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Headlines
 
 
BlackRock expands credit business with TCP acquisition
MFS unveils council for succession planning, investment culture
AllianzGI wagers fees on outperformance
Hedge funds of the future embrace AI, ESG

M&G launches first-of-its-kind impact debt fund

Moves: Cerberus appoints President; Mercer names UK CIO
 
 
 
 
BlackRock expands credit business with TCP acquisition
 
 
BlackRock agreed this week to acquire Tennenbaum Capital Partners (TCP) in Los Angeles, which focuses on middle market performing credit and special situation credit opportunities. The deal is expected to close in the third quarter.
 
TCP oversees $9 billion of committed client capital and is the investment adviser to TCP Capital Corp (TCPC). Its 80-person team will move to BlackRock, including the firm’s five partners.
 
“Our combination with BlackRock will provide TCPC with increased resources, scale and market access to continue to build on our long track record in middle market performing credit and to enhance long-term value for our clients and shareholders,” said Howard Levkowitz, a Managing Partner of TCP and Chairman & CEO of TCPC.
 
“We are focused on building a private credit business that seizes on long-term secular trends to deliver for clients the best results across risk spectrums and market cycles,” said James Keenan, Global Co-Head of Credit at BlackRock. “The acquisition of TCP accelerates our growth plans […] with its high-quality team, excellent long-term track record across multiple market cycles, diverse expertise, and proven origination capabilities.”
 
 
 
 
MFS unveils council for succession planning, investment culture
 
 
MFS Investment Management in Boston has established an Investment Advisory Council (IAC), a group of current and former MFS investment professionals who will mentor and train staff, and assist with succession planning. The IAC will also consult with investment teams at the $482.2 billion global manager on competitive outlooks and trends, management team interviews, mechanics of portfolio construction, time management, risk management and other matters.
 
“The council will reinforce our commitment to a collaborative investment culture, provide access to mentors with decades of investment experience and extend our ability to continue to manage retirements and transitions in a thoughtful and transparent manner,” said Michael Roberge, CEO and CIO. “The overarching goal of this council is to help ensure that MFS' investment culture endures for the benefit of our current and future clients.”
 
 
 
 
AllianzGI wagers fees on outperformance
 
 
Allianz Global Investors will introduce performance fees for five long-only equity funds available to UK retail investors on 3 May. Clients will pay a low fixed fee set at a similar level to passive funds, plus 20 per cent of outperformance. AllianzGI will “shar[e] in the value created only when we deliver the sustained, superior outperformance we aim to generate as an active manager,” said CEO Andreas Utermann.

On any day a fund beats its benchmark, 20 per cent of that day’s outperformance will be accrued as a performance fee. Any underperformance will be recorded on a daily basis and will reduce the performance fees.
 
At year’s end, if a fund’s overall returns have been positive, AllianzGI will collect the total performance fees accrued during that year. However, if the fund has lagged its benchmark, clients will only pay the low fixed fee. Any underperformance will be carried forward for up to five years, or until losses have been recovered.
 
 
 
 
Hedge funds of the future embrace AI, ESG
 
 
Hedge funds are at an inflection point, facing paradigm shifts in technology, investor demand and competition, according to the Alternative Investment Management Association (AIMA). Aberdeen Standard Investments (ASI) and AIMA asked 25 hedge fund executives how alternative investment firms should change to remain relevant. They discovered that responsible investing and artificial intelligence (AI) are becoming greater priorities.

“All of these changes are in turn forcing hedge fund firms to re-evaluate their own inner workings, from how they service investors through to how they build a business that outlasts its founders,” said AIMA’s Global Head of Research, Tom Kehoe.

In ‘Perspectives: Industry Leaders on the Future of the Hedge Fund Industry’, AIMA and ASI identified seven trends:
  • Smart beta and liquid alternatives strategies are replicating hedge fund techniques at a lower cost.
  • As competition for capital intensifies, hedge funds are rethinking their distribution models to target retail investors, and considering how to leverage digital and mobile technologies to serve clients.
     
