Archive » Murali Anantharaman

How wealth managers manage their own wealth

Murali Anantharaman — Thu, 16 Oct 2008 20:57:52 +0000

Private bankers are guiding their rich clients into safer investments as financial market turmoil spreads, but when it comes to their own money they often take a different tack.
"I don't have a very well diversified portfolio," admits Timothy Vaill, chairman and chief executive officer of Boston Private Financial Holdings , which owns 15 independently operated financial services firms.
"The majority of my investments are in my own company," he told this week's Reuters Wealth Management Summit.
"And I invested additionally this quarter in my own company again because I really believe what we are doing is the right thing to do and it is a very strong company. And I'm there all day, every day, watching it like a hawk."
David Lamere, chief executive of The Bank of New York Mellon's wealth management unit, said his money is managed by his own company.
"I'm a big shareholder in BNY Mellon, and the rest of my assets is managed by our organization," Lamere told the Reuters Summit. But his investments were "very diversified", he added.
How much do they own?
According to Thomson Reuters data, Vaill owned 201,794 shares of Boston Private as of mid-August valued at about $1.8 million. As of Thursday afternoon, his stake would have retained its value at $1.8 million.
Vaill also said he does not borrow against his stock and does not invest in hedge funds.
Lamere owned 255,820 shares of Bank of New York Mellon as of May 9, valued then at about $11 million. As of Thursday afternoon, that was notionally valued at about $7.5 million.
Lamere said he was at a lunch on Sept. 18 when Bank of New York Mellon stock briefly fell 35 percent along with a slump in shares of other trust banks and asset managers.
"It all happened within about an hour in the middle of the day and I was in a lunch. I got called six times," Lamere added.

Breathing easy

Murali Anantharaman — Mon, 12 May 2008 22:43:16 +0000

Fidelity Investments and some other U.S. asset managers with big money market funds can breathe a sigh of relief.

Boston-based data provider Financial Research Corp. (FRC) has decided to stop providing fund flows data to the media that identifies companies by name -- figures that while closely watched were a source of constant irritation to some firms.

News reports based on the monthly data by FRC, part of Citigroup, had rankled Fidelity and some other fund companies because the figures excluded money market fund flows and only included flows of stock and bond funds.

Over the past few years, Fidelity and other asset managers reported robust inflows into money market funds but received bad press because the FRC data excluded those figures.

For example, FRC numbers showed that Fidelity saw outflows of $9.9 billion in January.
But the world's biggest mutual fund company reported inflows of $14.4 billion that month, driven by money market fund inflows of $20.3 billion.

That nuance was often lost in headlines focusing on FRC's bond and stock fund flow data -- figures that had become industry benchmarks.

Putnam Investments, the Boston-based unit of Canada's Power Financial Corp, has regularly topped FRC's list of companies seeing the biggest outflows.

FRC may provide the firmwise data to companies as a paid service.

Other companies which track fund flows include Strategic Insight, Emerging Portfolio Fund Research and Lipper Inc, a unit of Thomson Reuters.

Photo credit: Reuters

Funds industry criticized for lack of diversity

Murali Anantharaman — Fri, 09 May 2008 19:00:40 +0000

The U.S. mutual fund industry is doing little to increase diversity and hire more minority workers, a senior executive at boutique investment firm Ariel Investments said this week.

"The fund industry has to make a real commitment, not lip service, to diversity. And really go out of our way to find people of color to work in our organizations," Ariel president Mellody Hobson told Reuters in an interview on Thursday.

Ariel has long championed the cause of spreading financial literacy in the African-American community. Founder John Rogers is helping raise support and funds for Barack Obama.

"Name any well-known black portfolio manager besides John Rogers," Hobson said on the sidelines of the annual Investment Company Institute (ICI) conference. "And, to our knowledge, I am the only black woman chair of a mutual fund board. That's not progress," she said. Hobson chairs the board of trustees of Ariel's mutual funds.

Rogers is chairman, CEO and chief investment officer of Chicago-based Ariel, which had $11 billion in assets under management at the end of March.

"We, as an industry, have a very very very long way to go. And I think it's more disconcerting when you look at private equity, when you look at hedge funds, there's no diversity at all," Hobson added.

