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Ninety One extends transfer agency partnership with SS&C
Ninety One, a global investment manager, has extended its long-time relationship with SS&C. The firm has retained SS&C Global Investor and Distribution Solutions (GIDS) to provide transfer agency services to its Ninety One Fund Managers UK Limited business.
SS&C supports Ninety One’s UK business with a full range of transfer agency services, including investor, distribution and analytics solutions. As part of the agreement, SS&C will work with Ninety One to enhance the funds’ digital investor engagement and further develop analytics capabilities.
“We are pleased to continue our long-standing partnership with SS&C,” says Cora Kielblock, Head of Global Operations. “SS&C supports our growth with consistent service and continuous investment in new tools for investors, sales and distribution and transfer agency oversight. We look forward to continuing our collaboration.”
“We are delighted to support Ninety One’s range of OEIC funds as their business evolves and grows,” says Spencer Baum, Head of Client Service & Relationship Management at SS&C GIDS. “SS&C is committed to helping our clients retain and capture new assets through the full spectrum of distribution channels with cutting-edge technology and industry-leading service.”
Digital assets funds see fourth week of outflows, says CoinShares
Digital asset investment products saw another week of outflows totalling USD19.5 million, the fourth consecutive week of outflows, according to the latest Digital Assets Fund Flows weekly report from CoinShares.
Since the outflows began, prompted by negative price action in mid-May, outflows have totalled USD295 million, representing 1 per cent of assets under management.
Bitcoin saw outflows totalling USD20 million, its fourth consecutive week of outflows.
Multi-asset investment products continued to buck the trend with another week of inflows totalling USD7.5 million.
Like this article? Sign up to our free newsletter Related Topics Digital Assets Surveys & researchTraditionDATA launches new SOFR Indicative Rate Service
TraditionDATA, the data and information services division of Compagnie Financière Tradition (Tradition), has launched its new Secured Overnight Financing Rate (SOFR) Indicative Rate Service.
Tradition will combine market leading general collateral (GC) repo trade and volume data sourced from its number one interdealer brokerage desk, alongside anonymised tri-party repo trade and volume data from BNY Mellon.
The service takes the incoming data from both providers and uses a proprietary methodology to produce a volume-weighted median repo rate throughout the day which is intended to inform market participants’ assessment of where SOFR will fix the following day.
Scott Fitzpatrick, Global Head of TraditionDATA, says: “SOFR is here, and it is here to stay. We are acutely aware of the significance of this and the requirement for high quality data services around it. This new development from our data product team will provide a valuable insight during the trading day as to where SOFR is likely to fix tomorrow. In addition, this intra-day service will allow the global trading community to monitor trends and track stress indicators.”
Brian Ruane, CEO, Clearance and Collateral BNY Mellon, says: “The industry is at a critical juncture in the transition away from LIBOR. Therefore, the ability to offer indicative rates to financial market participants will help facilitate a more seamless transition to SOFR, the leading alternative benchmark, and help improve marketplace efficiency and transparency.”
DTCC launches enhanced CDS Kinetics platform to provide increased transparency in credit default swaps market
The Depository Trust & Clearing Corporation (DTCC) has launched an enhanced DTCC CDS Kinetics platform to support growing demand for more transparency into the credit default swaps (CDS) market within the over-the-counter derivatives space.
DTCC CDS Kinetics provides position data on credit default swaps sourced from DTCC’s Trade Information Warehouse (TIW), offering notional outstanding, net notional, and trading volume metrics on securities including single-name, index, and index tranche. TIW is a centralised infrastructure for reporting and asset servicing on approximately 98 per cent of all credit derivative transactions outstanding worldwide.
Recognising that credit default swaps are a critical data source for understanding market risk, the DTCC CDS Kinetics service has been enhanced to support increased analysis and understanding of the CDS market. The service, which previously featured point-in-time snapshots of credit default swaps data, has been upgraded to provide over 10 years of historical and time-series data, a new user interface with graphical representations, and the ability to search for CDS instruments by a range of attributes including underlying reference entity, market sector, market type, and geographical region.
“The new DTCC CDS Kinetics platform provides unparalleled transparency into the credit default swaps market, offering unique insights on credit risk that will not only inform trading strategies, but will also help banks better prepare for potential market dislocations,” says Tim Lind, Managing Director of DTCC Data Services. “Now more than ever, it’s critical for firms to begin drawing upon more robust and higher-quality data sources to heighten their risk preparedness and response, as well as their overall business resilience.”
