Our weekly roundup of industry highlights
UBS secures fund license in mainland China
In order to begin managing money of the high-net-worth and institutional clients in Asia's largest economy, UBS Asset Management has secured a private-funds license in mainland China, according to Bloomberg News.
The firm's local unit is the first so-called qualified domestic limited partner to be granted a license from the Asset Management Association of China, a coveted status.
UBS said the move opens the door for offering onshore fixed income, equity and multi-asset private funds.
"China is a key growth market," Ulrich Koerner, president of UBS Asset Management, said in the statement. "Our goal is to be a leading asset manager in China for both onshore and offshore investors and a strong partner for clients there who invest overseas."
Fidelity eliminates hundreds of workers
Months after offering 1,500 of its employees a buyout option to leave the firm, Fidelity Investments has eliminated another 1% of its 45,000-person workforce.
Adam Banker, a spokesman for the Boston-based firm, responded in an e-mailed statement that the company doesn't comment about hiring or reductions.
"From time to time, our individual businesses may be making adjustments to their staffing levels; some may be adding employees while others may be reducing," Banker said in the statement. "We currently have hundreds of open positions that we are recruiting for nationwide."
Last month Fidelity said it offered 1,500 employees a buyout option announced in Feburary, which included salary and health care benefits and was extended to 3,000 employees that had been with the company for more than 10 years and were over 55.
RESEARCH
Most first half asset sales in nearly a decade
More global transactions were made in the first half of 2017 than in any half year since 2008, analysts say.
The increased volume was driven by small asset manager sales, according to Sandler O'Neill. For the first half of 2017, 62% of transaction involved sellers with less than $3 billion in AUM. Private wealth management and alternative asset transactions both increased more than 30%.
The acquisition of small companies to private client aggregators drove private wealth management transactions. The stake sales of private equity managers increased alternative asset transactions, the analysts reported.
Traditional asset transactions stayed the same. A total of 98 transactions took place in the first part of 2017.
Managers need tech innovation to survive
Traditional asset managers must adopt advanced data technologies to stay competitive, researchers say.
In the report, Boston Consulting Groups highlighted five ways asset managers can improve their performance — reconfigure their portfolio management process, adopt more advanced technology, create structural cost management, enter the Chinese market and use strategic M&A to build their business.
"Success in the future will require managers to identify opportunities, move boldly, and transform the very way they work," said Boston Consulting Partner Brent Beardsley, who co-authored the report.
Retail adviser channel is a key alternative tool
Nearly half of alternative managers say the retail adviser channel is their most important distribution channel.
They prefer it so much, in fact, that many are expanding this channel by increasing distribution teams, building partnerships with online technology platforms and developing new products to appeal to a wide market of advisers, according to Cerulli Associates.
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After yanking $719.9 million from a technology fund in May, investors poured $1.78 billion in one day to another fund in the sector.
June 7 -
The exploding popularity of quants has created a gold rush for fund developers.
June 1 -
A tweak in accounting guidelines the firm helped to modify is expected to make the funds cheaper and easier to own.
May 30
The use of business development companies is one way managers are aiming to make alternatives accessible for smaller retail investors.
Only 9% of surveyed currently use BCDs. However, more than a third of managers think it is a huge opportunity for raising future alternative assets.
PRODUCTS
SimCorp offers private debt module
The investment management solutions company SimCorp launched a new platform for investing in private debt.
SimCorp Dimension was built to meet the growing demand from institutional investors for risk-adjusted yields, according to the company. The product is compatible with SimCorp's Investment Book of Record that centralizes intraday positions across all asset classes.
IndexIQ lowers fees for half its funds
IndexIQ is cutting the total expense ratio for three of its 50% currency hedged international equity ETFs by 16 basis points, according to the company.
Active management gets a black eye when funds can’t keep pace with indexes, especially when the shortfalls aren’t short-term.
The IQ 50 Percent Hedged FTSE International ETF had an expense ratio of 0.36%. It has since been reduced to 0.20%.
The IQ 50 Percent Hedged FTSE Europe ETF and the IQ 50 Percent Hedged FTSE Japan ETF, both of which previously had expense ratios of 0.46%, have now been reduced to 30 basis points.
Schwab adds ETFs
Schwab announced the launch of 15 new ETFs through its ETF OneSource program.
In Schwab's existing ETF platform, investors can buy and sell from 245 ETFs in 69 Morningstar categories. With the new funds, Schwab clients can also invest in high-yield bond, energy limited partnerships and emerging markets ETFs.
ARRIVALS
Malkiel joins Toroso Index committee
Princeton professor and author Burton Malkiel joined the Index Committee for the Toroso ETF Industry Index (TETF).
In his books, Malkiel wrote about investment strategies and how to choose from different investment options such as bonds, equity and real estate.
"As the indexing and ETF universe has grown and matured, capturing its growth in an index of its own is the next logical step and is a very exciting proposition," Malkiel said. "It is one which I am very much looking forward to focusing on with my fellow Index Committee members."
Putnam hires a new director of client relations
Putnam Investments has hired a consultant relations executive to lead its institutional asset management consultants.
Before joining the firm, Anicia Mendez was a senior consultant relations representative for Janus Henderson.
At Janus, Mendez developed relationships at key firms while consulting members of her team.
Mendez previously worked at Sage Advisory Services, an independent investment management firm, and Dwight Asset Management Company, a firm owned Goldman Sachs Asset Management.
Based in Los Angeles, Mendez will report to Jeffrey L. Gould, head of Putnam Global Institutional Management.
Baird launches a new division, promotes executives
Baird appointed a director of planning to lead its newly created advanced planning division.
In this role, Timothy M. Steffen is responsible for educating Baird's advisers and clients about wealth management planning strategies for a variety of sectors including estate planning.
Along with Steffen, Scott M. Grenier was promoted to be manager of financial and estate planning, the firm said. Grenier directs Baird financial and estate planners across the U.S.
