Asset management

L&G gets an awareness of its own mortality

6 Mar 2019

The UK insurer’s shares fell despite a hiked 2018 dividend. L&G’s bulk annuity business is still delivering, but margins are under pressure. The bright spot is a windfall from customers dying quicker – but that’s because its actuaries got their forecasts wrong.

Aviva’s new CEO is a vote against restructuring

4 Mar 2019

The UK insurer has appointed veteran Maurice Tulloch as chief executive. Aviva is overleveraged and undervalued, and selling its international operations offers a potential fix. But given doing so is hardly a no-brainer, an insider CEO may prefer more of the same.

Fund managers face a never-ending war on fees

26 Feb 2019

Vanguard is slashing costs on dozens of mutual and exchange-traded funds just months after Fidelity launched zero-fee products. JPMorgan lowered the returns it targets for its asset-management arm. Yet the business remains lucrative - which ensures cuts will continue.

GAM employees outperform shareholders

21 Feb 2019

The scandal-hit Swiss fund group has lost three-quarters of its value in a year. Senior management’s bonus bill has nearly halved. A desire to hang onto staff in a crisis explains the relatively generous payoff. In asset management, shareholders bear more of the risks.

Asset managers given climate-risk ultimatum

19 Feb 2019

Groups that signed up to the leading principles of sustainable investing may be in for a shock. From next year they must report on their global-warming risks or face expulsion. Forcing managers of over $40 trln of assets to live up to their word can be a powerful tool for change.

Blackstone cast-offs offer easy fit for Elliott

19 Feb 2019

The activist has snapped up a 6.1 percent stake in Dutch fund services group Intertrust. Its stock has languished since Steve Schwarzman’s private equity group listed it in 2015, due to disappointing margins. A cheap valuation means Elliott may not need to roll up its sleeves.

Private equity may not be good enough for Elliott

31 Jan 2019

Bulking up in buyouts is logical for Paul Singer’s hedge fund, which is better known as an activist. Yet market turmoil has hit established players like Blackstone and Apollo, and the industry is awash in capital. Coming late and small to the game is no formula for success.

Thruppence: Who wins by sponsoring UK book prize?

29 Jan 2019

Man Group has ended its support for the UK’s prestigious Booker award. The hedge fund decided there were worthier recipients of its 1.6 mln pound annual cheque. Luckily for aspiring authors, Breakingviews columnists have a handy shortlist of those who could step into the breach.

Busy activists navigate tricky currents

22 Jan 2019

They are rattling the cages of new targets like Pernod Ricard and Campbell Soup. But regular investors are more demanding, and private equity may muscle in, panellists told Breakingviews Predictions events this month. The test is whether active shareholders produce better returns.

New Jupiter CEO’s challenge is to fix niche model

22 Jan 2019

The $55 bln fund manager hired Andrew Formica as its new boss after a year of client departures and near 50 pct stock fall. It doesn’t help that it depends on fickle retail investors, in Brexit-torn Britain. Finding more institutional clients is a priority, but will take time.

Market turmoil is last straw for asset managers

18 Jan 2019

State Street will slash its payroll by 6 percent. Both the selloff in stocks and outflows hit the company’s AUM in the fourth quarter. The investment industry is already reeling from fee pressure and turning to technology as the solution. That will mean plenty more pink slips.

BlackRock earnings dip is more than a blip

16 Jan 2019

Larry Fink’s manager of $6 trln of assets saw revenue and profit fall in the last quarter from a year earlier. December’s stock rout predictably hit fees, but the shift to cheap ETFs from actively managed funds also accelerated. That’s likely to continue even if markets recover.

Masters of detail will rule in jumpy markets

10 Jan 2019

Big swings in both directions in equities and bonds make it dangerous for investors to jump out of one and into the other. Better to drill down and find groups with healthy balance sheets and decent free cash flow. Those chasing high growth or cheap valuations could come unstuck.

Plunging GAM shares belie elusive value

13 Dec 2018

With shares down 80 pct this year, the Swiss asset manager could be a takeover target. Cost savings alone are worth more than its market value. Yet uncertainty may lead clients to pull money, leaving a buyer with little. Fund group valuations are especially blurry in a panic.

Amundi’s issues are of a higher quality than peers’

26 Oct 2018

The BlackRock of Europe is sticking by a 7 pct adjusted net income target through 2020. That’s higher than what it managed in the third quarter. But a faster rise in net inflows despite choppy market conditions is better than the outflows seen by rivals.

GAM takeover is only for the foolhardy

23 Oct 2018

Funds are flowing out of the Swiss group that suspended a money manager over compliance issues. Its stock has nearly halved in value since the scandal broke but the case for a takeover is far from compelling. The risk of haemorrhaging more assets will deter potential acquirers.

Aviva will find strategy harder to switch than CEO

9 Oct 2018

Mark Wilson is leaving the insurer after six years. Although he simplified the firm, boosted capital and bought Friends Life, Aviva’s valuation lags peers. If his successor can’t strategically advance beyond cross-selling and digital forays, it could become a takeover target.

UK tries shock therapy for fund liquidity disease

8 Oct 2018

Britain’s FCA is clamping down on open-ended funds that invest in hard-to-sell assets. One suggestion is to force funds to suspend redemptions – as happened in the chaos after Brexit – more frequently. That might eventually lead investors to pick less ropey fund structures.

Wealth tie-up can crack Lloyds’ top-line conundrum

8 Oct 2018

The UK bank is in talks to create a wealth management joint venture with Schroders. Boss Antonio Horta-Osorio needs to boost revenue to comfortably hit his 2020 targets. Flogging more savings products will boost fee income which has halved since 2012, while avoiding costly M&A.

Investec fund float could attract predators

14 Sep 2018

The Anglo-South African financial group is listing its asset management arm in London. Decent growth and increased focus should support a healthy valuation. With assets of 109 billion pounds, it may also make a choice morsel for a bigger rival.