Investment Management Fees: Is Competition Working?
The latest edition of bfinance’s Investment Management Fees series reveals substantial price reductions in Absolute Return Bonds, Emerging Market Equities, Fund of Hedge Funds and more.
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Direct Lending: to Cycle or Not to Cycle?
DNA of a Manager Search: Real Estate Debt
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Manager Intelligence and Market Trends - January 2020
Real Asset Debt: Lessons from Manager Selection
How Can Trustees Ensure Value for Money?
Investor Spotlight: Small Insurer Boosts Sophistication, Adds Alternatives
Hedge Funds Bounce Back, but Big Test Remains
Insurers and Investment Risk
Tackling Hidden Costs in FX Management
Investor Spotlight: Railpen Pursues Smart Insourcing
Manager Intelligence and Market Trends - November 2019
What Does “Paying for Alpha” Really Mean?
Investor Spotlight: Getting Real on Real Asset Returns
Investor Spotlight: Insurer Pioneers New Model for Investment Delegation
Five Levers for Reducing Equity Risk
Tackling Hidden Costs in US Private Debt
Manager Intelligence and Market Trends - August 2019
Green Bonds - Sector in Brief
Investor Spotlight: How Alberta Teachers’ is Investing ‘Between the Seams’
Private Debt: Do Fewer Covenants Really Mean More Risk?
Event Driven Investing - Sector in Brief
Investor Spotlight: How QSuper Halved Risk Without Losing Return
Small Cap: Old Questions, New Answers
Investors are demonstrating appetite for small cap equity strategies late in the market cycle. Yet the motivations for seeking small cap are evolving and the product universe has changed.
China A-Shares - Sector in Brief
Amid the escalating US/China trade war, no asset class has endured more collateral damage than Chinese equities. Yet active managers have delivered stronger results. This brief research note outlines key issues and considerations for investors.
Which EM Equity Managers Are Beating the Market Co...
October brought the most painful month of the year so far as the MSCI Emerging Markets index fell by 8.7%.
Manager Intelligence and Market Trends - November ...
The past year has seen a surge in manager selection projects handled by bfinance for a growing number of clients around the globe.
Asset Owner Survey 2018
In mid-2018, 485 investors around the globe with assets approaching USD$8 trillion participated in a study on investment and organisational strategies.
‘Real Asset’ Debt Evolves, Draws New Investors
Among the 485 investors studied for bfinance’s new Asset Owner Survey, 18% have either recently entered Real Estate Debt for the first time (within the last three years) or plan to do so in the coming year.
Am I Paying the Right Fee?
When it comes to paying external asset management fees, there are two certainties: managers will tell you that you’re getting a good deal, and consultants will tell you they get you a great deal.
Late-Cycle Volatility and Active Management
In bfinance’s recently published Asset Owner Survey, just over half of investors expressed the belief that market conditions over the coming twelve months should favour active equity manager performance versus passive strategies while only 10% disagreed.
Private Equity and the Hunt for Control
One of the most interesting trends in private equity through the last decade is the increasing demand among investors for control.
Australian Investors Lead Global Cost-Cutting Tren...
Investors in Australia and New Zealand lead the world in terms of improving efficiency, reducing fees and introducing new strategies, according to fresh asset owner research.
Alternative Risk Premia
Are Alternative Risk Premia Strategies Proving the...
This year has been something of a roller-coaster for traditional markets, particularly equities following a period of sustained low volatility and positive returns.
Manager Selection and the #FakeInfra Debate
For institutional investors thinking about LISTED INFRASTRUCTURE, particularly in light of the still-heated “#FakeInfra” debate, three questions are high on the agenda.
Manager Intelligence and Market Trends - August 20...
Our quarterly snapshot of the key developments within equity, fixed income and alternative investments, including analysis of which asset manager groups performed well and which didn't.
Do Active Currency Overlays Beat Passive Hedges?
Have enhanced (active) currency overlays outperformed static currency hedging in recent years?
Going Global in Real Estate
Why are there still so few “global” real estate funds, and what are the options for investors seeking global exposure?
CAT Bonds and ILS: Three Manager Selection Pitfall...
As we reach one of two major annual windows for contract renewals in Insurance-Linked Securities, asset owners are watching closely to see whether the recent rise in premiums will be sustained or reduced.
Does Japan’s ESG Trend Go Beyond the “G”?
“ESG” certainly wasn’t a buzzword in Japan five years ago. While a recent surge in responsible investment news from the country has raised the profile of this issue, we wondered: are the headlines being mirrored in local equity managers’ engagement practices?
