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Calculus Invests in Digital Admin Firm
FundsPensions

Calculus Invests in Digital Admin Firm

Private equity fund manager Calculus Capital has invested £2m – via its EIS Fund – into a digital administration services provider that is helping to deliver a low-cost revolution in the pensions, savings and investment industries.

Through its proprietary technology platform, Quai provides white-label administration services for personal savings products at a fraction of the costs currently borne by traditional providers.

Quai was established in 2011 by a team of former Legal and General, Brewin Dolphin and BNP Paribas Securities Services executives. The founders recognised that legislative and regulatory changes such as auto-enrolment, the Retail Distribution Review and the Solvency II Directive would fundamentally change the way wealth managers, insurers, banks and other pension and investment companies provide savings products to individuals.

Mass distribution of individual savings plans, combined with the elimination of commission payments are forcing providers to offer high-volume, low-margin saving plans – a process that is being further accelerated by the proposed Government cap on pension scheme costs.

However, the legacy systems of providers are increasingly unfit for the demands of this rapidly evolving landscape, driving a need for more advanced technology to reduce administrative costs, increase capacity and improve efficiency.

Susan McDonald, chairman of Calculus Capital, said: “Providers are having to manage more pension schemes, savings and investment products at a lower unit cost, whilst struggling with inefficient legacy systems and processes. Established operators must choose whether to build bespoke in-house systems to administer mass-market products – which is likely to be extremely expensive and time-consuming – or to outsource to a service supplier with a fully developed platform. Quai’s platform is regarded as one of the most advanced and cost-effective third-party solutions and is therefore generating a great deal of interest from major financial institutions.”

Quai’s outsourced service is built on a proprietary technology platform incorporating a full service portfolio management system. It allows banks, insurance, pension and investment businesses to efficiently administer extremely high volumes of savings plans through automated systems, straight-through processing, online functionality and multi-currency individual and model portfolio management services.

Ms McDonald adds: “Our investment should provide Quai with the breakthrough capital it needs to convert current levels of interest in its platform into signed contracts. The funding will support Quai in the completion of several deals with key UK financial institution that are keen to benefit from the company’s services as soon as possible.

“It also provides extra resources so the company can continue to develop and enhance its systems and focus more efforts on business development.”

Tony Webb, Quai managing director, adds: “Calculus’s investment comes at a crucial stage in our growth and development. There is a huge need for our services and technology platform; investment and pension administration systems are effectively creaking under the increased demands placed on them by the need to roll out mass-market products. Unless they take action this strain on their back-office systems is likely to result in potentially costly and damaging problems occurring. With our focus on high efficiency systems, we are able to resolve these problems and reduce costs to our clients and their end customers.”

Claranet Shows Strong Growth
Corporate Finance and M&A/DealsFinance

Claranet Shows Strong Growth

Claranet has released its financial figures and reported a growth of 47 per cent, with turnover across the European Group increasing to £103m (€124m) over the last year (2012/13).

The financial results follow the first anniversary of two key acquisitions, Star (in the UK) and Typhon (in France), which the company made at the end of 2012, and reflect a year of strong performance across the business – with key customer wins and the successful integration of the new acquisitions into the Claranet Group.

Commenting on the last year, Charles Nasser, CEO of Claranet, says: “Our rapid growth this year has positioned Claranet as one of the largest independent managed services providers to mid-sized companies in
Western Europe.

“Our business approach ensures that we focus on the long-term future of the business, to benefit our customers and our staff over time. This means that we continue to invest in developing our services and processes as the company grows, and as the needs of our customers evolve.”

With the increasing consolidation of providers in the technology space across Europe, the acquisitions of Star (in the UK) and Typhon (in France) have ensured that Claranet is well-placed with a broader market offer, following the addition of communications services to its existing portfolio of network and hosting solutions.

The latest financial results top off a year that has seen Claranet positioned as a leader in the Gartner Magic Quadrant for European Managed Hosting, and win two industry Awards – for Entrepreneur of the Year for Charles Nasser (Datacentre and Cloud Awards, in June) and for the Best Customer Service Strategy Award (SVC Awards, in November). These highlights are combined with several significant customer wins that include River Island, Veolia, Lyons Davidson, Total, Elior UK Ltd, N24, Action For Children, Warner Brothers, Radley, Airbus and Peugeot/Citroen, to name just a few.

Commenting on the financial results, Nigel Fairhurst, Chief Financial Officer, Claranet Group, says: “We have achieved what we set out to in these acquisitions, expanding the portfolio with a wider offering for customers, yet ensuring that we took advantage of synergies when bringing the
businesses together.

“This has led to recurring EBITDA on a like-for-like basis, increasing by 95% year-on-year. In addition, the strength of the wider business is reflected in the contracted future revenue for the Group, which was in excess of £167m (€195m) at the end of the FY13, an increase of almost 100% on the previous year. This reflects both the size of the new contracts and the continued trend towards longer contracts.”

Charles concludes: “We are seeing a rapidly maturing cloud services market that is consolidating towards a smaller number of regional players at the mid-market level. Our strong growth last year was underpinned by the successful integration of our acquisitions into the business. Our plans are ambitious and as we look ahead into 2014, we expect the year to be one of further rapid growth and expansion for us across our Western
European market.”

 

Investec Specialist Corporate Capital Strengthens
Corporate Finance and M&A/DealsFinance

Investec Specialist Corporate Capital Strengthens

Investec Specialist Bank has announced the appointment of Tim Howson to its Corporate Lending business.

Tim joins the Specialist Corporate Capital team, headed by Callum Bell, which originates, structures and arranges finance for transactions by financial sponsors and corporate clients with an enterprise value of between £100 million and £500 million.

Tim joins Investec from Jefferies & Co, where he was Senior Vice President in the Leveraged Finance team. Tim was responsible for the origination and execution of leveraged loan and high yield bond financings to support financial sponsors and corporate acquisitions. As part of this role, Tim also worked on refinancing transactions across Western Europe, CEE and MENA. Prior to this, Tim worked in the Leveraged Finance team at UBS Investment Bank and the mid-market Leveraged Finance team at Barclays, both based in London.

Callum Bell of Investec, said: “Tim’s appointment reflects our continued strategy of supporting corporate clients and financial sponsors in the mid-market. His origination and lending experience will support the team’s growth ambitions and reiterates our commitment to offering financing solutions to our clients to support their growth.”

