Scottish Widows pulls £109bn from Standard Life Aberdeen

Lloyds, RBS set BAME leadership targets

BlackRock tracks emojis to ascertain market sentiment 

European Commission takes tough stance on delegation

Invesco moves to one global brand

HSBC eyes acquisitions in China

London boutique attracts Chinese buyer

Moves: Fidelity names Global CIO, Equities; Jupiter adds multi-asset chief
Scottish Widows pulls £109bn from Standard Life Aberdeen
Scottish Widows and Lloyds Banking Group's wealth businesses have given notice to Standard Life Aberdeen (SLA) to terminate a £109 billion mandate, citing competition concerns. SLA expects to take a £40 million impairment charge as a result. Aberdeen Asset Management has been running this money since it acquired Scottish Widows Investment Partnership from Lloyds in 2014.
“Given the merger of Standard Life and Aberdeen has resulted in our assets being managed by a material competitor, it is now appropriate to review our long-term asset management arrangements to ensure they remain up-to-date and that customers continue to receive good service and investment performance,” said Antonio Lorenzo, CEO of Scottish Widows and Group Director of Insurance & Wealth. “We will begin an in-depth assessment of the market to identify a long-term strategic partner, or partners, to manage the current £109 billion of assets.” He expects these funds to transition to a new manager by June 2019.

The £109 billion mandate mostly consists of lower margin passive equity and fixed income assets, according to The Guardian. It represents about 17 per cent of SLA's assets under management, but less than 5 per cent of its revenues. SLA’s CEOs, Keith Skeoch and Martin Gilbert, are “disappointed by this decision in the context of the strong performance and good service we have delivered.”
Lloyds, RBS set BAME leadership targets
Lloyds Banking Group has become the first FTSE 100 company to set a public target for BAME representation. The bank aims for 8 per cent of its senior managers and 10 per cent of its total workforce to identify as black, Asian or minority ethnic (BAME) by 2020 - up from 5.6 and 8.3 per cent, currently.

At present, 10 per cent of Lloyds' customers are from a BAME background and “it is our ambition to better reflect the customers and communities we serve,” said Fiona Cannon, Director of Responsible Business and Inclusion. Lloyds’ targets are part of its 2018 Helping Britain Prosper Plan, which will be published on 21 February and aims to "help address some of the biggest social and economic issues facing Britain today.”

Royal Bank of Scotland also published diversity targets this week. Its goal is for 14 per cent of its senior leaders to identify as non-white by 2025, up from 4 per cent at present. “To serve our customers well we need to truly represent the diversity of the communities we operate in, and this target is a key step forward in helping us to do that,” said Marjorie Strachan, Head of Inclusion. “Increasing the diversity of our leadership teams will bring new ideas to the table.” Across RBS' broader workforce, BAME representation is 15 per cent, compared to 14 per cent for the UK population.
BlackRock tracks emojis to ascertain market sentiment
BlackRock’s quantitative investment arm, Systematic Active Equity, has developed a tool to measure the sentiment of tweets containing emojis, which it is using to gauge political risk. BlackRock will incorporate positive and negative political tweets alongside more traditional data, such as polling figures, to predict election results and their impact on markets.
Additionally, BlackRock has purchased data from a global anti-virus software provider that tracks the browsing history of anonymous users, Financial News reported. BlackRock is using this information to identify changes in web traffic to companies on a quarterly and annual basis, which can be an indicator of profitability. “There’s a pattern between web traffic and the growth of a company,” said David Wright, BlackRock’s Head of Product Strategy for EMEA.
BlackRock is also using natural language processing to evaluate transcripts of companies’ earnings calls and track the sentiment and tone of statements from senior managers, in the wake of trading updates.
European Commission takes tough stance
on post-Brexit delegation

The European Commission wrote to asset managers last week, warning them of the “legal repercussions that need to be considered” if the UK fails to conclude a withdrawal agreement before it leaves the EU, Ignites Europe reported. European fund companies will not be able to delegate portfolio management functions to UK entities if co-operation agreements between EU regulators and the UK are not reached, the letter said. European managers should “inform investors of the consequences of [Brexit],” the missive instructed.
The Commission also reminded managers that UK-domiciled UCITS funds will lose the UCITS label on 30 March 2019. Thereafter, they will become non-EU alternative investment funds, which cannot be widely sold to European retail investors. With that in mind, EU funds-of-funds should “assess the eligibility” of any UK UCITS in which they invest, the Commission wrote.

