment data management are different, data aggregation is a common challenge. The report cites that 90% of those surveyed indicated that they had experienced an increase in the need for data aggregation capabilities and that they felt they were ill-equipped to support these requirements.

Mutual Funds Add $56 Billion in May

In May, stock and bond mutual funds, including exchange-traded funds attracted $56 billion of net inflows bringing total net intake for the first five months to about $350 billion, according to data from Strategic Insight.

Mutual funds alone drew in $35 billion of net inflows in May, driven by nearly equal demand for stock and bond funds.

Exchange-traded products (including exchange-traded notes) attracted $21 billion of net intake in May, nearly triple the prior month's net intake.

Vanguard Draws $11 Billion in May

At the fund family level, Vanguard Group once again led all providers with more than $11 billion in flows last month, according to data from Morningstar.

"While PIMCO remained in second place in terms of fund family flows, its $2.5 billion May showing was its weakest showing for the year to date," according to the research firm.

Franklin Templeton also had a strong month of flows in May, bringing in more than $2 billion and Fidelity Investments came in fourth.

MMI: Liquid Alternatives at Crossroads

While liquid alternative assets grew double-digits last year within the wirehouse segment, the asset class has also seemingly hit a wall.

According to the Money Management Institute's latest report, by the third quarter of 2012, the liquid alternatives share of wirehouse assets in alternative investments had grown from 38% in 2011 to 42%, representing roughly 15% of the $391 billion in liquid alternatives held across the industry.

However, industry-wide, the emerging liquid alternatives segment is at a crossroads, according to the report. Specifically, "the metrics - market share, sales growth, size - describe a market that, through the third quarter of 2012, had leveled out at just under 4% for the industry and 5% for wirehouses with little growth in market share since 2010."

ARRIVALS

TCW Unveils Institutional Sales Chief

The TCW Group has added Joseph Carieri as head of U.S. institutional distribution and marketing, responsible for all marketing activities and initiatives related to the institutional investor community. Carieri will report directly to TCW President and CEO David Lippman.

Carieri will take over marketing responsibilities from Chris Scibelli, formerly a founding partner of MetWest and a managing director at TCW, who is leaving the firm to pursue other opportunities, according to the firm.

Montage Boosts Assets, Distribution Team

Leawood, Kan.-based Montage Investments has been busy lately adding more sales executives and assets.

The firm last week reported that assets at its affiliated investment managers have increased to more than $16 billion, reflecting an increase of more than $3 billion in the last five months.

As well, Montage has added eight new hires to its sales team including Jason McElwee, Managing Director-National Sales, and regional consultants Brett Frascati, Eric Bowen, Judy Gutierrez, Mark Peterson, Taylor Dorman, Chris Sullivan, Andrew Good and Rickey Gallagher.

DEPARTURE

Vacant: Sentinel Searches for CEO

Christian Thwaites has stepped down as president and chief executive officer of Montpelier, Vt.-based Sentinel Asset Management to pursue other opportunities, according to the firm.

In his stead, Thomas Brownell, National Life Group's chief investment officer and a senior vice president of Sentinel Asset Management, will serve as the interim CEO of Sentinel Asset Management while the firm searches for a new CEO.

State Street Switches Up Asset Management

State Street Global Advisors said it will lose Global Equities CIO Alistair Lowe as it plans to transition toward combining various investment disciplines.

The asset management division stated that Lowe will leave when it completes a transition from quantitative developed to enhanced equities.

Western Asset's Jablansky Leaves as Structured-Products Head

Paul Jablansky, the head of structured products at fixed-income manager Western Asset Management Co., has left the unit of Legg Mason.

Jablansky resigned last week from the firm, which oversees about $460 billion.

STATISTICS

80% of emerging investors (ages 21 to 29) say they "make decisions and manage money on my own."

The number drops off to 68% of Early Career investors (ages 30 to 39) who take the do-it-yourself approach to investing.

SOURCE: Hearts & Wallets

$554B in assets existed in U.S. alternative mutual funds and exchange-traded funds at the end of 2012.

This is more than double the number of alternative and ETF assets since 2008.

SOURCE: Strategic Insight

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