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Brief : Senior executives who have traveled to England can temporarily leave quarantine if their work is likely to bring major benefits to the U.K. economy, the government announced on Tuesday. The exemption from isolation rules for newly arrived travelers applies to multinational executives who are visiting British branches of their firms. Critics of the decision questioned why it wasn’t also extended to smaller businesses. Top executives of foreign companies can also be released from the quarantine requirement if they are looking to make an investment in a British business or set up a new company in the U.K, the government said. “Many other countries have introduced similar exemptions and it’s important the U.K. public don’t lose out on prospective major investment,” Prime Minister Boris Johnson’s spokesman Max Blain said on Tuesday. “This is about making limited exemptions when people can prove they are looking to make significant major investments.” The Telegraph newspaper reported last week that JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon skipped visiting England on a recent trip to Europe due to quarantine restrictions.
Brief: Bridgepoint Group, the buyout firm spun out of Royal Bank of Scotland Group in 2000, will go public in one of the biggest listings of a U.K. private equity firm in decades. The firm plans to raise about 300 million pounds ($416 million) and list at least a quarter of its shares, according to a statement Tuesday. The offering, which is expected to value the company at about 2 billion pounds, will also include the sale of about 200 million pounds from existing holders, said a person familiar with the matter. The buyout firm, which focuses on middle-market companies across Europe and owns stakes in Burger King franchises in the U.K. and a motorbike racing business, is seizing on an ebullient stock market that Bridgepoint’s own chairman said earlier this year was showing signs of being near a top. Unlike the U.S., where firms like Blackstone Group Inc. and KKR & Co. went public more than a decade ago, British buyout groups have tended to remain small private partnerships still dominated by their founders or immediate successors. Closely held firms have been grappling with how to provide exits for founders, while also ensuring rising stars can monetize their stakes.
Brief: Moderna Inc. climbed to a record high amid growing concern about a more contagious variant of Covid-19 in nations including India, which cleared the import of its vaccine. The shares rose as much as 6.9% to $238.40, breaking through the prior intraday record set earlier this month. Trading volume was about 1.2 times the 10-day average as of 12:16 p.m. in New York. Moderna said its vaccine produced protective antibodies against the delta variant, which emerged in India and has been spreading throughout the world. India’s drug regulator approved the import of the shots for restricted emergency use on Tuesday. The world’s second most-populous country trails richer nations with a little more than 4% of the population fully vaccinated, compared with almost half in the U.S. Some analysts had expressed concern about Moderna’s recent surge, which has pushed the Cambridge, Massachusetts-based company’s market value past $95 billion. Moderna continues to be driven by momentum, and today’s study results are “clearly showing good coverage of variants with their vaccine,” Michael Yee at Jefferies said in an email.
Brief : Market volatility caused by the pandemic is set to increase European equity commissions by 19 per cent from 2019, after five years of decline, according to the latest European Institutional Equity Trading Report published Bloomberg Intelligence (BI). The report is based on data from 87 European institutional equity head, and senior traders. Equity commissions are anticipated to increase by 8.8 per cent in 2021 to GBP2.3 billion after climbing 9.2 per cent in 2020. According to the study, a majority (53 per cent) of traders believe that their overall commission payments will rise this year, and more than two-thirds forecast improvements in trading volumes. The Bloomberg Intelligence report notes that, if predictions come true, 2021 will be the second year in a row to see brokerage commissions improve following a decline of a third in 2015-19. Currently, the average blended commission rate is at 3.46 basis points. This period saw a shift from active management strategies to more quantitative and passive strategies put pressure on turnover and fees and a switch to less expensive trading channels. Survey respondents view algorithms as the most important broker service, followed by high and low touch services.
Brief: Private equity firms invested in a record 566 companies in Central and Eastern Europe in 2020, as the industry supported dynamic SMEs and start-ups that will fuel the recovery from the impact of Covid-19 and underpin long-term economic and social development across the region. Invest Europe, the association representing Europe’s private equity, venture capital and infrastructure sectors, as well as their investors, today released its 2020 Central and Eastern Europe Private Equity Statistics. The report shows that the number of companies receiving private equity investment increased by 15 per cent on the previous year’s record and beat the five-year average by 46 per cent. Venture capital was the driving force for company investments in 2020 as firms backed 474 start-ups and scale-ups with total investment of EUR358 million – just 4 per cent below the all-time high achieved in 2019. Overall private equity investment slipped to EUR1.7 billion in 2020, mainly due to the absence of large buyout transactions involving equity commitments exceeding EUR300 million during the period. Poland was the leading destination with a quarter of the region’s total investment value (ER431 million) and home to almost a fifth of the companies receiving funding.
Brief: The pandemic had a tumultuous effect on the real estate industry. On the one hand, offices stood empty, hotel occupancy rates plummeted and construction was halted for many months. At the same time, demand for residential housing intensified as people were looking for more space to work and study. As a result, 2020 global VC deal flow into commercial real estate technologies fell nearly 80% compared with 2019. Meanwhile, venture investment into residential real estate tech dropped by less than 10% in that time, according to PitchBook data. As pandemic-related shutdowns are phasing out, both segments are seeing renewed interest from venture capitalists. Roughly six months through the year, VC deal activity in residential real estate tech has already reached an annual record of $6.2 billion, according to PitchBook data through June 18. And with $2.6 billion in funding, the commercial segment is on track to make 2021 the second-most valuable year for venture activity. Unlike in previous years, when the buzziest companies in the sector served commercial clients, much of the venture dollars are going to startups focused on disrupting the scorching-hot residential market.
Brief : A relentless global deal binge totaling nearly $60 billion has KKR & Co.’s leadership taking stock -- and a breather. When the pandemic hit, shortly after Philipp Freise and Mattia Caprioli took over new roles in Europe, the buyout house started deploying as much capital as possible while most rivals held back. More than a third of the total was spent in Europe, and KKR started working on a new fund dedicated to the region just a year after closing the last one. The breakneck pace of deals took its toll. KKR is now echoing the gentler tone adopted by investment banks like Goldman Sachs Group Inc. after employees balked at the work-till-you-drop culture. The biggest challenge to high performance in the buyout industry is “constant exhaustion,” Freise, 47, said in an interview. “As new-generation leaders, our job is to really temper,” said the German dealmaker, who’s co-head of KKR’s European private equity business with Caprioli. “It is almost like conducting an orchestra where the whole thing has gone into ‘Ride of the Valkyries’ -- we have to slow down a little bit to protect the human element from crashing.” The unusually open tone by leaders in the cutthroat buyout industry comes as workplace cultures come under increasing scrutiny and employers seek ways to retain a younger generation of workers.
