Our weekly roundup of industry highlights
Vanguard employs blockchain in index data distribution
In an effort to ease the sharing of data among index providers, Vanguard has turned to the blockchain.
Better known as the technology behind bitcoin, blockchain has given Vanguard speedier delivery and reduced manual tasks and risk, according to the company.
The Valley Forge, Pennsylvania-based asset manager has been working with the technology on a pilot basis and intends to expand the application in early 2018.
"Using this platform, investment managers will be able to instantly distribute, receive and process index data, resulting in better benchmark tracking and significant cost savings that potentially results in better returns for our clients," Warren Pennington, a principal in Vanguard's Investment Management Group, said in a statement.
In creating the platform, the company worked with the academic group Center for Research in Security Prices and Symbiont, which specializes in blockchain products and smart contracts for businesses.
Goldman pursues new venue ahead of MiFID
Goldman Sachs will offer bonds, derivatives, stocks and ETFs as a "systematic internalizer" in an effort to comply with European MiFID II requirements, Bloomberg reports. The change of venue, which eases some reporting requirements, is likewise being adopted by the likes of JPMorgan Chase, UBS and Deutsche Bank.
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Practitioners say the rules conceal problems that regulators never fully considered.
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Software from Liquidnet is designed to avoid curbs on dark pools in Europe.
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The regulation encourages more transparency around fees for products that weren’t previously required to reveal such information.
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Goldman said the move was in response to clients requesting easier reporting under MiFID II.
Registering as SIs provides the banks an alternative to a soon-to-be-banned platform, according to the report. On the equities side, SIs offer liquidity and pricing advantages to clients.
They also assume the burden of trade reporting requirements for non-equities.
"These benefits could see bank-run SIs gain significant market share in the next 12 to 18 months," Anish Puaar, market structure analyst at Rosenblatt Securities, told Bloomberg.
HN Capital links up with Pyrrho
HN Capital, an affiliate of Hunt Consolidated, has entered a strategic partnership with Pyrrho, which is known for event-driven, cross-capital structure asset management.
Pyrrho will relocate from New York to Dallas.
"With HN Capital's sponsorship, and the support of Hunt, I believe we can deliver a strong and sustainable asset management firm," said Vishal Bhutani, CIO of Pyrrho.
Hunt has been an active investor in asset managers in recent years. The firm seeded Hirzel Capital and Tålamod Asset Management, as well as many real estate asset managers.
RESEARCH
Managers see changing relationship with institutions
Shifting priorities among institutional investors is causing the nature of relationships with asset managers to change, new research shows.
Cerulli Associates reports that institutions are placing an elevated emphasis on long-term investing goals and a desire to protect against drawdown risk, with wide-ranging effects. Asset allocations, investment strategies and the use of consulting services are among the areas affected by the trend.
Among Asian institutional investors (excluding Japan), the changes are driving more direct work with asset managers, particularly around alternative investments and ESG strategies. Around half of asset managers in the region expect institutional investors to increase their use of consulting services, according to Cerulli.
In response, "large global asset managers are committing to dedicated consultant relations roles in Hong Kong and Singapore," said Alexi Maravel, director at Cerulli.
PRODUCTS
Goldman Sachs leans on Paul Tudor Jones for ESG ETF
Goldman Sachs' asset management unit is launching a socially responsible ETF that utilizes guidelines set by a non-profit organization co-founded by billionaire Paul Tudor Jones, Bloomberg reports.
The metric the firm aims to use to offer its values-based strategy identifies U.S. companies that engage in "just business behavior," as defined by Jones' JUST Capital Foundation.
The Goldman Sachs JUST U.S. Large Cap Equity ETF tracks an index based on annual rankings of corporate behavior compiled by JUST Capital, Bloomberg said. JUST surveys Americans each year to deem which issues are defined as "just" business behavior to develop the rankings.
J.P. Morgan Asset Management launches managed-futures ETF
J.P. Morgan Asset Management has launched the JPMorgan Managed Futures ETF (JPMF). The ETF aims to provide exposure to carry and momentum factors across currency, commodity, equity and fixed-income markets.
The actively managed fund will employ a bottoms-up strategy, taking long and short positions in futures markets through a systematic, rules-based approach.
Active management gets a black eye when funds can’t keep pace with indexes, especially when the shortfalls aren’t short-term.
By providing returns that are uncorrelated to traditional asset classes, the fund could serve as a portfolio diversifier by limiting drawdowns and reducing overall volatility, according to the firm. The fund features an expense ratio of 0.59%.
JPMF is managed by a team led by Dr. Yazann Romahi, CIO of Quantitative Beta Strategies and Portfolio Manager at J.P. Morgan Asset Management.
AdvisorShares issues alcohol, cannabis and tobacco-driven ETF
AdvisorShares launched the first ETF providing concentrated exposure to companies associated with cannabis, alcohol and tobacco.
The AdvisorShares Vice ETF (ACT) will invest in a variety of industries including agriculture, biotechnology, pharmaceutical, real estate, retail and finance.
It features an expense ratio of 0.75%.The firm noted that alcohol and tobacco are often viewed as recession-proof products that can also carry a competitive advantage operating within heavily regulated industries. The continued acceptance of marijuana, the firm said, also provides a growth opportunity "to complement the historically steady returns of alcohol and tobacco equities.
ARRIVALS
OppenheimerFunds names head of the Nordics, Benelux
OppenheimerFunds is continuing the expansion of its European business platform with the naming of Patrik Silfverling, former head of the Nordics region with Franklin Templeton, as head of the Nordics and Benelux.
In his new role, Silfverling will be tasked with growing sales and distribution among OppenheimerFunds' high-net-worth and institutional clients in the Nordic and Benelux regions. He will be based in Stockholm.
Silfverling's hire is the latest move in OppenheimerFunds's EMEA buildout strategy.
The firm recently hired Dicken Watson as EMEA COO, and opened a new European headquarters in London.
F.L. Putnam appoints chief administrative officer
F.L. Putnam Investment Management Company has appointed Christopher Parker, former chief administrative officer and executive managing director of operations with Boston Private Wealth, to its newly created role of chief administrative officer.
In this position, Parker's duties will include overseeing integration of the firm's new CRM platform and managing relationships with key vendors and partners. Parker has held senior administrative and operational roles in the financial services industry for over 20 years.
"Chris has deep knowledge and a strong track record working at firms with different models, and adds significant bandwidth to an already strong executive team.
"He will be a real asset to our team as we continue to expand into new markets and grow our business in the years ahead," F.L. Putnam CEO Tom Manning said.