The DTCC CDS Kinetics platform will also be made available in DTCC’s API Marketplace, as part of a planned future platform update. The API “App Store” allows direct programmatic access to DTCC processing functionality and includes comprehensive documentation and training materials to help developers use the APIs.
Adds Lind: “We worked closely with clients to develop the new API capability, which will allow users to leverage DTCC’s technology to suit their own business needs.”
Broadridge acquires post-trade solutions business
Broadridge Financial Solutions has acquired Alpha Omega, a market-leading FIX-based post-trade solutions provider for the investment management industry. This acquisition builds on Broadridge's recent acquisition of Itiviti.
The acquisition, which encompasses the remaining 68 per cent of Alpha Omega, will enable Broadridge to fully consolidate Alpha Omega’s post-trade matching and consolidation solution into its existing NYFIX connectivity and FIX infrastructure to better automate buy-side and sell-side firms’ trade matching processes and further accelerates Broadridge’s product roadmap.
“We are excited to formalise our four-year strategic partnership with Alpha Omega through this acquisition,” says Ray Tierney, President of Itiviti, a Broadridge business. “We are leading technology innovation in post-trade, and this acquisition is a testament to our continued growth and momentum in transforming this space. NYFIX Matching is the first ‘one-stop’ platform to handle all of a fund’s trade matching needs across various product types and asset classes.”
Alpha Omega brings invaluable expertise in advanced FIX-based technology for asset managers and broker/dealers in all areas covering automated allocation, confirmation and affirmation of trades for equities, fixed income securities, and derivatives.
NYFIX Matching, which combines Alpha Omega’s FIXAffirm solution with Itiviti’s NYFIX network, provides the market a single, consolidated platform to handle the entire affirmation process with the same speed and efficiencies of trading now applied to the post-trade piece of the workflow. Buy-side institutions can easily access NYFIX Matching through their existing NYFIX connections as a fully managed service. Through this service, the buy-side can allocate and match their trades, accomplishing same-day affirmation with a global community of more than 100 brokers. This extension of the NYFIX service into post-trade will deliver processing efficiencies with significant cost savings over current solutions.
Like this article? Sign up to our free newsletter Author Profile Related Topics Deals & Transactions Acquisitions Finance & Insurance Trading & ExecutionWhat are cryptoassets and how are they treated for tax purposes?
SPONSORED ARTICLE
Following HM Revenue & Customs’ (HMRC) recently published manual on cryptoassets, Stephen Kenny from Blick Rothenberg’s Financial Services team provides guidance on what they are, how they’re used and how they’re treated for tax purposes.
What are cryptoassets?
Cryptoassets are cryptographically secured digital representations of value or contractual rights that can be:
- transferred
- stored
- traded electronically
All cryptoassets use Distributed Ledger Technology – a digital system that records the details of the transactions in multiple places at the same time. The ledger acts as an immutable record of all the transactions that have happened previously.
What are the main types of cryptoassets?
The main types of cryptoassets are:
Exchange tokens – These are the most common sort of token, including bitcoin. They are intended to be used as a form of payment but have become increasingly common as an investment.
Utility tokens – These provide the holder with access to particular goods or services on a platform. Utility tokens can also be traded in the same away as exchange tokens.
Security tokens – These provide the holder with particular rights or interest in a business. ie ownership, repayment of a specific sum of money or entitlement to a share in future profits.
Stablecoins – These are linked to assets that are considered to have a stable value, such as a government currency or gold. The intention is to reduce volatility.
How are cryptoassets treated?
While the tax treatment of all types of token is dependent on the nature and use of the tax token in general, there are some who argue that dealing in cryptoassets is gambling. According to HMRC’s recent guidance, however, this is not the case.
Cryptoassets are intangible assets and in most circumstances, trading will be subject to Capital Gains Tax (CGT) for individuals. Therefore, only in exceptional circumstances would an individual be considered to be ‘trading’, as the level of activity and structuring would have to amount to a financial trade in itself.
As a fungible (mutually interchangeable) asset the calculation of gains/losses on cryptoassets will have to be done on a pooled basis (and have been acquired at their average price).
It is important to note that HMRC do not consider cryptoassets to be currency or money. This means that the useful exemptions for foreign currency bank accounts do not apply to cryptoassets and in practice all transaction in cryptoassets will be chargeable, meaning CGT could potentially arise on transactions between different cryptoassets being used to pay for goods and services.
