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Diligend launches free to use SEC Form ADV data module for institutional investors
Diligend, a fund due diligence and monitoring software provider, has launched a new and free to use Form ADV data module.
ADV data plays an instrumental role in helping investors make investment decisions during the selection of fund managers or when monitoring their existing portfolio. The data covers important information such as assets under management (AUM) breakdown, ownership, clients, employees, business practices, affiliations, and any disciplinary events of the adviser or its employees.
The Diligend Form ADV data module is a complimentary service enabling investors and consultants to review and monitor the Form ADV information and changes of any investment advisor registered with the SEC.
Key features of the module include:
• Access to a daily updated database of over 19,000 registered investment management firms with ADV reported data points.
• Follow managers and receive tailored automated notifications by email when there is a new or updated ADV filing, or whenever a material change occurs.
• Receive notifications when there are changes to key data points specified by each user.
• Easily spot data changes between filings.
• No restrictions as to the scope or volume of data presented or extracted.
• No restrictions as to the number of managers followed.
• Integrate SEC data with additional data collected through Diligend or third-party partners within unique fund profiles.
• Include SEC data within custom/proprietary due diligence reports.
Wissem Souissi, Diligend’s Chief Executive Officer, says: “For due diligence professionals, ADV data is a treasure trove. We understand the importance it plays, and we are happy to offer it for free to our clients. At Diligend, we also recognize that Form ADV is just one part of the whole due diligence process. Only with a holistic specialized solution can investors leverage Form ADV and all other facets of the due diligence process. Diligend enables clients to automate the entire due diligence and monitoring process for investors and financial consultants."
Like this article? Sign up to our free newsletter Related Topics Services ComplianceTORA expands UK presence with London office and new hires
TORA, provider of a cloud-based order and execution management system (OEMS) and portfolio management system (PMS), has expanded its UK presence with a new London office and new hires Peter Rank and Chris Hopton.
Rank has been brought on as Sales Manager, Europe, and Hopton as a Professional Services Manager.
Rank joins TORA from AxeTrading and Bloomberg AIM where he worked with clients across Europe. Peter will be reporting to David Tattan, the Head of Sales for Europe, and is responsible for driving new client acquisition for TORA’s software solutions.
Prior to joining TORA, Hopton was a Senior Account Manager at Trading Screen and SS&C where he was responsible for delivery of fund solutions to his clients. He will be joining the global team of professional service managers to help TORA to continue to provide software and workflow solutions, fast onboarding and leading service to global institutional investors.
Chris Jenkins, Managing Director at TORA, says: “We are excited to open the new London office, the company has seen substantial growth over the past 18 months with our expansion into new asset classes, an all-in-one front to back trading solution and new generation PMS.
“We are gaining solid momentum in Europe with our traditional equity as well as FX and Fixed Income markets. These hires are key to ensuring the company is positioned correctly with the right talent and jurisdictions, so that we can continue to deliver our clients the most innovative products and elite client service.”
TORA’s all-in-one OEMS & PMS offers a wealth of functionality covering execution, allocations, risk control, order management, real time general ledger, positions-keeping, P&L monitoring and SWAP finance modelling. The platform can also provide detailed reports, compliance management & advanced analytics with broker-neutral equity pairs algo suite. The system integrates with brokers, trading venues, custodians, prime brokerages and trade matching providers across the globe.
SimCorp partners with Qontigo for portfolio optimisation and risk management
SimCorp, an independent provider of SaaS investment management solutions, has partnered with Qontigo, a provider of analytics and indices, and part of the Deutsche Börse Group.
The partnership offers SimCorp clients a fully managed portfolio optimisation and risk management and modelling service, within SimCorp Dimension. It is one of several portfolio optimisation and risk analytics partnerships that SimCorp will grow, to complement and enhance its own front office suite, with a choice of market-leading tools for alpha generation and decision making. The partnership forms an integral part of SimCorp’s Open Platform, designed to democratise access to industry innovation and simplify vendor management.
Today, asset managers and asset owners license multiple portfolio optimisation tools in order to create competitive edge in an otherwise low-yield market. However, the sheer choice in the market, coupled with time-consuming and expensive maintenance of multiple system integrations, is draining resources and diverting attention away from the core business. SimCorp’s Open Platform addresses the market need for full-service innovation, by hand-picking compelling solutions from the best FinTech and industry providers in their field. To eliminate the operational minefield, these solutions are wrapped within an end-to-end managed integration and connectivity service, covering everything, from a single vendor contract to support.
Clients can now integrate Qontigo's best-in-class Axioma Equity Factor Risk Models, Axioma Portfolio Optimizer and Axioma Risk directly within SimCorp’s platform and through standardised APIs. Supporting a wide range of investment management strategies, Axioma Portfolio Optimizer offers clients a highly flexible and sophisticated approach to customising portfolio objectives and constraints. Its leading equity factor risk models cover a variety of fundamental and statistical variants with multiple horizons, enabling portfolio and risk managers with one transparent model for a fully aligned view.
And, through Qontigo’s cloud-native solution Axioma Risk, SimCorp Dimension users get access to a scalable, multi-asset portfolio risk management platform designed to support the unique requirements of each investment manager. Ultimately, the combination of these solutions with SimCorp Dimension will deliver clients seamless front office workflows, augmenting portfolio optimisation and enriching the investment decision making process.
Anders Kirkeby, Head of Open Innovation, SimCorp, says: “We’re very happy to have Qontigo join our Open Platform partnerships. Our ambition is to provide a strong selection of partners across the industry, giving clients easy access to innovative solutions, while maintaining secure and consistent data across the value chain. The approach we have taken is to offer optionality over championing one provider in a given space. We’ve done this, for the simple reason that it delivers the flexibility clients need to drive competitive edge and long-term sustainable growth, with SimCorp as the backbone. Effectively it cuts out arduous research, compliance and maintenance of multiple vendor contracts. We believe vendors who can take on such operational responsibility, and deliver one touch point for all client needs, will ultimately create the most success for their clients and deliver a strong ecosystem.”
