*|MC:SUBJECT|*
 
 
 
 
Headlines
 
 
Federated to acquire majority stake in Hermes
Fidelity proposes discounts for loyal clients
BlackRock’s Fink sees China as critical priority
Deutsche appoints retail banker as CEO

Investment 20/20 joins forces with Investment Association

First Trust launches pioneering blockchain ETF
Rathbones, Permira circle Speirs & Jeffrey

Moves: LSE appoints CEO; Lazard adds AI hedge fund manager

 
 
 
 
Federated to acquire majority stake in Hermes
 
 
Federated Investors has agreed to buy 60 per cent of Hermes Fund Managers Ltd. from BT Pension Scheme (BTPS) for £246 million. BTPS will keep a 29.5 per cent stake in Hermes, with the option to sell additional shares to Federated over the next three to six years. The remaining 10.5 per cent of Hermes will be owned by senior management.
 
“The agreement with BTPS brings to Federated great people, a growing global client base, a history of strong performance and one of the world’s leading active ESG investment and engagement businesses,” said J. Christopher Donahue, Federated’s President and CEO. “This is a growth opportunity for both Federated and Hermes, with Hermes’ range of investment strategies serving as effective complements to Federated’s existing strategies in equity, fixed income and cash management. In addition, Hermes’ capabilities and client relationships in the UK, the rest of Europe and the Asia-Pacific region significantly broaden Federated’s distribution capabilities.”
 
Hermes will retain its own brand and board, with no jobs expected to be at risk. BTPS will continue to invest with Hermes as a client.
 
 
 
 
Fidelity proposes discounts for loyal clients
 
 
Fidelity International is talking to its European institutional clients about a new “time-based pricing” structure whereby fees would fall over time, rewarding investors for loyalty. “If a client wants daily liquidity they will get a certain price, and if they want to stay invested with us for longer then they will get a lower fee,” said Bart Grenier, Global Head of Asset Management. He told Financial News he was surprised by how positively clients have reacted to this proposal.
 
Separately, AllianceBernstein is considering introducing a “flex fee” for its European clients, with a low flat charge, then a capped performance fee if its strategies beat their benchmarks. AB has already launched a US fund range with flex fees.

 
 
 
 
 
BlackRock’s Chairman sees China as critical priority
 
 
In his annual letter to shareholders, BlackRock’s Chairman Larry Fink described expanding the firm's presence in China as a critical priority. BlackRock has a two-pronged growth strategy, he said: being a leader in markets and investment opportunities where client demand is highest; and “broader participation across the investment ecosystem.” BlackRock is also focusing on digital innovations; rapid changes in technology have the potential to transform the asset management industry, Fink observed.
 
BlackRock obtained a Private Fund Management registration in China last year, allowing it to manufacture and distribute products to institutional and high-net-worth investors. In November, the Chinese government changed the ownership rules for domestic Fund Management Companies (FMCs), which can sell funds to retail investors. International asset managers are now permitted to own up to 51 per cent of FMCs, rising to 100 per cent after three years (up from a previous cap of 49 per cent). “This latest regulatory opening, together with other recent market developments, could significantly expand the prospect to grow our footprint in the market,” Fink explained. BlackRock already has a joint venture with Bank of China Investment Management and employs 30 staff in China.
 
Separately, BlackRock is working towards its ‘tech2020’ transformation plan, which includes: opening Aladdin to more clients and investors; growing its army of technologists; using data science, machine learning and artificial intelligence to find alpha; and building “a more data-driven feedback loop in the sales and product development process,” Fink wrote.

BlackRock established a Digital Wealth group last year to drive product development, explore investment opportunities, and reach individual investors through tech-enabled intermediary relationships. Earlier this year, it opened the BlackRock Lab for Artificial Intelligence in Palo Alto and a Data Science Core hub.
 
 
 
 
 
Deutsche appoints retail banker as CEO
 
 
Deutsche Bank chose Christian Sewing as its new CEO on Sunday 8 April, ending a two-week boardroom battle. Sewing previously co-led the Private & Commercial Bank division and has spent most of his career at Deutsche Bank, having joined in 1989. He replaces Yorkshireman John Cryan, who is leaving two years before his contract was due to end.
 