What Volatility in Q1 Revealed about Alternative R...
In a rocky round-trip, January saw trend-following and equity-focused strategies soar while February brought sizable losses for many trend-following and short volatility factors.
Private Market Secondaries: Sector in Brief
The flood of capital towards illiquid asset classes has produced a transformation in the secondary markets.
Manager Intelligence and Market Trends - May 2018
Our quarterly snapshot of the key developments within equity, fixed income and alternative investments, including analysis of which asset manager groups performed well and which didn't. The first quarter of 2018 has seen a significant inflexion point in market participants’ apparent risk appetite.
DNA of a Manager Search: Commodities
Commodity investment is back in the spotlight. This paper - part of the DNA of a Manager Search series -explores one pension fund’s hunt for an enhanced commodity overlay manager. We hope that it will give peers greater insight on the different strategies and implementation structures available.
Seven Shades of Multi-Asset
Multi-asset fund performance has been under fire in the first quarter of 2018. Many investors were left underwhelmed by 2017 results. Yet this sector is increasingly broad and complex.
Pensions, Pooling and Private Markets
Many of our LGPS clients have pushed ahead strongly with new private market investments rather than ‘waiting for the pools.’ Last week brought the latest example: a private debt search by five London boroughs who are also members of the London CIV group.
Rethinking Real Assets
While the post-GFC phase was marked by diversification towards real assets, recent years have seen greater emphasis on diversification within real assets. How beneficial is this type of diversification, particularly in the later stage of the market cycle? With both asset owners and asset managers now taking a more integrated approach to this sector, what are the implications and complications?
Smart Beta - the Next Generation
Investors today are being presented with an increasingly diverse menu of smart beta strategies. The newest products claim to incorporate the latest research innovations, particularly those relating to construction and implementation. This new generation is particularly evident in “multi-factor smart beta” - the most complex sub-sector, from an implementation perspective.
MBS and Securitised Credit: Sector in Brief
Asset managers are encouraging investors to look at securitised credit (MBS / ABS) in the current climate. While the pitch is compelling, there are notable headwinds to consider and there have been significant changes since 2013, such as the rise of new instruments and a changing asset manager universe. This brief note offers a fresh look at the sector.
Manager Intelligence and Market Trends - February ...
Our quarterly snapshot of the key developments within equity, fixed income and alternative investments, including analysis of which asset manager groups performed well and which didn't. Q4 rounded off a surprisingly risk-hungry year as positive economic data overshadowed persistent geopolitical concerns.
Is This the Moment of Truth for Multi Asset Credit...
Three years ago, we witnessed a wave of investment in Multi Asset Credit (or “MAC”) strategies. Not to be confused with Absolute Return or Unconstrained funds, which also experienced a surge in popularity, MAC products were marketed with a yield-boosting agenda and an eye towards upcoming rises in interest rates. Their performance has largely failed to impress, but now may be the time for these strategies to deliver....
Trade Finance: Sector in Brief
For most asset owners, trade finance - a quiet and esoteric member of the alternative credit family - has only appeared on the radar as a potential investment strategy during the past five years.
Emerging Market Debt: to Blend or Not to Blend?
For EMD investors, one key decision has dictated performance over the past decade: the use of local versus hard currency bonds. Meanwhile, ‘Blended EMD’ funds have become increasingly popular. But what are these strategies really designed to accomplish and how are they performing?
The Hurdle Rate Debate: Are Private Debt Managers ...
Amid the latest round of Direct Lending fundraising, a disturbing theme has started to emerge. Many managers, it seems, are rather keen to lower their hurdle rates – the point at which lucrative catch-ups and performance fees kick in. It is a step that a number of their private equity counterparts have already taken.
DNA of a Manager Search: Infrastructure
Under scrutiny, three recent Infrastructure manager searches reveal significant changes in exposures and strategies as funds reach for returns.
Sector in Brief: Agriculture and Timberland
Timberland is a relatively established, albeit small, asset class. In the past three years, however, a distinctive new group of agriculture funds have come onto the scene, encouraged by investor appetite for niche real assets.
bfinance’s quarterly report in November 2017: read the team’s latest insights on institutional investor activity, risk appetite, market developments and asset manager performance across all major asset classes.
Investing in the 'Infrastructure 3.0' Era
The financial crisis ushered in a new era of unlisted infrastructure investment. Three trends - high appetite for illiquid investments, the desire to reduce equity risk exposure after the lessons of 2008 and the subsequent need for income generation in an era of low rates - converged to create a ‘perfect storm’ of demand.