This makes the calculations potentially very complex and the onus will be on the individual to keep sufficient records for each transaction. These would have to include:
- the type of cryptoasset
- date of the transaction
- if they were bought or sold
- number of units involved
- value of the transaction in pounds sterling (as at the date of the transaction)
- cumulative total of the investment units held
- bank statements and wallet addresses, in case these are needed for an enquiry or review
Further, as cryptoassets are intangible, it is necessary to consider their location. This is going to be particularly relevant for non-domiciled UK-resident taxpayers.
The location will depend on whether the cryptoassets are distinct from any underlying assets. Where the cryptoasset is distinct from any underlying asset the location would be determined by the residency of the beneficial owner. In practice this means that where the cryptoasset is held by a UK-resident taxpayer they will be liable for CGT and would not be able to benefit from the remittance basis.
As such, it is important for individuals trading in cryptoassets to take seek professional advice when calculating the capital gains. In calculating the gains, it is also necessary to consider the expenses that have been incurred such as exchange fees.
What are the tax issues presented by cryptoassets?
As a digital asset they are stored in ‘wallets’. What happens if the individual loses access to their wallet? They still own the cryptoasset, but are unable to access them. HMRC have accepted where an individual can show they have no prospect of recovering access it would be possible to make a negligible value claim.
Also, there can be a number of transactions that would affect the tax position of the cryptoasset that would need to be considered such as: where a blockchain forks (i.e. splits into two distribution ledgers) or airdrop (receiving cryptoassets as part of marketing or advertising campaign).
If an individual is involved with staking (verifying transactions) and mining (verifying additions to the blockchain), these are going to be taxable as Income Tax. Whether they are treated as miscellaneous income or trading will depend on:
- degree of activity
- organisation
- risk
- commerciality
If the individual keeps the awarded assets there would be CGT to pay on the growth.
Summary
As cryptoassets continue to become more widely used it is necessary to seek professional tax advice on the treatment of these assets. Beyond the basic position, there are a number of other tax implications, including:
- treatment of remuneration in cryptoassets
- the Inheritance treatment of cryptoassets
- the Stamp Duty treatment
- the treatment of cryptoassets for corporates
Next steps
If you have any questions on, or are unsure of the tax treatment of cryptoassets, or would like to discuss your specific circumstances, please contact Stephen Kenny.
Visit Blick Rothenberg’s Financial Services sector hub to find out more.
Like this article? Sign up to our free newsletter Author Profile Related Topics Digital AssetsQuant hedge funds tipped to flourish with institutional inflows set to rise
Pension funds and institutional investors are set to increase their allocations to computer-based hedge funds over the next 12 months, with FX and equities-focused strategies tipped to see the biggest rise, according to new industry research by fintech and quantitative analysis platform SIGTech.
SIGTech’s ‘Hedge Fund Research Report 2021’ polled 100 leading hedge fund managers across the US, the UK and Asia in June, collectively managing more than USD231 billion in assets.
The study found that 80 per cent of those hedge fund managers polled expect institutional investors to up their allocations to quantitative strategies this year, with some 51 per cent expecting a ‘slight’ increase and 29 per cent forecasting a ‘dramatic’ increase.
It also found 78 per cent of managers believe systematic strategies – which use computer-driven models and complex algorithms to trade a range of assets – are well-placed to perform better in 2021 than in 2020, with 68 per cent expecting quants to outperform this year.
Roughly three-quarters (73 per cent) of those surveyed said the prevailing economic and fiscal environment is particularly suited to quant funds, while nearly six out of ten (59 per cent) believe many are becoming more attractive because they offer diversification benefits for investors’ portfolios.
Against that backdrop, more systematic strategies are expected to capitalise on the attractive market conditions, with some 86 per cent of those quizzed expecting a rise in the number of quant hedge funds over the next five years.
Asked about asset inflows over the coming 12 months, FX and equities-based quant funds ranked highest among the survey’s participants, followed by rates, volatility and commodities-focused funds.
SIGTech – which spun out from global macro hedge fund giant Brevan Howard Asset Management in 2019 – is a London-based fintech and quantitative analysis platform supporting data-driven, rule-based systematic investment processes for asset managers and hedge funds globally.
Chief Operating Officer Andrew Liddle (pictured) pointed to the growing levels of sophistication and innovation across the quants sector which is ultimately helping to drive its momentum.
“2021 is proving to be a strong year for hedge funds in terms of performance and the sector is on track for sustained growth. Exposure to new or previously under-utilised datasets and methods in social media, crypto, and even more recently, nowcasting, are further fuelling innovation in the industry,” Liddle said.
