Welcome to our asset management marketing focus
This week’s edition brings you the Fidelity of the future, gaming’s IPO surge, further ESG importance and failed UFO investing.
Movers & Shakers
Is now ➜ Sales Manager at Banque de Luxembourg Investments
Was: Business Development Executive – Benelux at Ethenea Independent Investors S.A.
Is now ➜ Senior Client Relationship Manager at Candriam
Was: Senior Business Development Manager at NN Investment Partners
Is now ➜ Head of Client Services & Change Delivery, Private Banking at Standard Chartered Bank
Was: Chief Operating Office, North Asia, Wealth Management at Deutsche Bank
Is now ➜ Sales Executive at Decalia Asset Management
Was: Head of Sales (Asset Management) – Romandie & Ticino at Edmond de Rothschild
Kurtosys expresses their best wishes to all starting in their new positions.
Fund in Focus: Schroders Sustainable Multi-Factor Equity Fund
Schroders’ own survey last month found that 60% of institutional investors in Europe have increased their attention on sustainable investments in the past five years. In response to this, the firm has now uncovered its new Sustainable Multi-Factor Equity Fund.
On top of sustainability, this new fund will hope to aid defined contribution (DC) schemes in the UK by integrating them with popular ESG factors; the solution is aiming to take advantage of the desire for pension savings to be invested sustainably.
It will be based on Schroders’ pre-existing global multi-factor equity fund which was released in September 2017, and will aim to outperform the MSCI All Country World Index. Both strategies aim to provide exposure to companies with proven returns, looking into quality, value and low volatility. Research conducted for the fund has analysed around 9,000 companies for a holistic and thorough strategy, and it excludes such industries as tobacco, weapons and gambling.
The Head of Institutional DC at Schroders, Tim Horne, states that for DC schemes to reach actively-managed strategies is difficult due to limited approaches to sustainable investing from low-cost options which exist already. However, he further outlines that,
“We are confident that Schroders’ SMFE fund, a cost effective, systematic multi-factor solution which integrates ESG through its bottom-up investment approach, will appeal to trustees wishing to add sustainability into the default investment strategy.”
ESG factors are clearly now becoming even more a front-of-mind part to any investment strategy, being coupled with such other investment plans as DC schemes for maximum sustainable opportunities.
Firm in Focus: Fidelity Investments
A couple of weeks ago here at AMMF, we had Fidelity Investments in the firm-of-the-week spotlight for their foray into AI, blockchain and other nascent technologies in their Fidelity Lab offshoot. It’s fair to say that the company is making more than a splash, being featured here again, for a cryptocurrency-based reason; the 72 year old business is spearheading itself as one of Wall Street’s most technologically savvy businesses.
As they have self-proclaimed themselves the company that was “doing fintech before fintech was cool”, how’s that for Bitcoin and Ethereum, then? Well, considering much of the financial world has not been as receptive to such commodities as the optimistic institutional clients that are looking to invest in them, once again Fidelity seems to be leading a charge of sorts.
The firm has announced a new platform specifically tailored to providing cryptocurrency trading capabilities on Monday named Fidelity Digital Asset Services. Money managers, family offices and institutional clients will be able to trade the two largest digital currencies, although it will be looking to expand to allow trading through other digital exchanges and platforms. There may also be a furthered foray into bitcoin trading for retail customers, although this has not been confirmed by the firm’s head of corporate business development, Tom Jessop.
Fidelity has some history in crypto; it starting a bitcoin ‘mining’ location in New Hampshire and has a partnership with trading platform Coinbase, whereby Fidelity’s customers can view their cryptocurrency balances through the Fidelity app.
Accessibility into the equally revered and hated digital assets has been a challenge for a long while – a problem which Fidelity is looking to overturn, as well as re-marketing itself as a global financial leader in future technologies; not what has been expected of them, but is now certainly welcomed by investors keen on the fintech and cryptocurrency spaces.
In the realm of fintech, the most prevalent sub-sector is e-payments, particularly in the Eurozone. We are seeing more and more of an inclination for contactless payments, and a flailing love for cash (Sweden, for instance, are looking to go completely cashless by 2023, possibly the world’s first too).
In which case, research into the payments space is becoming just as invaluable. Luckily, head research firm Capgemini has once again produced the goods, in conjunction with BNP Paribas, with its World Payments Report 2018.
Alongside the hefty publication – which looks into the current trends and predictions for global and regional non-cash payments, regulatory hurdles and the state of the ecosystem – are more digestible titbits which you can find at this impressive landing page.
There are some informative animated videos embedded within for the visual fans, as well as infographics to show the most pertinent analysis into e-wallet usage and transaction data.
It’s a behemoth bit of research, but one that will require careful attention for financial firms who must adapt to a less-enamoured-with-cash consumer base.
Fintech News: The search continues…
Despite the clear desire for cryptocurrencies from institutional investors, and from some of Wall Street’s biggest names (including the aforementioned Fidelity Investments), one institution seen as the killjoy in operations is the Securities and Exchange Commission (SEC).