Tim Howson said “I am excited to be joining Investec at this time and working in an ambitious, fast developing team focused on building long term relationships with corporates and financial sponsors, delivering financial solutions that help to add value for our clients.”

350IP Beats Targets
Corporate Finance and M&A/DealsFinance

350IP Beats Targets

350 Investment Partners (350IP), managers of The North West Fund for Energy and Environmental, has exceeded 2013 portfolio targets, investing in seven new clean tech and green energy companies across the region.

2013’s financial successes have been particularly beneficial to the Liverpool City Region, which received 30 per cent of the fund’s total financing for
the year.

The portfolio target for the end of 2014 was to have 14 companies on the books, with 350IP achieving this one year before it was scheduled.

Investment for the last year stands at £6.1m, accounting for more than half of the £11.7m invested since The Fund launched in 2011. With several more deals anticipated in the coming months, The Fund aims to be fully committed by the end of the year.

The North West Fund for Energy & Environmental is part of The North West Fund which is financed jointly by the European Regional Development Fund and the European Investment Bank.

The evergreen fund provides investment to environmentally conscious enterprises, and promotes energy efficient business nationwide. This year saw seven new companies added to its portfolio, including Acoustic Sensing Technologies, MHA Lighting, PVC Recycling, Community Switch, Arvia Technologies, Sign Lights and Stopford Projects.

The new businesses join Acal Energy, Imperative Energy, EcoLogicLiving, PlaceFirst, Ultromex, SenseLogix and CableSense in helping The Fund succeed its original target of 14.

Adam Workman, partner at 350 IP, said: “This year has seen us get involved with some really exciting companies. We’re proud to support the sector and put the region on the map as a centre for green energy excellence
and innovation.

“We’re looking forward to further extending our investments this year and engaging with more socially aware enterprises that continue to enhance the UK economy and wider environment. We could be fully committed by the end of this year which is an extremely exciting prospect.”

Global AUM to Exceed $100tn
CommoditiesMarkets

Global AUM to Exceed $100tn

Research from PwC predicts that global assets under management (AuM) will rise to around $101.7 trillion by 2020, from a 2012 total of $63.9 trillion. This represents a compound annual growth rate (CAGR) of nearly 6 per cent.

The report, Asset Management 2020: A Brave New World, also finds that assets under management in South America, Asia, Africa and Middle East economies are set to grow faster than in the developed world in the years leading up to 2020, creating new pools of assets that can potentially be tapped by the asset management (AM) industry. However, the majority of assets will still be concentrated in the US and Europe.

PwC predicts that assets under management (AuM) in Europe will rise to $27.9 trillion by 2020, from a 2012 total of $19.7 trillion. This represents a CAGR of 4.4 per cent.

Global AuM growth will be driven by pension funds, high-net-worth individuals (HNWIs) and sovereign wealth funds. At the client level, the global growth in assets will be driven by three key trends:

• The increase of mass affluent and high-net-worth-individuals in the South America, Asia, Africa and Middle East region.

• The expansion and emergence of new sovereign wealth funds (SWF) with diverse agendas and investment goals.

• The increasing defined contribution (DC) schemes partly, driven by government-incentivised or government-mandated shift to individual retirement plans.

In 2012, the AM industry managed 36.5 per cent of assets held by pension funds, sovereign wealth funds, insurance companies, mass affluent and high-net-worth-individuals. If the AM industry is successful in penetrating these clients assets further, PwC believes that the AM industry would be able to increase their share of managed assets by 10 per cent to a level of 46.5 per cent, which would in turn represent $130 trillion in Global AuM.

Rob Mellor, Asset Management 2020 leader at PwC, said: “Amid unprecedented economic turmoil and regulatory change, most asset managers have not had time to bring the future into focus. But the industry stands on the precipice of a number of fundamental shifts that will shape the future of the asset management industry.

“Strong branding and investor trust in 2020 will only be achieved by those firms that avoid making mistakes that attract the ire of investors, regulators and policymakers. Asset managers must deliver the clear message that they deliver a positive social impact to investors and policymakers. The efforts required to satisfy investors and policymakers cannot be left to others.

“The coming years will bring the industry higher volumes of assets than ever before which places more responsibility on firms to manage these assets to the best of their collective ability. Asset managers must clearly outline the value they bring to customers while being fully transparent over fees and costs.”

Confluence Launches in Dublin
FundsInfrastructure

Confluence Launches in Dublin

 

Confluence, the global leader in investment data management automation, has continued its expansion by opening an office in Ireland.

Regulatory challenges such as AIFMD have meant that fund managers are increasingly looking to data automation to help manage their investments. Located in Dublin’s popular Silicon Docks district, the new operation extends Confluence’s European presence beyond London and Luxembourg, where the company has serviced the European asset management industry since 2006.

Despite the increase in regulation, many fund managers still rely on manual spreadsheets to track investments that make up a multi-trillion dollar industry. Confluence has been working to create a smooth, automated process which saves time and improves accuracy.

Commenting on the opening, Skip Smith, Chief Operating Officer of Confluence said, “The global fund industry’s appetite for data consolidation and automation solutions is increasing. The Dublin office is part of our strategic plan to meet the rising needs of back office professionals. Our goal is to support asset managers and service providers as they look to solve the complex data management challenges associated with regulatory issues, and other cross-border
reporting challenges.”

Smith concluded, “Ireland is a financial gateway to the global fund industry and it was a natural next step for our business to open an office in one of the international fund jurisdictions. The Irish funds industry supports an innovative business environment within a renowned regulatory landscape and Ireland’s status as an international hub for the funds industry is deserved.”

Confluence provides data consolidation and automation solutions to more than 40 percent of leading global investment managers. Ireland hosts over 40 percent of global alternative investment industry fund assets and an infrastructure that provides distribution and domicile services to over 12,000 funds.

UK Growth Brings Skills Into Focus
FundsInfrastructure

UK Growth Brings Skills Into Focus

 

As UK businesses enjoy a positive start to 2014, a leading international training organisation warns that growth could be severely curtailed for those that fail to address their immediate
sales-base requirements.

Confidence in the UK economy is noticeably increasing, with falling unemployment and manufacturing and retail sectors recording strong growth. In fact, the International Monetary Fund puts UK growth at 2.4 per cent – stronger than any other European economy.

