22nd Jan 2020 - 10:20am
Refinitiv launches Future of Sustainable Data Alliance
22/01/2020 - 10:20am
- Refinitiv has launched the Future of Sustainable Data Alliance (The Alliance) in conjunction with the World Economic Forum, United Nations, IIF, OMFIF, Tsinghua University, ASIFMA, GFMA, Climate Bonds Initiative, FinTech4good, Everledger, Institute of Public and Environmental Affairs, Bank of Africa-BCME, GoImpact and other founding member firms.
- The objective of The Alliance is to accelerate the mobilisation of capital into sustainable finance. The Alliance will solve the question: What data do investors and governments need to meet the requirements of both regulators and customers for sustainable investments and products in pursuit of the 2030 Agenda.
- The Alliance says: “Fundamental ESG data access and additional alternative data sets are seen as key drivers to help investors make sustainable investment decisions and positively contribute to the UN Sustainable Development Goals.”
- Climate change and the UN Sustainable Development Goals (SDGs) continue to accelerate the drive towards sustainable finance, however information to quantify, measure and compare impact is in its infancy. Companies both public and private require disclosure standards on tracking, managing and reporting such information to their stakeholders. The lack of actionable data and standards results in capital markets that are unable to fully understand and integrate sustainability considerations, and as a result allocate capital to inefficient and sometimes environmentally or socially damaging activities, projects and assets. Fundamental ESG and alternative data are required to make sustainable investment decisions and to positively contribute to the UN SDGs. The Alliance aims to identify and consolidate the data required now and in the future.
22nd Jan 2020 - 10:07am
Digital Vega hires non-exec director and head of business development
22/01/2020 - 10:07am
- Digital Vega, an FX Options e-trading platform and provider of FX Options trading solutions, has appointed Rob Wemyss as a Non Executive Director and Head of Business Development.
- Wemyss joins Digital Vega from JP Morgan where he was Global Head of FX Options. He worked at JP Morgan for 25 years in a variety of roles.
- "During 2020 we aim to cement our leading position in multi-dealer FX Options trading by adding more liquidity providers and clients, increasing automation in our Vanillas platform and launching a new Exotics service,” says Mark Suter, Executive Chairman and Co-Founder, Digital Vega. “We are delighted to welcome Rob to Digital Vega, where his unparalleled industry experience and senior level contacts with liquidity providers and clients will help to maximise our growth.
- “Over the past 12 months Digital Vega has made several key hires. In addition to Rob joining, we have hired Simon Nursey as Head of Asia, Asa Attwell as Head of Product Development, Romain Camus as Head of Exotic Options, Laura Winkler as EMEA Relationship Manager, and Benny LewisasHead of Interdealer Solutions."
- Wemyss says: "Transparency, automation and workflow efficiency are driving the market increasingly towards trading FX Options electronically. Digital Vega is already considered the market leader, and by investing in new products and services we expect to capture future market growth.”
22nd Jan 2020 - 9:49am
Kempen adds to alternatives solutions team
22/01/2020 - 9:49am
- Kempen Capital Management (Kempen) has strengthened its alternative solutions team with the appointment of Anne Mei Poppe as alternative investment specialist.
- Poppe, who has twelve years of experience in financial services, will focus on the growing demand from international institutional investors, wealth managers and family offices for alternative investment strategies.
- Anne Mei joined from Dutch asset management and direct lending firm Dynamic Credit, where she shared responsibility for alternative fixed income sales and client management for the past three years. Prior to this, she worked as a senior financial services adviser at EY after starting her career at Heineken and BinckBank.
- Her appointment demonstrates Kempen’s commitment to boosting growth in alternative investments.
- Rutger-Jan Leewens, head Wholesale Distribution at Kempen, says: “Alternative investments are a key part of Kempen’s active approach, which aims to generate alpha for our clients. Driven by the search for extra yield, our clients are showing a keen interest in alternative investment strategies. Examples include our Private Markets and alternative Credit strategies. The enormous interest in the Kempen European Private Equity Fund and its faster-than-expected final close are other telling examples. We are very pleased that Anne Mei Poppe has joined us at this exciting time. She will strengthen the team and help us to boost the international growth of alternative investments.”
22nd Jan 2020 - 9:48am
QuantConnect announces designer algorithm development competition winners
22/01/2020 - 9:48am
- QuantConnect has announced the winners of its innovative Alpha Five competition, which started in October 2019 and saw a sponsoring hedge fund solicit “designer” alphas from the crowd.
- QuantConnect, an open-source algorithmic trading platform, provides its community of almost 100,000 quants access to financial data, cloud computing, and a coding environment where they can design, build, and live trade algorithmic trading strategies.
- Alpha Five gave quants the opportunity to submit their alphas for one of the following five universes pre-defined by the sponsoring fund: Energy, Precious Metals, Technology, US Treasuries, or Volatility ETFs. Quants submitted their strategies for the chance to win part of a USD27,500 cash prize pool and the potential to be licensed by institutional investors for additional and recurring compensation.
Over the course of October, 102 quants from 21 countries in five continents designed and submitted 245 algorithms for consideration; the competition strategies’ beta ranged from -1.1 to positive 1.4, providing a diverse range of uncorrelated signals to the sponsoring client. The submitted algorithms went through live paper trading in November and December, and were then judged by assigning a score based on the Sharpe ratio and the realism of the model. QuantConnect selected a first-, second-, and third-place winner for the highest-scoring algorithms in each universe. The full list of winners from Alpha Five can be found here.
- These winning alphas will be available to license exclusively by the sponsoring fund for the first three months. Alphas from this competition that did not win will be available for live trading and for any hedge fund to license on the Alpha Streams marketplace.
- “We knew that this competition would be a compelling opportunity for quants to gain value from their ideas, but even we were surprised at the diverse range of strategies submitted,” says Jared Broad, CEO and founder of QuantConnect. “During the competition, we saw a significant uptick in our website usage, which has continued to climb since the competition ended. This enthusiasm shows the great potential of this and future competitions for the QuantConnect community.”
22nd Jan 2020 - 9:47am
CFTC orders Australian company to pay USD1m for spoofing
22/01/2020 - 9:47am
- The Commodity Futures Trading Commission has issued an order filing and settling charges against Propex Derivatives Pty Ltd, a proprietary trading firm headquartered in Australia, for spoofing in the Chicago Mercantile Exchange E-mini S&P 500 futures market.
- The order finds that Propex, through a former trader, engaged in spoofing from at least July 2012 through March 2017, causing USD464,300 in market losses.
- The order imposes a total of USD1 million against Propex, comprised of USD464,300 in restitution, USD73,429 in disgorgement, and a USD462,271 civil monetary penalty. It also requires Propex to cease and desist from violating the Commodity Exchange Act’s prohibition on spoofing. This case was brought in connection with the CFTC Division of Enforcement’s Spoofing Task Force.
- “This enforcement action demonstrates, once again, the continued parallel efforts between the CFTC and our law enforcement partners to preserve market integrity and protect market participants,” says CFTC Director of Enforcement James McDonald. “This action also shows the CFTC’s commitment to holding wrongdoers accountable wherever they may be located, including halfway around the globe.”
- The order finds that between July 2012 and March 2017, a Propex trader engaged in proprietary trading in commodity futures markets on behalf of Propex. On numerous occasions during that time period, the trader engaged in typical spoofing activities – placing bids and offers for E-mini futures contracts with the intent to cancel the bids and offers before execution. The trader typically placed order(s) that he wanted to get filled (genuine orders), on one side of the market, while on the opposite side of the market, he placed order(s) that the trader intended to cancel before execution (spoof orders). The spoof orders typically consisted of orders that were five times as many contracts as the genuine orders. Generally, the trader cancelled the spoof orders shortly after placing them, often after the genuine orders were filled.