Brief: The European Union’s top economic policy makers are exposing a gulf in their views on how to run the economy after the pandemic. European Central Bank Executive Board member Fabio Panetta said on Monday that monetary officials should retain the “unconventional flexibility” they granted themselves during the crisis, keeping borrowing costs low until government spending helps push up inflation. Hours later, his policy-making colleagues Jens Weidmann and Robert Holzmann said the ECB’s emergency powers are temporary and must end once the emergency is over. Panetta also said the ECB should consider retaining the flexibility ingrained in its 1.85 trillion-euro ($2.2 trillion) pandemic emergency bond-buying program when it expires. An older quantitative-easing program is tied to limits on how much of a country’s bonds can be bought.
Brief: The global economy has recovered from the pandemic sooner than most expected, with diversified investors benefiting from financial markets. But with growth now expected to be at its peak, U.S. asset managers, in particular, must now grapple with new concerns surrounding interest rates, inflation, and valuations. According to Nuveen’s mid-year outlook released Monday, “a booming economy brings with it new opportunities — and risks.” While asset growth improved from 2020, yields are still “frustratingly” low, which means returns may be fewer and far between in the second half of 2021. Moving into the second half of the year, the asset manager recommended clients consider differentiating between short- and long-term inflation risks and diversifying income and asset classes. “Both the level of output and its first derivative (growth) remain quite strong. It’s the second derivative — the change in the rate of growth — that has started to fall, presenting a challenge for investors and policymakers alike (not to mention those charged with making economic forecasts),” the report stated.
Brief : Asset managers are weighing the impact of upgraded inflation expectations on financial markets, as the Federal Reserve moves up its timeline for interest rate hikes and bond tapering. An array of buoyant economic data from the US resulted in the Federal Reserve upgrading its inflation expectations and moving up its timeline for raising interest rates, with the first hikes now expected in 2023. The Federal Reserve now predicts that inflation will climb to 3.4 per cent this year. This is a marked shift in tone from the FOMC’s meeting in March, which projected 2.4 per cent yearly inflation, and no rise in interest rates until 2024. Earlier this month, Russell Investments found that 70 per cent of fixed income managers expect inflation in the next year will exceed 2 per cent. Meanwhile, average allocations to bonds are currently at a three-year low, according to Bank of America’s fund manager survey in June. US 10-year Treasury yields rose to 1.55 per cent on Friday, twelve basis points higher than the end of last week. BlackRock Investment Institute sees the Federal Reserve’s new guidance as “more balanced”, with two interest rate hikes projected for 2023. “We view this upgrade as the Fed catching up with the restart dynamics.”
Brief: Inflation, having been off the menu for so long, now seems to be the hottest of topics. How worried should investors be given recent inflation fuelled market wobbles and how can they protect themselves if it does become a problem in reality? One answer could be found in real assets, which generally benefit by economic growth that causes inflation. Certain types of real assets, like property and infrastructure, can also rise in price when their input costs rise, as the replacement cost of building similar buildings or structures rises. However, for most investors infrastructure or commodity investments can be too niche or volatile, and the liquidity mismatch of direct property funds throws up additional risk. As such many investors look to REITs (real estate investment trusts) or funds of REITs for long term capital appreciation, a robust income stream and inflation protection, as rental incomes general include inflation uplifts. Most investors would invest in REITs that focus on commercial property, but more specialist REITs and residential REITs are available.
Brief: A group of Uruguay’s top real estate investors is planning to raise $165 million to wager that demand for office space is about to take off as foreigners flock to the nation known as the Switzerland of South America. Investors including architect Ernesto Kimelman and construction executive Eduardo Campiglia are seeking to sell hybrid securities through a real estate trust, Fideicomiso Financiero Platinum. The cash raised through the sale will go toward building two office towers and a 98-unit apartment building expected to house locals and newcomers to the nation of 3.5 million people. “We’re in the middle of a region that unfortunately has lots of issues. There are problems in Chile, in Argentina, in Peru. Things aren’t good in Brazil,” Kimelman said in an interview. “That probably means many companies or independent workers view Uruguay as a place” to do business. Wedged between Argentina and Brazil, Uruguay has leveraged its economic and political stability to persuade companies like chemicals producer BASF SE and oil-trading giant Trafigura Group to open local offices. The government is also offering generous tax breaks to attract skilled immigrants, and revive investment and the broader economy.
Brief : Wall Street's big investment banks are sending a message to their employees this summer: Get back into the office and bring your vaccination card. New York-based Morgan Stanley said this week that all employees will be required to attest to their vaccination status. Those who are not vaccinated will be required to work remotely, which could potentially put their jobs at risk, since the bank's top executives have said they want everyone back in the office by September. “If you can go into a restaurant in New York City, you can come into the office,” said Morgan Stanley CEO James Gorman at an industry conference earlier this month. Morgan Stanley is one of several big banks requiring employees to return to the office and also provide documentation of having received a coronavirus vaccine or making a formal declaration confirming vaccination. Goldman Sachs required most of its employees to return to the office on June 14, with some exceptions extending that deadline to Sept. 30. It requires every employee to state their vaccine status, but does not require proof. JPMorgan is asking employees to submit their vaccination records as well, in the form of an internal portal. The return-to-office push has its roots in banking-industry culture.
Brief: The pandemic has created a once-in-a-generation buying opportunity for investors willing to bet on the long-term prospects of workers returning to the hearts of global cities. That’s the view of real estate titans including Tishman Speyer Properties President Rob Speyer and Brookfield Asset Management Inc. Chief Executive Officer Bruce Flatt, who have invested billions snapping up discounted offices and other commercial buildings since the start of the pandemic. “There are extraordinary opportunistic things to buy in major cities around the world,” Speyer said during a panel at the Qatar Economic Forum Wednesday. “We have been active during Covid in Paris, in Washington D.C., in San Francisco, in London and people are just selling off real estate at 25%, 30%, 40% discounts.” Even as others fret about the future demand for workspace, Tishman has spent about $12 billion since March last year on deals it expects “to be some of the best investments we have ever made,” Speyer said. “If you have a long-term view of things reverting anywhere near where they were pre-Covid, these are generational buying opportunities.”