According to a recent CBI report, to truly fulfil this growth, Britain needs to close the gap between schools, colleges, universities and the work place with world-class apprenticeship and earn while you learn schemes.

Doug Tucker, Managing Director of Sales Commando, believes this needs to be taken a step further.

“With growth comes re-employment. Companies that laid people off during the recession are now desperate to build up staff numbers to fulfil increasing demand and competition. And it is going to become very competitive.

“The only way companies can compete to win as the economy rights itself is through sales. And that requires up-to-the-minute, professional sales training.”

Sales Commando recently polled its clients, not just in the UK but in all of the international markets within which it operates. Unsurprisingly, the biggest area of concern was the need “to sell better.”

“Bridging the gap between education and business is an on-going challenge and the CBI is right to champion this cause. But of equal importance is the need to equip sales forces with the ability to capitalise on a rapidly growing economic environment and changing realities by selling more effectively.”

Doug warns: “Companies that fail to sell better will fail ultimately as they’re surpassed by others who progress and expand. Now the UK is emerging from one of its most severe recessions of recent times, sales skills are being brought sharply into focus.”

Regulatory Change Slowing Growth
Corporate GovernanceRegulation

Regulatory Change Slowing Growth

 

New research from one of the world’s leading software and technology services companies has highlighted how regulatory change is second only to market volatility as an executive issue for financial services firms.

According to a survey, carried out by SunGard, with many new regulations taking effect during the course of 2014, in some cases it is even considered the number one strategic risk.

Senior executives are now concerned that regulatory change is distracting attention from core business activities and potentially hindering companies’ ability to grow.

Adapting to new regulations is also causing financial services firms to rethink their approach to compliance and restructure their organizations accordingly. Many, however, still do not feel ready for the changes taking effect
this year.

Key findings of the survey include:

Regulation is high on the executive agenda

• The pressure of dealing with change has expanded beyond compliance departments into the C-suite. One in two respondents warns that dealing with regulatory change has impacted shareholder returns and the ability to invest for the future.

• Almost half of respondents describe themselves as “highly stressed” by the current pressure of regulatory change, with little prospect of imminent improvement.

• The broad nature of regulatory change is driving a more cross-functional response within businesses. Best-in-class institutions are breaking through siloes, allowing for a more efficient response to the issue.

Despite ongoing efforts, readiness levels remain relatively low

• Only one in two companies say they are highly ready for the regulatory changes that they must confront throughout 2014 and 2015.

• Financial services firms plan to continue investing heavily in technology, people and processes over the next two years to cope with regulatory change.

Firms are starting to move beyond checking the box

• While recognizing the benefits of a culture change to compliance, forty percent of respondents are finding it challenging to move beyond a checking the box approach.

• Despite concerns that the degree of regulatory change is overblown, most firms responded in the survey that they accept the need for change and are moving along with their responses to new regulations.

Jeffrey Wallis, managing partner and president of SunGard Consulting Services, said: “The definition of what regulators are becoming concerned about is broadening to include areas such as operational risk, adding extra strain to the financial services industry.

“Our survey demonstrates that executives at the highest levels are struggling to marry ensuring regulatory readiness with maintaining a focus on day-to-day operations. In our work with firms on regulatory compliance, we see the most success when a business takes a combined approach to the twin challenges of growth and compliance.”

Sang Lee, managing partner, Aite Group, added: “Regulatory reform is putting the financial services industry under intense pressure, and the situation will not change in the near future.

“This pressure is being felt all the way up to the C-suite and the board. Regulatory uncertainty has forced some companies to put off key investments in new industries and geographies at a time when they are increasing their investment in compliance across departments.

“Regulations may be putting a strain on the industry, but we are starting to see some companies use them as an opportunity to reorganize themselves along more efficient lines. These businesses will be the future leaders in
the industry.”

H.I.G. Capital Strengthens London Team
BankingTransactional and Investment Banking

H.I.G. Capital Strengthens London Team

Leading global investment firm, H.I.G. Capital has announced that two experienced private equity investors, Johannes Huttunen and Johan Pernvi, have joined the London team.

Johannes was formerly at Silverfleet Capital where he worked on the origination and execution of transactions as part of the team in London. Before that he was at European Capital, working on UK buyouts, and in the healthcare M&A team at Deutsche Bank in London. Johannes has a first class honours degree in Management Sciences from the London School
of Economics.

Johan was previously a Senior Investment Manager at publically listed Swedish private equity company, Ratos, where he worked on buyout transactions. Before that he was at Bain & Co. Johan has an MSc from Stockholm School of Economics and a BSc from Lund University, School of Economics and Management.

Commenting on the appointments Paul Canning, H.I.G. London Managing Director said: “We are delighted to welcome Johannes and Johan. These appointments will further strengthen our team’s in-house operational, financial and strategic expertise as we continue to seek opportunities to drive value creation working with businesses in the mid-market.”

One in Four Not Ready to Retire
FundsPensions

One in Four Not Ready to Retire

New research from Prudential has highlighted how attitudes to retirement are changing, with nearly one in four (23 per cent) people planning to retire this year saying they don’t feel ready to stop working altogether.

Meanwhile 13 per cent of those who had been scheduled to retire have chosen to delay their plans because they don’t want to give up work just yet.

The research into the ‘Class of 2014’ is Prudential’s seventh annual study tracking the future plans and aspirations of people who plan to become new retirees this year. More than half (54 per cent) will consider working past the State Pension Age in an attempt to make their retirement more financially comfortable.

Around a quarter (23 per cent) would consider working full-time while 31 per cent would weigh up the idea of working on part-time. Ideally they would prefer to continue in their current job with reduced hours, with 32 per cent of those considering working past the State Pension Age suggesting that option is the one that would suit them best.

However, this year’s results highlight positive attitudes to retirement despite ongoing financial pressures. The main motivation for 57 per cent of this year’s retirees who would consider continuing to work past the traditional retirement age is to keep mentally and physically fit. More than a third (35 per cent) also cite the ability to boost retirement savings as a consideration, while 40 per cent simply enjoy working and 39 per cent don’t feel ready to retire just yet.

The study also found that the ‘Class of 2014’ are expecting a busy and enjoyable retirement – 53 per cent of those planning to retire this year intend to do more exercise, 37 per cent will be socialising more, while 36 per cent plan to take up voluntary or charity work. Around 29 per cent say they have no worries or concerns and are really looking forward to their retirement.