“When launching new systematic investment processes, infrastructure build-out and data management can be slow and expensive, while strategy development and backtesting can be cumbersome and repetitive. Fund managers are increasingly looking for new ways to reduce inefficiencies and create operational leverage via SaaS solutions and ‘plug and play’ technologies to ensure that their funds can improve their pace, scale and innovation when launching new strategies.”
Like this article? Sign up to our free newsletter Related Topics Investments Surveys & researchVoting now open for Hedgeweek Americas Awards 2021
Voting is now underway for the Hedgeweek Americas Awards 2021, which will be announced and celebrated at an exclusive awards presentation ceremony and industry networking event to be held on Thursday, 21 October at The University Club of New York.
The Hedgeweek Americas Awards – hosted by Hedgeweek, with fund manager data being provided in partnership with Bloomberg – recognise and honour excellence among hedge fund managers and service providers in the Americas.
The hedge fund categories cover a wide range of investment strategies – including Equity, Credit, Macro, CTA, Event-Driven, Specialist Sector, Relative Value, Insurance-Linked Strategies, Structured Credit and Multi-Manager – while the service provider categories span all the key areas of the broader hedge fund industry ecosystem.
This year the hedge fund manager award spectrum has been further expanded to include several additional categories – including Women-Managed funds, Emerging Manager funds, Liquid Alternative funds, Canadian funds, and Latin American funds.
The awards follow a clear and transparent methodology. For the manager categories, the shortlists are based on data provided by Bloomberg – with the candidates being selected on the basis of annualised performance by Americas-based hedge funds in their respective categories over a 12-month period from 1 June, 2020 to 31 May, 2021.
More than 80 different single-manager and multi-manager hedge fund firms have been shortlisted across the 29 fund manager award categories this year, representing a broad and diverse cross-section of the hedge fund manager universe across the US, as well as in Canada and Latin America.
For the service provider categories, the nominations are based on a widespread pre-poll survey of more than 100 managers and other key industry participants.
Voting for the eventual winners is being conducted over the next several weeks via an online poll of the extensive Hedgeweek readership, with participants invited to make their choices among the pre-selected firms in each category.
All winners are invited to attend an exclusive awards ceremony and networking event on Thursday 21 October 2021 at The University Club of New York at 17.00 EST. The results of the awards will also be covered – along with winners’ profiles – in a Hedgeweek Americas Awards Special Report that will be distributed globally.
Voted for by participants within the hedge fund industry itself, the awards represent an important mark of recognition and respect among peers, investors, advisors, and counterparties – highlighting the achievements and successes of the leaders and top performers in an extraordinary and very challenging year.
To participate in the poll, please click here. For all information about the Hedgeweek Americas Awards, see here.
Like this article? Sign up to our free newsletter Related Topics AwardsBitfinex Derivatives to launch Solana perpetual swap
Bitfinex Derivatives, a derivatives platform accessible through the Bitfinex digital token trading platform, has launched a perpetual contract for solana (SOLF0:USTF0).
Solana (SOLF0:USTF0) will go live on 02/08/21 at 10:00 AM UTC. The contract offers users up to 100x leverage and will be settled in tether tokens (USDt).
“We’re delighted to announce the addition of Solana to the growing portfolio of perpetual swaps available to trade on the exchange,” says Paolo Ardoino, CTO at Bitfinex Derivatives. “We anticipate great interest in these products, particularly among funds and professional investors for hedging purposes and to manage risk.”
Bitfinex Derivatives platform and products are only available in eligible jurisdictions, and are exclusive to verified users.
Like this article? Sign up to our free newsletter Author Profile Related Topics Digital Assets Trading & ExecutionHIG Capital to acquire Quick Restaurants
An affiliate of global alternative investment firm HIG Capital (HIG) has entered into a definitive agreement to acquire Quick Restaurants (Quick) from Burger King France.
The transaction is expected to be completed before the end of the year, following regulatory approval.
Established in 1971, Quick is one of the leading burger fast food chains. Present in France since 1980, Quick serves more than 36 million meals per year from a network of 107 restaurants.
Olivier Boyadjian, Managing Director at HIG Capital, says: “HIG’s investment will support Quick’s management team in its transition to an independent company and further accelerate its expansion with an objective of doubling the size of its network in the coming years.”
HFD to power 177 Bothwell Street development via renewable energy deal
HFD Group has announced it will deliver 100 per cent of the energy for its flagship 177 Bothwell Street office development in Glasgow from an identified, local renewable supply.