Brief: Brevan Howard Asset Management has stopped accepting new cash into its two biggest multi-manager funds after the firm’s record year of performance swelled the money pools. Assets in the Brevan Howard Master Fund, its main strategy, have more than doubled since the start of last year to more than $7 billion, and the money manager wants to control the size to maintain returns, according to people with knowledge of the matter. The firm has also closed the Brevan Howard Alpha Strategies Master Fund to new investment for similar reasons, said the people, who asked not to be identified as the information is private. The move marks a change of fortunes for the macro trading firm, which up until three years ago was fighting to stem an exodus of client money after several years of mediocre returns. Total assets had collapsed to about $6 billion from more than $40 billion in 2013. They have since risen to about $16 billion, one of the people said. A spokesman for the Jersey, Channel Islands-based investment firm declined to comment.
Brief : COVID-19 remained a top concern for chief compliance officers in the first half of 2021 as they continued to confront the challenges of monitoring a remote work environment. In March, industry experts cautioned that compliance officers were stretched desperately thin amid the pandemic, a sentiment that was backed by industry research showing that compliance and legal teams were having trouble keeping pace with investigations and audits. The challenges felt no less daunting as President Joe Biden issued a series of orders and memos that outlined a stiffer regulatory agenda, beginning in January with his calls for "regulations that promote the public interest." Conservatives warned this could lead to "hyper-regulation." Experts suggested compliance departments undertake a wholesale review of compliance policies and procedures to consider the new president's priorities, a recommendation that was renewed more recently as sweeping new anti-money-laundering rules edged closer to reality and Biden issued a memo signaling an even tougher U.S. stance on anti-corruption. Experts say there has been a perfect storm of challenges for compliance teams to juggle. And there's been no shortage of compliance news so far this year as companies seek to navigate a radically different risk and regulatory environment.
Brief: Net Inflows of USD23.3 billion in April signaled a continued vote of investor confidence in the hedge fund industry. This result represented an increase in industry AUM of .6 per cent on the month and built momentum on the previous month’s USD19.1 billion increase in assets, according to the Barclay Fund Flow Indicator published by BarclayHedge. Industry trading profits exceeded USD55.5 billion in April and carried the industry’s aggregate AUM figure past the USD4.18 trillion mark. “In the midst of a brightening economic outlook across the globe, it might be easy to miss the fact that hedge funds have delivered four strong quarters in a row and through a pandemic, no less,” says Ben Crawford, Head of Research at Backstop BarclayHedge. “Yet when you put that fact into conversation with the stories about glowing economic forecasts, new equity market records and the arrival of an additional USD1.9 trillion in US stimulus — then you have a representative set of factors playing out.” The increase in net inflows was broad-based, with most fund sectors attracting new assets in April. The strongest activity was among Fixed Income hedge funds which reaped an estimated USD8.2 billion, followed closely by Multi-Strategy funds which added another USD7.1 billion.
Brief: The benefits of diversification have been highlighted in the past 18 months and in this context, institutional investor appetite for emerging markets has increased. As they hunt for returns in a low interest environment and seek to take advantage of dislocations resulting from the Covid-19 turbulence, investors and asset managers have underscored the role an allocation to developing markets can play within portfolios. Although investment in emerging markets typically represents greater levels of risk, the opportunity identified is currently considered worthwhile, according to managers and institutional investors. “Conditions for emerging market debt outperformance in 2021 appear to be in place. First, a global backdrop of steady, extended monetary accommodation, prospects of a large-scale deployment of Covid-19 vaccines, and, to a lesser extent, expectations of fiscal stimulus in the US, should boost the growth-sensitive segments of the asset class,” wrote the Morgan Stanley global fixed income team in an outlook briefing. “Therefore, high yield credit, emerging market FX and local currency high-yielders should outperform investment grade, which has less of a valuation cushion, and is vulnerable to potentially steepening yield curves in our opinion.”
Brief : Federal Reserve Chair Jerome Powell said Tuesday that he expects recent price spikes will soon subside and reduce inflation to a sustainable level. Consumer prices jumped 5% in May compared with a year earlier, the largest increase in 13 years. But Powell said the increase mostly reflected temporary supply bottlenecks, and the fact that prices fell sharply last spring at the onset of the pandemic, which make inflation figures now, compared with a year ago, look much larger. “As these transitory supply effects abate, inflation is expected to drop back toward our longer-run goal,” he said in testimony prepared for a congressional oversight panel. Powell’s comments come at a time that financial markets are struggling to interpret the Federal Reserve’s recent moves. Last week Fed officials signaled that they may increase the central bank’s benchmark interest rate twice in 2023, an earlier time frame than they set out in March, when no rate hike was expected until after that year. Powell also said the Fed had formally begun discussing when and how the central bank might reduce the current $120 billion a month of Treasury’s and mortgage-backed bonds that the Fed is purchasing each month. Those purchases are intended to keep longer-term interest rates lower to encourage more borrowing and spending.
Brief: An Ernst & Young survey has found that Canadian employees have embraced workplace flexibility and want it to continue post-pandemic. The 2021 Work Reimagined Employee Survey found that 93 per cent of respondents said they would likely remain with their organization for the next year or more if they have control over where and when they work. But 54 per cent would be willing to quit if flexibility on schedule and work location is not maintained. Even if top-notch, on-site office amenities are offered, two-thirds would prefer to control where and then they work with respondents being 1.4 times more likely to opt for having control over working hours. Some 61 per cent want their company to require vaccines before returning to physical workspaces. Nearly half say company culture has improved since the beginning of the pandemic in early 2020. "Whether you know — and accept — it or not, your employees have been forever transformed, and walking back this sea of change isn't an option," says Darryl Wright, partner, People Advisory Services at EY Canada.
Brief: GHO Capital Partners has amassed the largest ever healthcare-focused private equity fund for a Europe-headquartered firm in a sign LPs are backing GPs in one of the most sought-after secular growth industries. The London-based healthcare specialist raised more than €2 billion in LP commitments for GHO Capital III, according to two sources with knowledge of the fundraise. The firm began raising capital for the vehicle six months ago with a €1.25 billion target. The launch was a little over one year after GHO raised €975 million for its oversubscribed sophomore vehicle. It is unclear what the hard-cap is for Fund III and the firm is understood to have not yet held the final close on the fund. Los Angeles County Employees’ Retirement Association committed €100 million to the vehicle, according to PEI data. Fund III is the biggest Europe-headquartered healthcare fund in history, knocking out ArchiMed’s MED Platform I, which collected €1 billion in August last year. Similar to prior funds, Fund III will back mid-market companies in Europe within healthcare subsectors pharmabio, medtech, outsourced services and patient services. It is unclear how much of Fund III has been deployed thus far.
