Money managers under the microscope
The vexing question of how much to tell retail investors about what exactly they are buying has been exercising industry participants at the Reuters European Funds Summit. Although the sentiment is for more transparency and simplicity, as exemplified by the EU’s new two page marketing document, some managers feel this won’t fully reflect the risks and processes involved in a product.
The Key Investor Information Document (KIID), to be rolled out under UCITS IV, will replace the little loved ”simplified” prospectus as the primary document via which fund promoters communicate with prospective clients – something that makes some managers very uneasy.
Noel Fessey, managing director of Schroder Investment Management in Luxembourg, admitted he had a bee in his bonnet about KIID, which requires managers to be very concise in their descriptions. “Under UCITS IV the fund prospectus becomes the subordinate document but that’s the main document in which you can set out all the risks.”
He agreed that the KIID would allow investors to compare products – something the simplified prospectus had failed to do, but added, “There’s a significant degree of optimism by the regulator about what the KIID can do.”
Citigroup's agreement to sell Phibro, its profitable but controversial commodity trading business, to Occidental Petroleum today puts the finishing touches on a slow erosion of a once-dominant bond trading and investment banking firm.
When Sandy Weill (pictured left) staged his 1998 coup -- combining Citicorp and Travelers, Salomon Brothers was a strong albeit humbled investment banking and trading force. Yet little by little, a succession of financial crises, Wall Street fashion and regulatory intervention has whittled away at the once-dominant firm.
from Summit Notebook:
By Neil Chatterjee
The U.S. has promised it will hunt down tax evaders.
And it seems tax evaders are on the run.
DBS bank, based in the growing offshore financial centre of
Singapore, told Reuters it had been approached by U.S. citizens
asking for its private banking services. But when told they would
have to sign U.S. tax declaration forms, the potential clients
Swiss banks also approached DBS on the hope they could
offload troublesome U.S. clients to a location that so far has
not been reached by the strong arms of Washington or Brussels.
DBS said no thanks. In fact many private banks and boutique
advisors now seem to be avoiding U.S. clients.
Will this spread to other nationalities, as governments
invest in tax spies and tax havens invest in white paint?
Is this the end of offshore private private banking?
Isabella of Castile was a controversial woman. A woman who made history for herself and her country. She has been called saint and a tyrant, but never before a hedge fund manager.
Nowadays most hedge fund managers who use leveraged trading strategies such as relative value to exploit pricing inefficiencies employ multiple prime brokers.
from Global Investing:
Direct and indirect foreign investors fled from Africa as the credit crisis sparked a flight to safety, or at least familiarity, but Ayo Salami, manager of the Duet Victoire Africa Index fund believes domestic demand can step in to underpin growth.
Giampaolo was speaking today at the London leg of the Reuters Hedge Fund and Private Equity Summit.
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from Global Investing:
Just how much have world stocks suffered in the past year or so? Try this. According to the World Federation of Exchanges, the market capitalisation of global stock markets has halved. It was $63 trillion in October 2007. At the end of January this year it was only $31 trillion.
It has all been more furious than most people can recall as well. When the internet-stock bubble burst at the beginning of this decade, MSCI's all-country world stock index lost around 51 percent of its value from peak to trough. In the latest drop, the index fell 58 percent from an all-time high in November 2007 to a new cycle low yesterday.