Brian Rosenberg, Chief Revenue Officer at Qontigo, adds: “We are pleased to become part of SimCorp’s Open Platform community. This partnership is a natural fit for Qontigo, as we share a philosophy of open ecosystem innovation. Providing the end-client with flexibility and choice is critical to both entities. We have worked together to ensure that the functionality and competencies of SimCorp’s Asset Manager solution and our market-leading risk models, portfolio optimiser, and risk management solution, deliver clients a consistent and transparent view for enriched decision making. We look forward to working with SimCorp and to witnessing the growing industry network it is cultivating, to drive client success.”
FlexTrade becomes first EMS to Integrate with Appital’s bookbuilding platform
By working with firms like FlexTrade, Appital is aiming to drive the technological infrastructure development necessary to integrate its platform into existing market structures and bring innovation and automation to equity capital markets.
Appital’s platform will be fully integrated with FlexTrade’s FlexTRADER EMS, bringing a historically manual order flow process to an automated platform. Through FlexTrade’s integration with Appital, buy-side firms will have access to the liquidity and efficiency of executing on Turquoise, LSEG’s (London Stock Exchange Group) pan-European MTF with seamless straight-through-processing (STP) to over 20 settlement venues. Sparked by demand from some of the largest asset management firms globally, the integration will offer the buy-side community a more efficient and transparent way to execute large orders with minimal market impact or risk of price erosion.
Andy Mahoney, Managing Director EMEA FlexTrade Systems, says: “This integration with Appital brings transparency and automation to an area of the market traditionally plagued by opacity and outdated, phone based bookbuilding activity. We see significant demand for Appital’s offering from some of our largest asset management customers. As a result, we have been collaborating with Appital to develop standard integration procedures to ensure our clients have seamless access to Appital’s platform directly within the FlexTRADER EMS order blotter to actively participate in the liquidity discovery process in the market for size”.
The integration with FlexTrade has led to the establishment of a working group that includes some of the largest asset managers globally. The group helps mutual clients define how they want to interact with the hard-to-find liquidity in the market and proactively build books of demand, while ensuring that the integration to existing workflows remains seamless. Other EMS providers are now able to code to the established, FIX based protocols, to the benefit of the buy-side community overall.
Dr Robert Barnes, CEO, Turquoise Global Holdings & Group Head of Securities Trading at London Stock Exchange Group, says: “Turquoise is pleased to build on our innovation in partnership with Appital to unlock latent liquidity for the market. Through FlexTrade’s integration, buy-side participants can look forward to Appital’s novel bookbuilding and seamless execution to settlement of liquidity at the right price through Turquoise.”
Mark Badyra, CEO of Appital, says: “In our mission to put buy-side firms in control of their bookbuilding activity we are excited to work with innovative firms like FlexTrade to help us shape the technology infrastructure for EMS integrations. FlexTrade clients and the asset management community can now gain exposure to deal flow opportunities they have not been able to access before. This integration transforms a traditionally manual order flow process, that historically sits outside any EMS, into an automated, electronic platform.
“FlexTrade has been instrumental in developing the Appital workflow alongside ourselves and the team at Turquoise. This is a major step forward for not only our combined client base, but the market as a whole, and we look forward to scaling this integration market-wide in the coming months.”
Appital gives the buy-side community greater exposure to deal flow opportunities they have not been able to access before. Buy-side traders looking to execute large orders in excess of five days ADV, including in highly illiquid, small and mid-cap stocks, have access to real-time visibility, full transparency and maximum control over the bookbuilding and deal distribution process. They can proactively source liquidity and efficiently drive the bookbuilding process in real-time, on one automated platform, with the ability to make distribution adjustments throughout. What’s more, Appital users will be able to execute all deals through the Turquoise MTF, via a single point of access and with seamless straight-through-processing (STP) to over 20 settlement venues.
Like this article? Sign up to our free newsletter Related Topics Trading & ExecutionNasdaq launches Nasdaq Data Link to simplify data discovery and expand cloud delivery
Nasdaq has launched Nasdaq Data Link, a cloud-based technology platform that empowers all segments of the investing public with a comprehensive suite of core financial, fund and alternative data.
The platform connects the global financial community to the information needed to generate alpha, manage risk and gain transparency into public and private markets.
Nasdaq’s acquisition of Quandl in 2018 accelerated its vision to unify access to a broad portfolio of data and insights from across Nasdaq’s businesses and network of global partners, empowering users to efficiently discover and integrate market data and analytics for their investment strategies and financial applications. Quandl’s technology serves as the new platform’s underlying infrastructure, ensuring seamless user experience and continued delivery of high-performance APIs.
Nasdaq customers can now access an expanding library of datasets via cloud APIs to manage, discover, and integrate new information with ease. The delivery of this information includes streaming, restful APIs as well as other methods of receiving content. The platform will also provide secure, end-to-end data hosting through managed infrastructure and services that enable users to privately share proprietary data, manage data access, and monitor data quality over time within a single organisation.
“Nasdaq Data Link is a key step in delivering on our commitment to creating an innovative and transparent data marketplace, allowing more people to access information," says Lauren Dillard, Executive Vice President and Head of Investment Intelligence, Nasdaq. "The financial industry continues to experience rapid digitalisation coupled with an accelerated need for intelligent insights. With the new platform, Nasdaq is bringing our data and technology to bear, helping our clients drive better investment outcomes and build better solutions for the community they serve.”
“Nasdaq Data Link is one of the world’s most diverse sources of market intelligence, as well as a powerful data infrastructure platform,” says Oliver Albers, Senior Vice President and Head of Data, Investment Intelligence, Nasdaq. “The industry is undergoing an evolution almost as drastic as the transition from brick and mortar retail to e-commerce. Consuming and managing datasets in the cloud is now the norm for our clients. Nasdaq Data Link continues to expand our cloud delivery optionality following the successful launch of Nasdaq Cloud Data Service last year. The launch of the platform signifies a milestone in Nasdaq’s cloud transformation and strengthens our commitment to being forward-thinking partners to the industry.”