Brief : Volatility is back for global stock markets, triggered by uncertainty over central banks’ plans for monetary policy and rising Covid-19 cases around the world. The VIX volatility index, a real-time measure of volatility expectations over the next 30 days, inched lower on Monday. Last week, the VIX spiked more than 16% to its highest point since May, as markets digested a surprisingly hawkish turn from the U.S. Federal Reserve. The Dow Jones Industrial Average also logged its worst week since October, and futures contracts tied to the index initially fell more than 200 points in early premarket trade on Monday before reversing course to open higher. Monday’s choppy trade also played out in Asia, where Japan’s Nikkei 225 closed 3.3% down, and Europe, where the continental Stoxx 600 index dropped 0.8% in early trade, only to recoup its losses and advance into positive territory. Matteo Andreetto, head of State Street Global Advisors’ SPDR ETF business in the EMEA region, told CNBC on Monday that with Covid cases rising, the potential for monetary tightening and high equity valuations on a historical basis, a market correction could be possible.
Brief: The Canadian Securities Administrators (CSA) today released its fiscal year 2020/2021 Enforcement Report, which provides details on enforcement efforts and outlines how securities regulators are protecting investors and the integrity of Canada’s capital markets… “This year’s Enforcement Report highlights how CSA members adapted quickly to evolving circumstances by introducing new ways of protecting investors, while staying ahead of emerging issues and trends,” said Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers. The report outlines how CSA members continued to strengthen their technical knowledge on critical and emerging topics, such as open-source intelligence and mobile forensics, and implement best practices and tools across the country to recognize and target fraudulent activity. The CSA also formally launched the Market Analysis Platform (MAP) in October 2020. MAP is a data repository and analytics system designed to help all CSA members identify and analyze market misconduct. The system has increased efficiency and speed in accessing and analyzing trading activity, which is critical as capital markets continue to evolve.
Brief: As the world went into lockdown last year, hedge funds stuck by the companies that suffered the most. It paid off. Some of the industry’s biggest names loaded up on companies that were pummeled as Covid-19 prompted government lockdowns and social-distancing guidelines, according to hedge fund consultant PivotalPath. They’re the hotels, casinos, cruise lines, restaurant chains and theme park companies that people are longing to frequent again as the pandemic recedes in the U.S. “Despite popular belief that hedge funds all made money shifting into tech and remote-environment stocks, most hedge funds actually made money because they stayed in the beaten-down names, or they ramped up those investments,” said PivotalPath Chief Executive Officer Jon Caplis. “They saw that a lot of the economy was going to come back.” While some funds bought up stocks that boomed as workers stayed at home -- like Zoom Video Communications Inc. and Peloton Interactive Inc. -- those wagers were on the margin, Caplis said. And, they were placed early in the pandemic -- even in February, before stocks plunged as major cities ground to a halt in March, he said. Those bets helped offset losses from the selloff. But once technology stocks jumped in April, hedge funds pivoted into the hammered “Social Distance Loser” stocks -- as Caplis calls them -- or increased their existing positions in them, he said.
Brief : The Covid-19 pandemic is opening up a deeper discussion around more business functions becoming permanently outsourced, particularly among start-up and emerging hedge funds battling against budgetary constraints. Speakers at the fourth annual HedgeweekLIVE North America Emerging Manager summit this week discussed how approaches towards outsourcing – traditionally the next step on the emerging manager journey after launch – have dramatically changed as a result of the coronavirus crisis and remote working. Jack Seibald, managing director and global co-head of prime brokerage and outsourced trading at Cowen, believes the pandemic has accelerated what had already been a meaningful upward trajectory in terms of outsourced trading. Initially driven out of necessity as a result of homeworking, many temporary solutions have turned out to be interesting opportunities for both managers and service providers, Seibald told the panel. “It opened up the opportunity for a more comprehensive discussion about whether outsourced trading as a permanent solution would be the right thing for them,” he explained. “We saw an acceleration of that process and it’s particularly noticeable among emerging managers.”
Brief: Almost half of London companies whose staff can work from home expect them to do so up to five days a week after the pandemic finishes, and smaller businesses are more likely than larger ones to move ahead with remote working. That’s according to a poll of 520 business leaders by the London Chamber of Commerce and Industry, which also found that slightly more companies said employees’ main reason for concern about returning to the office was the risk of contracting Covid-19 when commuting -- rather than at the office. While most economists concur that remote working is likely to continue in some form, the figures suggest a profound impact on the workplace that could translate into reduced footfall in major cities and lower sales for businesses that rely on people going to offices. “Many businesses have already made decisions regarding their premises and ways of working once restrictions are lifted,” said Richard Burge, chief executive officer of LCCI. “It’s about what business has judged best for the bottom line or productivity of their company.” About 6 million professional jobs in the U.K. that could be done from anywhere risk being outsourced to other countries, according to a separate report by the Tony Blair Institute for Global Change, the research group founded by the former U.K. prime minister.
Brief: Shareholder activists, fresh from stepping up their campaigns by a third in the first half of the year, are expected to be emboldened by an economic rebound for the rest of 2021. The total number of activist campaigns launched through June 21 at companies with a market value of more than $1 billion reached 116, up from 87 over the same period in 2020 and 115 in 2019, according to data compiled by Bloomberg. The first six months of the year marked a rebound in activism generally as the economy started to recover from the pandemic. Advisers expect that momentum to continue into the second half of the year and into 2022 and beyond. This year’s proxy season will largely be remembered for the unexpected victory of first-time activist Engine No. 1 over Exxon Mobil Corp. and the lift it gave to activist investors focused on environmental, social and governance issues. The little-known fund managed to win three seats on the board of the oil and gas giant despite owning only a 0.02% stake. It’s something other companies will need to take heed of heading into next proxy season, said David Rosewater, Morgan Stanley’s global head of shareholder activism and corporate defense. ESG issues are now at the forefront of a lot of campaigns, and front of mind for a lot of investors, he said.
Brief : Former Treasury Secretary Lawrence Summers and billionaire investor Ray Dalio said the U.S. is headed for a period of overheating and inflation that could threaten the economic recovery, even as the Federal Reserve signaled it would step in before that happened. “It’s easy to say that the Fed should tighten, and I think that they should,” said Dalio, the founder of Bridgewater Associates, the world’s biggest hedge fund. “But I think you’ll see a very sensitive market, and a very sensitive economy because the duration of assets has gone very, very long. Just the slightest touching on those brakes has the effect of hurting markets because of where they’re priced, and also passing through to the economy.” Dalio spoke in a conversation with Summers at the Qatar Economic Forum Monday. Fed officials surprised markets last week by accelerating their timeline for potential interest-rate increases. They also raised their inflation expectations for the next three years and have started to discuss when and how to pare back from their $120 billion in monthly asset purchases. The Dow Jones Industrial Average fell 3.5% last week, the biggest drop since October.
