20 Apr 2021

Credit Suisse troubles due to wrong Leadership Development

Media Pundits and Deal Makers are keen to give free advice to Credit Suisse - sell this, spin off that - especially with reference to its Asset Management unit. But one thing should not be forgotten: there is no clear rationale against combining Retail, Investment and Private Banking and Asset Management as JP Morgan demonstrates. What is required, however, is superior management, and that means having the right people in charge. This means not only hiring potential saviours or mercenaries from outside but creating a HumanResource strategy that develops and fosters talent from the bottom up as demonstrated by GoldmanSachs. Neither the Chairman nor the previous CEO had any proper training as a banker. Head of Risk Management had no previous trading experience or appropriate qualification for the role.

19 Apr 2021

Are CVA's undermining Real Estate Investment?

The widespread practice of reducing rent obligations is leading to problematic outcomes. The UK restaurant chain Leon just last December completed a CVA and today's media report that the operation is sold for an eye-watering amount, giving the founders a substantial multi-million pound pay-off. One has to assume that the sale was made much easier now that the rent bill was reduced - at the expense of the landlords one has to assume (happy to hear about details of the CVA in case you are privy to the information).

12 Aug 2020

Outsourced CIO (OCIO) - solution of fad?

Basically the OCIO (or 'fiduciary') approach to manage institutional portfolios is a move back to what once was popular as the 'balanced' approach to portfolio management. The provider is given more or less discretionary authority though tailored constraints transfer more or less responsibility back to the client. The more constraints are included in the mandate the less responsibility for the ultimate performance can be pinned on the OCIO and in the end the whole thing ends up in a messy outcome where each side blames the other when results are sub-par.
Reading this statement from the quoted report one has to wonder whether or not those responsible for the management of the portfolios are really qualified for their tasks.

The Pandemic Is Spurring OCIO Growth. Transparency Will Follow 

"Crises cause many institutional investors to realize that they are not comfortable or properly structured to effectively navigate a volatile, complex, fast-moving capital markets environment under the traditional consulting relationship, much less fully independently."


27 Jul 2020

Limits of Homeworking

All very well, we all will sit on our sofas and - between walking the dog and helping with the housework - do our work on the pc and telephone. But all this new thinking falls down in one important aspect - how to bring new people, experienced and - more importantly - those starting their career - into the business. You cannot just have a fresh graduate sit at home and being taught all the ins and outs of the job. Sooner or later any organisation will be short of talent and will have to face the fact that office life will have to be resumed. Organisation like large retail banks are more and more similar to a utility and basically just have to make sure that a lot of routine transactions get handled smoothly - but this indicates that they are also very easy to be replaced by upstarts that can perform these functions cheaper and more efficiently.

Wuhan Virus turns City into a Ghost Town

One piece of consolation, the cities that want to steal London's crown will not be in a much different position, what price an office tower in Frankfurt or Paris? Always thought the vast expanses of entrance lobbies in the towers were an absurd waste of money, one or two receptionists and a lonely plant, in addition to the inevitable 'security' personnel....and is there really enough business for the cast of thousands employed by the major banks, brokers, lawyers and accountants?
Virus turns City into a Ghost Town

ESG creates quagmire for Fund Managers

And business in general. The demands from lobbies and interest groups will expand and no action by managers and businesses will be enough to satisfy them. Once pandora's box is opened issues that really should be settled in the realm of politics will lead to never-ending complications for what should really be the priority for business and investment - obtaining profits or a satisfactory performance for savers.
Boohoo supply chain allegations reveal challenges facing ESG investors

31 May 2020

London is Top City Brand

London is the world’s top “City Brand”, with Sydney, Paris, New York, and Rome rounding out the top five, according to the people in ten countries surveyed for the Anholt-Ipsos City Brands Index.

27 Nov 2019

Let Politicians sort out Climate Change

And Fund Managers should get on with doing their job, which is find good investments for their clients. Has ANYONE ever heard of this 'ThinkTank'? (and should many of them not just simply be called non-representative/unelected lobbies?). So who should care about the latests moan (sorry, 'Report') by 'InfluenceMap'? Why should companies and shareholders, and the investment managers accept lock, stock and barrel what is bandied about regarding 'Climate Change'. Let politics set rules in a democratic fashion, that is its role and business and investors can work in the framwork that is given. Everything else is just Virtue-signalling - esp as long as the 100 pound gorilla in the Climate 'Emergency' discussion, rampant growth in world's  Population, is swept under the carpet.
Biggest Asset Managers not holding Companies to account on Climate Change 

21 Oct 2019

Fund Management Consolidation - a caveat

Anath Capital acquires Stratton Street  and will integrate the credit fund manager's $500 Mio AuM with its Garraway Capital subsidiary to bring combined AuM to $ 1 Bio.
While consolidation in the Asset Management space continues it will not end in a completely oligopolistic landscape. The bigger the dominant firms become the less able they will be to differentiate their products or achieve outperformance. This will always leave room for up-and-coming managers - apart from the human desire to run their own business rather than being stuck in huge bureaucracies.

26 Apr 2019

Asset Managers strive to cut Banks out of Forex Dealing

Not sure that FX trading is such a significant drag on performance. Maybe fund managers should just do less frantic in- and out trading. And trying to find counter parties directly at the right time and right size is not going to offer significant rewards. Who wants to take the other side of a 1 billion trade when one knows that the other side HAS to trade?
Asset managers strive to cut out banks from forex dealing