Cheyne Strategic Value Credit completes EUR1bn fundraise
Cheyne Strategic Value Credit has successfully raised its second fund, Cheyne European Strategic Value Credit Fund II (SVC II) securing EUR 1 billion capacity less than six months after its first close, with strong support from existing investors and significant excess demand from new investors.
Cheyne Strategic Value Credit was established in 2017 as a new investment division within alternative asset manager Cheyne Capital and employs a value-oriented, opportunistic approach to investing in corporate credit, with a focus on special situations and debt restructurings. The group’s inaugural European Strategic Value Credit Fund (SVC I) was substantially oversubscribed and closed at its hard capacity limit of EUR1 billion in June 2019.
SVC II continues the same investment strategy as its predecessor fund, providing constructive capital solutions to mid-market corporates facing liquidity and other complex financial challenges, working on a consensual basis with management teams and shareholders to effect a positive turnaround. The new fund has already initiated seven investments, in five different European countries and across a range of industries including business process outsourcing, ground & cargo handling services, security solutions and food products.
As part of its aim to promote higher ESG standards within private credit, the team has adopted an enhanced ESG framework for new investments with an increased emphasis on positive engagement. The group is seeking to influence ESG strategy and outcomes more meaningfully at the corporate borrower level and is actively incorporating ESG-linked covenants in new facility agreements. This includes, for example, pricing incentives when pre-defined ESG targets have been met and adhered to.
Key sources of opportunity for the fund include the ongoing sell-down of underperforming and other non-core corporate loans by European banks, and the provision of rescue and liquidity bridge financings to stressed but fundamentally viable businesses. The fund has been deliberately capacity-constrained to maximise its participation in the broadest range of opportunities and capital structures, with a focus on smaller transaction sizes which fall below the minimum size requirements of the larger distressed debt and opportunistic credit funds.
Anthony Robertson, Managing Partner & CIO of Cheyne Strategic Value Credit, says: “We are honoured that so many of our existing investors have chosen to continue the journey with us, and we warmly welcome our new investors. There is a huge need for alternative sources of capital to support European mid-market businesses facing financial challenges, particularly those which have been negatively impacted by the pandemic. Our team has a recognised track record in providing flexible capital solutions to facilitate a normalisation and recovery in operating performance.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Funds Launches & FundraisingSBAI adds to board of trustees
The Standards Board for Alternative Investments (SBAI) has appointed Paula Volent, Vice President and Chief Investment Officer of The Rockefeller University, to its Board of Trustees.
Mario Therrien, Chair of the SBAI, says: “We are absolutely delighted to welcome Paula to our Board. She brings a keen understanding of the challenges and opportunities in our industry and a wealth of experience and knowledge from the endowment perspective.”
Volent says: “The SBAI has a strong history of innovation, problem-solving and improving practices in the alternative investment industry. I am thrilled to be joining the SBAI Board and look forward to being a part of this important endeavour.”
Luke Ellis, Deputy Chair of the SBAI, says: “Paula is a business leader of the highest calibre. Her extensive experience managing large endowments will be an asset to our Board and stakeholders. Having a board with a diversity of backgrounds and experiences makes the SBAI strong and more successful.”
Volent is responsible for the oversight and management of Rockefeller’s USD2.5 billion endowment. Prior to joining Rockefeller in August 2021, Volent was the Chief Investment Officer and Senior Vice President at Bowdoin College for over two decades. Prior to Bowdoin, she began her investment career as a Senior Associate at the Yale University endowment under the leadership of David Swensen. Volent has a BA from the University of New Hampshire; a master’s degree in Art History from the Institute of Fine Arts at New York University; a Certificate in Conservation from the Conservation Center at NYU, with a specialisation in the conservation of works of art on paper; and an MBA from the Yale School of Management.
The SBAI Board of Trustees which consists of 15 trustees, is responsible for leading the SBAI’s initiatives and furthering its to improve the alternative investment industry. Current initiatives that are shaping practices in the industry include working groups on responsible investment and a multitude of initiatives focusing on Culture & Diversity.
Like this article? Sign up to our free newsletter Related Topics Moves & AppointmentsProxy voting advisers increasingly lean with management in board fights
The two leading proxy advisers have become less likely to support dissident director candidates in US proxy fights over the past five years, according to data from Insightia.
So far this year (as of 15 August), Institutional Shareholder Services (ISS) and Glass Lewis have sided with management in 73 per cent and 64 per cent of contests, respectively. In 2016, when activism was already a well-established feature of corporate life, ISS backed management only 50 per cent of the time and Glass Lewis 46 per cent of the time.
When these advisers do endorse dissidents, they are becoming less willing to support entire slates. ISS backed all dissident candidates in one-third of 2016 proxy contests, and Glass Lewis one-fifth. For both advisers, this number is down to 9 per cent in 2021.
Insightia’s analysis was based on 98 US proxy contests out of 145 recorded since 2016, limited to meetings where data for both advisers was available. An analysis of 120 Glass Lewis recommendations over the same period confirms the trend. The figures for ISS are based on Insightia’s proprietary “synthetic” model, which uses investor voting to accurately derive ISS recommendations. Glass Lewis recommendations were provided by the adviser directly.
The change is thought to be the result not of advisers changing their approach, but perhaps to the smaller number of proxy fights going to a vote, proactive board refreshment by targeted companies, and larger activists increasingly settling early in a fight.
Like this article? Sign up to our free newsletter Related Topics Surveys & researchDigital asset hedge fund manager Nickel Digital highlights strong potential US growth
London-based digital assets hedge fund manager Nickel Digital Asset Management (Nickel) is planning to make the US one of its top priority markets, as new research reveals the potential for strong growth in the country.