Brief: M&G Investments has launched an impact equity strategy which will seek to deliver attractive returns by investing in companies whose products or services are designed to promote better health and wellbeing. The M&G Better Health Solutions fund will be a concentrated portfolio of 30-35 holdings (32 at launch), managed by Jasveet Brar. The stocks will be diversified around better healthcare and better wellbeing, with the latter theme covering improvements in lifestyle, hygiene and safety. M&G will publish annual reports on each company's impact on the two themes and their revenue alignment with health-related UN Sustainable Development Goals (SDGs). The fund follows the same investment approach and process as M&G's £480m Positive Impact strategy, managed by John William Olsen, who will be a deputy on the new fund, as well as the recently launched M&G Climate Solutions strategy. Investible companies are ranked in three categories: pioneers, whose products or services have a transformational effect on society or the environment; enablers, which provide the tools for others to deliver positive social or environmental impact; and leaders, which spearhead and mainstream impact and sustainability in their industries.
Brief: Emerging markets aren't what come to mind first when allocators think about investing in companies based on environmental, social, and governance goals. But the pandemic has accelerated the adoption of some of these objectives, especially the “S” in ESG. Teresa Barger, co-founder of Cartica Management, said the way companies treat their employees has become a critical factor in the valuation of their shares. Barger, who spent 21 years at the International Finance Corp. before going out on her own, should know. Cartica has a long history of applying activist techniques to companies exclusively in emerging markets. In fact, the firm, founded during the global financial crisis, makes money by persuading companies to fix their corporate governance issues, and identify and improve environmental and social risks. Barger said companies that weren’t providing safety measures for factory workers, for example, saw their shares tumble during the pandemic. On the flip side, companies such as retailer Magazine Luiza in Brazil, which isn’t currently in Cartica’s portfolio, saw their prices skyrocket after announcing they wouldn’t lay off workers and that some executives in the firm, including the CEO, would not be taking a salary. Magazine Luiza, which runs both brick-and-mortar and e-commerce, also provided accommodations for its employees and their families.
Brief : Investors are still headed for the exits at Renaissance Technologies, pulling $11 billion from the quant giant in seven months. Disgruntled by subpar returns, clients have now redeemed -- or asked to redeem -- more than a quarter of the capital that Renaissance manages in hedge funds with outside money, according to investor documents seen by Bloomberg. The firm now is mostly managing its own internal capital, a person with knowledge of the matter said. The exodus marks a setback for legendary investor Jim Simons, the military codebreaker and mathematician who started Renaissance and turned it into one of the industry’s most successful hedge fund firms. It’s also put the spotlight on a discrepancy not lost on clients: They’ve been losing money on struggling funds while Renaissance insiders have been reaping fat returns, with Simon himself making billions of dollars last year alone. From December to February, clients pulled, or asked to pull, about $5 billion from the funds, Bloomberg reported. That was followed by about $6 billion more through June, the documents show. While redemptions peaked in April, they slowed in May and June.
Brief: Global GDP is likely to recover to pre-pandemic levels in the first half of 2022, an expert has said. Speaking at Federated Hermes’ outlook roundtable yesterday (June 17), Eoin Murray, head of investment at the investment manager, said recovery of global GDP will be "at some point within the first half of 2022". He added there are certain signs indicating whether economies will see long-term scarring. “There also appears to be an expectation that longer term economic scarring will most likely be down to, first of all, an incomplete recovery in the labor market. And secondly, bankruptcies,” he said. Murray expects the bankruptcies to be in zombie companies (a company that needs bailouts in order to operate) which have been created by quantitative easing. “We all know that the rate of bankruptcies has fallen during the pandemic, on the back of huge monetary support, contrary to my predictions of solvency problems at the beginning of the pandemic.
Brief: Middle-market private equity firms have bounced back from Covid-19 pandemic-related lows, with dealmaking, exit activity, and fundraising showing signs of continued strength. In PitchBook’s U.S. PE middle-market report published Wednesday, author and PitchBook analyst Rebecca Springer cited “robust” dealmaking in the first quarter of 2021 as one element of the sector’s success. According to the report, deal count and value in the first quarter of 2021 “easily exceeded” numbers in the first quarter of 2020. In 2021, U.S. PE firms closed 776 deals and spent a total of $119.5 billion, an amount the report deems the “second highest quarterly deal value figure” since the fourth quarter of 2020. PitchBook credits the successful dealmaking to increased vaccinations, the Federal Reserve, and an “ample supply” of cheap debt. “In Q4 2020, we saw a backlog from the pandemic, so deals that would’ve been done earlier but were delayed,” Springer told Institutional Investor. “In Q1, we saw a continuation of that.” As for the near future of deal activity in the middle markets, Springer expects the upward momentum to continue for the rest of the year. In the report, Springer lists the $1.9 trillion American Rescue Plan and subsequent increased consumer and business spending as reasons for increased activity.
Brief :The Autorité des marchés financiers (AMF) today published its Enforcement Report for the 2020-2021 fiscal year. The report presents the highlights of the AMF’s enforcement activities and results for the past year. “Despite the unprecedented public health crisis caused by the pandemic, the AMF showed agility and resilience by continuing its operations remotely and reacting quickly to protect consumers and ensure market efficiency,” said Louis Morisset, AMF President and CEO. “Our inspection, investigation and prosecution teams were very proactive and able to maintain their operations, resulting in a large number of prosecutions and in important rulings that sent a deterrent message,” said Jean-François Fortin, Executive Director, Enforcement. In addition to providing a comprehensive picture of the past year’s enforcement activities, the report describes major technological advances to detect potential violations and more efficiently manage investigation matters and prosecutions, as well as the AMF’s continuing offensive on the crypto asset front. The report also touches on the teams’ efforts to integrate mortgage brokerage into its inspection activities while supervising the clienteles regulated by the AMF, including in order to assess the impacts of the pandemic on their activities. The Autorité des marchés financiers is the regulatory and oversight body for Québec’s financial sector.