Some senior executives of the $11.7 trillion U.S. funds industry agreed with Hobson's view on the lack of diversity.

"I think it varies by the types of roles. I think among the investment management professionals, there is less diversity than all of us would like," said Edward Bernard, vice chairman of T. Rowe Price Group

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Paul Schott Stevens, president and chief executive of ICI, the fund industry's representative body, said the challenge of increasing diversity was being felt across the whole financial sector. The ICI does not collect data on diversity in the industry.
"I hope more people of color will come and be part of our business in the future. Because certainly more and more of our investors are going to be minorities and people of color," Stevens said.

Audio - Finding private bankers in unlikely places

Murali Anantharaman — Wed, 10 Oct 2007 18:55:09 +0000

Wealth management firms, facing a shortage of talented advisers, are recruiting from industries like pharmaceuticals and software, where sales staff have mastered technical issues and used to selling to intelligent people, said Bruce Holley, a partner at Boston Consulting Group.

"You need intellectual capability to handle the discussion and understand the products. But you also need selling skills to interact with the clients and provide the client experience," Holley said.

People in the pharmaceutical industry may not be experienced with wealth management, Holley said. But, "they have proven selling skills," he added.

Audio-Hedge fund on Citi’s speculated break-up

Murali Anantharaman — Wed, 13 Dec 2006 22:26:06 +0000

A break-up of Citigroup is not expected to happen in the next few months, says Tom Brown, chief executive of hedge fund firm Second Curve Capital.

Brown told the Reuters Investment Outlook Summit a break-up for Citi could become a reality if its 2007 performance disappoints, leading to chief executive Chuck Prince getting forced out.

Audio-Fed chief gets thumbs up from Lord, Abbett

Murali Anantharaman — Wed, 13 Dec 2006 20:33:35 +0000

Robert Morris, chief investment officer of Lord, Abbett & Co., says the new chairman of the U.S. Federal Reserve, Ben Bernanke, has more substance than his predecessor, Alan Greenspan.

"There's very little entertainment value in the man and I think a lot more substance. So I am actually a big fan of him," Morris said about Bernanke at the Reuters Investment Outlook Summit.

Audio-North Korea, Iran lead investor’s fears

Murali Anantharaman — Tue, 12 Dec 2006 23:06:29 +0000

The North Korean and Iranian nuclear threats, the conflict in the Middle East and the impact on China's neighbors from its growing role in the world stage are geo-political events that will affect global investments, says Reiner Triltsch, head of International Investments at U.S. Trust.

Speaking at the Reuters Investment Outlook Summit, Triltsch, however, said developments in Russia would not have any significant impact as it had weakened militarily.

Audio-Shorting stocks is harder now, says manager

Murali Anantharaman — Tue, 12 Dec 2006 22:21:51 +0000

Shawn Kravetz, president of Esplanade Capital, says shorting stocks has become harder than ever because you never know where private equity players will pop up next and blow the bets out of the water.

"Private equity and the perception of the bogeyman thereof have created a floor for a lot of these stocks," Kravetz told the Reuters Investment Outlook Summit.

Audio - International equities manager likes Japan

Murali Anantharaman — Tue, 12 Dec 2006 21:44:21 +0000

Reiner Triltsch, head of International Investments at U.S. Trust, is bullish on Japan because of a view that quality firms can be found in the world's second largest economy and because valuations there are attractive.
Triltsch spoke at the Reuters Investment Outlook Summit. His Excelsior International fund owns many Japanese firms among its top holdings, including Sumitomo Trust & Banking and Canon.

Audio - Real estate fund manager Winer sees opportunities in HK

Murali Anantharaman — Mon, 11 Dec 2006 20:29:34 +0000

Michael Winer, portfolio manager of the Third Avenue Real Estate Fund, says that Hong Kong is where the fund is finding the most opportunities for investment.

"Hong Kong is where we're putting more dollars to work than anywhere right now," he said.

The territory boasts stocks that trade at substantial discounts to net asset value and firms that are financially strong with good cash-flows. Famed value investor Marty Whitman has also picked Hong Kong property firms for his Third Avenue Value Fund, Winer said at the Reuters Investment Outlook Summit in New York.

For the rest of the summit coverage, click here