Nickel’s clients include institutional investors, global wealth managers and ultra-high net worth individuals from around the world.
Nickel Digital recently commissioned a survey with 40 institutional investors and wealth managers in the US who collectively oversee USD112 billion in assets and who currently have some exposure to digital assets. The survey revealed that 24 of those interviewed expect to dramatically increase their exposure to cryptoassets between now and 2023, and another 10 who said they will also add to their exposure.
The three main reasons given for greater allocation to digital assets is the structural long-term capital appreciation prospects of cryptoassets – the view cited by 24 of the 40 US-based professional investors. This is followed by 17 who said having some exposure to cryptoassets, they have become more comfortable and confident in how the asset class works and the infrastructure around it, and 15 who said it was because of the improving regulatory environment.
However, the survey has also identified several hurdles to investing into cryptoassets. Some 34 of the 40 US based professional investors cited concerns over the quality of custodial services as a hurdle. This was followed by 33 who highlighted concerns about the relative size of the cryptoasset market and its liquidity and 32 who cited the lack of reputable fund managers offering investments in this area.
Nickel Digital’s funds have delivered strong performance despite recent crypto market corrections with its flagship Digital Asset Arbitrage Fund posting record returns in April and May, the months of intense selloff in the Bitcoin market. The fund was up +4.1 per cent in April and +2.6 per cent in May, in the face of Bitcoin dropping more than 40 per cent from April’s highs, taking H1 2021 performance to +12.6 per cent with a Sharpe of over 4, comfortably outperforming gains of 2.5 per cent for an average hedge fund in a closely watched HFRX Equity Market Neural Index its closest market-neutral benchmark.
Anatoly Crachilov, CEO and Founding Partner of Nickel Digital, says:“Despite the recent correction in the crypto market, our survey confirms there is an ever-increasing appetite for this asset class among professional investors, willing to take constructive longer-term view on this asset class.
“We are glad to see increasing adoption of digital assets by many professional investors in the US. We would be honoured to help forward-looking investors understand and navigate this nascent market by sharing our multiyear financial experience, originated in major Wall Street banks and now successfully applied to crypto ecosystem over the last few years.”
Fiona King, Nickel’s Head of Institutional Sales, says: “We are looking to address many of the concerns investors might have, not least the high volatility of crypto market. To that end, the recent performance of our market-neutral arbitrage fund demonstrated its ability to protect capital, as well as to deliver consistent and repeatable returns during turbulent times, such as April and May 2021.”
Henry Howell, Nickel’s Head of Business Development, adds: “Security of clients' assets is paramount at Nickel. We deploy independent institutional-grade custody models in partnership with US-based Fidelity and UK-based Copper. using a range of sophisticated cryptographic solutions, including distributed private keys and MPC (multi-party computation) vaults. The approach is based on air-gapped, multi-signature, cross-organisation setup, thus mitigating a “single point of failure”, typically associated with self-custody of crypto assets. In our setup, the join control over fund assets is retained by independent fund administrator and fund custodian at all times.”
Like this article? Sign up to our free newsletter Related Topics Digital AssetsSir Christopher Hohn’s activist hedge fund TCI calls for special shareholder meeting in bid to overhaul Canadian National
TCI Fund Management, Sir Christopher Hohn’s high-profile activist hedge fund firm, is calling on Canadian National Railway to end its “reckless, irresponsible, and value destructive pursuit” of Kansas City Southern, and wants to requisition a special meeting of CN shareholders aimed at overhauling the board and replacing its CEO.
TCI, which has been a shareholder in CN since 2018, last week increased its holdings to more than 5 per cent of the shares outstanding, valued at USD4 billion.
TCI said on Tuesday it has retained shareholder advisory firm Kingsdale Advisors to offer strategic advice, assist in engaging with shareholders, and, “if CN continues to act in a manner that ignores the interest of shareholders and a proxy fight is required, Kingsdale Advisors will lead TCI’s campaign for positive change.”
Montreal-based Canadian National Railway has made a USD30 billion swoop for Kansas City Southern, the US, Mexico, and Panama-focused railroad operator.
Sir Christopher Hohn’s London-based activist hedge fund giant, which takes a value-oriented, fundamental, private equity-style approach to investing, wants CN to halt its pursuit of KCS and change direction.
TCI founder and portfolio manager Hohn said he believes most CN shareholders share TCI’s vision, will support its proposed actions and leadership changes, and called on CN to “listen to its shareholders and engage with TCI constructively.”
“We believe CN’s best days are ahead of it, provided the company immediately withdraws from its reckless, irresponsible, and value destructive pursuit of KCS,” Hohn said in Tuesday’s announcement.
TCI criticised CN’s ‘copy-cat’ bid for KCS, saying it reflected a “defensive motivation and lack of strategic thinking”.
It said CN has misjudged the view of the railroad industry regulator the Surface Transportation Board, which earlier this month rejected CN’s proposed deal structure.
TCI said persisting in the face of opposition from the STB and other government agencies would be “negligent, hugely damaging to the reputation of CN”, and “potentially financially disastrous because it would expose the company to the risk of forced divestment and damaging remedies.”
Combined with CN’s continued operational underperformance, TCI said the saga makes the case for change at the “compelling and clear.”
“It is shocking to us that there is currently no-one on the Board who has had any meaningful outside involvement, background or training in the railroad industry. The bid for KCS exposed a basic misunderstanding of the industry and the regulatory environment,” Hohn said.
“The CN Board must therefore take full responsibility for its egregious failure of oversight in sanctioning the bid.”
Kingsdale Advisors has previous experience in the railroad industry, having earlier represented high-profile hedge fund veteran Bill Ackman, founder and CEO of Pershing Square Capital Management, in his campaign to change the board at Canadian Pacific Railway.
Hohn now wants to “urgently” requisition a meeting of CN shareholders to nominate “at least five new directors with a with a mandate to lead the Board in the process of selecting a new world class CEO with extensive experience of railroad operations to turn CN around.”