  • Alpha is becoming more difficult, but not impossible, to deliver. Hedge funds need to compete harder to produce alpha, and use different investment timeframes to maximise their advantage.
     
  • Both systematic and discretionary hedge funds need to use machine learning to process data. AI is becoming particularly important in short-term trading.
     
  • Clients expect their investments to incorporate their values, which AIMA predicted will push more hedge funds to offer ESG strategies.  
     
  • The rise of systematic investing and AI is prompting hedge funds to hire mathematicians, physicists and computer scientists.
     
  • Hedge funds are partnering more closely with investors, sharing knowledge, co-investing, and offering increased transparency.
“What we found was an industry embracing change,” Kehoe concluded. “In the coming years, hedge fund firms will continue to refine not just what they deliver to their investors, but how they deliver it.”
 
 
 
 
M&G launches first-of-its-kind impact debt fund
 
 
M&G Investments has launched its M&G Impact Financing Fund, which will provide financing to social and environmental projects by investing in private and illiquid debt. It aims to achieve a total return above publicly-traded bonds and a regular income, in addition to supporting social or environmental initiatives. This is the first impact debt fund investing across multiple sectors on an institutional scale, M&G said.
 
The strategy has raised £44.5 million so far, including £15 million from Big Society Capital. The Swedish Foundation for Strategic Environmental Research and M&G Prudential are also seed investors. The fund has already provided finance to UK housing associations and invested in US solar power. M&G worked with Sustainalytics to develop a methodology for measuring the fund’s positive impact.
 
“Environmental and social considerations have long been integrated into our fixed income investment process but the philosophy behind this fund is to actively seek investments that will have a measurable positive impact,” said Richard Sherry, Director of Alternative Credit, who manages the fund. “It is vital that investors can clearly see what their money is doing to improve people’s lives and the environment whilst providing stable financial returns.”
 
 
 
 
 
 
APG Asset Management has promoted CIO Ronald Wuijster to CEO. He replaces Eduard van Gelderen, who joined the University of California’s investment team last year.
 
ARA Asset Management, a real estate manager in Singapore, has hired former diplomat Grant Dooley as CEO of its new infrastructure business. He previously ran Hastings Fund Management’s Asia operations.
 
Aviva Investors has named Daniel McHugh as Head of UK Real Estate and Melanie Collett as Head of Real Estate Asset Management. McHugh was Head of Continental European Real Estate Investment at Standard Life Investments, while Collett was Head of Asset Management at Round Hill Capital.
 
Bank of America Merrill Lynch has promoted Bernard Mensah, Co-Head of Global Fixed Income, Currency and Commodities Trading, to President for EMEA. He retains his current role.
 
BMO Global Asset Management has added Zahra Sachak to its UK institutional team as Director of Relationship Management. She joins from Investec Asset Management’s North American institutional sales team.
 
Julien Halfon, a Senior Consultant at Mercer, has moved to BNP Paribas Asset Management as Head of Pension Solutions within its Multi Asset, Quantitative & Solutions investment group in London. 
 
The California Public Employees’ Retirement System (CalPERS) has hired Elisabeth Bourqui as Chief Operating Investment Officer, effective 14 May. She was Head of Pension Assets and Liabilities Management at ABB Group.
 
Separately, Curtis Ishii, Managing Investment Director, Fixed Income at CalPERS, will retire in July after 40 years with the $351 billion fund. Arnie Phillips, a Senior Fixed Income Portfolio Manager, will take on his responsibilities until a permanent successor is appointed.
 
Matt Zames, who was COO of JPMorgan Chase & Co. until he stepped down last June, will become President of Cerberus Capital Management. The private equity firm also promoted Frank Bruno to Co-CEO, alongside Founder Stephen Feinberg.
 
Ben Willis, Head of Research at Whitechurch Securities, will join Chase de Vere on 30 April as Head of Portfolio Management.
 
Cryptocurrency specialist Coinbase has brought in Alesia Haas as CFO. She was hedge fund Och-Ziff Capital Management Group’s CFO.