New Equity Perspectives
The latest bfinance data reveals major changes in institutional investors’ equity mandates through 2017. This collection of articles explores the most significant shifts and addresses key debates within emerging market equities, ESG integration and active/passive management.
Emerging Market Equity and the ESG Challenge
The resurgence of investor appetite for emerging markets is proving to be the most significant allocation trend of 2017, at least according to bfinance data on new mandates. The positive macro tailwinds witnessed in the aftermath of President Trump’s election have simultaneously sent emerging market equity to the top of the performance rankings.
Will the ‘Real Active Managers’ Please Stand Up?
The year was 2009. Amid a climate of investor cynicism, disappointment and self-examination, two papers were published that would fundamentally change the way that the investment industry viewed active equity management.
Is ESG Compatible with Passive Management?
We were recently invited by FT’s Pensions Expert to provide an article debating the potentially thorny question: Is ESG Compatible with the Rise of Passive Management? This brainteaser was born out of a plausible tension between two of this decade’s most significant trends.
On the Hunt for Liquid Alternatives
Diversification is a very personal property. The definition of a good diversifier varies with each investor’s existing exposures, liquidity profile and risk tolerance, as well as the market environment. Today, one of the most significant allocation trends among bfinance clients appears to be a shift towards liquid diversifying alternatives.
How Have Alternative Risk Premia Strategies Perfor...
There is now a critical mass of Alternative Risk Premia managers with live track records near or above the three-year mark. And their performance is illuminating…
Managing Currency Risk in a Two-Speed World
Today’s climate raises new FX-related headaches for investors, provoking a rethink of historic decisions to hedge currency risks, leave them unhedged or delegate to fixed income and equity managers. Active currency overlays appear to be increasingly popular.
Sub-Advisor Funds of Hedge Funds: Sector in Brief
The ‘sub-advisor fund of hedge fund’ (or ‘fund of sub-advisor’) model is the latest innovation to disrupt the hedge fund sector.
Investment Management Fees: New Savings, New Chall...
New bfinance data reveals falling fees in several sectors, especially where providers have been under pressure from cheaper competitors or the investment landscape has evolved.
Direct Lending: What’s Different Now?
The pile of dry powder chasing corporate direct lending has never been higher. Yet, with rising risks, a deep understanding of what’s under the bonnet is increasingly vital to successful implementation. Explore the recent spread compression, the changing composition of senior debt funds and the evolving nature of unitranche loans.
Fund of Hedge Funds Cut Fees to Regain Lost Ground...
Investors’ costs have never been more vigilantly scrutinised than they are today. New bfinance data published in Investment Management Fees: New Savings, New Challenges (May 2017) reveals falling fees in several sectors, especially where providers have been under pressure from cheaper competitors or the investment landscape has evolved.
Private Debt: Why Does Unitranche Evolution Matte...
Unitranche loans, which increasingly dominate European private debt funds and also play a key role in the US market, were only invented a decade ago. GE and Allied Capital (later Ares) teamed up to offer a single-tranche of lending where the first-out position was provided by GE and the second-out by Allied.
Taxable Municipal Bonds: Sector in Brief
The persistence of a record low-yield climate has increased the appetite of international investors for this high-quality asset class.
DNA of a Manager Search: ESG in Private Debt
Throughout 2016, innovative ESG-focused pension funds have sought ways to integrate sustainability factors in asset classes where these considerations are not necessarily mainstream. One such investor is the Environment Agency Pension Fund: their September 2016 search for a private debt manager placed ESG issues high on the priority list.
ESG Under Scrutiny: Lessons from Manager Selection...
Environmental, social and governance considerations are increasingly important across all asset classes. Yet ESG priorities and principles varying hugely among investors, creating interesting dynamics in manager search and selection.
The Changing World of Alternative Beta
When implementing an allocation in the rapidly-growing alternative risk premia (“alternative beta” sector, a great deal can fall through the cracks between theory and practice.
Absolute Return Fixed Income: Sector in Brief
The increasingly popular Absolute Return fixed income space includes a diverse group of strategies and labels: Unconstrained Bonds, Multi-Asset Credit (a.k.a MAC), Strategic Bond and Fixed Income Opportunities.
Global Sharia Equity: DNA of a Manager Search
A detailed examination of a recent Global Equity search for an investor for whom Sharia compliance was critical. Part of bfinance’s popular ‘DNA of a Manager Search’ series.
Hedge Funds: CTAs Deliver Strong Fundraising Despi...
Although CTAs bounced back in the fourth quarter of 2017, with the return of trending markets, full-year performance figures for managed futures have proven lacklustre, if considerably better than the broadly negative results of 2016.
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