TCI wants to remove CEO Jean-Jacques Ruest and has identified Jim Vena, who has previously worked at CN and Union Pacific, as his replacement.
Like this article? Sign up to our free newsletter Related Topics Deals & TransactionsDTCC's FICC launches new sponsored general collateral service
The Depository Trust & Clearing Corporation (DTCC), a post-trade market infrastructure provider for the global financial services industry, has launched its Sponsored General Collateral (GC) Service, a new offering from its Fixed Income Clearing Corporation (FICC) subsidiary, where the first trades have been executed by BNY Mellon, Federated Hermes and JP Morgan Securities LLC.
The new Sponsored GC Service allows Sponsoring Members and their Sponsored Member Clients to submit triparty repo transactions executed on a general collateral basis across US Treasury securities, agency debentures and agency mortgage-backed securities collateral to central clearing. Users benefit from a reduction in operational and counterparty risk, potential balance sheet and capital relief, and access to greater market liquidity. The new service has been launched in collaboration with BNY Mellon and with the support of Broadridge.
“We are pleased to work with BNY Mellon, Federated Hermes and JP Morgan Securities in making this new service a reality,” states Murray Pozmanter, Head of Clearing Agency Services at DTCC. “FICC’s Sponsored Service has become an integral part of the US repo market, and the new Sponsored GC Service will enable us to further enhance risk management through broader access to central clearing. We look forward to welcoming clients to the service while also continuing our work with Broadridge.”
As part of this offering, cleared repo transactions will settle on the triparty platform of BNY Mellon, similar to how triparty repo transactions are handled outside of central clearing today. By enabling access to FICC via BNY Mellon’s triparty repo platform, users benefit from an operationally efficient way to clear their repo transactions – including overnight and term repo transactions. BNY Mellon will also act as a Sponsoring Member for Sponsored Member Clients seeking to participate in cleared repo via the new Sponsored GC Service.
“Triparty sits at the heart of BNY Mellon’s collateral management offering, providing operational efficiencies and promoting collateral optimisation and mobilisation for more than USD3.6 trillion in balances on our platform,” adds Andrea Pfenning, President & COO of BNY Mellon Government Securities Services Corp. “In addition to our existing settlement role for FICC’s Sponsored Service where trades settle bilaterally, BNY Mellon will now provide settlement for FICC Sponsored GC Service transactions via triparty. We are pleased to be playing an integral role supporting this product for FICC and the broader market.”
To make this trade a reality, DTCC worked closely with Broadridge to support the connectivity of JP Morgan Securities and other Sponsoring Members into central clearing, enabling these Members to submit and process their Sponsored activity at FICC.
“We’ve worked very closely with DTCC and BNY Mellon over the past few years to bring DTCC’s recent enhancements to the Sponsored Service to life by helping to connect Broadridge users with FICC,” says John Garahan, Head of North American Fixed Income at Broadridge. “Broadridge is excited to roll out this latest offering under FICC’s Sponsored Service umbrella to enable clients to take full advantage of these programmes.”
Broadridge adds fintech fixed income veterans to LTX team
Broadridge Financial Solutions has added Ted Bragg and Jim Kwiatkowski to the team at LTX, a Broadridge company offering a new AI-driven digital trading platform for corporate bonds.
Bragg and Kwiatkowski join the LTX leadership team, working closely with LTX CEO Jim Toffey to accelerate the digitisation of corporate bond trading.
"As we leverage next-gen technologies to take the bond market to the next level, Ted and Jim are welcomed additions who are recognised leaders with decades of experience driving transformation in the capital markets industry," says Toffey. "These latest hires reinforce Broadridge's commitment and investment in LTX and we look forward to further strengthening our liquidity network, enabling more dealers and investors to trade smarter."
Bragg brings more than 30 years of executive leadership in the global markets and will be responsible for further enhancing LTX's trading capabilities. Most recently, Bragg served as Vice President and Head of Fixed Income at Nasdaq where his responsibilities included running the Execution Access broker-dealer team and the registered ATS, NFI, for US Treasuries. Previously, Bragg was SVP for TP-ICAP Securities USA, where he was responsible for expanding fixed income initiatives to create liquidity sources for fixed income and credit markets. Prior to ICAP, Bragg held a variety of leadership roles for BNY Mellon, including Managing Director in the Markets Group, as Head of E-Commerce strategy.
Kwiatkowski also joins LTX with more than 30 years of industry experience. Most recently, he served as Managing Director and Global Head of Transaction Sales at the London Stock Exchange where he was responsible for leading sales of the foremost electronic trading platform for foreign exchange. Prior, he served as Global Head of Transaction Sales at Refinitiv, encompassing both client relationship management and new business teams for the buy-side and sell-side client segments. Prior to Refinitiv, Kwiatkowski was Global Head of Transaction Sales at Thomson Reuters, which he joined as part of the acquisition of FXall, where he was also Global Head of Sales, through its successful IPO.
Centaur expands in London
Centaur Fund Services, a specialist in fund administration and fiduciary services, has moved to new offices in the heart of the West End of London. This new location marks the continuation of Centaur’s European expansion.
After more than a decade of building client relationships and providing extensive services to hedge fund and private equity clients, Centaur is cementing its position as an asset servicing partner across Europe with an increased footprint and presence in the UK capital.
Gavan McGuire, Head of Business Development Europe, says: “This move marks a significant milestone for Centaur’s UK and European presence. We have a significant client base which has been built over the past decade and the new location, along with the expansion of the London based team will enable us to continue to support our partners with the excellent service that Centaur is renowned for.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsAlphaTrAI appoints Chief Investment Officer
AlphaTrAI, a technology-driven asset management firm that delivers results through transformative artificial intelligence, has appointed Max Gokhman as Chief Investment Officer (CIO).
In this role, he will oversee the firm’s quantitative, multi-asset, AI-enabled platform.