Brief: Europe’s private equity patrons are piling debt onto the books of their companies to support dividend payouts, a move which could threaten these firms’ prospects when the fiscal and monetary stimulus of the pandemic era starts to wind down. Just under 13 billion euros ($16 billion) of leveraged loan deals linked to dividend recapitalizations took place by early June -- the highest level in 14 years -- according to S&P Global Market Intelligence’s Leveraged Commentary & Data unit. That’s only 4 billion euros shy of the total for the same period in 2007, on the eve of the great financial crisis. The stimulus deployed since March last year has kept many companies afloat amid ruinous lockdowns. Some private equity owners have seized the chance to issue more debt from their companies, potentially jeopardizing how quickly they can bounce back as economies start to open up and policymakers mull tapering. “A dividend recap isn’t a positive credit scenario for any company,” said BlackRock Inc.’s Head of European Leveraged Finance James Turner. “But whether or not we decide to support them is dependent on each individual case.” German buildings material maker Xella International GmbH, for instance, was downgraded after it sought to borrow 1.95 billion euros in March this year, with nearly a third of that amount slated to go to private equity sponsor Lone Star Funds.
Brief : BlackRock Inc. is adjusting its plans for U.S. employees to return to the office, allowing only fully-vaccinated staff to come back to work starting next month. The world’s biggest asset manager said that U.S.-based employees who’ve been inoculated against Covid-19 can resume in-person work in July and August if they’d like to, according to a memo from the New York-based company. Non-vaccinated staffers are not allowed in the office, the memo said. All employees will be required to report their vaccination status by June 30. The company said it will provide an update for non-vaccinated employees later this summer. The company already announced plans to bring employees back to the office in September while allowing some remote work. Firms across Wall Street are experimenting with how to bring back workers, with some companies -- like Goldman Sachs Group Inc. -- taking a more ambitious stance about workers coming back, and others -- like BlackRock -- pursuing a hybrid approach. BlackRock changed its policy after receiving feedback from employees who said they would feel better about returning to work if their colleagues in the office were vaccinated.
Brief: Bank of America Corp. expects all of its vaccinated employees to return to the office after Labor Day in early September, and will then focus on developing plans for returning unvaccinated workers to its sites. More than 70,000 of the firm’s employees have voluntarily disclosed their vaccine status to the bank, Chief Executive Officer Brian Moynihan said in a Bloomberg Television interview Thursday. The firm, which has more than 210,000 employees globally, has already invited those who have received their shots to begin returning. “Right now we’re moving people back who are vaccinated,” Moynihan said. “We’re concentrating on getting them back to work because that allows people to move about under the CDC guidelines without masks and thing like that.” Bank of America and its rivals have begun unveiling plans in recent weeks to return thousands of workers to towers in New York and elsewhere in coming months as vaccines abound across the U.S. Goldman Sachs Group Inc. asked its New York staff to begin returning this week, marking the most ambitious plan among major Wall Street firms.
Brief: Despite any headwinds caused by the pandemic, the private equity industry has remained strong, with investor demand and planned allocations continuing to grow. However, with high levels of dry powder and increasing regulator scrutiny, startup private equity funds have much to contend with. “There is currently more money available in private equity. The among of dry powder has exploded and is the highest it’s been in 10 years,” remarks Alain Kinsch, co-chairman of the Association of the Luxembourg Fund Industry (ALFI) Private Equity Committee and Vice-President of the Luxembourg Private Equity and Venture Capital Association. According to Hugh MacArthur, Partner, Bain & Co: “Total investment value last year was supported by ever-larger deals, not more deals. This fact is important because it means many GPs did not get the deals done that they had intended to in 2020. “With soaring levels of dry powder, robust credit markets and recovering economies, 2021 deal markets promise to be incredibly busy.”
Brief: If there is a prolonged shift in sentiment towards UK equities, the likelihood is that just as the negative view dragged the valuation of all companies down, so a rally in UK equities has the potential to place many stocks, good and mediocre alike, at elevated valuations. This creates a challenge for UK fund managers, as they seek to create portfolios without owning over-priced assets. Alexandra Jackson, who runs the Rathbone UK Opportunities fund, says one area to avoid at present is hospitality, despite the present good news surrounding the sector, as much uncertainty remains about the scale of future demand, particularly in London. Her view is that the valuations of many of those stocks already reflect positive news for the sector, but do not necessarily reflect the ongoing uncertainty. With this in mind, her way of gaining exposure to the reopening of the hospitality sector is via Johnson Service Group, a supplier of linen to the hospitality sector. She says the company will benefit from the cyclical recovery, but also may grow structurally in future if the public becomes more focused on hygiene issues as a result of the pandemic.
Brief: As global asset management industry recovers from the Covid-19 pandemic, Moody’s has shifted its outlook for investment managers from negative to stable. In its June 2021 global asset management report, the credit rating company revised its outlook on the asset management industry, attributing the change to the strong market rebound after March 2020, the recovery of organic growth rates, and the resulting recovery in investor risk appetite. The report, which was published Wednesday, also noted that, as a result of strong market performance, asset managers’s revenue and profit margins have recovered from the pandemic crash. “The industry has been resilient through the pandemic,” Rory Callagy, associate managing director at Moody’s Investors Services and lead author of the study, said in an interview. “Private markets provided a lot of that support, but there are also positive trends in the operating fundamentals.” In March 2020, extreme market volatility caused assets under management to fall. Moody’s analysts had expected this decline to send reverberations through the market for the rest of the year, but by the second quarter of 2020, the equity markets had “rebounded sharply,” the report said.
Brief : The Federal Reserve on Wednesday held interest rates at near-zero but optimism over the progression of the U.S. economic recovery spurred more Fed officials to pencil in rate hikes by the end of 2023. The Fed also reiterated for now its commitment to its asset purchase program, which is absorbing about $120 billion a month in assets. “Progress on vaccinations will likely continue to reduce the effects of the public health crisis on the economy, but risks to the economic outlook remain,” the Federal Open Market Committee said in a statement. A fresh round of its quarterly economic projections reflected the central bank’s optimism over the economic outlook, with 13 of the FOMC’s 18 members projecting at least one rate hike by the end of 2023. The median member of the FOMC in the so-called “dot plot,” which maps out each member’s expectations for rates over coming years, now expects two rate hikes by the end of 2023. For comparison, the Fed’s dot plots in March of this year showed the median member expecting no rate hikes through that time horizon. The upward revision suggests that the Fed sees a faster-than-expected recovery. The economic projections raised expectations for real GDP growth in 2021 to 7.0%, a notch up from March projections for 6.5%.