Stan Russell, a retirement income expert at Prudential, said: “For many people retirement is now a gradual process rather than a watershed where you simply stop working one day and become retired the next, and that is reflected in the change in attitudes shown by our research.

“However, there is no one size fits all solution to retirement and many people will be looking forward to leaving work as soon as they can. What is important is that people plan ahead for retirement and do as much as possible to ensure a comfortable retirement by consulting a financial adviser or retirement specialist well ahead of their planned retirement date.

“Working past traditional retirement ages is not solely driven by financial pressures and the research shows growing numbers of people wanting to carry on working because they enjoy it and because it keeps them stimulated mentally and physically. Increased life expectancy and improvements in general health are changing how we think about retirement.”

deVere Group Backs IFS Concerns
High Net-worth IndividualsWealth Management

deVere Group Backs IFS Concerns

One of the world’s largest independent financial advisory groups is supporting a leading economic think tank’s warnings about the UK’s reliance on tax revenue from a small number of better
off individuals.

It comes after its own research finds a growing number of the well-paid are looking to move themselves and their funds out of the UK.

The Institute of Fiscal Studies (IFS) is raising concerns that “lumping more taxes on the rich” is putting the country’s long-term finances at risk; whilst deVere Group reports that more than half (56 per cent) of its UK-based ‘high earner’ clients say they want to leave Britain within the next five years.

Nigel Green, founder and chief executive of deVere Group, comments: “The IFS is absolutely right to raise the alarm on ‘soaking the rich’ because these people, typically, have the resources to move to lower tax jurisdictions if the tax burden in the UK becomes too great. They are internationally mobile.

“Should they emigrate – and according to a recent deVere poll a high number very well could – government finances will suffer considerably because they contribute a disproportionately large amount to the state’s coffers. 30 per cent of all income tax and 7.5 per cent of total tax revenue is paid by those earning £150,000 a year or more.

He continues: “In a recent survey of more than 190 high earning clients, more than half revealed that they are considering a move to live and work or retire overseas within the next five years. The primary reason for this is that they feel taxation in Britain is stifling their financial ambitions.

“They tell us that they believe their hard-work, aspiration and success is being punished and they fear more punitive taxes on achievement could be on their way. As such, many are considering their options outside the UK.

“This should be a wake-up call for political leaders because the state is reliant on these people’s taxes.”

Mr Green concludes: “If the government is serious about having the better-off pay more tax, they should cut rates further and allow them to become wealthier. This would incentivise top achievers, who prop-up ‘The System’, to remain in the UK. However, I suspect that implementing this economically-sound philosophy would be political suicide for many politicians in the current climate.”

Pay-Day Loans Masking  UK’s Credit Crisis
BankingCash Management

Pay-Day Loans Masking UK’s Credit Crisis

Pay-day loan and ‘debt management’ industries could be masking the full extent of the personal debt crisis in the UK, according to top 25 accountancy firm, Wilkins Kennedy LLP.

The latest figures published today show that there were 101,049 individual insolvencies in England and Wales last year, down by 7% on 2012. This included 24,536 bankruptcies (down 22.8% on 2012), 27,546 Debt Relief Orders (DROs) (down 11.7% on 2012) and 48,967 Individual Voluntary Arrangements (IVAs) (up 4.9% on 2012).

There were 109,477 individual insolvencies in England and Wales in 2012. This included 31,756 bankruptcies, 46,694 Individual Voluntary Arrangements (IVAs), and 31,027 Debt Relief Orders (DROs).

However, Wilkins Kennedy note that the growth of the payday loans and debt management industry means that many individuals that are effectively bankrupt are not caught by these figures.

Louise Brittain, Insolvency Partner at Wilkins Kennedy says: “we know that massive and highly targeted marketing campaigns are attracting more and more individuals into using Debt Management Plans and Pay Day loans as ways to manage their debts.”

“In many cases the arrangements are rolled over from one month to the next, and because of the punitive interest or high, front-loaded fees, very little capital is repaid and the individual’s financial difficulties get worse, not better.”

“However, because these companies are not required to register their schemes, it is difficult to know exactly how big the scale of the problem really is. I am concerned that many people using Debt Management Plans and Pay Day loans will at best eventually end up formally insolvent or at worst taking desperate measures to repay their creditors.”

Wilkins Kennedy adds that this year’s bankruptcy figures are likely to be swollen by recent difficulties in the legal sector. The profession has been suffered as a result of legal aid cuts, and over 130 firms were unable to secure Professional Indemnity Insurance, without which they are unable to practice and must be dissolved.

Louise Brittain comments: “This has been a bruising year for the legal profession – with even major names like Cobbetts and Manches experiencing financial difficulty, and some smaller firms faring far worse. Problems with obtaining Professional Indemnity Insurance also put the nail in the coffin of over a hundred firms that were already struggling financially, forcing the individual partners to liquidate.”

Spain’s Largest SICAV Doubles Assets
BankingTransactional and Investment Banking

Spain’s Largest SICAV Doubles Assets

The inflows into Torrenova confirms March Gestión’s position as Spain’s most successful home grown asset management business with assets trebling over the past five years in a local market which has
largely stagnated.

With an aggressively customer focused mind-set, simple, transparent products based on its global equity skill-set and backed by Europe’s best capitalised bank, Banca March, the asset manager has UK and European expansion firmly in mind.

Using Torrenova to enhance and protect Spanish investor’s assets over the past 25 years (including those of the March family whose policy is to co-invest in March Gestión funds)* March Gestión now has its eyes firmly fixed on those UK investors who seek long term growth with lower average volatility in a highly transparent investment vehicle.

March Gestión CEO José Luis Jimenez said today that by targeting European CPI plus 2% Torrenova’s simple transparent bond/equity mix had shown all the hallmarks of a total return fund – one which had seen consistent growth while demonstrating defensive qualities. During the last 10 years average return has been 4.7% while volatility has been reduced to 2.56%. In 2013 the fund returned 6.2%,.

José Luis said, “For those who seek greater certainty in a simply uncomplicated fund Torrenova is a straight forward, transparent global equities plus bond fund whose success has been driven by the stock picking and asset allocation skills of Juan Berberana – a manager with over 20 years’ experience – and the rest of the team at March Gestión.