The firm also announced the expansion of its advisory council with Amy Wierenga, John Culbertson, Andrew Malloy, and Jose Pierre.
“Max shares our firm’s commitment to modernising asset management by harnessing the power of artificial intelligence,” says Andreas Roell, CEO, AlphaTrAI. “He has the right combination of investment discipline and passion for innovation to deliver long-term value to our clients. His addition is powerful proof of how we are seeking to blend technical innovation with experienced financial discipline.”
Gokhman was most recently Head of Asset Allocation for Pacific Life’s multi-asset investment division, Pacific Life Fund Advisors (PLFA), with over USD33 billion under management. Before joining Pacific Life, he was a global macro portfolio manager at Mellon Capital which acquired Coefficient Global, a quantitative hedge fund where he was a founding member. That fund achieved strong positive performance through both the crash of 2008 and the rebound of 2009.
Gokhman received a BA in Economics and Psychology from Claremont McKenna College in 2006. He is a member of the Milken Institute Young Leaders Circle, the Global Capital Markets Advisory Council, and is a CFA charterholder. Outside of work, Gokhman is an amateur racing driver competing at tracks across the West Coast.
“Artificial intelligence is the future of finance, so I am thrilled to join the brilliant team of AlphaTrAI that is quickly establishing itself as the vanguard of AI-powered investing,” adds Gokhman.
Coinciding with Gokhman’s hire, AlphaTrAI also added four additional members to its advisory council.
“We are excited to expand our advisory council with leading experts in their fields to help us build a firm that can stay ahead of cutting-edge technology and investment innovations in order to best serve our clients,” says Roell.
Amy Wierenga is Chief Risk Officer at GCM Grosvenor, a global alternative asset management firm, and is a member of the Absolute Return Strategies Investment Committee and the Private Equity, Real Estate and Infrastructure Investment Committee. She also serves on the Global Investment Council and the ESG Committee. With more than 20 years of industry experience at firms including Merrill Lynch and BlueMountain Capital Management, she was recognized by the Hedge Fund Journal as one of the 50 Leading Women in Hedge Funds in 2018.
John Culbertson is a strategic advisor and board member for Context Capital Partners and a member of the Management Board of Context Business Lending, a subsidiary of Context Capital Partners. He has more than 28 years of experience in quantitative trading, asset allocation, and alternative asset management. He is also a member of the Board of Directors at Wincoram Asset Management and member of the Board of Managers at Verger Capital Management.
Andrew Malloy is Founder of ATMalloy & Partners LLC Family Office Consultants and is an experienced family office executive, consultant, and alternative asset investor. Andrew is also the co-CIO of his multi-generational family's New York City-based single-family office.
Jose Pierre is Founder and CEO of Marketware International Inc, which provides technology platforms globally for secure, cost effective, high volume online trading and portfolio management. Jose has also served as Senior Strategic Advisor for RBC Wealth Management, PWC Canada, EPAM, Desjardins, National Bank Financial, and others.
Digital asset investment products see third week of positive flows
Digital asset investment products saw inflows totalling USD98 million last week, the third consecutive week of positive flows, according to the latest Digital Asset Fund Flows weekly report from CoinShares.
Bitcoin saw inflows totalling USD59m, marking a potential turnaround in sentiment amongst investors, while Solana remains the favourite with weekly inflows totalling USD13.2 million, doubling its total inflows year-to-date.
Ether also saw a third week of inflows totalling USD14.4 market, while ether market share is now at a record 28 per cent.
Like this article? Sign up to our free newsletter Author Profile Related Topics Digital AssetsGreatest asset raising environment in the history of the hedge fund industry
By Don Steinbrugge (pictured), Agecroft Partners – The next 15 months will be the greatest asset raising environment in the history of the hedge fund industry and potentially a once-in-a-career opportunity for managers to grow assets. The strength of asset flows to managers will be much stronger than many industry professionals expect and potentially surpass USD1 trillion.
This should become clear as they consider these three factors that drive asset flows to managers: asset size of the hedge fund industry, manager turnover rate within investors’ portfolios, and net flows to the hedge fund industry. All of these point to record asset flows to hedge fund managers and are further described below:
Size of the hedge fund industry. BarclayHedge reported that hedge fund industry assets ended the 2nd quarter at an all-time high of more than USD4.3 trillion. This is up seven-fold from approximately USD600 billion at the turn of the century. Asset growth in the industry has been incredibly resilient, reaching new highs in 17 of the last 20 years. A majority of asset growth over the past decade is primarily attributable to compounding of industry assets due to positive performance and only a small amount came from positive net industry flows.
With limited net inflows of assets to the hedge fund industry, the size of the industry assets under management is an important driver of new asset flows to fund managers. Over the past 10 years, the hedge fund industry has been very Darwinian: Manager turnover within investors’ hedge fund portfolios has been responsible for almost all new asset flows to managers. Holding net industry inflows and manager turnover constant, the higher the hedge fund industry assets, the more new assets will flow to managers.
Manager turnover rate within investor’s portfolios. There is a natural rate of manager turnover that fluctuates over time within the hedge fund industry and can have a massive impact on new asset flows to managers. For example, a 15 per cent turnover rate of managers on USD4.3 trillion in assets results in USD645 billion in new asset flows to managers. If the turnover rate increases to 25 per cent, nearly USD1.1 trillion will flow to new managers. The manager turnover rate is typically driven by how investors perceive the relative quality of a manager versus others in their strategy, or by changes in target hedge fund strategy weightings within the portfolio. We expect manager turnover to reach an all-time high in calendar year 2022 due to pent-up demand, the large dispersion of returns among managers, and changes in hedge fund strategy preferences.
