Mutual funds

Rather than acquire or invest only in companies seen as turnarounds, private equity firms are increasingly attracted to the strength and high-net-worth retail customer base of asset management firms, a category they traditionally have sidestepped, Dow Jones reports.As Miguel Sagarna, a partner in the private equity group at KPMG, put it, “It’s a very scalable business, and it is a good quality product, it can grow fast with good margins.”And with so many banks and asset management firms looking to raise capital by selectively selling off divisions, private equity firms are seeing this as a great opportunity to take advantage of good prices. Some are even planning to build broad financial services operations, said William Kirsch, chairman of the private equity group at Paul Hastings.Certainly, private equity firms are looking to diversify their holdings, Sagarna agreed.However, since most private equity firms closely guard their business, it is likely they will run any asset management firms they acquire alongside their business, experts said. That does not mean that they may not still share information and research, Kirsch said.Asset management firms might even help private equity shops develop new products, added Adam Schneider, a principal at Deloitte.

Mutual fund managers in China are waiting for the economic outlook to improve before they launch new funds, according to China Knowledge Press.Industry insiders say that as of Aug. 18, managers of 16 funds that have already received approval from the China Securities Regulatory Commission, including nine stock funds and seven bond funds, are waiting to launch until the Chinese stock market and investor attitudes improve.According to official statistics, there were 88,000 new accounts for fund investment in July, down 19% from the prior month. There were 5 million new accounts added in August 2007.

Total assets in money market mutual funds fell by $1.45 billion to $3.573 trillion for the week ending Aug. 20, according to the Investment Company Institute. Assets of retail money market mutual funds fell by $1.35 billion to $1.239 trillion.Taxable money market fund assets in the retail category fell $2.85 billion to $931.24 billion, while tax-exempt fund assets rose $1.49 billion to $307.45 billion.Institutional money market fund assets fell $98 million to $2.334 trillion, while taxable money market fund assets rose $2.02 billion to $2.126 trillion and tax-exempt fund assets fell $2.12 billion to $208.12 billion.The seven-day average yield rose from 1.84% to 1.87% for the week ending Aug. 19, and the 30-day average yield rose from 1.85% to 1.86% during the same period, according to iMoneyNet Inc.'s Money Fund Report.The seven-day compounded yield increased from 1.86% to 1.89%, and the 30-day compounded yield rose from 1.87% to 1.88%. The average maturity of money fund portfolios was at 46 days, up from 45 days.

U.S. junk bond mutual funds saw $8.63 million in net outflows for the week ending Aug. 20, a steep drop from $53.47 million in inflows the previous week, according to AMG Data Services.The struggling economy and rising defaults have caused junk bonds to post a 2.73% loss year-to-date, the second-worst performance among fixed-income assets after asset-backed bonds, which are down 9.35% for the year.Junk bonds carry high yields to compensate for their risks and are rated below investment grade.

West Virginia and Nebraska offer the best 529 college savings plans, according to a ranking by SavingforCollege.com, a unit of Bankrate Inc., set to be released Friday.

Investors are interested in going green with their portfolio, but advisers are failing to even suggest investing in it, according to a Roper Center poll.

The Securities and Exchange Commission has unveiled its latest plan to make financial information far more accessible and easy to use.

U.S. investment bank Lehman Brothers is considering shedding part or all of its money management division in order to raise capital and ease real estate losses, according to the International Herald Tribune.

Many alternative asset managers, who brag about their ability to make money regardless of market conditions, posted their worst figures in years last month after worldwide sentiment suddenly changed on energy prices, financial stock and the U.S. dollar.

While there has been growing talk of the aging of America, two National Bureau of Economic Research economists have now coined a term for it: “age inflation,” The Wall Street Journal reports.

William F. Galvin, Massachusetts secretary of the commonwealth, has written a letter to Fidelity Chairman Edward C. Johnson III asking the firm to repurchase auction-rate securities that it sold to investors through its brokerage unit, Dow Jones reports.

Assets in mutual funds worldwide declined 5.1% to $24.81 trillion by the end of the first quarter, the Investment Company Institute announced Tuesday. It is the first decline in nearly four years, which the ICI attributed to the market’s decline, depreciation of the dollar and one country, Hong Kong, failing to report its figures.

The Securities and Exchange Commission announced Tuesday that it made its first of four payments to the 1.5 million Putnam Investments who were harmed by market timing, paying $40 million to 600,000 investors. In all, the distributions will total $150 million.

A number of brokerage firms that sold auction-rate securities, including Fidelity Investments, do not think they should be forced to buy back the instruments, much as the investment banks that created them have been doing, to the tune of $40 billion, The Wall Street Journal reports. Their thinking is that they were merely sellers of the ARS and didn’t have knowledge of their imminent demise, as the banks that ran the auctions did.

Forward Management has hired Jeffrey P. Cusack as president. J. Alan Reid, Jr. will remain chief executive officer, focusing on strategic direction.

New York Attorney General Andrew Cuomo is reportedly investigating Fidelity Investments and Charles Schwab over auction-rate securities, although it is unclear at this point over whether the probe is into sales or investment strategies.

Fidelity is expanding its three-year-old plan to “virtualize,” or standardize, its servers—so that there no longer is great a bond between data, applications, desktops and storage, and the underlying server and operating system infrastructure— focusing on both x86 and reduced-instruction-set computing, or RISC, servers, Network World reports.

Mutual fund investors appear to be biting the bullet amid market turbulence and talk of the recession, the Associated Press reports. But most of their money is pouting into money market and bond funds, $75 billion and $4.5 billion, respectively, along with renewed interest in dividend-paying instruments.

Genworth Financial in Richmond, Va., has launched a new wealth management division, Genworth Financial Wealth Management. The launch completes the integration of two Genworth companies: AssetMark Investment Services, which it acquired in October of 2006, and Genworth Financial Asset Management.

Fidelity Equips RIAs With e-Signature Software