The fund also avoids the lack of clarity surrounding some well-known total return funds by avoiding complex financial instruments to manage returns and that, we believe, is valued by many investors.

“With a proven track record over 25 and more years the fund has been the investment of choice for many investors who are keen to protect and supplement their wealth without taking the sort of significant risks which severely impact their investments.

Even during the financial crisis of 2009 when markets plummeted, Torrenova proved itself with a modest fall of just -5.4% compared with far more significant equity market falls (see illustrative chart in notes to editors). Now, within a UCITS structure, it has become available in the UK market to those wealth managers who seek this style of investment for their customers,” said Jimenez.

FXCM Japan Business Improvement Order Lifted
BankingFX and Payment

FXCM Japan Business Improvement Order Lifted

 

FXCM Inc. today announced that the Business Improvement Order issued by the Kanto Financial Bureau in July 2012 has been lifted for its Japan entity, FXCM Japan Securities Co. Ltd.

FXCMJ has worked extensively over the past year and a half to enhance and strengthen its internal control systems including its risk management system. FXCMJ has also improved the customer protection system throughout
the company.

“We will continue reinforcing our internal control system,” said Kazunori Iida, President, FXCMJ. “We recognize that regaining our customers’ trust is our top priority and strive to meet customers’ needs.” Iida added, “We always look to offer our customers our best service, to support their trading experience with FXCMJ and to contribute to further development of the Japanese financial market.”

“Again we express our sincere apology to our customers and related parties for the great concern and inconvenience that this may have caused,” said Drew Niv, CEO and president of FXCM Inc. “We appreciate your continued support,” he added.

FXCM recently deployed a global matching engine in one of Equinix’s IBX data centers in Tokyo to further expand its business and provide high-speed and reliable online trading for customers in the Asia Pacific region.

Investor Confidence in UK Shares
Private BankingWealth Management

Investor Confidence in UK Shares

After a strong year for UK shares, the Lloyds Bank Private Banking Investor Sentiment Index survey shows private investor confidence in asset class is at its highest since the survey began
in March 2013.

According to the monthly survey, the net sentiment1 among surveyed investors has risen to  38 at the start of January, with over 47% of respondents holding a positive view just 9% holding a negative view, while 31% held a neutral view. This is in sharp contrast to March 2013, when the figure was just over 16, with nearly 34 per cent holding a positive view and over 17% negative, while 38% held a neutral view.

Despite periods of volatility, the FTSE 100 enjoyed a strong 2013, rising 14.4% in the best year for the index since 2009 when it made gains of 18.66%. Meanwhile, the FTSE 250 of smaller companies finished 2013 at an all-time high of 15,935.35.

The year 2013 saw a number of positive news stories about the UK economy including improved economic indicators and company earnings. Lloyds Bank Private Banking currently holds a positive view towards UK equities, with an overweight position in its client portfolios towards the
asset class.

In other global markets, private investors looked beyond market concerns towards US equities following the first round of the government’s reduction in quantitative easing. Net sentiment improved towards the US stock market between December and January rising nearly seven points to 7.

Investors surveyed also remain broadly negative towards Eurozone stock markets, with sentiment staying firmly in negative figures at -21. However, this is a substantial improvement on lows of -59 in April 2013. Japanese shares also reached their highest net sentiment in the survey’s history, climbing almost five points from the previous month to 13 in January 2014.

Lloyds Bank Private Banking maintains a neutral stance towards US equities, but sees value in the Eurozone and Japan, holding an equity overweight position in both these markets.

Commenting on the latest Investor Sentiment Index, Ashish Misra, Head of Investment Policy at Lloyds Bank Private Banking said: “It’s encouraging to see investors placing more faith in the UK stock market, and good news for British companies ahead of the first earnings season of 2014.

There has been a slew of positive economic data out of the UK throughout 2013, suggesting that the recovery is gaining momentum, and it’s likely that investors’ views towards the UK stock market are reflective of this.

“The increase in sentiment towards US equities was perhaps surprising given the QE taper that began just before Christmas, although US equities outperformed every other global equity market except Japan in 2013. We remain neutral towards the US and see the best opportunities for equity investors currently in the UK, Japan and the Eurozone.”

Nick Hamilton to Join Oakley
BankingCash Management

Nick Hamilton to Join Oakley

Oakley Capital Management Limited appointed Nick Hamilton, Head of Institutional Business at Colonial First State in Sydney to work in its retail asset management business.

Prior to joining Colonial First State, Nick spent nine years as Head of Global Equity Products at Invesco Perpetual.

The appointment follows the news that Craig Newman, former Head of Sales at Invesco Perpetual has joined Oakley Capital Management as Head of Retail Asset Management.

Craig Newman said: “Nick brings a wealth of experience in growing assets, building businesses and leading teams. Nick shares our vision of building a market leading asset management business of the future.”

Oakley Capital Management is providing the infrastructure which will allow the team to manage retail and institutional clients’ money from the beginning of May 2014. This transitional arrangement will provide an environment in which the team can have the autonomy and flexibility to best serve the interests of clients’ money immediately after Neil Woodford’s employment with Invesco terminates on 29th April 2014.

Exact details about the firm and its offerings will follow in due course, but Neil Woodford’s unconstrained, fundamental and disciplined approach to investing will remain the same.

Weil Appoints Chris McLaughlin
LegalRegulation

Weil Appoints Chris McLaughlin

International law firm Weil, Gotshal & Manges has announced that Chris McLaughlin will join its London office as a partner in the Banking & Finance practice.

Chris, who was most recently a partner at Hogan Lovells, has extensive experience acting for banks and borrowers on the financing of cross-border private equity buyouts, European real estate acquisitions, and restructurings.

Chris’ arrival comes on the back of a period of strong growth for Weil’s London and wider European leveraged finance practice, following the recruitment of Chambers Band 1 ranked Stephen Lucas in 2011, along with Mark Donald and James Hogben in London, and Olivier Jauffret and James Clarke in Paris, over the last three years. In addition to the now 12-strong partner-led European leveraged finance group, Weil also boosted its high yield practice with the recruitment in June 2013 of Gil Strauss. His addition also follows that of financing expert Courtney Marcus, who rejoined the Firm as a partner based in the Dallas office in November.

Barry Wolf, Weil’s Executive Partner, said, “We are delighted that Chris is joining Weil to further enhance the growing European Finance practice. In a short space of time, Stephen Lucas and the London team, working with our teams in Paris, the rest of Europe and the US, have established a leading reputation for sophisticated leveraged finance work.”

