Posted inFSA Spy

The FSA Spy market buzz – 9 July 2021

BNP Paribas is seeking; Aviva Investors hires; Natixis is going private; Fidelity’s virtual work experience; Chinese walls; Sotheby’s crypto diamond; HNWIs moving; and much more.

Spy had a drink with a particularly “glass half-empty sort” of asset management salesperson this week, who was gloomy about the future of asset management, largely due to perceived fee and regulatory pressure. Almost on cue, Spy came across a nice little milestone that was reached at the end of 2020, according to Boston Consulting. The global asset management industry attained a cumulative AUM of more than $100trn, or $103trn to be precise. This was an 11% increase on the previous year. Institutional investors had the lion’s share with $61trn of assets and retail portfolios snaffled the rest. As Spy said repeatedly to the gloomster over a very mediocre bottle of Aussie red, the future of asset management is bright, in fact, very bright indeed.

With the news out this week that Steven Billiet, the CEO of BNP Paribas Asset Management, Asia is taking on the role of head of global client group in Paris, Spy can’t help but notice that one of the most senior roles in Apac asset management has just opened up. Billiet is currently located in Hong Kong, but will move to Paris when his successor is found. BNP does not break out its AUM figure specifically for Asia, but the group now has more than €420bn ($497bn) in assets around the world, a substantial amount of which is located in Apac. The manager has had success in the last 12 months with its energy transition fund, up a whopping 119%.

Aviva Investors have added to its emerging market corporate bond team. The British manager has pinched Amy Kam from Gam. Kam has just taken up the role of senior portfolio manager in London. Asian fund selectors may recall that Fund Selector Asia had the pleasure of Amy speaking at one of our virtual forums last year. Aviva Investors has had success in the last twelve months with its global convertibles fund, which is up 25%.

Talking of French asset managers, it seems change is coming at Natixis. The firm is going to be taken private, according to a report in the FT. BPCE has apparently raised its stake in the banking and asset management group to a level that will allow the firm to take complete control. Natixis has suffered from a number of issues during the past few years, not least of all, its liquidity woes within its asset management subsidiary H20. The firm has not enjoyed its time as listed group, losing almost 80% of its value since its IPO in 2006. Being private will almost certainly give the chance for the firm to be restructured, and there is talk that the asset manager, with $1.3trn in AUM, across more than 20 boutiques, may be spun off into a completely separate business.

What do you do in the middle of a pandemic to help young people understand the benefits of working for you? You provide a Virtual Work Experience Programme if you are Fidelity International. The virtual programme allows graduates and other people seeking a bit of work experience the chance to understand the different parts of your business. If one does the entire virtual programme, Fidelity will even provide attendees with a certificate to flaunt on LinkedIn.

Passive has had a good 13 years since the financial crisis. In 2008, just $915bn of assets tracked the S&P 500. Today, that figure has risen to a staggering $5.4trn. That means that in total, S&P 500 tracking assets have risen six-fold, while the S&P 500 index itself has “only” quadrupled, according to data provided by Axios.

A Chinese Wall is coming down — no, not the Great one in China itself, if you are wondering. Apparently, the UK’s Financial Conduct Authority, has decided the innocuous term is culturally insensitive and now wants banks and asset managers to drop the term from their lexicon. Spy can’t really see the benefit of the change, but if it makes some excitable woke busybodies feel good, he supposes there is no real harm.

If you have secretly made a fortune in Bitcoin and are wondering how to spend the money, Spy imagines you will be relieved to know that Sotheby’s has come up with a new outlet for your crypto wealth. A 100 carat-diamond, with an estimated value of $15m, is going on sale today and the storied auctioneer is allowing payment in Bitcoin. Apparently, this is a first for a stone that valuable.

If you have the sense that rich people are on the move like never before, these snippets from Statista may give you idea of the scale. A stunning 16,000 millionaires left China in 2019. But, for Hong Kong, as % of population, the numbers were even more dramatic with 4,200 exiting. This represented 3% of the city’s millionaires. Sadly, this data doesn’t tell us where they are going, but Spy would imagine New Zealand, Canada, the USA and Singapore might be good places to hunt for these relocators. The fact that the UK lost 2,000 and stayed net flat suggests some of the movers chose the UK, too.

If you want to feel financially inadequate, you could do worse than look at the wealth of the world’s nine richest people, which, as of this week, now includes Steve Ballmer, the former CEO of Microsoft after Bill Gates. The top nine all have more than $100bn and their cumulative assets are now worth more than $1.264trn. Being a billionaire, is not what it used to be.

PersonBillions of USD
1. Jeff Bezos212
2. Elon Musk177
3. Bernard Arnault169
4. Bill Gates148
5. Mark Zuckerberg130
6. Larry Page115
7. Sergey Brin111
8. Warren Buffett101
9. Steve Ballmer101

In Singapore, Pinebridge is encouraging retail investors to buy Singapore dollar bonds in a new campaign spotted by one of Spy’s eagle-eyed photographers.

Until next week…

Part of the Mark Allen Group.