Brief: Blackstone Group Inc. offered to take over office developer Soho China Ltd. for as much as HK$23.7 billion ($3.05 billion), its biggest bet yet on the real estate market in Asia’s largest economy. The New York-based private equity firm is offering HK$5 in cash for each Soho share, it said in a Hong Kong stock exchange filing Wednesday, confirming an earlier Bloomberg News report that it was nearing a deal. The bid represents a 31.6% premium to Soho’s last closing price before trading was suspended. Soho Chairman Pan Shiyi and Chief Executive Officer Zhang Xin, who own a majority stake in Soho China, have agreed to sell most of their shares to Blackstone, according to the statement. They plan to keep a 9% stake after the deal closes. Blackstone intends to keep Soho listed on the Hong Kong stock exchange, the statement shows. Blackstone has been investing in office, retail and logistics assets in China since 2008 and owns approximately 6 million square meters of properties in the country, according to the statement. The firm is doubling down on Asia, seeking to raise at least $5 billion for a fund focused on the region, people familiar with the matter have said.
Brief: State Street Corporation has published new research which reveals that with increasing pressures and demands on returns and reporting, alternative asset managers have work to do to meet the growing needs of institutional investors. The survey found that just 57 per cent of the alternative asset managers interviewed said their investment operations are built to scale to deal with increasing volume and complexity. 70 per cent believe they will need to increase the amount they invest in data storage, management and analysis; and only 24 per cent have already done so. Despite market instability, shifting business models and pressure on asset valuations, the vast majority (82 per cent) of alternative managers surveyed believe their organisation has been effective at responding to increasing investor demand for transparency and additional types of data. However, when highlighting areas for improvement, 57 per cent positively rated their companies data management, but less than half (48 per cent) said they have a good level of efficiency and effectiveness in their business’ technology systems, which underpins their use and management of data.
Brief: Pfizer CEO Albert Bourla told CNBC on Wednesday he expects life could return to normal for developed countries by the end of this year and the rest of the world by the end of 2022. By the end of next year, there should be enough Covid-19 vaccine doses for most world leaders to successfully inoculate their populations against the virus, Bourla said during an interview with Andrew Ross Sorkin at the CNBC Evolve Global Summit. “I think the whole world will have enough volumes [of vaccine doses] by the end of 2022 to vaccinate, to protect everyone,” he said. “And I think that by the end of this year, the developed world will already be in this situation.” Pfizer and German partner BioNTech reached the milestone of manufacturing 1 billion doses of their Covid vaccine last week, Bourla told CNBC. The two companies expect to produce up to 3 billion doses this year. The vaccine, one of three authorized for use in the U.S., has played a major role in driving down the number of new infections and hospitalizations across the country. As many states begin to lift their Covid restrictions and return to normal, leaders from other countries are urging the U.S. to donate leftover shots.
Brief: Nearly three-quarters of fund managers believe inflation will be short-lived, according to Bank of America’s latest investor survey. The survey, which was published Tuesday, found that 72 percent respondents view the current state of rising inflation as “transitory.” Still, fund managers don’t believe inflation has peaked yet, with net 64 percent of survey respondents predicting higher inflation in the next 12 months. The survey, which included 224 participants with a total of $667 billion in assets under management, aggregated responses from June 4 to June 10. According to BofA, economic expectations among survey participants have peaked. Three-quarters of investors said they expect a stronger economy, a percentage that indicates investors’ “cruising altitude” when it comes to the market, according to David Jones, investment strategist at BofA Securities. “They are watching rates and inflation carefully, but people, at the moment, think inflation is transitory,” Jones told Institutional Investor. “We are seeing signs of a peak in optimism.” Jones said the survey responses indicate that the market is evolving from the early part of the cycle into a mid-cycle position. As for expectations for future downturns, 68 percent of respondents think the next recession will occur in 2024 — no earlier.
Brief : Morgan Stanley's chief executive officer said on Monday that if most employees are not back to work at the bank's Manhattan headquarters in September, he will be "very disappointed." "If you want to get paid in New York, you need to be in New York," CEO James Gorman, speaking from the bank's offices at 1585 Broadway, told analysts and investors during a virtual conference. Like the rest of Wall Street, most of Morgan Stanley's nearly 70,000 employees worked remotely during the pandemic. But in recent weeks, rival banks JPMorgan Chase & Co and Goldman Sachs Group Inc have begun to bring employees back to U.S. offices on a rotational basis. Gorman said his bank's policy will vary by location, noting the firm's 2,000 employees in India will not return to offices this year. As of Monday, India has reported more than 29 million cases of COVID-19. During the wide-ranging conversation, Gorman said the bank's revenues in the second quarter "look good" and that it will "likely" make another acquisition in its wealth management business.
Brief: After the best year for hedge funds in a decade, promising traders can seek a place at the many major firms on a hiring spree or strike out on their own to seize on investor appetite. But a push by Schonfeld Strategic Advisors is a prominent example of a lucrative third option. The firm is dangling a hefty cut of profits as part of a foray into macro trading, taking a page out of the books of industry giants Citadel and Millennium Management. The pitch has already won over hedge fund veterans Colin Lancaster and Mitesh Parikh, who are in turn offering recruits the combination of a big firm’s backing and a stable capital base with the ability to set one’s own financial destiny with an average 20% of trading gains. The duo are among dozens of traders who are settling for the safety net of being part of a bigger firm rather than taking the risk of running their own shops. It strengthens an entrenched trend in the hedge fund industry: assets as well as trading talent concentrating in fewer and fewer players, reducing the ability clients have to negotiate fees.
Brief: The European Commission said on Tuesday it has raised €20 billion ($24.2 billion) through a 10-year bond as part of its plans to finance the 27-nation bloc's recovery from the coronavirus crisis. EU Commission president Ursula von der Leyen said the inaugural transaction of the NextGeneration EU program is the largest ever institutional bond issuance in Europe. The money will help finance the national recovery plans devised by member states to get their economies back on track. Von der Leyen said the bond was priced at “very attractive terms" and that the European Union will pay less than 0.1% interest on it. “Europe is attractive," she said. “By the end of this year, we expect to have issued around 100 billion in bonds and bills." The commissioner in charge of Budget and Administration, Johannes Hahn, said the recovery plan’s first borrowing operation attracted interest from investors across Europe and the rest of the world, including central banks and pension funds. To finance the stimulus, the EU's executive arm said it will raise from capital markets up to an estimated €800 billion by the end of 2026. In total, member states have agreed on a €1.8 trillion budget and pandemic recovery package.
Brief: As the world emerges tentatively from the pandemic, economic data has been unpredictable at best. The April US jobs report showed 266,000 new hires, against economists’ estimates of 1 million. Inflation data also continues to diverge significantly from expectations. This has prompted Treasury Secretary Janet Yellen to say: “As the economy gets back on line, it is going to be a bumpy process.” There are plenty of reasons for this bumpiness. The first is that there is no rule book for the economic impact of a pandemic. No-one really knows what happens when an economy is forcibly shut down and then reopened. Is it more akin to a natural disaster? Or to the global financial crisis? The Blackrock Investment Institute recently acknowledged the difficulties of interpreting data during this period: “Investors are grappling with how to interpret unusual growth dynamics and new central bank frameworks. On the first, US activity looks set to restart strongly this year, powered by pent-up demand across income cohorts and sky-high excess savings. Growth forecasts have been catching up, but the magnitude of the restart may still be underappreciated.