22nd Jan 2020 - 9:44am
Bixby Research and Analytics launches private markets news and information platform for hedge funds and asset managers
22/01/2020 - 9:44am
- Bixby Research and Analytics, a fintech focused on information flow, has launched a web platform powered by Rightpoint technology, which connects asset managers and hedge funds to real-time market moving news and financial information for companies in the private debt market.
- Over the last several decades, the asset management industry has seen unprecedented advances in technology; however, when you step back and look at where this advancement is taking place, it's been almost solely confined to the public market. Over the same time, private market information flow has remained antiquated with virtually no resources available to investment professionals.
- "The market for leveraged loans has doubled in the past decade to over 1.7 trillion in assets, and approximately half of these companies are private," says Brian Conroy, Founder and CEO, Bixby Research and Analytics. "The lack of resources available to investment professionals in the private debt market has made it increasingly difficult to manage these positions. Our platform modernises information flow so our clients can stay focused on investing."
- Bixby Research and Analytics turned to Rightpoint in 2019 for its best-in-class technology and experience-led approach to bring the concept to life. Bixby's web portal went live in late 2019 providing asset managers and hedge funds with real-time news, financial data and detailed portfolio information that is specifically tailored to each client's needs.With the private debt market being one of the fastest growing, and most underserved segments in the asset management world, Bixby Research and Analytics is uniquely positioned to become an industry leader in the fintech market.
- "When Bixby turned to us to support them on the full experience of creating this platform – setting out to design and develop a solution that could transform the private investment marketplace – we were excited to work together on a product that is bringing the private debt market into the future," says Jason Sears, Senior Solutions Architect, Rightpoint.
22nd Jan 2020 - 9:43am
LiquidityBook reports record-setting revenue growth
22/01/2020 - 9:43am
- LiquidityBook, a Software-as-a-Service (SaaS)-based provider of buy- and sell-side trading solutions, has reported record results for 2019 across all sales and client growth metrics tracked by the firm.
- This rapid growth was fuelled by a continued rise in demand for its
- POEMS (portfolio, order and execution management system) platform, which provides significant cost, management and functionality benefits over the legacy platforms many investment managers currently employ.
- LiquidityBook’s total revenues for 2019 were up 33 per cent year-over-year, fueled by steady client wins for each of the firm’s products: LBX Buy-Side, LBX Sell-Side and LBX Outsourced Trader. Recently, the firm signed multi-strategy manager FNY Investment Advisers, which resulted in significant enhancements to the LiquidityBook back end to optimize the way LBX utilises market data and processes fills.
- Ninety fover per cent of new deployments were replacements of legacy platforms. Growth in the overall client base led to an 85 per cent increase in total orders sent via LBX Connect, LiquidityBook’s proprietary FIX network, as well as a 35 per cent increase in overall fill traffic. LBX Connect now has over 180 broker-dealers on the network globally, with clients able to send Equities, Options, Futures, FX and Swap/CFD orders, as well as allocations, to them. In addition, a primary focus in 2019 was the integration of multiple new OTC/credit-focused EMS and ATS platforms, with clients trading record amounts of Credit, Repos, Collateralized Loan Products and Credit Derivatives through LiquidityBook over the course of the year.
- LiquidityBook continued to expand its global footprint in 2019, establishing a fourth office – in Sydney – in response to a rapid increase in clients seeking to execute investment ideas in the Asia-Pacific region. Opened by Chief Architect Andy Carroll, the office plays a vital role in providing local service and support to LiquidityBook’s growing roster of clients trading around the clock. The office will play a vital part in LiquidityBook’s plans to further expand into Asia-Pacific.
- LiquidityBook also continued expanding its global development and client service organisation, making several key hires in 2019 including Alexander Ponyrko as Principal Software Engineer and Andre Meintjes as Asia-Pacific Client Services Lead. Over the course of 2019, Liquiditybook increased its headcount by nearly 50 per cent, all of which were in product development and client service.
- During the year, LiquidityBook experienced a number of “firsts” as a company, including onboarding its first client trading over 50 million shares a day, as well as its first client with over USD20 billion in credit assets (Repos, Bank Debt, Collateralised Loans and Credit Derivatives).
- Chief Revenue Officer Sean Sullivan says: “Thanks to a record-setting number of new engagements, we finished the decade with our strongest year yet. The discussion around SaaS-based technologies and the benefits they offer on cost, functionality and service continues to be a key factor in firms’ willingness and desire to migrate from legacy platforms. People today clearly recognise how valuable web-based apps are in their everyday lives, and it’s only logical that there is a growing market for this model in the trading technology space as well.
- “It’s no secret that investment professionals must today offer more diverse products across the cap structure to stay competitive and retain assets. It is therefore very important to have a foundational product like Liquiditybook that can move with you as your business demands it to. Our workflow and asset class flexibility is one of the primary drivers for our 2019 growth, and based on our pipeline, we expect to see similarly strong demand in 2020.”
Four years ago, Chris Collins became the first sitting member of Congress to endorse Donald Trump for president. Four years later, both have moved from New York to Florida and both have been accused of all manner of financial malfeasance. And that is where the similarities end, because while Trump ...
Bailey McCann, Opalesque New York: Institutional investors are backing alternatives heading into 2020. According to the newly released Eaton Partners LP Pulse Survey, 72% of institutional investors expect alternative assets to meet or exceed their benchmarks this year. More than half (52%) also desc...
Laxman Pai, Opalesque Asia: Global alternative asset manager Ares Management has agreed to acquire a controlling stake in Asian alternative money manager SSG Capital Holdings for an undisclosed amount.
Headquartered in Hong Kong with offices across Asia, SSG manages private credit and special situ...
Laxman Pai, Opalesque Asia: The global hedge fund industry AUM has increased by US$9.9 billion in 2019. Investor redemptions totaling US$126.2 billion have been recorded throughout the year, a level the industry has not seen post-crisis.
The Eurekahedge Hedge Fund Index returned 8.74% in 2019, suppo...
Laxman Pai, Opalesque Asia: Total hedge fund capital surged to $3.32 trillion, representing a quarterly increase of over $80 billion and surpassing the previous record of $3.24 trillion set in mid-2019.
Driven by investor optimism regarding the record US-lead economic surge, the hedge fund industry ...
Laxman Pai, Opalesque Asia: Incline Equity Partners closed its latest private equity fund, Incline Equity Partners Fund V, with $1.2 billion of capital commitments.
The Pennsylvania-headquartered private equity firm said the fund was oversubscribed above its initial target of $850 million.
Fund V re...
Laxman Pai, Opalesque Asia: New Jersey-based energy infrastructure specialist Energy Capital Partners (ECP) has amassed $6.8 billion for its latest flagship fund and parallel co-investment pools targeting power plants and other energy-infrastructure assets, despite tepid interest from U.S. investors...
B. G., Opalesque Geneva: SPARX Asset Management 's Japan Long-Short Fund (USD class) returned 15.98% in 2019, against the TOPIX 's 13.7%.
"In Q4 2019, the Japanese stock market continued its substantial rise, due to high global stock prices resulting from progress in
US-China trade talks ...
For many hedge funds in Asia, 2019 was good, but not good enough
From Bloomberg: For many Asia hedge funds, 2019 was a good year -- just not good enough to allow them to charge performance fees. More than 73% of Asia-based or Asia-focused firms made money in 2019. But almost 71% of those finished t...