Pent-up demand to hire new managers. Covid 19 artificially reduced manager turnover. Coming into the pandemic, investors typically required an in person meeting with the hedge fund organisation before making an allocation. Travel restrictions effectively cancelled all in-person meetings, thereby putting most new manager hires on hold for calendar year 2020. Assets placed during the year were significantly reduced. The allocations made were typically with managers the investor had met before Covid 19 or recommended by their investment consultant. During the first half of 2021, we have seen a growing, but still small, number of investors gain comfort in allocating to managers based solely on virtual meetings.
Although the resurgence of Covid caused by the Delta variant has slowed the opening of many offices, we expect travel to pick up throughout the 4th quarter with most offices opening by 1 January. This will significantly increase the pace and efficiency of both investment due diligence and operational due diligence on new managers. It will also be the strongest catalyst for achieving record levels of manager search activity, manager turnover, and flows to new managers in 2022.
Large dispersion of performance among managers. Over the past 18 months, we have seen a complete market cycle. The largest selloff in the capital markets since 2008 was followed by one of the strongest bull markets in history. This market volatility has led to a large dispersion of performance across managers within similar strategies and across strategies. The turnover rate of managers in investors’ portfolios is positively correlated with the level of dispersion in returns across managers. Simply put, if most managers' performance is similar, few managers get terminated. When relative performance is widely dispersed, as was the case in 2020 and 2021, the rate of manager turnover increases significantly.
Changes in hedge fund strategy preference. The volatility in the capital markets over the past 18 months has also changed investors’ perception of relative values across the capital markets. This will influence investor preferences for hedge fund strategies and increase manager turnover. Allocations to less desirable strategies will be redeemed and the assets will be reallocated to managers in preferred strategies.
Net flows to the hedge fund industry. BarclayHedge reported positive net inflows during the past 12 months of USD148.8 billion. This resurgence of net new investments follows a decade of nearly flat net flows to the hedge fund industry. We expect this recent trend to continue due to strong hedge fund industry performance, low interest rates and a two tiered fee structure benefiting large institutional investors.
Strong industry performance. After a long period of broadly lacklustre results across the hedge fund industry, performance over the last 18 months has sparked renewed investor confidence. Hedge funds are typically added to investors’ portfolios to provide diversification and are expected to significantly outperform the capital markets during market selloffs. 2020 began with the largest selloff in the capital markets since 2008 and, for the most part, hedge fund performance met investor expectations. The modest drawdowns in the first quarter were followed by strong performance during the last 9 months of 2020. This resulted in the average hedge fund delivering net returns of almost 11 per cent for the full year 2020. The first six months of 2021 saw hedge fund industry performance up approximately 10 per cent, marking the strongest start to a year since 1999. Performance in 2020 and 2021 has led to growing investor confidence in the hedge fund industry and will help drive continued positive net industry flows.
Interest rates and credit spreads near all-time lows. Many large institutional investors evaluate the attractiveness of an asset class based on expected returns, volatility (risk) and correlation with other asset classes. Interest rates and credit spreads near all-time lows render fixed income strategies relatively less attractive. Interest rates cannot go much lower and credit spreads cannot get much tighter. As such, the negative correlation benefits typically anticipated from a “flight to quality” during equity market sell-offs will have limited positive effect on bond prices. The risk of owning fixed income has also increased, because the duration of bonds (sensitivity to interest rates) increases in low interest rate environments.
Finally, return expectations in the mid 2 per cent range make diversified fixed income portfolios less attractive to most public pension funds, whose actuarial rate of return assumptions are around 7 per cent, and to endowments and foundations with payout ratios of 4 per cent after allowing the fund assets to grow by the inflation rate. Many of these large institutional investors will continue to allocate away from low yielding fixed income investments to hedge fund strategies with higher expected returns and uncorrelated performance to the capital markets. Investors who do not view hedge funds as a separate asset class will invest part of their fixed income allocation to hedge fund strategies such as, distressed debt, specialty financing, structured credit, reinsurance and relative value fixed income among others.
Two tiered fee structure benefiting large institutional investors. High fees have historically been one of the biggest complaints about the hedge fund industry from large institutional investors. This fee pressure over the past decade has helped bring the average management fee down to 1.38 per cent and performance fee down to 15.9 per cent as reported by Eurekahedge. What typically is not mentioned, is the two tiered fee structure that has been adopted by the industry. Most hedge funds are willing to provide significant discounts to their standard fees to attract large institutional investors.
In addition to the volume of inflows at record levels for the hedge fund industry, we are also seeing many Hedge Funds no longer accepting assets. Based on data they received from Preqin, Bloomberg recently reported that a record 1144 hedge funds have closed to new money. Additionally, more than half of the largest multi manager funds, often referred to as multi-strategy, are no longer accepting new clients. This creates opportunities for new managers to fill the void.
What does all this mean to hedge fund managers? For managers seeking to raise assets and build new investor relationships, this may be a once in a career opportunity to do so. Most hedge fund managers have spent very few resources on travel or marketing over the past 18 months. Now is the time to use those resources to get in front of as many investors as possible. The most efficient way to do so is to participate in cap intro events hosted by both prime brokers and independent companies. Many of these will take place in January 2022 and managers who participate in multiple events will potentially have the opportunity to meet with more investors over a two-week period than they would be able to travel and see over the following six months.
This is not the time for managers to rely on posting their fund information and performance to industry databases and hope investors will come; very little new business comes from this strategy. Investors respond much better to a catalyst such as a cap intro event or in person meeting. Following the January cap intro events, hedge fund organizations should plan a heavy travel schedule for the first half of 2022. Once investors work through their pent up demand for new managers, we expect search activity to decline. This heavy travel schedule is also advisable for Managers that have had disappointing performance. To reduce the likelihood of redemptions, managers should be sure clients understand what drove the underperformance and are confident in the managers’ future performance.
EFA selects NeoXam for regulatory reporting
EFA, a provider of administrative services to the funds industry in Luxembourg, has selected NeoXam’s Impress Regulatory Edition to help meet its regulatory goals.
A calculation engine and advanced visualisation interface were key factors behind EFA’s decision to select NeoXam.