Fidante Partners has hired Gihan Ismail as Head of Strategic Partnerships, a newly-created role in London. She was a Partner at Marine Capital and before that spent 14 years with Hewitt Associates (now Aon Hewitt). Fidante has also added Hugh Ferrand to its institutional business development team in London; he was previously Head of the Invesco Perpetual Institutional Division.
 
George Varino, who co-founded Lazard Asset Management’s emerging market debt business, has moved to Investec Asset Management as Head of Emerging Markets Solutions. He is based in New York.
 
J.P. Morgan Asset Management has brought in Alistair Lowe as Managing Director and Senior Portfolio Manager, Quantitative Beta Strategies in New York. He was an independent consultant, providing asset allocation and portfolio construction advice. 

Georgina Fogo, who was BlackRock’s Global Head of Compliance, will join Janus Henderson Investors in July as Chief Risk Officer. She replaces David Kowalski, who retired last year.

Johns Hopkins University’s office of investments in Baltimore has appointed Christopher Lenox as Managing Director of Investments and Joanna Pratt as Managing Director for Markets and Risk. Lenox was Director of investments at Brandeis University, while Pratt was Investment Team Director at Stanford University’s endowment.
 
Jupiter Asset Management’s liquid alternatives business has hired Darren Starr and plans to launch a US equity long/short fund for him to manage. He was a Portfolio Manager at Segantii Capital Management.
 
Legal & General Investment Management has appointed Janine Menasakanian as Head of Distribution Strategy, Personal Investing. She was Head of Financial Institutions at Vanguard.
 
Legg Mason has named Sophie Andrews as Head of UK Strategic Alliances. She was a Strategic Relationship Manager at J.P. Morgan Asset Management.
 
LGIAsuper in Queensland has hired Kate Farrar as CEO. David Todd, who had been serving as CEO and CIO of the $11 billion fund, continues as CIO. Farrar was Senior Implementation Leader at McKinsey & Co.
 
Loomis, Sayles & Co. in Boston has promoted Portfolio Manager Kathleen Bochman to Director of ESG.
 
Mercer has promoted Jo Holden to UK CIO and a member of its UK defined benefit leadership team. She replaces Steven Blackie, who is joining Aviva Investors as Global Head of Product Strategy. Holden joined Mercer’s Liverpool office in 2002 from PwC, before moving to Manchester in 2010 to establish a new investment team there.
 
Mirabaud & Cie has added Marta Raga as a Senior Portfolio in Spain. She was a Fixed Income Director at BNP Paribas Gestión de Inversiones.
 
Yvette Babb has joined NN Investment Partners’ emerging market debt team as a Portfolio Manager. She was Chief Economist and Strategist at J.P.Morgan, where she focused on Sub-Saharan Africa.
 
Oldfield Partners has hired David Gallagher as Head of US Business Development and Relationship Management, based in Boston. He was a Partner at small-cap specialist Granahan Investment Management, responsible for investor relations and distribution.
 
PIMCO has brought in David Forgash as Head of European High Yield Portfolio Management, a new role based in London. He was a Senior Portfolio Manager at Millennium Capital Partners where he focussed on European credit.
 
Danish pension fund PKA is dividing its alternatives arm, PKA Alternative Investment Partners, into two businesses: AIP Private Funds (managing private equity and infrastructure funds) and AIP Infrastructure (overseeing direct infrastructure investments.) Anette Eberhard will join AIP Private Funds on 1 October as CEO and Managing Partner. She is currently CEO of EKF, the Danish export credit agency. Kasper Hansen, who joined PKA in 2016, has been promoted to Managing Partner of AIP Infrastructure.
 
Alexandre de Rothschild will become Executive Chairman of Rothschild & Co next month, taking over from his 75-year-old father David. Alexandre, who is 37, told the Financial Times he plans to expand the eponymous Franco-British bank in the US.
 
Paolo Federici, Head of Northern Europe at Fidelity International, is moving to UBS’ Italian wealth management division as Head of Wealth.
 
Mary Haly has left Coutts & Co for Waverton Investment Management, where she becomes a Senior Portfolio Manager and Director in the private client team.
 
 
 
 
 
 
Editor
Emma Wallis
 
Head of News and Insight
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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