Asterion surges past debut fund target, hard cap to reach $1.22bn final close
From Altassets: Asterion Industrial Partners has raised euro;1.1bn ($1.22bn) for the biggest private capital fund ever registered in Spain, bearing its original hard cap in the process. The Madrid-headquartered investor ...
$1.6tn Japan's Government Pension Investment Fund says short selling is wrong
From Washington Post: Japan's Government Pension Investment Fund has been a trailblazer in promoting the need to incorporate environmental, social and governance issues into the day-to-day job of portfolio construction. ...
Global fund managers see above trend growth in 2020, rising corporate profits
From The Street: Global fund managers are forecasting above-trend growth for the world economy this year, according to Bank of America's benchmark survey, and see the fastest inflation in more than a year as corporate ...
Diamond Hill hires Artisan veteran as managing director for marketing
Diamond Hill Capital Management, an independent active asset manager and a subsidiary of Diamond Hill Investment Group announced the appointment of Lara Hoffmans, CFA, as managing director, marketing, a new position, effective Fe...
Is Bitcoin a safe haven for your money?
From Coin Telegraph: In the summer of 2019, the 10-year minus 3-month yield curve inverted for the first time in 13 years. During the time of the inversion, Bitcoin's price hit all-time highs for the year. The previous inversion in 2006 was followed shortly t...
Raising capital gets tougher for real-estate funds
From WSJ: The amount of capital raised by real-estate private-equity funds plummeted in the fourth quarter of 2019 in a sign that investors are struggling to find high-yielding deals after years of soaring prices.
Only $18 billion of real-estate ...
Why Chicago Tribune staffers are terrified of their hedge fund owner
From Forbes: Two veteran journalists from the Chicago Tribune published an op-ed on Sunday challenging one of the paper's principal owners, the New York hedge fund Alden Global Capital. The column-"Will The Chicago Tribun...
UK 'leading' European market for ESG investments
From Pension Sage: The UK is the 'leading European market' for environmental, social and governance (ESG)-related investments, with pound;6,439bn assets under management, according to joint research by Association of Luxembourg Fund Industry (ALFI) ...
Big Australia investors to take riskier bets in hunt for returns
From Bloomberg: Australia has some big decisions to make about its future. For insight into the stories that matter, sign up for our new weekly newsletter. Australia's largest investors intend to take riskier bets in 2020 as they hunt...
Ray Dalio is in Davos (obviously), where the founder of the World Economic Conference is still insisting that it’s all about bringing people together in spite of not only having Donald Trump as his guest, but having Donald Trump use his platform to distract attention from his pro-forma impeachment ...
Private equity managers plan to raise ever-larger funds in 2020
From Bloomberg: Private equity firms have big plans for 2020. About three-quarters of managers raising a private equity fund in the coming year expect it to be larger than the prior money pool, according to an EY survey. That's the hig...
21st Jan 2020 - 5:22pm
Saemor’s market neutral fund suffers third monthly slide
By Hugh Leask | 21/01/2020 - 5:22pm
- The Saemor Europe Alpha Fund, Saemor Capital’s long-running market neutral hedge fund strategy, shed 1.9 per cent last month – its third successive monthly loss –rounding off a disappointing spell for the Netherlands-based manager which saw the fund down almost 10 per cent for the year.
- The fund - which uses a quantitative factor model aimed at making gains throughout the business cycle, regardless of market environment – generated positive returns in its value and price momentum trades during December.
- But while tactical bets in value positions stemmed losses during the fourth quarter, other factor positions suffered negative returns, leaving the fund down 9.9 per cent annually in 2019, Saemor said in its monthly update.
- “Our preference for highly profitable qualitatively strong companies, with earnings upgrades and attractive valuations, did not pay off,” Saemor observed. “The results of the UK election lifted domestic plays and banks, but the fund is no longer as geared towards UK domestics as it was a year ago, with earnings revisions having deteriorated for those stocks.”
- Looking ahead, the firm is eyeing a recovery scenario in the business cycle, with value names outperforming other factor clusters in Europe and globally. Momentum stocks meanwhile should benefit from falling macro risk, Saemor officials observed in the note.
- “Full year results and 2020 outlooks could be beneficial to earnings momentum, which remains one of the key building blocks of our multi-factor approach,” they added. “If and when both value and momentum start to work - our ‘goldilocks’ moment - we would expect a strong turnaround in performance for the fund.
- As a result, the strategy is positioned net long in the IT, healthcare, utlilities, media, real estate and energy sectors, while being short materials, consumer discretionary, consumer staples, banks, telecoms and insurance.Aviva and GlaxoSmithKline are among the fund’s key long bets, along with Tate & Lyle and Bawag. Key shorts include Nokia and Daimler.
- Geographically, Dutch, Austrian, Spanish, Swedish and Portuguese stocks are overweight in the portfolio, while Swiss, German, Danish and UK names are under-represented.
21st Jan 2020 - 3:32pm
JTC expands institutional senior leadership team
21/01/2020 - 3:32pm
- JTC, a provider of fund, corporate and private client services, has announced two new strategic senior appointments within its Institutional Client Services (ICS) division.
- Fiona Wild, joins JTC as a Group Director, Head of Operations – ICS and Marie Fitzpatrick joins as a Senior Director in ICS.
- Wild will be responsible for leading and creating operational efficiency within the ICS network of offices to support the consistent delivery of the division’s business plan and to ensure an efficient and effective working environment.
- Wild has over 17 years’ funds experience and joins JTC from IQ-EQ, where she headed up the fund services division for Jersey. Fiona will be based in JTC’s Jersey headquarters office and become an integral member of the ICS Division’s management team, led by Jon Jennings, JTC’s Global Head of ICS. She has extensive experience in all major alternative asset classes, including real estate, private equity, venture capital and renewable energy. Wild is a qualified chartered accountant and a graduate of Strathclyde University.
- Fitzpatrick, joins JTC’s London office and will play a leading role in building and maintaining intermediary relationships and growing organic new business in the fund and corporate services markets with a particular mandate on developing our global Private Equity offering.
- Fitzpatrick has over 20 years’ global funds experience and has spent eleven of those years working for two prestigious private equity firms and she is recognised as a leading business development executive. She joins JTC from Langham Hall where she had responsibility for growing new business across Europe. Marie is a qualified chartered accountant.
- JTC’s Group Head of Institutional Client Services, Jon Jennings, says: “JTC is now firmly established as a leading provider of fund and corporate services globally and in order to support our continued expansion and growth, I am delighted to welcome both Fiona and Marie to the senior leadership team. They each bring a wealth of knowledge and experience that will further strengthen our proposition to both new and existing clients, as well as our many intermediary partners. Fiona and Marie will be instrumental in driving continuous improvement in our global operating platform, as well as strong growth of the business.”
- Wild says: “I am excited to join JTC, one of the fastest growing and most innovative firms in the fund and corporate services market. Their vision for growth based on a scalable global platform and the delivery of client service excellence resonates deeply with me and I look forward to working with Jon and the other members of the ICS Division globally to help the business achieve its goals.”
- Fitzpatrick adds: “I am delighted to join JTC at an exciting time in the company’s development. Since listing in 2018 the business has continued to grow strongly and I look forward to being part of the next chapter in JTC’s journey and in particular to being part of it’s expanding London-based team.”