The German bank also appointed two Presidents: Garth Ritchie, Co-Head of the Corporate & Investment Bank, and Karl von Rohr, Chief Administrative Officer. Ritchie will lead the Corporate & Investment Bank single-handedly after his co-head Marcus Schenck leaves next month.
 
In a letter to staff, Sewing said his main goal this year was to reach revenue and cost targets. (Deutsche Bank has experienced three years of losses.) “With regard to our revenues we have to regain our hunger for business, achieve improvements in all business divisions and set the bar higher,” he wrote.
 
Sewing also intends to thoroughly analyse the Corporate & Investment Bank’s market position. “The priority is to leverage our strengths and to allocate our investments accordingly. And at the same time we will look to free up capacity for growth by pulling back from those areas where we are not sufficiently profitable,” he explained.
 
 
 
 
 
Investment 20/20 joins forces with Investment Association
 
 
Investment 20/20 has become part of the Investment Association. “Joining forces with the IA gives us the reach and scale to get in front of tomorrow’s workforce,” said Karis Stander, who will remain Managing Director of Investment 20/20.
 
Since it was founded five years ago, Investment 20/20 has helped more than a thousand trainees to enter the investment industry. It now plans to develop a more targeted programme in schools and universities to encourage students with a wide range of skills and backgrounds to apply for roles in fund management. It will also team up with the IA to reach returners and professionals changing careers, and to provide leadership training to young professionals.
 
 
 
 
Rathbones, Permira circle Speirs & Jeffrey
 
 
Rathbone Brothers is holding takeover talks with Glasgow stockbroker Speirs & Jeffrey, while Permira (which owns Tilney) is mulling a rival bid.

"Rathbones regularly assesses various acquisition opportunities in line with its stated strategy and accordingly confirms that discussions between Rathbones and Speirs & Jeffrey in relation to a possible acquisition... are taking place,” the wealth manager stated. Rathbones recently walked away from a merger with Smith & Williamson.

Both suitors are valuing Speirs & Jeffrey at around £200 million, which represents a hefty premium to the firm’s assets under management and profits, according to Paul McGinnis, an Analyst at Shore Capital. “Any synergies would need to be at least double the current level of profitability to generate a return capable of value creation,” he wrote in a note cited by City A.M.
 
 
 
 
First Trust launches pioneering blockchain ETF
 
 
First Trust Global Portfolios has launched Europe’s first blockchain UCITS ETF. The First Trust Indxx Innovative Transaction & Process UCITS ETF will physically replicate the Indxx Blockchain Index. It will gain exposure to companies whose products stand to benefit from blockchain, as well as firms investing resources in distributed ledger technology.
 
The ETF’s largest holdings are ASUSTeK Computer, Gemalto N.V., Intel Corp, and IBM. US stocks comprise 41 per cent of its holdings, followed by China, Germany and Taiwan, which account for about 7 per cent each.
 
“With an increasing number of institutions harnessing blockchain technology and applications spanning a wide range of industries, we believe the efficiency, auditability and transparency provided by blockchain offers the potential for significant growth opportunities,” said Derek Fulton, CEO of First Trust.
 
 
 
 
 
 
Portfolio Managers Gregory Jones and Pragna Shere have left Redwood Investments to join Fred Alger Management in New York. They will manage Alger’s international and global growth strategies.
 
AllianceBernstein has hired Markus Novak as Director of Wholesale and Siegfried Volkmar as Director of Institutional Sales and Consultant Relations. Novak was an Investment Director at Aberdeen Standard Investments, while Volkmar was Head of Institutional Sales for Germany, Switzerland & Austria at Natixis Investment Managers.
 
Mercer’s UK Head of Investments, Steven Blackie, has moved to Aviva Investors to become Global Head of Product Strategy.
 
Barnett Waddingham has promoted Sonia Kataora to Head of Defined Contribution Investment. She replaces Alex Pocock, who was promoted to Head of Investment Consulting last month.
 
Blackstone has appointed Yan Yan as Managing Director of its Asia real estate team. She was President of real estate developer Soho China.
 
Elizabeth Grier has moved from J.P.Morgan to BNY Mellon as a Director and Sales Executive, Hedge Fund, ETF and Structured Products in London.