Invesco moves to one global brand
Invesco plans to phase out its PowerShares, Perpetual and Trimark brands this year in a move to a single, global brand. “Invesco is a well-recognized brand in many of the markets in which we operate. Moving to a unified brand globally strengthens our ability to market our comprehensive range of capabilities more effectively and contributes to a consistent client experience across multiple markets,” said CEO Martin Flanagan.
The branding move will not herald any changes to investment processes or philosophies. “Although we are moving to a unified brand, we will preserve the time tested and distinctive investment perspectives, processes and approaches of our many investment teams across the globe,” Flanagan said. “In the case of PowerShares, we will build on its reputation as an innovative pioneer in factor and smart beta. In the case of Perpetual, we will focus on preserving its reputation for a distinctive investment management philosophy and approach.”
HSBC eyes acquisitions in China
HSBC intends to make three or four acquisitions this year to expand its asset and wealth management businesses, and to grow its market share among Asia’s increasingly affluent middle classes. The bank is looking to acquire portfolios of assets or platforms to expand its product range, rather than sizeable asset management firms, Bloomberg reported. Although HSBC is hunting globally for targets, it is focusing on China in particular.
HSBC Asset Management is also shifting its focus to Asia, according to John Flint, CEO of Retail Banking and Wealth Management, who will succeed Stuart Gulliver as Group CEO next week. The asset management business has “the potential for selective acquisitions to strengthen franchise,” Flint told investors in a presentation last October.
Separately, HSBC is in the middle of an initiative (which began in mid-2015) to redeploy up to $150 billion of assets to Asia and hire 4,000 people in the Pearl River Delta region around Hong Kong.
London boutique attracts Chinese buyer
Chinese conglomerate Zhejiang Zhongnan UK has acquired Peterhouse Asset Management in London and Peterhouse Capital (Guernsey). They have rebranded as South River Asset Management and South River (Guernsey).
Zhejiang Zhongnan Holdings Group (ZZHG) is a top 500 Chinese private enterprise, with ambitions to grow its asset management business in both the UK and China. “As the leading conglomerate in Zhejiang province, where ZZHG has been headquartered for 34 years, the group has access to a superb network of individuals who want to invest in Europe to grow their wealth, and we are delighted to be involved in a true east/west partnership,” said Amanda Van Dyke, a Senior Fund Manager at South River Asset Management.
Alternative asset manager Ares Management has hired Myles Gilbert as Partner, Head of Investor Strategy & Solutions - a newly-created role. He was a Managing Director at Cambridge Associates and Co-Chairman of its Credit Investment Committee.
Kimberly Kim will join BlackRock in April as Head of Financial Institutions Group, Asia Pacific. She was Deutsche Asset Management’s Head of Global Client Group for Hong Kong and Regional Head of Insurance Coverage for APAC ex-Japan.
Blackstone has promoted Jonathan Gray to President and COO, replacing Tony James, who will become Executive Vice Chairman. Gray has spent his entire career at Blackstone and was Global Head of Real Estate. Ken Caplan and Kathleen McCarthy, Global CIO and COO of the real estate business, respectively, have been promoted to Co-Heads.
The Carlyle Group has hired Wanlin Liu as a Managing Director in Shanghai to lead its growth investments in China. She has more than 13 years of private equity experience and joins from Goldman Sachs.
Columbia Threadneedle Investments has named Scott Couto as Head of North America. He was President of Fidelity Institutional Asset Management.
Credit Suisse has brought in Alexandra Dhavernas von Elverfeldt as a Managing Director in its international wealth management division. She was CEO and Founder of Trocadero Corporate Finance.
Amundi’s Head of Equities, Romain Boscher will join Fidelity International in April as Global CIO, Equities. He will replace Dominic Rossi, who has moved into a part-time role.
Fulcrum Asset Management has hired Mark Horne as a Director in its new Fulcrum Alternative Strategies team. Most recently, he was an independent asset management consultant and before that, a Senior Credit Manager Researcher at Willis Towers Watson. 
Talib Sheikh, a Portfolio Manager in J.P. Morgan Asset Management’s Multi-Asset Solutions team, will join Jupiter Asset Management in June as Head of Multi-Asset Strategy. He spent two decades with J.P. Morgan and ran its Global Macro Opportunities and Global Income funds, among other strategies. Meanwhile, former colleague Antony Vallee, who managed the J.P. Morgan Global Convertibles Income fund, has also left to pursue other opportunities.
Tony Brown has been promoted from CIO to Head of M&G Real Estate, replacing Alex Jeffrey, who will lead M&G Investments in Asia Pacific from April. Simon Pilcher, CEO of M&G’s Institutional Fixed Income business, will become Executive Chairman of M&G Real Estate, a newly-created position to broaden the distribution of real estate strategies and accelerate growth. Martin Towns has been promoted to Head of UK Commercial and Capital Solutions; he will oversee M&G Real Estate’s UK-based fund management, investment and asset management teams.
Muzinich & Co has added John Clifford to its European private debt team. He will focus on origination and deal sourcing in the UK lower mid-market. Clifford was previously a Managing Director in Investec Bank’s Growth and Acquisition Finance division.
Nuveen has brought in Louise Kavanagh from Invesco as a Managing Director for Real Estate, based in Hong Kong. She will lead a team at Nuveen affiliate TH Real Estate, focusing on opportunities in the largest, most transparent cities across Asia Pacific.
OppenheimerFunds has hired Charles Oldmeadow as Business Development Director in London. He joins from Jupiter Asset Management, where he was responsible for discretionary wealth managers. 
Edward Bernard, Vice Chairman of T. Rowe Price Group in Baltimore, will retire at year’s end. Meanwhile Rob Sharps will become Head of Investments on March 1. He is currently Group CIO (a title he retains) and Co-Head of Global Equity  ̶  a role he will hand to Eric Veiel, the current Head of US Equity.
Over in the UK, Tammy McPherson has joined T. Rowe Price as a Senior Relationship Manager for the UK and Ireland. She previously led Lombard Odier’s UK institutional team.

Wells Fargo Asset Management (WFAM) has hired Peter Weidner as Head of Factor Solutions and Mark Brandreth as a Senior Portfolio Manager. They are joining WFAM’s multi-asset team to design solutions with an emphasis on portfolio construction, risk and alternative risk premia. Based in London, the pair previously worked for Schroders. 
Emma Wallis
Head of News and Insight