London Managing Partner, Mike Francies, added, “We are one of the few firms with a Chambers Band 1 ranking in the UK both for Sponsor Finance and for Private Equity thereby offering clients the full range of European leveraged financing solutions covering loans, high yield and yankee loans. We look forward to Chris being part of the team expanding this further.”

The announcement follows a successful twelve months for the London Banking team and the office in general. The Banking team have acted on a number of deals recently including the following in 2013: European sponsor-side deals for Avista Capital and Nordic Capital on their Swiss take-private of Acino Holding; OMERS Private Equity on its £390 million acquisition of Civica, and Ontario Teachers’ Pension Plan on its acquisition of Busy Bees, and bank-side representations for the mandated lead arrangers on Advent International’s £1.16 billion public-to-private bid for Unit4 and Hellman & Friedman’s £1.5 billion buyout of Scout24; and Yankee loan sponsor financings for Charterhouse Capital Partners on its €500 million acquisition of Armacell, Advent International portfolio company Oberthur on its debt refinancing and acting for the lenders on Carlyle’s yankee loan acquisition of Chesapeake.

Weil’s London office has received a host of awards and recognition for its lawyers in the past twelve months including: retaining its Band 1 rankings for Sponsor Finance and Private Equity in Chambers UK 2014; top tier rankings in Chambers 100 and Legal 500 this year; and awards including “Most Innovative Firm in Corporate Law” at the FT Innovative Lawyers Awards Europe 2013, with standout entries and commendations in a further three categories including Finance law. With recent growth, we now have top ranked practices in Sponsor Finance, Restructuring and Fund Formation, to complement our existing top ranked Structured Finance and Private Equity practices.

Genii Capital Appoints Andrew Ruhan
BankingTransactional and Investment Banking

Genii Capital Appoints Andrew Ruhan

Genii Capital SA has appointed Andrew Ruhan as Partner. This appointment will enable Genii to strengthen and broaden its reach in the real estate, oil and gas, automotive and financial services sectors.

Having worked with Andrew on a number of projects in the past, this appointment is part of Genii’s strategy to further enhance its credentials in these core areas. In real estate, this will mean access and implementation of major global projects, including in Central Europe, the United Kingdom and major cities in the United States.

There are also a number of synergies in the oil & gas sectors, particularly in supply and distribution, initially focusing on distribution in Africa. Genii automotive division, which will be managed by Patrick Louis, will also benefit from Genii’s stronger position.

On the appointment Gerard Lopez, Chairman of Genii Capital, said: “having teamed up with Andy on a variety of projects in recent years, we know that we work well together and share the same values and ambition to pursue exciting business opportunities across a variety of different industries.

In addition to being a savvy investor and a fine strategist with an impressive proprietary deals track record, Andy shares our passion for excellence and is results oriented. Outside our business relationship, we share a strong friendship and have several interests in common, such as racing.”

Andrew Ruhan said: “I am delighted to be joining the Genii team at this exciting time for the business, when it is continuing to focus on major new projects. Genii Capital has an excellent reputation around the world for its work, in particular in investing and financial transactions.

We have already identified a number of projects to pursue, which will enable us to leverage our investment management capabilities and global network. I am confident this will be a very successful long term partnership.”

The Patent Box: Unfair Competition?
Corporate TaxTax

The Patent Box: Unfair Competition?

Businesses are under immense pressure to produce innovative new products to keep up with the competition.

The UK’s Patent Box tax incentive was developed as a spur to industry to develop and patent new products and encourage innovation. But now this generous tax regime, introduced in April 2013 has come under fire from other EU countries, notably Germany, who feel that it represents harmful competition in the race to attract foreign corporate investment.

The Patent Box was introduced into UK tax legislation in April 2013. It allows profits arising from qualifying patents to be taxed at a reduced rate of corporation tax. If the Patent Box continues, by 2017 the rate of corporation tax applied to Patent Box profits will be 10%, a significant discount compared to the anticipated rate for other taxable profits.

The rate is currently 15.2% compared to the main rate of corporation tax of 23%. It will fall to 13.3% on 6 April 2014 and gradually taper down to 10% from 1 April 2017, when the main rate of corporation tax is expected to be 20%.

Too much of a good thing?

The challenge to the Patent Box comes as part of a general clampdown on tax regimes that are perceived to facilitate profit shifting rather than genuine economic development. The EU’s Code of Conduct Group has fielded complaints from several member states (including Germany) that the Patent Box is too generous and represents harmful tax competition.

The EU’s Code of Conduct Group was not able to reach a majority decision about this and the matter was referred up to The Economic and Financial Affairs Council (ECOFIN). ECOFIN met in December but was unable to conclude whether the UK’s Patent Box regime is a ‘harmful’ tax incentive. It recommended a review of existing preferential intellectual property regimes by the European Commission, which is expected to be concluded by mid-2014.

The review will look at economic substance and compliance with OECD principles of each regime. It is likely to differentiate between measures that encourage genuine economic activity and those that merely facilitate profit shifting. The review is expected to take place under the Greek presidency of the EU and be concluded by mid-2014.

The ‘active management’ test

The review of the Patent Box will concentrate on whether the ‘active management’ test, which does not require research and development (R&D) to be performed in the UK, is ‘harmful’ tax competition.

‘Broadly ‘active management’ means input into the decision-making processes relating to the development and exploitation of intellectual property rights.

This would include activities such as deciding on whether to maintain protection in particular jurisdictions; granting licences; researching alternative applications for the innovation or licensing others to do so.

Where the rights are being exploited by incorporating the item into products, activities such as deciding on which products go to market, what features these products will have and how and where they will be sold would also count as ‘active management’.

The UK Government robustly defends its view that in today’s global business environment it is not realistic to demand that R&D has to be performed in the UK and if there was a requirement to carry out the R&D in the UK, this would be in breach of European Union law.

The European Commission’s concerns about the ‘active management’ test are ill founded.

The UK tax legislation has been carefully drafted so that passive owners of qualifying patents cannot benefit from the reduced rate of corporation tax. Groups that carry out research and development outside of the UK not only have to adhere to the ‘active management’ conditions but also to strict ‘development’ conditions before Patent Box benefits can apply. The furore caused by the Patent Box in Europe highlights the issues facing multinational businesses operating in different, often competing tax regimes, where one country’s ‘generous tax incentive’ is seen by another as ‘unfair competition.’