There’s been plenty of ‘maybes’ when it comes to the SEC’s approval of Bitcoin ETFs. Seemingly all stemming from an application made by the Winklevoss Twins, the SEC is still set to reach decisions for other Bitcoin ETFs applications by the end of October, but history has not exactly been kind on this type of digital asset.
As Finance Magnates outlines, the SEC’s staunch rejection of Bitcoin ETFs is starting to cause institutional investors to flee in search of alternatives, given the promise that they show and despite Bitcoin’s shunned image. As approvals get hinted at and rejected, the price of Bitcoin spikes and deflates, but keen believers are still holding out for their materialisation. Coinbase, it is reported, is looking to develop an application for Bitcoin ETFs of their own, whilst the UK’s eToro has been offering a OTC Bitcoin trading service since June.
Competition for the elusive Bitcoin ETF seems to continue amid sustained interest from investors, and indeed sustained disdain from the SEC, but it’s a battle that affects the cryptocurrency space muchly, already on the up due to interest from financial institutions the world over.
Hedging their bets
ESG is now getting so big that fairly infamous (in terms of ‘doing good’) hedge funds are now rapidly asserting themselves into the sustainable field, by making a large proportion of their assets respectful of environmental, social and governance principles.
The Financial Times has looked to some research carried out by the Alternative Investment Management Association (AIMA), whose survey in May clarified that, out of 80 global firms, only a tenth of the combined $550 billion under management were committed to ESG strategies back then.
Talking to representatives from some of the world’s largest hedge funds, it seems that this is due to the firms’ traditional short-term investment holding periods are at odds with the longer-term sustainable investment practice. However, they do recognise that clients should be there to stay for the long game; millennial investors care about the impact that their investments can have, and so will stick with hedge funds if they can successfully embed ESG into their investment process. As well as this, hedge funds ‘going green’ could boost a recruitment drive from a more socially-conscious consumer base.
It is still obvious however that ESGs among hedge funds is not quite as readily embraced in the US, but given client demand for ESGs rising to 50% in the past year (from AIMA’s studies), hedge funds should recognise and implement their potential to connect with clients old and new.
Gamers and investors unite!
What? Christmas talk already? That’s correct, Investment Week has only gone and done exactly that. But you can’t complain too much – it is now only 67 days until one of the most cherished family holidays, so get out the Slade.
Joking aside, this news is not just relevant for Yuletide lovers, but investors hoping to cash in on an up-and-coming investment opportunity: gaming.
As the article states, some of the UK’s largest gaming companies including Dundee’s Rockstar, have often by bought up by larger companies the other side of the Atlantic, or been private, making it difficult to get involved in the space.
However, now there are many new British games-makers publicly listed; the industry has been given a much-needed boost from the HM Revenue & Customs Games Tax Relief which gives a 20% discount on development cost.
Now that coding has come a long way, releasing old-school classics has become commonplace (all the Crash Bandicoot franchise remastered? Count me in), computer games have never seen such a meteoric rise. In time for Christmas, better cash in on some new games, and maybe think about the returns that could come. Then again, we’ve always experienced the disappointment of a shocking game, and those won’t look good for investments either. Player: Select Difficulty.
Road to Ruin
So, if you were thinking about how to ruin your returns with poor investment decisions, look no further.
InvestmentNews’ ‘On Your Best Behaviour’ series, courtesy of Dr Daniel Crosby, covers important behavioural finance topics. And in this video, he’ll offer 10 big-time mistakes that often occur which will lead to poor choices.
It’s an entertaining slap-dash infomercial style romp which covers all you’ll want to know in as little as three minutes. Check it out right here, folks.
LRI Investment Summit 2018 30 OCTOBER 2018 | FRANKFURT
We’re pleased to announced that Kurtosys’ very own CEO Mash Patel will feature as a keynote speaker at the LRI Investment Summit 2018 in a couple of weeks’ time.
The annual conference acts as a remarkable networking opportunity for the investment industry, bringing together institutional investors, asset and fund managers, distribution partners and other investment professionals for a day of incisive talks. Over 100 senior representatives from the financial community will be in attendance to share their professional insights.
The list of speakers includes Detlef Glow, MBA (Head of EMEA Research ta Lipper), Manuela Fröhlich (Global Head of Business Development at LRI Group) and Jefferson L. Matias Oliveira (Director at PwC). Topics include Private Debt funds, fund buyer research, fund flows in Europe and their distribution worldwide.
Registration is free, and you can join by filling in the form at the registration page.
See you there!
…unfortunately following in the vein of poor investment news is the demise of a certain UFO-centric organisation. The SEC has found that To the Stars Academy of Arts and Science has accumulated a deficit of $37.4 million, despite its website claiming that it has 2,547 investors. However only $1 million worth of their $50 million total of allocated stocks to run its operations has been sold. Uh oh. Motherboard has all the news, and did you know the company was co-founded by ex-Blink-182 frontman Tom DeLonge? Clearly not his greatest achievement outside of the successful band, and on the UFO front, Aliens Exist still remains one of my most cherished songs from the band’s best teenage-nostalgia album, so, whatever.
That’s all for this week, but be sure to check back soon for more asset management marketing highlights and fintech snippets from Kurtosys.