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The FSA Spy market buzz – 14 February 2020

Envy Capital’s new CEO; Promotion at UBS; Polar buys value; Blackrock’s foundation for good; Naming financial roles; Event delays; Asset manager outlooks; Bart Simpson and more.

Roses are red, violets are blue, the CV is swirling, don’t give me the flu. Spy is finding it hard to feel the flushes of romance this Valentine’s day. In fact he is feeling distinctly out of love with the virus which is making every day a challenge in Asia. It seems Spy is not alone. Speaking to asset managers this week – strictly by phone – the typical refrain was that every single one of their plans for Q1 have been put on hold, pushed back or ,worse, simply cancelled. As one senior distribution head put it to Spy, “It is giving everyone the perfect excuse to do nothing.” And doing nothing is the bane of the business world. It is all very well telling teams they can work from home, but face-to-face meetings have always driven our industry forward, despite 50 years of tech improvement. Give Spy a drink with an industry colleague over a webinar, any day of the week.

 Spy spotted the news on LinkedIn no less, that William Tan has just become the CEO of a company named Envy Capital Pte. Ltd. Experienced Asian wealth management executives will remember that William was until recently, head of intermediary channel distribution for M&G Investments based in Singapore and before that was with Capital Group and Franklin Templeton. Spy, almost, needs to hang his head in shame as he has not been able to find out more about Envy Capital. Spy will watch with interest what this new entity is up to. In January M&G hired Berny Lin from Eastspring to head its distribution efforts in January, reporting in to Lorreta Ng.

UBS has promoted Karen Lau to director, hedge funds Greater China.  Karen has been with UBS since 2009 in various equity and fund distribution roles and this is her most senior role to date. Spy reported last week that UBS’s China Opportunities Fund was up 41% over the last year and is a bestseller at Hang Seng Bank.

There are funds that like to buy value and there are fund companies that truly believe in value and buy value teams. This most unfashionable segment of the market, which has been a very difficult place for portfolio managers, has not been on many asset manager radars of late. It was thus, with a slightly raised eyebrow, that Spy spotted the news that Polar Capital had acquired a value team from Los Angeles-based asset manager, First Pacific Advisors. FPA’s International Value and World Value equity team led by Pierre Py and Greg Herr have joined the Polar team. Polar has limited distribution in Asia, but its tech fund has almost cult-like following among those who know it.

Massive hat tip to Blackrock this week which has just made a donation of $589m, in the form of 15.6m shares of PennyMac Financial Services, to its new charitable foundation. The shares will form the basis of the foundation’s wealth, allowing the organisation to provide support to its mission of promoting sustainability and economic mobility for underserved and underemployed people around the world. The foundation will work with various partners to achieve its aims. Just one of the programmes it is committed to help is One Acre Fund, a pilot programme in India that is aiming to plant 20,000,000 trees and has also been helping farmers in Africa. Nobody can accuse Blackrock of greenwashing this initiative.

What’s in a name? Spy has noticed over the last decade a proliferation of descriptions for what is either a financial planner or private banker and its firm. We start with financial advisor, banker, and, perhaps, a financial life planner. Soon it is wealth manager, financial coach, wealth coach, lifestyle wealth coach. Of course, don’t forget: personal banker or relationship manager. Then we jump to finance guru, personal financial analyst or even behavioural financial coach. The firms too: wealth specialists, family office, multi-family office, discretionary managers, independent financial advisor, independent wealth advisors. And so it goes and so it goes. There are indeed differences between some of these roles and firms, but how the consumer really knows what they need, is beyond Spy, at times.

The virus is making public events very difficult in Asia. High profile gatherings such as the Shanghai Formula 1 and Hong Kong Rugby 7s have been postponed. The Singapore Air Show has had numerous firms pull out. Further afield, Barcelona has had to cancel the Mobile World Congress. In the asset and wealth management industry, events are being shifted back or cancelled altogether for practical reasons or being limited in their attendees. FSA is, sadly, not immune with some events being shifted back in the calendar. Spy can just hear the conversations being held by event marketing departments: “I wish we could do a branded N95 mask, those would fly off the stands.” It is the must-have premium that absolutely nobody can put their brand to.

Spy has watched a number of asset management outlook videos or read their instant reports that include strategies to cope with the coronavirus and, remarkably, almost all of them recommend buying something that asset managers already run. Spy has seen encouragement for: active China equity selection, covered calls, selective Asian bonds, selective Asian credit, active Asian equity and countless others. The markets seem to be in a buy anything, buy everything mode and the virus is making little difference to real asset allocation – for now anyway. Spy finds it hard not to be a touch cynical.

Spy has not spotted any new outdoor advertising this week. Hardly a massive surprise, to be fair. So enjoy this one instead.

Until next week…

Part of the Mark Allen Group.