By Guest Contributor Aaron Filbeck, CFA, CAIA, CIPM, Associate Director, Content Development The death of the 60/40 may be a welcome change for multi-asset investors who understand that exposure to risk premia is perhaps a far better long-term investment strategy. Diversification remains an important facet of asset allocation, but weRead More
MUST BE THIS RICH TO RIDE The 50th annual World Economic Forum kicks off today in Davos, Switzerland. As is tradition, the forum will give the 1% an opportunity to pat each other on the back, discuss income inequality (LOL JK) and presumably pledge a blood oath to the New World Order.
Of course, ...
21st Jan 2020 - 9:30am
Ardea adds senior hire to investment team
21/01/2020 - 9:30am
- Fixed income specialist Ardea Investment Management has made a senior appointment to its investment team as part of a strategic plan to capitalise on future growth opportunities.
- Ardea has appointed Dr Laura Ryan to a newly created role as Head of Research, in which capacity she will progressively build a new research team to support Ardea’s growing investment capabilities.
Prior to Ardea, Laura was Senior Vice President (Quantitative Research) and member of the Australian senior management team at PIMCO, Manager of Quantitative Strategy at CBA, Quantitative Manager at AMP Capital Investors and a Lecturer in Statistics at the Australian National University (ANU).
Laura’s 21 years of global financial markets experience brings depth of technical knowledge and experience across a range of fixed income investing capabilities, including Ardea’s specialisation of ‘relative value’ investing. Laura also has a breadth of experience extending beyond fixed income to portfolio construction, asset allocation and portfolio risk management.
The research team, headed by Laura, will increase the breadth of Ardea’s global fixed income coverage by supporting portfolio managers in researching and developing relative value investment strategies. Leveraging Laura’s rare combination of strong academic credentials and extensive practical investment experience, the team will also produce value-add research and thought leadership for clients which will be independent of Ardea’s product offerings.
In announcing Laura’s appointment, Ardea’s CEO and co-founder Stephen Clout, says: “We are thrilled to have someone of Laura’s calibre joining our investment team. Not only is she exceptional in terms of technical skills and investment experience, she is also a great cultural fit, being strongly aligned with our core values around client service and teamwork.
- “Creating a research team under Laura is a key component of our strategic plan to prepare Ardea for a strong pipeline of long-term growth opportunities. This is a pre-emptive investment in resourcing to ensure we maintain our highest standards of alpha generation and client service as we continue to grow in a considered and sustainable way.”
Ardea has also added Tom McFadyen as a Risk Analyst within the Portfolio Implementation team. McFadyen has worked with Ardea previously as part of an internship programme with The University of Sydney. He holds a Bachelor of Engineering in Mechatronics and a Bachelor of Commerce, majoring in Finance. With further hires planned over the course of 2020 to ensure Ardea is adequately resourced for future growth we have also appointed Anna Price as Office Manager to support Ardea’s growing team and company culture.
21st Jan 2020 - 9:26am
Bitfinex launches sub-account feature
21/01/2020 - 9:26am
- Bitfinex, a digital asset trading platform, has launched a sub-account feature that allows users of the exchange to set up multiple trading accounts within one master account.
- The addition of the sub-account feature meets institutional demand to deploy more complex crypto trading strategies.
- The feature will enable users to create up to 100 subsidiary trading accounts under one master account, which retains full managerial control and the authority for sharing funds between accounts. Institutional traders, verified as corporate users, who wish to give different levels of access to employees within the same organisation can do so utilising the sub-account feature.
- “There is huge pent up demand among institutional traders for a more sophisticated way of accessing crypto markets,” says Paolo Ardoino, CTO at Bitfinex. “The sub-account feature will facilitate myriad trading strategies across different accounts, and further underlines our capacity to meet the needs of institutional traders pursuing increasingly complex strategies.”
- The new sub-account feature offers the following benefits: Shared volume with fee discounts across all accounts based on the cumulative fee tier. The deployment of various trading strategies at the same time, enabling traders to track their strategies more accurately. If a user’s account is verified, the customer can decide which sub-account to share verification data. A user taking advantage of the service will be able to transfer cryptocurrency funds between the master account into the wallet of a chosen sub-account.
- A master account has the capacity to perform a variety of functions, including: Switch access to view and make changes to the various sub-accounts (a user’s sub-account email has to be verified first in order to perform this function). Set security restrictions on sub-accounts. Identify the desired verification status on each sub-account.
21st Jan 2020 - 8:56am
Broadridge to acquire FundsLibrary
21/01/2020 - 8:56am
- Broadridge Financial Solutions is to acquire FundsLibrary, a specialist in fund document and data dissemination in the European market, from its parent company Hargreaves Lansdown.
- Combining FundsLibrary’s capabilities with Broadridge’s existing regulatory communications offerings will enable Broadridge to significantly reduce complexity and cost for global fund managers, helping them to increase distribution opportunities and meet their regulatory requirements across multiple jurisdictions.
FundsLibrary’s services link fund managers to distributors and investors to provide complete, accurate and timely information supporting fund sales. The solution helps fund managers increase distribution opportunities and comply with both UK domestic and EU regulations such as Solvency II and MiFID II, and makes information easily accessible for investors in digital format. Integrating FundsLibrary’s data platform and technology with Broadridge’s existing fund calculation, translation and document creation capabilities creates an end-to-end solution for fund managers and distributors. This comes at a time where there is growing demand for transparency, operational efficiency and compliant communications in an increasingly competitive and highly regulated environment.
“Today, global fund managers face a real challenge in creating and disseminating compliant marketing and regulatory documents that meet domestic and cross-border requirements throughout the EU and UK,” says Samir Pandiri, president, Broadridge International. “The acquisition is a natural extension of Broadridge’s regulatory communications business and the next step in creating a leading pan-European digital data platform, supporting the lifecycle of fund data, documents, and regulatory reporting for the investment industry.”
“FundsLibrary has had an enviable track record within the investment industry for its breadth, quality and timeliness of fund data solutions,” says Arun Sarwal, CEO of FundsLibrary. “We are excited to be joining forces with Broadridge to enable us to serve our clients across a larger part of their global value chain and to extend our services across multiple geographies.”
The acquisition is subject to the satisfaction of customary closing conditions and is expected to close in mid-to late-February. Grant Thornton UK LLP acted as lead financial advisor to Hargreaves Lansdown plc. Terms of the transaction were not disclosed.
A recent MIT Sloan research paper looks at the degree to which various environmental, social, and governance (ESG) ratings diverge and why. The paper is the work of Florian Berg and Roberto Rigobon, both of MIT Sloan, and Julian F. Kolbel, who is affiliated with the University of Zurich’s departmentRead More
Laxman Pai, Opalesque Asia: Investors in 'real assets' - an asset class including property - will increase their focus on environmental, social and governance (ESG) criteria, over the next five years, according to a survey by Macquarie Infrastructure and Real Assets (MIRA).
Over 90% of investors sa...
Laxman Pai, Opalesque Asia: The Luxembourg alternatives scene offers an increasing range of attractive structuring options, says the Association of the Luxembourg Fund Industry (ALFI).
Over 265 alternative investment funds managers (AIFMs) have been authorized by Luxembourg's regulator, the CSSF. T...
Laxman Pai, Opalesque Asia: New York-based banking institution Citi has launched a $150 million fund that will invest in private-sector companies that have a positive impact on society.
The Citi Impact Fund, which the banking giant has launched using its own capital, will actively seek to invest in...
Bailey McCann, Opalesque New York: Citadel Securities will pay 670 million yuan ($97 million) as part of a settlement with Chinese regulators over alleged trading irregularities in 2015. The settlement was announced by the China Securities Regulatory Commission.