In any event, the EU Code of Conduct is not legally binding, so the UK Government potentially resist any adverse findings that come out of the review, which could be a gift in the current political environment.

So for now, it is business as usual, with the expectation that the Patent Box incentives will continue to be available in its current form.

Companies should be looking to make the most of a tax regime that other EU members think too generous.

Loans: A Tactical  Investment Opportunity
BankingTransactional and Investment Banking

Loans: A Tactical Investment Opportunity

“At Insight we believe that senior loans in Europe will return 5% in 2014 despite tightening spreads across most credit markets, with the benefit that loans are typically senior in the capital structure with a higher implicit
credit rating.

“This is an investment opportunity that has arisen due to the hunt for yield across asset classes and many investors lacking the specialist expertise to access the loan market. Five years on from setting up the fund, the asset class remains as relevant as ever,” says Singh Lakhpuri.

The appeal of loans is likely to increase as investors anticipate the normalisation of monetary policy. Loans are floating rate products, meaning that the interest they pay intermittently resets with market rates, thus offering some protection against rising interest rates. The Insight Loan Fund is benchmarked against three-month Libor and targets absolute returns.

The Fund has returned an annualised 6.0% in the last three years compared to 0.7% for three-month sterling Libor, with a one year return of 6.3% vs. 0.5% for three-month sterling Libor. These returns have been produced with exceptionally low volatility with a Sharpe ratio of 2.4 vs. 1.6 for the Credit Suisse Institutional Western European Leveraged Loan Index (“CS Loan Index”) over the three-years to 31 December 2013 proving the strong risk-adjusted performance of the fund.

Stephen Alleway Joins Questro International
TaxTransfer Pricing

Stephen Alleway Joins Questro International

Questro International, a new transfer pricing advisory firm has announced the opening of their first office in Zurich and the recruitment of Stephen Alleway as their new head of Transfer Pricing in Switzerland.

Questro International was founded in October 2013 by experienced and internationally operating transfer pricing professionals. Stephen joins the firm after 15 years of Big 4 transfer pricing experience at both PricewaterhouseCoppers (PwC) and Deloitte covering the UK, Australia, and Switzerland.

Stephen was most recently the founder of Deloitte’s transfer pricing group in Switzerland and assumed a variety of transfer pricing leadership roles during his time as a Partner with the firm.

Stephen has more than 15 years of tax experience in the field of transfer pricing. He has acquired broad experience in leading large global projects for Swiss and foreign headquartered multinationals.

Stephen has been named as a leading transfer pricing adviser in various publications since 2007 and has been listed in recent Euromoney/Legal Media Expert guides. He was cited in the 2012 publication of World Tax, the International Tax Review’s directory of leading tax advisory firms around the world, as an adviser recommended for his transfer pricing work by contemporaries in the Swiss market. He is a contributor to publications on transfer pricing and speaks widely on the subject in Switzerland and Internationally.

Before joining Questro, Stephen was recruited in 2006 by Deloitte AG in Switzerland to establish and build up a transfer pricing group in Switzerland. Under his leadership, he established a well regarded team of professionals and helped raise Deloitte’s profile locally. This was recognised in the market with various client wins and awards, including International Tax Review’s Transfer Pricing Firm of the Year Award in May 2008.

Stephen is an experienced practitioner, having led client assignments in many countries around the world and across all industry sectors. He holds a Bachelor of Social Science Degree (1st Class with Honors) from The University of Birmingham.

Stephen comments: “I am delighted to be joining a group of senior professionals in launching a new and truly innovative transfer pricing advisory firm. Transfer pricing has never been higher as an issue on the global tax agenda. For me, it makes perfect sense that our first office should open in Switzerland, which finds itself at the heart of so many client’s TP structures and is under great international scrutiny within the current G20 debate about tax base erosion and profit shifting”

RiverPeak Wealth Appoints Marianne Hay
Private BankingWealth Management

RiverPeak Wealth Appoints Marianne Hay

Marianne Hay has joined the Advisory Board of RiverPeak Wealth, the newly launched wealth management firm.

Hay, who has headed global wealth and asset management groups including roles as CEO of Europe, Middle East and Africa Wealth Management at Morgan Stanley, Citi and Standard Chartered, will offer advice on the growth and development of the business.

Launched in December, RiverPeak Wealth provides portfolio management, investment analysis and financial planning advice.

Nick Parker, RiverPeak Managing Director, commented “We are delighted that Marianne is joining us in an advisory capacity. Her past experience and skills will prove invaluable to us, and our clients, as we grow the business.”.

Hay added “The wealth management market in the UK continues to be fragmented with no clear market leader. RDR has given RiverPeak Wealth an opportunity to develop new ways of providing wealth advice. I am looking forward to helping RiverPeak’s directors meet their ambitious goals over the months ahead.”

UFXMarkets to Offer Bitcoin Trading Online
BankingFX and Payment

UFXMarkets to Offer Bitcoin Trading Online

 

UFXMarkets is proud to be among the only Forex trading platforms facilitating investment in Bitcoin alongside more traditional national currencies. Bitcoin, the growing peer-to-peer digital currency, is gaining traction as a trading instrument as much as for use in business and retail.

“Forex traders don’t need to care how economies are doing or whether something new will catch on,” said Chris Judd, Chief Analyst at UFXMarkets. “Volatility creates great opportunities for Traders. That means that no matter what you think about the future of Bitcoin, it’s an ideal trading asset.”

Due to Bitcoin’s dramatic price fluctuations, even relatively low leverage allows each Trade to have remarkable results. The currency will have 24-hour-a-day trading hours and is available with leverage of 1:10.

Ride a White Swan
Mega Buyout Funds Raise $85bn
EquityFunds

Mega Buyout Funds Raise $85bn

Following the recent significant final close of Apollo Investment Fund VIII, the largest buyout vehicle to have reached a final close since the global financial crisis in 2008, Preqin has taken a closer look at the private equity buyout fundraising market.

In the factsheet below are key figures including an updated table of the top 10 buyout funds closed ever and the largest buyout funds currently in market, as well as charts examining historical fundraising, the changing average size of final closes, and a breakdown of buyout fundraising by fund size.

