Your loyal Spy has buyer’s remorse. A long career in enjoying quality wine and craft beer on someone else’s dime has been brought to an abrupt interruption. Cheap tequila served in cheap shot glasses in a cheap-sort of bar on his own wallet has left Spy feeling worse for wear. Like a silver investor who thought the earlier part of year heralded a second coming for commodities, only to have the market fall with astonishing speed in recent weeks, he is nursing a severe hangover. Even teaming rain over Singapore, where Spy has found himself this week, has done nothing to ease his pain. Yes, dear readers, the party is always fun until the music stops and the bartender closes the doors.
Schroders continues to build out its team in Asia with a relocation brought to Spy’s notice this week. Rosalind Bazany has a few weeks ago moved from HQ in London to Singapore to work with the Schroders Global Financial Client Group. She will be working alongside Alex Prawitz in Hong Kong as Schroders gives even more attention to the giant players who rule distribution in Asia.
Old Mutual’s life and wealth platform in Singapore, Old Mutual International, is on the hunt for a new local chief executive hears Spy. Steve Hickman, who was relatively short lived in the role has been poached by Swiss Life. Steve is replacing Thomas Henze who is returning to Europe with Swiss Life to take on a larger role.
Spy hears from reliable sources that M&G is looking for another person to join their business development team in Hong Kong. With a shiny new office, as reported last week by Spy, M&G is clearly committed to developing their business in the North Asian market. Enquiries on a postcard to Ben Cherrington, Spy would imagine.
Those keeping an eye on Asian alumni may be interested to know that Patrick Tissot-Favre, the former head of marketing and communications at Amundi in Hong Kong has moved to CPR Asset Management, an affiliate of Amundi in Paris. His new role is for “international development”. Does that mean CPR will be coming to Asia? Watch this space, says Spy.
Spy has been watching the consolidation of the wealth management space in Asia gather relentless pace. The newest merger to come to light will bring a new name to Hong Kong. TTG, the wealth manager lead by Jon Dingley has been acquired by Swiss privately-owned, private bank CBH. Spy understands that TTG will be renamed CBH in due course and local chief investment officer, Kevin Liem is staying in his position.
The MAS has shared the news that hedge fund assets in the Lion City have grown the most slowly in 3 years, up only 11% in 2015, with hedgie assets now standing at $87 billion, reports Bloomberg. However, the much bigger and head-turning fact came from MAS’s report on total assets, now managed in Singapore itself, by the asset management community. These are now standing at a staggering $SGD2.6 trillion. Even Spy, who has long suspected Singapore of stealthily gathering assets rapidly, had no idea they were so large. Take a bow asset managers, you are doing something right.
Schroder’s highly readable blog, The Value Perspective, has a great insight into how some big companies play the accounting game in a recent blog post manipulating goodwill for tax purposes and giving the impression they are delivering a healthy return on investment, when it may be far from the truth. It is the kind of insight that will separate the mom and pop investors from real value. Spy has long advocated hiring more accountants in asset management and fewer economists. This blog post reinforces that view wholeheartedly.
Mirae Asset Global Investments is adding to its ETF range with some new pairs of launches in Hong Kong next week on Tuesday, hears Spy. Look out for Mirae’s double long and a single short funds tracking the Topix and S&P 500 respectively; four funds in total.
Spy’s quote of the week comes from John Kenneth Galbraith who wisely said, 'There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have insight to appreciate the incredible wonders of the present.'
And yet, the fund management community continues to plaster every advert and every presentation with a performance chart like Pavlov and his doggie. Dylan Emery, Last Word’s group editorial director made a similar observation, based on hundreds of interviews with fund selectors, that the real problem with past performance, is that you can’t buy it. “It is like showing someone a beautiful car which is unavailable. Merely frustrating.”
Ever wondered why emerging markets rally so hard when in favour and fall so fast when out? The answer, discovers Spy, is thoroughly prosaic: because emerging markets are so tiny. According the World Bank these are some of the market capitalisations of these stock markets at the end of 2015 with companies approximately their market cap in brackets: Argentina: $56bn (Adobe Systems), Thailand $348bn (Berkshire Hathaway), Indonesia $353bn (Exxon Mobil), Russia $393bn (Amazon.com) and Turkey $188bn (Novartis). When big, institutional money flows in it is chasing a very small number of available shares and the markets will respond accordingly. Sadly, it works both ways…
Spy leaves you this week with some thoughts from Martin Gilbert, the CEO of Aberdeen who penned in a blog “Online platforms can take some of the manual labour out of the exercise of giving financial advice. But there are a great many people who want the comfort of having a well-qualified professional there to guide where they put their money. Technology presents a huge opportunity in this situation. It can give advisers more effective tools to give more efficient and better reasoned advice. The future of advice is one where the decisions of humans are augmented by technology, not replaced. In this sense, advice will be bionic, not exclusively robo”. Spy concurs: use tech well and YOU will always have a role, ignore tech and your neighbour who doesn’t ignore it will have the role instead.
Pictet is out in the market again promoting its Strategic Income Fund spotted outside Jardine House.
Until next week, stay away from tequila unless you are very young and foolish…