The regulator had been investigating...
Top hedge funds post biggest gains in at least a decade
From FT: The top 20 best-performing hedge fund managers of all time made $59.3bn for their investors last year, their biggest annual gains in at least a decade, as hedge funds took advantage of a strong tailwind in stock and bond markets.
Baring PE Asia closes seventh fund at $6.5bn, exceeds target
From Today Online: Hong Kong-based Baring Private Equity Asia closed its seventh private equity fund at $6.5 billion, its largest to date, the firm said Tuesday. The fund size exceeded Baring's initial target by $1 billion and is 60% bi...
ALFI: Pension funds seek diversification in foreign assets, alternatives
From IPE: Low interest rate environments in many developed nations, alongside increasingly volatile equity markets, are leading pension funds to adapt their investment strategies and increase their allocation to foreign inve...
PIMCO appoints its Australia head to manage Asia-Pacific ex-Japan client relationships
From PIonline.com: Adrian Stewart, an executive vice president and head of Australia and New Zealand with Pacific Investment Management Co., will take on a new role at PIMCO as head of client management for APA...
Blockchain related investments in China declined 40% y-o-y in 2019
From Coin Trust: As per the latest study by China's statistical organizations, the country's blockchain spending in finance and investment sectors have tumbled more than 40% last year. In 2019, there were 245 investment and fundin...
Hedge funds sell oil as doubts about economy resurface
From Reuters: Hedge funds turned heavy sellers of petroleum last week as the threat of conflict in the Middle East receded and was replaced by renewed concerns about the health of the global economy.
Hedge funds and other money managers sold...
From FT: Investors are increasingly bullish on the pound, even as the currency has stumbled amid rising expectations for a Bank of England rate cut and renewed Brexit uncertainty. Fund managers and other companies trading in the futures market have reached their most bullish point since April 2018 a...
The investor clash behind Tesla's surge toward $100bn in market value
From WSJ: When Tesla Inc. stock tumbled to a three-year low of around $178 a share last June, Brian White pounced. The online producer sold holdings in tech stalwarts like Microsoft Corp. and says he put about three-quarters of...
UK economy will outpace eurozone for first two years after Brexit, IMF predicts
From Telegraph: The UK economy will outpace the struggling eurozone in the first two years after Brexit, the International Monetary Fund (IMF) has predicted for the first time.
Britain also outpaced the monetary uni...
January still has a way to go and Chinese property developers have already issued more than $10 billion of offshore bonds, roughly double the monthly average of $5.5 billion.
"Particularly in the past two weeks, there has been a big increase in issuance of US dollar offshore bonds by Chine...
Low-value deals dominated Asia-Pacific VC at close of 2019
From Altassets: Low value deals dominated the Asia-Pacific venture capital funding landscape at the end of 2019 thanks to trade tensions and an economic slowdown in the region, new research shows.
Investments of less than $10m made up th...
From Bloomberg: The biggest global funds should all be monitoring their investments in illiquid assets, according to the head of Canada's largest pension fund.
"I do ring the alarm bell on not to be too invested in illiquid assets," Mark Machin, chief executive officer of the Cana...
Climate change threatens quant funds
From FT: UBS, the Swiss banking behemoth, yesterday unveiled its latest report on climate change and sustainability, which included plenty of alarming and startling numbers. For example, the report estimates the $600bn currently invested in climate finance is ...
Fund tied to activist Murakami starts Toshiba Machine takeover bid
From Nikkei: A fund linked to prominent activist investor Yoshiaki Murakami on Tuesday announced a takeover bid for Toshiba Machine, looking to spend up to 25.9 billion yen ($235.4 million) to acquire 44% of outstanding shares.
Elon Musk says he'll put a million people on Mars by 2050
From Futurism: SpaceX CEO Elon Musk revealed new details about his plans to colonize Mars. In theory, 1,000 Starships could eventually send "maybe around 100k people per Earth-Mars orbital sync," Musk tweeted. "T...
20th Jan 2020 - 4:49pm
Feedstock secures GBP2.5m VC injection
20/01/2020 - 4:49pm
- FeedStock, an AI-driven SaaS business that leverages the latest natural language processing technologies to enable financial services companies to meet both their compliance requirements and commercial goals, has secured a GBP2.5 million investment in a funding round led by Praetura Ventures.
- Praetura Ventures, the Manchester-based investor that backs early-stage businesses in high-value sectors, has invested GBP1.8 million in FeedStock from its Praetura EIS 2019 Fund. Existing investor Illuminate Financial and a selection of angel investors as well as Force Over Mass are contributing a further GBP0.7 million.
- FeedStock is one of the first AI solutions to deliver value for clients on both the buy and sell-side of financial services institutions. The system streamlines compliance requirements, cost control measures and revenue generating activities by analysing communication streams within enterprises. The data generated gives businesses the edge to make smarter decisions and meet stringent regulatory requirements.
Its leading product, Cortex, automatically scans emails and chat streams, as well as calendar events and research portals to ensure compliance with investment research regulations imposed by MiFID II, the landmark legislation introduced by the EU in 2018. The recent growth in demand for FeedStock’s Cortex product is a demonstration of the buyside’s increasing efforts to adopt emerging AI technologies to streamline existing operations and unlock value in their data. Cortex is being used by some of the largest and most successful asset managers and hedge funds globally.
Building on the success of Cortex, FeedStock released Synapse last year, a product which analyses a firm’s communications with clients in real-time to deliver insights for Next Best Action (NBA) as well as automating CRM data entry. The software is used by tier one institutions to automate manual data entry into CRMs and to map key customer relationships Synapse automatically informs businesses when an account is at risk of churn, identifies opportunities within the existing client base and assists with the management of large enterprise sales teams.
FeedStock was founded in 2015 and is run by co-founders and joint managing directors Charlie Henderson, a former corporate broker, and Lucas Wurfbain, who was previously a fund manager. The business is based in London’s Covent Garden and operates across multiple jurisdictions with clients in the US, Europe and UK.
The funding will enable FeedStock to accelerate the rollout of its products, expand the size of its team and extend into new markets. The deal is Praetura Ventures’ tenth in the last six months, with a total of GBP12.6 million invested in early-stage businesses since June. FeedStock is the third AI-focused business in Praetura Ventures’ portfolio, following investments in Peak and Futr.
FeedStock co-founder Charlie Henderson says: “With our background in highly regulated businesses, we are seeing enormous appetite for our proprietary technology; not only from businesses required to comply with MiFID II, but also for enterprises that are looking to leverage AI as a core component of their business for efficiency gains and revenue generation.
“Financial services firms recognise that investing in their compliance and technology is key to winning and retaining the trust of customers and investors. These businesses also understand the importance of analysing data to power smarter decisions ahead of their competitors.
“It’s clear to us that the team at Praetura Ventures understand the opportunities and challenges in our sector, and also understand the potential of where we can take the business. Their entrepreneurial and proactive approach resonates with our values and they will help us to successfully deliver our growth strategy. We are looking forward to working with them closely.”
As part of the deal, Mark Lyons, director at Praetura Ventures, will join the FeedStock board as a non-executive director.
Mark Lyons, director at Praetura Ventures, says: “Our support for FeedStock fits well with our strategy of investing in exciting businesses led by entrepreneurial management teams with experience in high-value sectors.
“AI is beginning to disrupt financial services in a positive way. The most forward-thinking businesses recognise that proprietary software like FeedStock’s will be at the heart of their future business models.