Brief: The Abu Dhabi Investment Authority, one of the world’s biggest property investors, is considering changes to its real estate strategy after some of its major holdings suffered during the coronavirus pandemic, people with knowledge of the matter said. The sovereign wealth fund is reviewing the performance of its property assets following weakness in a number of the shopping malls and office buildings in its portfolio, according to the people, who asked not to be identified because the information is private. ADIA may consider cutting its exposure to some troubled investments, the people said. ADIA has shifted in recent years to making more direct property investments and relying less on external managers. The state-owned investor has amassed just under $700 billion in assets, according to estimates from data provider Global SWF, and ADIA has said real estate traditionally accounts for about 5% to 10% of that overall portfolio. While ADIA will continue to be a major player in property, it could shift its focus for future deals and increase exposure to areas like warehouses, life sciences properties, technology hubs and affordable housing, one of the people said.
Brief : It’s a short stroll from Goldman Sachs Group Inc.’s global headquarters to Citigroup Inc.’s, but when it comes to reopening after the pandemic, the two Manhattan towers might as well be thousands of miles apart. Starting this morning, Goldman Sachs is requiring almost all employees at its perch over the Hudson River to report to their desks, marking one of Wall Street’s most ambitious returns to the workplace since COVID-19 besieged the city more than a year ago. Meanwhile, Citigroup won’t recall more of its staff to its mostly empty Tribeca tower in downtown Manhattan until July. Even then, the firm has told most workers that they can adopt a so-called hybrid schedule between home and the office longer term. Such divergences are popping up across Manhattan’s mighty financial industry, creating pockets of optimism within the city’s economy, but widespread anxiety inside workplaces. Bosses worry their teams will be less competitive if members are slow to come back. Parents fret about losing remote-work flexibility, but also that young, single colleagues and competitors may rush back sooner and soak up face time with executives or clients. “Women are absolutely nervous about it,” said Rob Dicks, Accenture Plc’s talent and organization lead for capital markets. “I’m seeing the HR and business leaders at banks recognizing, understanding and starting to plan around fairness in evaluations.”
Brief: Club deals are back, whether institutional investors want them or not. Since the beginning of June, Blackstone has announced that it completed three massive transactions alongside fellow private equity firms. Asset owners are watching closely to see if they're a sign that club deals are becoming market mainstays. And it’s for good reason: when multiple private equity firms join forces and pool their resources to buy a big company, limited partners in their funds don't always benefit… Club deals were popular in the lead up to the Great Financial Crisis of 2008, as PitchBook noted in a recent analyst note. In fact, in retrospect, they ended up being a signal for the peak of the market, unsustainable valuations, and a symptom of how much money the industry was sitting on. In some cases, they also ended in bankruptcy. For instance, after KKR, TPG, and Goldman Sachs acquired Energy Future Holdings for $45 billion, the company filed for bankruptcy in 2014. And it’s not the only one: Toys R Us and Caesars Entertainment were also victims of club deals, according to PitchBook. While the return of these deals may not signal a 2008-like market downturn, they do show that there is a mountain of dry powder waiting to be invested, but not enough companies to go around.
Brief: Wall Street’s pandemic-era trading boom could be drawing to a close, with JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon signaling a 38% decline in trading revenue from a year ago -- a bigger drop than previously expected. Trading revenue at the largest U.S. bank will drop to just north of $6 billion in the second quarter, Dimon said Monday at a Morgan Stanley virtual conference. That tally could end up lower than the already reduced average analyst estimate of $6.5 billion, according to data compiled by Bloomberg. The drop comes after a year of pandemic-induced market volatility proved lucrative for the biggest Wall Street operations. JPMorgan shares dropped as much as 2% after Dimon’s comments, continuing a slide after the stock hit an all-time high earlier this month, with other bank stocks declining as well. This quarter will be “more normal” for fixed-income and equities trading, meaning “something a little bit north of $6 billion, which is still pretty good, by the way,” he said. Investment-banking revenue, meanwhile, will be driven up by an active mergers-and-acquisitions market, resulting in what “could be one of the best quarters you’ve ever seen” for that business.
Brief: Aviva Investors, the investment arm of insurer Aviva, is reported to be laying off ten equity managers in an attempt to cut costs, with high-profile managers including Mikhail Zverev set to leave the firm. Aviva Investors has confirmed that "a number of roles have been put at risk" in its equities team, and said that consultations with the "impacted individuals" were underway, adding that "we are unable to provide further details while we go through the consultation process". According to The Mail on Sunday, the decision to reduce its equity management team will leave 25 fund managers at Aviva Investors and comes as activist investor Cevian Capital has built up a 5% stake in the insurer. Aviva Investors has confirmed that chief investment officer for equities David Cumming has already left the business. In a statement, Aviva Investors said: "We have taken the decision to focus our equities business on sustainable outcomes and core strategies where there is clear client demand, namely UK and global equities, while retaining sufficient coverage to support our multi-asset strategies." It added: "As a result of this decision, we have mutually agreed with David Cumming that he will leave Aviva Investors to pursue other opportunities. We would like to thank David for his positive contribution to the business since joining in 2018 and wish him all the best for the future."
Brief: Managers hoping to lure employees into offices may find their youngest and newest staff are their strongest allies. Young white-collar staff feel caught between a rock and a hard place — they value quality of life over old-fashioned 9-5 commuting, but are even more worried about seeing their careers stall unless they head back into an office. That’s encouraging many to be among the first to return to their desks. While experienced employees often have established professional networks and dedicated home offices, younger staff say the pandemic has left them under-informed and cut off from their teams. There are now growing concerns that they are missing out on career opportunities older colleagues took for granted. Well over half of staff aged 21-30 stressed the importance of being able to meet and work with colleagues in person again, according to a 6,000-person survey carried out for Sharp Corp., results of which were shared with Bloomberg. Nearly 60 per cent said working in a modern, collegiate office environment has become more important to them over the past year. Despite a majority under 30 saying remote work made them more productive, over half of the survey’s respondents across Europe — ranging in age from 18 to 45 — say they feel anxious about a lack of training and career opportunities when thinking long-term about the future of work.
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