13 Oct 2017

Deutsche Bank: Lacks top managers

This article points to a weakness in the bank's staff development program. It should be one of the key - if not the key - responsibilities of Top Management to make sure that enough talented managers are moving through the ranks.
Temple Associates is able to conduct a 'Talent Audit' and put 40 years of experience at the disposal of your company.

Manager Magazin

7 Oct 2017

Zero Fund Management Fees?

Maybe at first sight it appears reasonable to wave any fund management fee if the performance does not match the agreed benchmark. And why not ask the fund manager to make a penalty payment as well? But to be serious, any business that agrees to a zero fee would not be viable in the long run. Better to agree fees to be calculated on a (three year?) rolling basis and set the fee in a narrow zone, for example basic 1% and a band of +/- 0.5% to adjust for over/under performance?
Bloomberg

5 Oct 2017

Bitcoin: What is the Value of Hot Air?

Let self-interested promoters and their acolytes in the Media invest their hard-earned savings in a bit of (hot) air, or better: some digits in a far-away computer that nobody controls. Shares (hopefully) pay dividends, bonds pay interest, land can be rented out, but bitcoins and the like? Nothing but the hope of finding a Greater Fool down the road.
And Bitstamp, a 'digital currency exchange', should it not be banned from calling itself as an exchange by the SEC and fellow regulators? No surprise that its chairman sings the praises of 'crypto' 'currencies' (their are neither crypto nor currencies, you might as well start paying your groceries with some rare shells)
CNBC

27 Sep 2017

Invesco may acquire Guggenheim ETF Biz

All very well, consolidation, getting critical mass etc - but is 3% of AuM not a bit rich for a business with wafer-thin (and still trending down, towards zero?) margins?
Invesco may acquire Guggenheim ETF business

20 Sep 2017

McKinsey's Spur der Verw├╝stung - Inside Paradeplatz

Maybe a bit exaggerated, but there is an element of truth in it. The fees charged by Management Consultants - esp. the largest ones - are out of line with the benefits they often bring. Fees are paid independent of ultimate results, if they are below par there is no chance to get reimbursed. And quite often the gruntwork is done by very junior staffers that never had any real business experience. But the fees that are charged for them do not reflect this. So why not use someone with frontline experience gained over many decades, over many market cycles and in many company cultures?

McKinsey's Spur der Verw├╝stung - Inside Paradeplatz

13 Sep 2017

MUFG said to pick Amsterdam for Securities Base after Brexit

The Securities Diaspora gathers pace. There is only the little problem of human 'resources' to consider. While Japanese and Expats from other countries (less so) can be shifted quite easily - how about the workforce that has its roots in London? And how easy will it be to find willing recruits in London, Paris or other centres that will consider job offers in a smaller regional centre - however brilliant some aspects or life might be there? And managing dispersed teams all over Europe will be a major challenge for management!
(Bloomberg)

30% of Bank Jobs May Disappear in Next Five Years - Former Citi CEO

Vikram Pandit, who ran Citigroup Inc. during the financial crisis, said developments in technology could see some 30 percent of banking jobs disappearing in the next five years.

8 Sep 2017

Investment Management: No limits to Size?

Talk of (inevitable?) concentration in the Investment Management universe must lead to the obvious question: is it really inevitable as many consultants and industry bigwigs are saying or is there a natural limit to ever-expanding amount of aum among the industry giants such as Vanguard, Blackrock or JP Morgan?
There may well be the result of at best matching the investment benchmarks (minus fees, costs) as the sheer size of portfolios makes any meaningful divergence from the benchmark more and more impractical. So even active management will be not much different from passive management the bigger a provider becomes.
Product differentiation may provide a (temporary)?) solution as the myriad of strategies can again try to be nimble small fish in a big pond. So effectively big investment houses become a congregation of investment boutiques under the same roof - be they separate subsidiaries (as at Natixis for example) or just different teams under the same umbrella.
Which leads to the next conclusion: if boutiques are the way to at least try to make active investment management work who is to say that free-standing boutiques or even mid-sized firms are necessarily at a disadvantage? Everybody knows where the big pools or money are and digital distribution channels will keep the costs garnering assets under control.
Largest US pension fund CalPERS in talks with BlackRock to outsource buyout business, source says

Top Execs sell stock before bad company news breaks

When well-paid (overpaid?) top executives behave like this one should not wonder that Capitalism and the Market System increasingly lose public support. It is only fortunate that the average citizen is not really able to properly put such blatant abuse of position into proper perspective. After all, how many do really understand what a million dollars (life changing amount for 99% of the population) means? The maths scores tell a story! And it will be interesting to see how regulators and the trustees of the savings of ordinary people (aka investment managers, private bankers) and the corporate and 'socially responsible' investment crowd are going to do about this.
http://www.marketwatch.com/story/equifax-executives-sold-stock-after-data-breach-before-informing-public-2017-09-07?siteid=rss&rss=1

7 Sep 2017

Diamonds are Forever?

Lending ONE BILLION against some baubles supposed to be in envelopes or safes? NUTS! Did they never hear about the Great Salad Oil Swindle in the early 1960's? What do these risk managers do? Do the 'Elite' Business Schools teach them the basics?
https://www.bloomberg.com//news/articles/2017-09-07/how-standard-chartered-lost-400-million-on-risky-diamond-debt