Spy found himself in Singapore this week. He was jostling with the rich and the beautiful who have swanned into town for the annual Formula One night race this weekend. Bars were heaving, champagne was bubbling and the feel good factor was undeniable. Spy could barely turn a corner without bumping into portfolio managers who just happened to have chosen this week to come to Asia. Former US vice-president, Al Gore, was also in town to address the Milken Institute’s jamboree. Spy wondered, over an overpriced glass of cheap cabernet-sauvignon, what the star of climate change documentary An Inconvenient Truth (and the 2017 sequel) thought about the petrol guzzling, environment destroying, F1 cars all around him.
News reaches Spy that Leonie Yoong has joined Bank of Singapore as a senior product specialist. Spy understands that Leonie’s role encompasses the governance aspects of funds on the BoS platform. Leonie was with Coutts in their fund analysis and selection team prior to UBP acquiring that business in Asia.
Spy has heard that the shuffling of the deck at Amundi continues, post the merger with Pioneer. Angeline Goh who has been in charge of marketing in Southeast Asia for Amundi, has decided to step down from the giant French firm. Stephen Chu is reported to be in charge of marketing for SEA at the combined entity.
Allianz Global Investors has hired Oskar Potyka, formerly a product manager at Standard Chartered Bank, to join their multi-national distribution team, based in Singapore. Prior to joining SC, Oskar worked for Pimco – so this is a return to asset management.
Spy has heard that a number of asset managers are seeking to hire business development people to help with intermediary markets. Value Partners is looking to add in Singapore. M&G in Hong Kong. Hermes in Singapore. Not to mention Capital Group in Singapore. The list goes on. Spy thinks the real winners at the moment must be the head hunters…
Spy continues to see evidence that the top in equity bull markets is near. Evidence piece no. 1) Professional bears give up the fight. Hugh Hendry, contrarian investor and hedge fund maverick of Eclectica Asset Management is throwing in the towel. He announced yesterday that he is closing his Global Macro Absolute Return Fund after 15 years. This follows a year of disappointing losses and shrinking assets for Hugh and the fund. He wrote to clients that the “markets are wrong” and laments the untradeable nature of markets controlled by central banks. Spy notes that Keynes has never been proven wrong on his “The markets can stay irrational longer than you can stay solvent” quip.
Evidence piece no. 2) Consumers get very excited about the stock market. Wells Fargo and Gallup have been surveying American mom and pop investors for years on their investor sentiment. Not since the near peak of the of the dotcom boom 17 years ago has sentiment assessed by Gallup been this high among retail investors. The survey results report consumers think we should buy, buy, buy stocks. We may not be getting tips from shoe shine lads and taxi drivers here in Hong Kong but in California, everyone has a view on the money they have made on paper in Facebook, Amazon, Apple, Netflix and Google. Spy notes that consumers have a great track record of getting in early, don’t they?
FSA has been hosting its annual alternatives forums in Hong Kong and Singapore this week. In Hong Kong, nearly half of all attendees (fund selectors, analysts and influencers) claimed that poor performance was the main reason for clients not buying alts. Meanwhile in Singapore a similar number claimed the complexity put off their investors. The alts industry still has a challenge on its hand to explain its benefits, thinks Spy.
Spy is hearing more and more about sophisticated investors and hedge funds looking to position themselves for a bout of dramatic market volatility and profit from a turn in markets. In an interview with the New York Times this week, Christopher Cole of Artemis Capital, who is doing just that, said the following – which Spy wholeheartedly agrees with: “Volatility is an instrument of truth, and the more you deny the truth, the more the truth will find you through volatility. If central banks want to keep saving the day, that is fine. But volatility will then be transmuted through other forms like populism and identity politics and threaten the fabric of democracy. And that is something that my hedge fund will never be able to protect against.” Well said.
The drumbeats of the establishment against cryptocurrencies gather pace this week. China has practically declared all-out war against the crypto exchanges. Jamie Dimon, the venerable chief of JP Morgan did not mince words, declaring the whole thing humbug and its traders as fools. Spy’s take, for what it is worth – is that Blockchain seems incredibly useful as a cheap, verifiable legal ledger. However, central banks seldom like competition to their fiat currencies, and therefore crypto is going to be on the receiving end of a lot of flak. And a lot of volatility. For the believers, it is time to hold on to your hat, reckons Spy.
Forget the Big Mac, these days it is all about Big Data. If you are wondering why Big Data is even necessary, consider this fact reported by Norwegian scientific researchers SINTEF: 90% of all the available data in the world had been generated over the previous two years. Think about it, from the dawn of mankind, all data accumulated by man so far represents only 10% of data available to researchers. To begin with, the large hedge funds got in on the act. Now the broader mutual fund industry is racing to use machine learning and AI to improve decisions. The real trick is working out what data is useful and what is not and how accurate the data is, thinks Spy. After all, in tech we say garbage in = garbage out. Indeed.
Spy is constantly on acronym watch and he understands BAT (Baidu, Alibaba, Tencent) is Asia’s answer to FANG (Facebook, Apple, Google, Netflix). We are all waiting for the Batfang-theme fund.
Spy’s photographers have been spoilt for choice as Autumn asset management advertising campaigns gear up.
In Hong Kong, Spy was amused to see Barings choosing to promote adaptability on the one thing in Hong Kong that never seems to change, its venerable trams:
Old Mutual Global Investors is hunting for hidden gems and is not shy about telling Hong Kong:
Until next week…
P.S. Fund Selector Asia’s fund selectors who attended the FSA Alts Forum this week overwhelmingly thought Lewis Hamilton would win the F1. Spy will watch to see if they are as good at predicting races as they are at choosing fund winners…