“We’ve been hugely impressed with the experience and vision of Charlie and Lucas and are confident that with our support, the business will deliver on its ambitious growth targets. They have developed a world-class product with significant momentum, and we are very excited about what the future holds for the business.”
Other high-profile businesses backed by Praetura Ventures include AI and machine learning business, Peak, and online delivery platform, Sorted.
20th Jan 2020 - 12:46pm
Pictet balances emerging markets optimism with caution on equities and bonds
20/01/2020 - 12:46pm
- Pictet Asset Management, the investment management arm of the Geneva-headquartered wealth management giant Pictet Group, is warning against complacency in global markets amid easing US-China trade tensions and reopened negotiations over the UK’s withdrawal from the EU.
- Luca Paolini, chief strategist at Pictet Asset Management, voiced optimism in emerging market assets while remaining neutral on equities, and negative on bonds.
- In a note on Monday morning, Paolini suggested bonds are “extremely expensive” on both a relative and absolute basis, and instead favours emerging markets equities and credit.
- Within equities, UK assets offer the best value within a generally overvalued global market, he said. An end to the Brexit impasse could bolster UK equities valuations, while light investor positioning could support a further rally, with sterling also strengthening following any resolution. UK companies could become acquisition targets for overseas firms.
- “The UK market also provides greater exposure to sectors we favour at a global level: cyclical value stocks such as banks and quality defensives such as pharmaceuticals.”
- Elsewhere, Pictet is resolute on EM growth. Paolini noted developing economies will continue to outpace developed nations this year, adding there is value in EM bonds, particularly Mexico and Russia.
- “Consumer price pressures in EM economies should continue easing. Shrinkage in the inflation gap between the emerging and developed world will allow EM central banks to cut rates further in 2020,” he observed.
- Emerging markets-focused hedge funds gained 11.67 per cent in 2019, reversing the previous year’s 10.94 per cent loss, according to HFRI data.
- “EM real bond yields are almost 300 basis points above those of developed market bonds suggesting scope for further gains. EM currencies also look cheap against the dollar. We expect the greenback to lose ground next year which, in particular, should be a spur to EM local bonds.”
- Pictet Asset Management, the investment management arm of the USD557 billion Geneva-headquartered Pictet Group, manages around USD192 billion in assets spanning equities and bond markets globally.
- The firm runs an assortment of investment strategies including Agora, the European market neutral hedge fund managed by former Goldman Sachs equity long/short portfolio manager Elif Aktuğ.
ABORT MISSION Elon Musk certainly didn't have a case of the Sunday Scaries.
The mastermind behind the “Big F*cking Rocket” announced that SpaceX would be ready to take its maiden manned voyage in 2020. According to Musk, NASA can fire the real-life humans into orbit between April and June. No more ...
20th Jan 2020 - 11:26am
Brodie Consulting Group launches in alts space
20/01/2020 - 11:26am
- Brodie Consultancy Group, a UK-based financial services marketing and communications consultancy, has launched with a focus on the alternative funds and commodity sectors.
- The founder, Alastair Crabbe, is the former Global Head of Marketing and Communications at Marex Spectron and prior to that was the long-term Global Head of Marketing and Communications at Permal Group.
- With extensive experience both in-house and also as a consultant at Maitland, where Crabbe advised many leading managers, Brodie Consultancy aims to help managers strengthen their brand, position their business and more effectively communicate with stakeholders. Its services range from client communications and factsheet design to activist and crisis communications.
- Crabbe says: “Our goal is to build a market-leading offering in this space. This sector has the smartest managers, but not always the most effective communicators, and their brand will often play second fiddle. Today, brand differentiation is hugely important, particularly in a world where there are 100s of managers offering similar strategies.
- “When I started working with alternative funds twenty years ago, investors were surprised to see a website or a factsheet with more than a paragraph of anodyne copy, but the sector has moved on and expectations are for so much more. Funds have a fiduciary duty of care to communicate with their investors and today it is about offering more, not less.
- “At the base level, this should be a clearer, stronger, identity on websites, factsheets and presentations, but managers should also be looking at video, podcasts, smarter roadshows and investor seminars, and this is where we are positioning Brodie Consulting Group.”
20th Jan 2020 - 10:23am
SGSS appoints CEO and Country Head in Italy
20/01/2020 - 10:23am
- Societe Generale Securities Services (SGSS) has appointed Roberto Pecora as Chief Executive Officer (CEO) and country head for Italy.
- Pecora reports to the board of directors of SGSS and will work in alignment with David Abitbol, Chairman of the board of directors of SGSS and Head of Societe Generale Securities Services (SGSS), and Alessandro Gumier, Head of Global Banking and Investor Solutions in Italy. Based in Milan, his appointment is effective since 1 January 2020.
- Pecora replaces Frédéric Barroyer, who was recently appointed as Head of Group Retirement and Employee Savings within Societe Generale Assurances.
“I would like to warmly thank Frédéric for his commitment and his leading role in the expansion of the Bank’s securities services activities in Italy," says Dvid Abitbol, Chairman of the board of directors of SGSS and Head of SGSS. “Roberto's long-lasting experience of market activities and deep knowledge of local financial institutions will be key assets to further develop our business in Italy, a strategic market for us, leveraging on our innovation, efficiency and technology capabilities.”
“With his extensive expertise in the Italian market, Roberto will play an important role in helping our clients to meet efficiently their market, regulatory and technological needs through a range of innovative services, as well as in promoting cross selling within the Group and in developing commercial synergies,” says Alessandro Gumier, Head of Global Banking and Investor Solutions in Italy.
SGSS in Italy, a leading player in the securities services industry with over EUR698 billion in assets under custody, provides post-trade services to institutional investors: custody and settlement, depositary and fund administration services, middle office, liquidity management, transfer agent and risk & performance management.
20th Jan 2020 - 10:21am
BlueBay hires industry veteran to expand Swiss team
20/01/2020 - 10:21am
- Specialist fixed income manager, BlueBay Asset Management (BlueBay), has appointed Stephan Eckstein to the newly created role of Sales Director.
- Based in Zurich, Eckstein reports to Roberto Valsecchi Oliva, Head of Switzerland and Southern Europe and will be responsible for developing BlueBay’s presence with wholesale investors in the region. Stephan’s appointment continues to bolster BlueBay’s Swiss presence, following the appointments of Renato Aebi and Marc-Hendrik Berthold in 2018.
Valsecchi Oliva says: “Stephan is a very experienced senior sales individual who I believe will be integral in driving and further developing our Swiss wholesale presence. Stephan’s appointment highlights BlueBay’s strong commitment to deepening our relationships across Swiss investors and complements BlueBay’s wider focus on building and nurturing deep client relationships.”
Eckstein has more than two decades industry experience, most recently as Head of Wholesale Switzerland for Schroders, which he joined in 2000. Prior to Schroders he held a number of roles at Zurcher Kantonalbank.
20th Jan 2020 - 9:45am
Deaglo aiming to mitigate the FX risk of cross-border transactions
20/01/2020 - 9:45am
- Deaglo, a cross-border advisory firm that provides FX execution and risk management solutions to institutional investors, investment managers, multinational corporations and private clients, has launched.
- The firm says its aim is to ‘educate and empower CFOs to take control of their FX risk and manage their cross-border transactions more effectively’.
- Ashley Groves, CEO & Founder, says: “Investors are increasingly looking overseas for deal making opportunities, yet in many cases don’t have the in-house expertise to quantify and manage their FX risk. Unfortunately, traditional approaches to managing these risks, which have beens by the banks, are opaque, cumbersome and expensive, and as such, have become obsolete. Deaglo was founded with the sole purpose of educating CFOs and their teams, and providing them with a clear plan and the appropriate cutting-edge analytical tools to make cross-border transactions effortless.”
