“Some people love managing money, others love deal making – and they most definitely are not the same thing.” These words were spoken to Spy by a very senior British asset management executive and the topic was Martin Gilbert’s newish vehicle, Asset Co. Gilbert, the former chief executive officer of Aberdeen Asset Management, made clear this week he is looking for asset managers in Asia to acquire outright or, at the least, buy stakes in. Gilbert may be in deal making mood with a modest financial war chest, but Spy can’t help but remember that Gilbert’s single biggest deal in his career, the merger of Aberdeen with Standard Life Investments has not exactly been the value creator their shareholders envisaged. At the time of the merger in August 2017 the combined businesses had £670 bn of AUM. As of June 2021, the firm has £532 bn, £140 bn less. Spy will watch with interest.
JO Hambro Capital Management (JOHCM) has made a statement this week with its new head of investments. The London-headquartered active manager with offices in New York and Singapore has hired Andrew Parry. He will also join the executive board of the company. Parry was previously the head of sustainable investing at Newton Investment Management, a wholly owned division of BNY Mellon Investment Management. Prior to that, he was with Hermes Investment Management (now Federated Hermes). Spy has little doubt that Parry’s exceptional ESG credentials played a key role in the decision to recruit him. In an era of greenwashing, his genuine track record speaks for itself. JOHCM has had success in the last 12 months with its UK Equity Income, which is up 51%.
Wide moat, what wide moat? That seems to be the mantra at Goldman Sachs Asset Management (GSAM). The firm has just launched a new active strategy, in an ETF format, that is targeting the “next generation of tech leaders”. According to the firm, in a decade the leaderboard of tech is going to look very different and, therefore, GSAM is looking below the $100 bn market cap area for its new investments. Megacaps are going to be deliberately avoided. The strategy is trading in New York under the ticker, GTEK. Are Google, Apple, Microsoft and Facebook quivering? Spy doubts it.
How buoyant is the jobs market for asset management? Spy took a peek at eFinancial Careers and did a quick search on “Asset Management + Singapore” and the site returned 457 job opportunities. Schroders, PIMCO, Manulife Investment Management, UBS, Bloomberg, DBS and GIC – to name but a few – are hiring. Are they all deep ops roles where one has to have a maths PHD and less buoyant personality? Not at all! Distribution, portfolio management and marketing all get a look in. Asset management in the Lion City seems in rude health indeed.
The rather dramatic news that Australia has snubbed France and joined with the US and the UK to build nuclear submarines seems to have caused a geopolitical stir in China and Europe this week. Australia may be paying less for its nuclear underwater boats than its original French diesel ones, but it may have to boost its fuel budget anyway, reckons Spy. The Uranium ETF, URA, has recently gone bananas. It is up 140% over the last year. Apparently the “meme crowd” is in on the act, punting uranium, which is leading to, eh, atomic price rises.
Answers on a postcard please. What percentage of asset management flows now goes into ESG funds? A decade ago, the term was almost unknown, or perhaps, at best, was a fringe activity named SRI. Now, one in every three dollars invested is going into a vehicle branded with ESG, according to the Global Sustainable Investment Alliance (GSIA). Spy deliberately uses the term “branded” because it would seem almost impossible that one third of all investments truly care for the environment when their money is put to work. Still, the direction of travel is undeniable.
Are you feeling nervous about all those juicy profits that have been made in the last 18 months due to central bank largesse? Don’t know if the music is going to stop soon and you will be left without a chair? Listening to the Cassandras out there preaching imminent doom and not sure whether to believe them? Just in time, Mirae’s Global X ETF division has a soothing balm for you. The firm has launched two funds that might address your shattered nerves: Global X Nasdaq 100 Tail Risk ETF (QTR); and Global X S&P 500 Tail Risk ETF (XTR). Both of these funds buy “out of the money” put options on the respective indices, just in case the market is in line for a big swoon. Timing is everything, especially for tails, reckons Spy.
There can’t be a Star Wars-generation kid out there who doesn’t want a flying car. This week, Munich-based company, Lilium, which is backed by Chinese technology giant Tencent, went public in New York via a SPAC (Qell Acquisition Corp). Of course, it is all about tomorrow. The firm is hoping to have its vertical take-off and landing vehicles in production by 2024. With so many people having gotten used to the convenience of working from home, perhaps aerial taxis will be just the thing to coax people back to the office, contemplates Spy.
Spy’s photographers have been out. In Singapore, a new retail campaign by JPMorgan Asset Management was spotted by an eagle eye. The manager is promoting its Income Fund.
Until next week…