The regulatory environment around funds has drastically increased in recent years and this trend is expected to continue. As a leading provider of the fund industry in Luxembourg, EFA is committed to providing its clients with the best service and the most up-to-date tools to respond to their existing and future regulatory requirements. To this end, EFA wanted to adopt a dedicated platform to industrialise the operations of its teams of experts.
This decision both reinforces and expands the long-standing relationship between EFA and NeoXam initiated with the adoption of the back-office investment accounting tool NeoXam GP.
Gary Janaway, COO at EFA, says: “The ability to provide our clients with a full range of regulatory reports with increasing demand for digital output led EFA to extent our partnership with NeoXam. Primary factors that influenced our selection were the ability to manage the integrity and quality of data from internal production systems and to import data from external sources. Impress Regulatory Edition facilitates our clients’ need for high quality branded regulatory reports and provides EFA with a high capacity production capability.”
Florent Fabre, COO of NeoXam, adds: “The future of reporting is undoubtedly industrial and digital. We develop high-performance and innovative solutions that meet the demanding expectations of the market to support our customers. We’ve worked closely with EFA for over a decade now and look forward to continuing to support them in their growth.”
Qomply adds to advisory team
Qomply, a transaction reporting technology firm, has made David Peniket, former President of ICE Futures, Europe, the latest appointment to its high-profile advisory team.
Before joining Qomply, Peniket helped spearhead the growth of Intercontinental Exchange (ICE) in Europe through an 18-year tenure at ICE Futures Europe, including over a decade as President. Peniket led the ICE team which helped create the European Climate Exchange, and participated in a number of asset purchases, notably the creation of the Dutch exchange ICE Endex and the acquisition and integration of NYSE Euronext. Before joining ICE, Peniket was a financial management consultant at KPMG.
Since retiring in 2017, Peniket has continued his service to ICE, where he serves as Chair of ICE Futures US and a member of the ICE LIBOR Oversight Committee. He serves on the Advisory Board and Risk Committee at Prism FP and chairs the Development Committee at Wesley House, a Methodist College in Cambridge.
Michelle Zak, Director, Qomply, says: “David stands out as one of a small group of people in the financial industry who truly understands the ever-changing dynamic of financial markets and its participants. Throughout his career, he has exemplified the acumen necessary to drive, grow and expand a company. It is always personally satisfying to see such a creative and adaptive mind in the industry, and we are excited that David is joining us.”
Peniket says: “Qomply’s tools use technology to solve a pressing customer problem: how to provide executives, their boards and their regulators with assurance that their regulatory reporting is as complete and accurate as possible. I am delighted to have the opportunity to help Michelle and the brilliant Qomply team as the growth of their business accelerates.”
Peniket's appointment adds to that of Peter Green, an industry veteran and visionary who joined Qomply in March 2021.
Like this article? Sign up to our free newsletter Related Topics Moves & AppointmentsRegulated Investment Exchange launched by Bitfinex Securities
Bitfinex Securities, a provider of blockchain-based investment products, has launched a regulated investment exchange in the AIFC Fintech Lab, aiming at increasing accessibility to a large set of financial products for eligible members who wish to diversify their portfolio.
The Bitfinex Securities platform is designed to facilitate the raising of capital for issuers seeking to have their tokenised securities publicly traded through an easily accessible ‘admission to trading’ process. This meaningful step for the industry will widen access to a variety of innovative financial products, including notably blockchain-based equities and bonds, along with investment funds.
“As a pioneer in blockchain-based securities, we aim to be the most liquid exchange of its kind in the world,” says Paolo Ardoino, CTO at Bitfinex Securities Ltd. “Bitfinex Securities Ltd. provides a regulated platform serving small and medium-cap companies that are currently underserved by existing, inefficient capital markets.”
Like this article? Sign up to our free newsletter Related Topics Digital Assets Trading & ExecutionFundRock launches Middle East ManCo Services
FundRock, a European third-party UCITS Management Company (ManCo) and Alternative Investment Fund Manager (AIFM), has launched FundRock (ME) Ltd (FundRock ME), in the Abu Dhabi Global Market (ADGM) following full regulatory approval by the ADGM Financial Services Regulatory Authority.
FundRock ME operates a fully authorised ManCo for Qualified Investor Funds and Exempt Funds in the ADGM enabling asset management clients to streamline their operations in a cost-effective manner. As a subsidiary of the Apex Group, FundRock ME offers Middle East ManCo Services previously delivered under the LRI Middle East brand.
FundRock ME plans and coordinates all steps in fund structuring and all the legal and administrative requirements relating to the fund and investors. This new offering includes third-party ManCo services as well as in-depth advice on the opportunities, risks and requirements for designing, setting up and managing a tailored investment fund in the ADGM.
Services offered by FundRock ME include:
Managing a Collective Investment Fund
Managing assets
Arranging deals in investments
Advising on investments or credit
As part of the Apex Group, FundRock ME enables clients to benefit from access to a wide range of complementary fund administration, middle office, banking, depositary and custody services that are offered globally.
The business will be led by Senior Executive Officer Faisal Hasan, CFA, and Chief Risk Officer Martin Bond who bring a combined four decades of experience in financial markets in the GCC region.
Xavier Parain, Head of FundRock, says: “The launch of FundRock in the dynamic and fast-growing ADGM jurisdiction further strengthens our strategic intent to represent asset managers across their portfolio, helping them to tackle the complex regulatory requirements of cross-border fund distribution and supporting their asset raising activities.”
Faisal Hasan, CFA, Senior Executive Officer, FundRock (ME) Ltd, adds: “We are excited to announce the launch of FundRock ME, with an experienced team in place to act as the ideal partner for asset managers, institutional clients and family offices who wish to set up their funds and distribute them within the ADGM. As part of the Apex Group, FundRock ME offers a powerful solution for asset managers, providing local substance combined with global connectivity, enabling clients to focus on their core business.”