- Deaglo provides firms of any size with a range of solutions, currently available to, or being utilised by, some of the world’s largest investors and corporations. In a recent survey of 100 global private equity deal makers, 45 per cent of them realised deal value through revenue enhancement and 80 per cent of transactions that utilised a formalised approach to creating deal value delivered material returns. Deaglo was launched with the aim of enhancing clients’ revenues and creating deal value through appropriate FX risk management.
- Deaglo’s solutions employ the latest machine learning and algorithmic techniques to simplify and execute cross-border transactions with unparalleled efficiency. Alongside cheaper and more transparent FX execution, and the ability to open a multi-currency account in just one day, Deaglo has seen strong interest for the following solutions:
- • Hedging illiquid and exotic currency pairs can be confusing and expensive. Dealgo’s Illiquid FX Proxy Hedging solution uses a unique application of Bayesian regression to identify a basket of currencies with sufficient correlations to act as a proxy, which mirrors the target illiquid currency and is cheaper to hedge.
• Traditional options hedging strategies offered by the banks to account for deal failure during the due diligence stage of an acquisition are often costly and inflexible. Deaglo’s Deal Contingent Hedging solution limits FX losses or cancellation costs on any type of cross-border acquisition via a proprietary optimum basket hedging tool.
• Identifying and quantifying the most efficient portfolio hedge for a portfolio consisting of numerous FX exposures of varying sizes and volatility can be challenging. Deaglo’s Portfolio Hedge Optimisation solution uses the firm’s efficiency frontier analysis to analyse a firm’s recent trades to achieve lower hedging costs.
• Deaglo’s Hedging Simulations use a first of its kind application of a Monte Carlo analysis to help clients stress test hedging strategies against future volatility, and identify the most suitable hedging products.
- Deaglo was founded by Ashley Groves, who previously led the East Coast region of AFEX, one of the world’s largest non-bank providers of foreign payment solutions. Whilst at AFEX, Groves was instrumental in doubling the regions revenues and developed an expertise in a variety of industries, including private equity, venture capital and real estate.
- Groves is joined by Matthew Fotheringham, who leads the promotion of Deaglo’s cross-border advisory solutions across EMEA, with a particular focus on private fund managers and family offices. Matthew was previously a Vice President at Third Seven Capital, a boutique investment bank serving both growth-oriented and lower middle-market companies.
- Deaglo’s APAC operations, focused on firms making investments and raising money in or from the APAC region, are headed up by Clive Cooper, who has over 13 years’ experience helping investment banks and private equity firms source more deals and operate more efficiently. He joined Deaglo having most recently led worldwide sales teams at SourceScrub, Ansarada and S&P Global.
20th Jan 2020 - 9:43am
EJF Capital and AmWest form new strategic partnership
20/01/2020 - 9:43am
- EJF Capital (EJF), a global alternative asset management firm, and AmWest Asset Management, an affiliate of The AmWest Group (AmWest), have formed a strategic joint venture partnership to manage investments in non-qualified mortgage (non-QM) loans as well as other non-agency mortgage loans acquired from select bank and non-bank originators.
- As part of the agreement, AmWest Asset Management LLC will have a minority role in the partnership.
- EJF’s Co-Founder and Co-Chief Executive Officer Neal Wilson says: “We are excited to partner with AmWest to take advantage of the attractive investment environment in the non-qualified residential mortgage space, which has begun to experience meaningful growth. AmWest’s deep mortgage banking and non-agency mortgage expertise, coupled with EJF's asset management and capital markets acumen, creates a powerful combination.”
- Kevin Stein, Head of Mortgage at EJF, adds: “AmWest is a leading non-QM originator and industry specialist that we have long admired. We look forward to working with their experienced team to grow the non-agency business at EJF.”
- AmWest’s Chairman, William Park, says: “We are happy to announce our entry into the asset management business and delighted to partner with EJF and its team.”
- Kenny Jo, Chief Executive Officer of AmWest, says: “With this partnership, we can continue to be a leading and innovative mortgage lender.”
20th Jan 2020 - 9:40am
E*TRADE appoints Chief Risk Officer
20/01/2020 - 9:40am
- E*TRADE Financial Corporation has appointed Corporate Controller Brent Simonich as Chief Risk Officer after Paul Brandow advised the Company of his decision to retire, following over a decade of service to the firm.
- The appointment of Simonich is effective immediately, while Brandow has agreed to serve in an advisory capacity throughout the transition.
- “We are extremely fortunate to have such a proven and capable leader as Brent on our bench, who will ably take the charge,” says Mike Pizzi, Chief Executive Officer of E*TRADE Financial. “Brent is a tried and true E*TRADE stalwart with deep knowledge of our industry, our Company, and our risks and controls. His diligence, integrity, and steadfast eye for detail will be tremendous assets as he leads our risk function into the future.”
- An E*TRADE veteran, Simonich joined the Company in 1999. He has served E*TRADE in several leadership positions, most recently as Corporate Controller, Principal Accounting Officer, and CFO of E*TRADE Securities. Mr. Simonich has experience in finance and risk and controls functions including risk management, accounting, financial reporting, vendor oversight, due diligence and acquisitions, and real estate and physical security. Prior to E*TRADE he served as a Certified Public Accountant with Seiler LLP where his focus was in audit and tax. He holds Series 27 and 99 designations, and earned his BS in Business from California Polytechnic State University. Mr. Simonich assumes the role from previous CRO Paul Brandow, who is retiring after a career of over 45 years in financial services, including more than 10 years at E*TRADE.
- “We are tremendously grateful to have had Paul serve our firm for as long as he has,” says Pizzi. “He has been an incredible asset in building out a fulsome risk function that is best in class, which is a result of Paul’s steady hand in guiding its maturation. His influence will be felt throughout our organisation beyond risk, as he is a deeply respected source of insight for the entire firm. We wish him the best in his much-deserved retirement, and are grateful for his many contributions.”
20th Jan 2020 - 9:38am
Airbus establishes Skytra for airline industry risk management
20/01/2020 - 9:38am
- A new venture called Skytra has been launched by Airbus to develop highly regulated financial instruments and infrastructure to support the air travel industry’s risk management of its revenues.
- Skytra has developed a family of global and regional indices which track the daily changes in the price of air travel in each geographic market. Airline ticket prices change constantly due to a multitude of external factors including supply or demand surges, political issues, tax and economic uncertainty. Whilst airline infrastructure and operational commitments are planned years into the future, the vast majority of airline tickets are sold in the last five weeks before take-off.
The indices will be used to price standardised futures and options contracts to be offered on a regulated derivatives trading venue that Skytra is developing, addressing a key need in the air travel industry. While airlines are currently able to hedge their cost base using derivative contracts – notably currency, interest rate and fuel prices – there are no existing instruments enabling them to manage air travel revenue volatility effectively. It makes airlines financially vulnerable and affects their ability to plan long-term and make the necessary investments to grow sustainably.
The impact of this problem is felt by the whole air travel value chain including the passenger, travel agents, airports and aircraft manufacturers. Today, 67 million jobs are supported by the industry globally and the wide-range of related industries around the world depend on the health of air travel. However, the cyclical nature of the industry, the high competition and its exposure to global events makes adequate risk management crucial for supporting the predicted growth. According to IATA the number of annual trips will double in the next 15 years from 4 billion to 8 billion.