The Competition and Markets Authority has appointed Andrew Tyrie, former Chair of the UK Treasury Select Committee, as its new Chairman. He will lead the CMA through a major expansion after Brexit, when the European Commission rescinds its authority over competition in the UK.
 
Srinivas “Srini” Pulavarti will become CIO of Emory University’s $6.9 billion endowment in Atlanta on 1 July. He was President and CIO of UCLA Investment Company in Los Angeles.
 
Fidelity International has added Credit Suisse’s Joaquín Martín Garre to its sales team covering Spain and Portugal.
 
Rachel Wheeler will join GAM Holding later this year as Group General Counsel and a member of the Group Management Board. She has been Aviva Investors’ General Counsel since 2014.
 
Paul-Georges Moucan and Sébastien Gangnat-Tunzini have moved from Quadra Capital Partners to H2O Asset Management. They will continue to manage the Quadra Capital Global Equity Alpha fund, which H2O AM will distribute. Additionally, Quadra and H2O AM have signed a partnership to develop new alternative investment strategies together, InvestmentEurope reported.
 
Harvest Fund Management in Beijing has promoted Jing Lei, CIO of its fixed income and institutional business, to CEO. He replaces Zhao Xuejun, who will become Co-Chairman.
 
HSBC Global Asset Management has hired Amundi’s Samir Essafri to manage its HSBC GIF European Equity fund.

Steven Gardner has moved to Jupiter from Franklin Templeton Investments as a UK Institutional Relationship Director.
 
Hedge fund veteran David Gibson has joined Lazard Asset Management in New York. He will launch “a hybrid strategy at the intersection of human- and algorithmic-driven investment approaches” in the second half of this year, according to an announcement. Gibson was a Managing Partner at Assiduous Investments, which he founded in 2015 after a 20-year career at D. E. Shaw.

The London Stock Exchange has appointed David Schwimmer as its next CEO. He will take the reins on 1 August from CFO David Warren, who has been interim CEO since Xavier Rolet’s departure last year. Schwimmer is currently Global Head of Market Structure and Global Head of Metals and Mining at Goldman Sachs.

Mercer has made three additions to its responsible investment team, hiring Tomi Nummela from the Principles of Responsible Investment in London, Max Messervy from Ceres in Boston, and Timothy Stamp from KPMG Banarra in Sydney.

Natixis Wealth Management has named Jean-Jacques Friedman as CIO. He retains his current role as CIO of Vega Investment Managers.
 
The £46 billion Northern Pool, which encompasses the local government pension plans of Greater Manchester, West Yorkshire and Merseyside, has named Ian Greenwood as Chairman. He is currently Deputy Chairman of the West Yorkshire Pension Fund and the Local Authority Pension Fund Forum.
 
Ostrum in Paris has brought in Jean-Louis Scandella as Equity CIO. He was Barings Asset Management’s Head of Equities.
 
PSP Investments has hired Matthias Osthoff and Philipp Schröder as Directors in its private equity and private credit teams, respectively, in London. Osthoff was a Principal at Bain Capital and Schröder was a Director in Deutsche Bank’s leveraged finance team. PSP Investments manages the Royal Canadian Mounted Police and the Canadian Armed Forces’ pension funds, among others.
 
Paul McGlone, a Partner in Aon Hewitt's retirement practice, will become President of the Society of Pension Professionals on 1 June.
 
Russell Investments has brought in Northern Trust’s Maarten Roeleveld as Director for Business Development in Benelux. 

SVM Asset Management in Edinburgh has hired Martin Orrin from Aberdeen Asset Management as Regional Sales Manager for the South West.
 
UBS Asset Management’s Real Estate & Private Markets business has appointed Perry Offutt as Head of Infrastructure, Americas, effective in June. He was Managing Director of Macquarie Infrastructure & Real Assets’ North American Investment team.

German Master KVG Universal-Investment has appointed Marcus Kuntz as Head of International Sales. He joins from State Street, where he was Head of Asset Manager Solutions for Continental Europe and Head of Sales for Switzerland.
 
 
 
 
 
 
Editor
Emma Wallis
 
Head of News and Insight
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*|IF:REWARDS|* *|HTML:REWARDS|* *|END:IF|*