The $18.4bn raised by Apollo – including $17.5bn in LP commitments – has pushed the average size of buyout funds closed in 2013 to over $1.2bn, the largest average size seen in any year since the onset of the global financial crisis.

UK Investors are Underweight
Capital Markets (stocks and bonds)Markets

UK Investors are Underweight

The majority (50%) of UK independent financial advisers (IFAs) believe sophisticated investors are underweight in the venture capital sector according to new research commissioned by leading venture capital investor Albion Ventures.

IFAs estimate that less than a fifth (17%) of their clients’ currently have direct exposure to venture capital, with most of those surveyed (48%) believing that their clients’ exposure to venture capital will increase in the next five years. Just 3% expect a decrease. Only a handful of IFAs (2.2%) believe their clients are overweight in the sector.

Sophisticated investors can access the venture capital sector through venture capital trusts (VCTs), investment companies listed on the London Stock Exchange. VCTs provide investment for smaller companies and offer investors a range of incentives including: 30% income tax relief, tax free dividends and no tax on capital gains. VCTs have continued to grow in popularity in recent years. In 2012-13 £370m of funds were raised by VCTs, £45m more than 2011-12.3

Patrick Reeve, Managing Partner of Albion Ventures said, “IFAs recognise there is currently an investment gap in the UK venture capital sector. Most investors are not realising the potential benefits of investing through VCTs.
“Financial advisers need to explore alternative tax efficient methods to help their clients build up a suitably sized nest egg. VCTs are a great option offering investors significant tax incentives and long-term capital growth.

Investors in VCTs also benefit in the knowledge they are helping small firms grow and are supporting the wider UK economy.”

The research follows the launch of Albion VCTs Top Up Offers, which are seeking to raise up to £15 million across its six venture capital trusts. The Offers are targeting a monthly tax-free income of 5% (should investors choose to invest equally across all Offers), equivalent to 7.1% on the net cost of investment after up-front tax relief at 30%. Investors in the Offers also have the option to boost their capital growth by participating in the dividend reinvestment scheme (“DRIS”), under which dividends are reinvested in the form of new shares in Albion VCTs.

Former Colleagues join forces at Insight
Corporate Finance and M&A/DealsFinance

Former Colleagues join forces at Insight

Insight are pleased to announce that Doug Smith has joined their rapidly growing Corporate Insurance consultancy business.

Doug has held previous senior positions as Chairman of Marsh’s Private Equity practice and latterly as Non-Exec Deputy Chairman of Willis M&A practice, and is widely regarded as one of the leading UK insurance advisors on transactional insurance issues to the private equity industry and major/mid size corporates.

Doug will team up again with former Corporate Risk plc colleague Colin Paterson, Managing Director and founder of Insight, and will focus on broadening and strengthening relationships with the private
equity community.

He will also provide strategic advice on growing Insight’s unique concept of introducing client-side (in house) corporate insurance expertise, free from any commercial conflicts, directly to the PE community and their portfolio companies, and to corporate insurance buyers of medium/large corporates.

Commenting on the appointment, Colin Paterson said: “We are delighted to have been able to attract the services of Doug Smith in an advisory non-executive role. Doug is recognised as being one of the UK’s most experienced insurance professionals and has a long-standing track record in advising private equity firms and corporate business from both operational and strategic perspectives on Insurance matters.

We look forward to working together again and I am sure Insight will greatly benefit from his participation and professional input, which will further assist us in rolling out our unique client-side corporate insurance offering and attaining our expansion plans.”

Doug, whose previous roles include Chairman and Founder of insurance broker Corporate Risk plc, Director and Chairman of Heart of Midlothian from 1997 – 2004 together with a number of Public & Private companies, commented: “Insight is providing a valuable service, increasingly recognised by corporate insurance buyers. It allows the key process of insurance renewal and risk issues to be dealt with using the in-house services of experienced insurance professionals from Insight. I am very much looking forward to the challenge of developing Insight in the UK and
European markets.”

Guernsey adds 33 new funds in Q3 2013
RiverPeak Wealth Expands Senior Team
Private BankingWealth Management

RiverPeak Wealth Expands Senior Team

James Powell, former director of private banking at Banque Havilland, is joining newly launched wealth management firm RiverPeak Wealth as Managing Director.

Launched in December, RiverPeak Wealth provides portfolio management, investment analysis and financial planning across London and the South East.

Powell, a private banking and financial planning veteran of 20 years, will be joining former colleague and founder Nick Parker at the helm of the business.

At Banque Havilland, Powell was responsible for establishing and growing the bank’s London branch. Previously, he was a wealth structuring specialist and then a private banker at Citi Private Bank.

Commenting on his new role, Powell said: “RiverPeak is filling the gap in the market for a wealth management and financial planning firm which goes beyond the usual product sell to provide a highly personalised private banking style service that is usually only experienced by the very wealthiest individuals and families. I’m excited about our offering plus the support and interest RiverPeak is already generating amongst UK financial influencers and business leaders, and importantly prospective clients. “

Tristan Nagler Joins Aurelius Investments
BankingTransactional and Investment Banking

Tristan Nagler Joins Aurelius Investments

Tristan Nagler joined Aurelius Investments, London, on 2 January 2014 as Managing Director.

He will lead Aurelius’ London office and be responsible for sourcing, identifying and executing equity investments across the UK and Ireland. Aurelius´ focus remains on companies and corporate spin-offs with development potential generating revenues of between 30 – 750 million euros across all industries.

Tristan started his career with KPMG in 1998, transferring into KPMG Corporate Finance in 2001 where he became a director in the London-based M&A team. In 2010 he joined Investec Growth & Acquisition Finance as a senior banker originating and executing a number of UK mid-market debt facilities including company refinances, MBOs and acquisition finance transactions.

Dr. Dirk Markus, CEO of Aurelius AG says: “We’re delighted to welcome Tristan to Aurelius. We have ambitious plans for targeting investment opportunities in the UK market and expect this appointment to be followed by further new hires to our London based team in 2014, augmenting our presence and enhancing our position in London”

Tristan Nagler, Managing Director of Aurelius Investments comments: “The Aurelius Group’s financial strength coupled with its investment and operational track record means now is an exciting time to be joining Aurelius in London. There is already strong momentum in the business and with the benefit of improving market conditions, I am confident Aurelius’ offering will be increasingly sought after in the UK market”