As in the energy, agriculture or shipping markets, the indices and the platform Skytra is developing will ensure that air travel industry has its own class of derivatives to manage ticket price volatility. The benefits, however, are much wider-reaching. It will allow companies across the air travel chain to manage their own financial risk as well as to design and offer new products.
AirbusChief Commercial Officer, Christian Scherer, says:“Airbus recognises that the air travel industrycould see substantial value in being able to control its revenue risk.Financial predictability is beneficial to the whole value chain – from passengers to airlines, airports, lessors and aircraft manufacturers,enabling theindustryto invest in reducing our carbon footprint.After considerable engagement with our customers, Skytra is born!Airbus is proudto support Skytra’s mission bringing together industry experts across air travel and the financial markets.”
- Skytra CEO Mark Howarth says: “I have worked in financial services for more than 20 years and I have to say that Skytra will bring to market the most innovative trading contract I have seen in my career, and the opportunity to join the business was a very easy decision for me to make. We are reinventing risk management for air travel and I look forward to establishing Skytra in the coming months and years.”
Christine Rovelli, Head of Treasury at Finnair, says: “Finally we will have a risk management instrument tailor-made for the air travel industry that will help us manage our exposure to ticket price volatility more efficiently.”
Jerome Kemp, Managing Director and Global Head of Futures, Clearing and Collateral, Citi, says: “Airbus’ creation of Skytra presents a genuine product innovation that seeks to resolve a real world industry challenge with established financial instruments. Citi is well placed to serve its many global customers by connecting them to this new market.”
London-based Skytra is seeking approval from the UK’s Financial Conduct Authority (FCA) to become a regulated Benchmark Administrator for its air travel indices, with the goal of making these available in late 2020. The company will also be applying to the FCA for a licence to operate a Multilateral Trading Facility (MTF).
Skytra is led by a senior management team drawn from both the aviation and financial sectors. The team has extensive experience in building and launching new trading venues and products, with former managing directors from firms including Cboe, Chi-X, LIFFE, London Stock Exchange, and Tradition.
Laxman Pai, Opalesque Asia: The VC market in Asia remained soft in Q4'19. In the last quarter, VC-backed companies in the Asia region raised across 1,021 deals, said a report by KPMG.
Despite two $1 billion deals in the final quarter of the year, the region's total annual VC investment in 2019 was ...
Laxman Pai, Opalesque Asia: J.P. Morgan has taken an equity stake in Arcesium, an investment-management technology business that D.E. Shaw Co. launched as an independent company in 2015.
New York-based Arcesium LLC is an investment management technology and services firm, offering services in post...
Laxman Pai, Opalesque Asia: US venture capital-backed companies raised $23bn in Q4'19, down 16% compared to Q3. YoY funding fell 9% to $108bn making 2019 the third biggest year ever (with 2018 in the first place; 2000 in second).
Mega-rounds ($100m+) played a role in this as they fell for the secon...
In the week ending January 17th 2020, the Preqin All-Strategies Hedge Fund benchmark returned +2.00% in December, bringing the 2019 return to +11.58%. Funds of hedge funds gained 1.32% in December, generating a 2019 return of +8.34%, the highest annual return since 2013 (+8.82%). The Eurekahedge Hed...
From FA-Mag: A hedge fund set up by a former Millennium Management investment manager has more than quadrupled its assets to $1 billion over the past year, defying an exodus of capital from the industry.
Michael Cowley's Sandbar Asset Management, which started trading in August 2018, had about $2...
Hedge funds that bet on big trends are trying to bounce back
From Bloomberg: Greg Coffey's hedge fund firm, Kirkoswald Asset Management, gained 28% for clients in 2019. That's a decent profit by any standard, but what makes it more impressive is that Coffey is what's known as a macro investor. Th...
Liquid alternatives catch on in Canada with new Algonquin fund
From Bloomberg: Algonquin Capital Corp. is wading into the nascent market for liquid alternatives in Canada, launching a hedge fund-like mutual fund that's available to retail investors. The firm is planning to raise as much as C$3 bi...
CalPERS tops $400bn in total assets
From PIonline.com: CalPERS' total assets have hit $401.4 billion - a new high, according to information on the pension fund's website. The California Public Employees' Retirement System, Sacramento, is 71% funded, current estimates show. This is up from 70.2% a...
Betting big on stocks paid off for hedge funds in 2019
From Barrons: Being bullish on equities paid off big for hedge-fund managers in 2019. While the top 20 managers-ranked by net gains since inception-made $59.3 billion net of fees last year, more than a quarter of those gains were had by two h...
Hedge fund godfather Lord Fink to chair HSBC backed tech start-up Bud
From Standard: Hedge fund tycoon Lord Fink has been named chairman of bank software start-up Bud, which is backed by HSBC and Goldman Sachs. Fink, dubbed the "Godfather of hedge funds" for his role at Man Grou...
From Institutional Investor: This is a big week for special-purpose acquisition companies sponsored by hedge funds. On Tuesday Mudrick Capital Acquisition Corporation, sponsored by Jason Mudrick's Mudrick Capital Management, announced it will merge with Hycroft Mining Corporation, a gold and silver ...
Crypto terrorism funding is growing more sophisticated
From Bloomberg: Terrorism financing schemes using cryptocurrencies are growing in sophistication, according to researcher Chainalysis Inc., which helps law enforcement track digital-coin transactions.
In one instance, terrorists collected...
Artificial intelligence (AI) has become fairly commonplace in our lives-it runs in the background doing everything from curating song lists to unlocking phones.
In the world of asset management too, as more wealth managers use similar models to pick stocks, the differentiator could be AI. But we ...
Just 1.3% of US financial assets are managed by women or minorities. Here's how to change that
Diverse investment portfolios can reduce risk, promote innovation and improve returns. But as we begin 2020, despite equal or better performance, women and minority-owned firms control just 1.3% of all ...
From Sifted: There is more money in Europe for startup founders to tap into than ever before - but that doesn't mean it's all cash that they should take. For early-stage founders in Europe (at seed and Series A) it's often hard to know where to turn and how to tell a good venture capital firm from a...
Hedge fund makes huge bet on Korean governance change
From Bloomberg: A Seoul hedge fund is making a massive bet that hinges on changes in the chronic issue of South Korea's corporate governance.
It all started in August, when Must Asset Management, a 500 billion-won ($430 million) long-only h...
PE Panorama: Post-Brexit hollow-out
From Asia Asset: Connoisseurs of Brexit schadenfreude will likely find bitter-sweet savour in the latest report from London-headquartered law firm Pinsent Masons, quoted in several news media, which notes that the number of public-to-private deals delisting com...
Credit investors may lose four years of income in next downturn
From Institutional Investor: Investors will probably see cumulative losses as steep as 19 percent in the next downturn in leveraged credit, with mark-to-market drawdowns that may run three times as large, according to Bank of America...
Boom in emerging market corporate debt stirs fears
From FT: The developing world's rapidly swelling corporate debt market is an accident waiting to happen, according to a prominent emerging-markets hedge fund that says a lack of liquidity could lead to violent price declines in a crisis.
In a ...
Record sums deployed into sustainable investment funds
From FT: Interest among US investors in sustainable investment funds surged in 2019 amid mounting fears about the risks posed by climate change to the global economy.
Investors ploughed a record $20.6bn into US sustainable investment funds...
Businessweek has a long profile out on Apollo Global Management founder Leon Black this week. It covers all the necessary bases: his father’s suicide, Michael Milken, midnight chats with Carl Icahn, the private equity model, his seeming immunity to all of the illegality surrounding him, Jeff ...