Set to be Glasgow’s largest single office building when it completes in Q4 2021, the 313,000 sq. ft. property will receive 2.52 GWh of certified wind energy from Blantyre Muir Wind Farm in South Lanarkshire, located just 15 miles away.
HFD will receive the energy through an innovative corporate power purchase agreement (PPA), thought to be the only deal of its kind between a property company and energy provider in Scotland. Its origin will be guaranteed through the Renewable Energy Guarantee of Origin (REGO) scheme.
Established 10 years ago as a joint venture between Engie and HFD Group, Blantyre Muir Wind Farm comprises of six wind turbines. Phase 1 of the wind farm originally powered HFD’s EcoCampus development in Hamilton – home to the University of the West of Scotland – along with HFD’s serviced office properties at Strathclyde Business Park and Hamilton International Park.
The latest commitment from HFD underlines its ambition to create Glasgow’s most sustainable office building. Last year, the company announced 177 Bothwell Street would be fully electric, with zero carbon emissions. The building is set to achieve an Energy Performance Certificate (EPC) score nearly 50% above the standard for an ‘A’ rating.
177 Bothwell Street will also feature a range of facilities for climate-friendly commuting, with extensive provisions for cyclists and capacity for all 48 of its car parking spaces to connect electric vehicle charging points.
A number of occupiers have already secured space at 177 Bothwell Street, with Virgin Money pre-letting 65,000 sq ft, BNP Paribas letting the first floor, and CBRE taking a further 18,000 sq ft. An independent economic impact assessment concluded that the development will generate GBP2.8 billion of gross value added (GVA) to the Scottish economy over 25 years.
Stephen Lewis, managing director of HFD Property Group, says: "Sustainability is not new for us, but we were determined to take it even further at 177 Bothwell Street. The infrastructure at Blantyre Muir Wind Farm was only made possible through our PPA with Engie and it has formed a cornerstone of our commitment to green energy across our property portfolio over the past decade.
“Generating 100 per cent renewable energy from an identifiable source in close proximity to the building was important for us so that our occupiers can say they are delivering on their sustainability pledges with full transparency. It is another important part of how we plan to deliver a de-carbonised building, through the reduction of consumption, the use of renewables, and recycling wherever possible.
“The arrival of the COP26 summit in a few months’ time will focus attention on the efforts being made in Scotland, and the wider UK, in the fight against climate change. The built environment represents a significant amount of annual carbon emissions, and it is incumbent on us all – from construction to property management – to try to minimise the sector’s environmental impact.”
AirCarbon Exchange reports 3.6 million carbon credits traded in H1
AirCarbon Exchange (ACX), a fully digital exchange for voluntary carbon credits with real-time trading and settlement, has executed transactions representing 3,603,284 metric tons of carbon dioxide equivalent (tCO2e) during the first six months of 2021.
Most of the trading on the exchange has been on the CET (CORSIA Eligible Token) contract, making it one of the world’s most traded carbon contracts. Open interest on the exchange continues to increase, from 854,366 tCO2e as at 30 June, 2021 to 1,115,266 tCO2e currently.
ACX has solidified its international reach by attracting over 130 clients across 29 countries. In the second half of 2021, ACX will continue to expand its global footprint with offices in Abu Dhabi, London and Canada. During this first half, ACX has doubled its personnel and continues to expand and strengthen its team.
ACX has also grown its ecosystem of partnerships with companies at the forefront of innovation in the carbon industry, strengthening the quality, service and product offerings on the exchange. ACX is the first exchange to integrate BeZero’s carbon ratings to assess the quality of voluntary carbon credits. The exchange has also partnered with Abaxx to develop carbon solutions for the LNG market and with Flovtec to enhance liquidity of tokens on the exchange. Additional partnerships include established carbon market entities such as Redshaw Advisors, BLOCK C and EQAO.
Thom McMahon, CEO and Co-Founder of AirCarbon Exchange, says: “It has been an incredibly exciting time since we started trading in January. We have grown significantly and it is clear that the exchange offers much needed transparency and liquidity to the voluntary carbon market. Our client list continues to grow and we have partnered with some excellent innovators in the industry. We won’t be slowing down any time soon.”
Bill Pazos, Managing Director and Co-Founder of AirCarbon Exchange, says: “First and foremost I want to thank the 130-plus companies that have helped us get to this milestone. Their endorsement has made our CET contract one of the most traded carbon contracts in the world. Our intent has always been to become a global marketplace for carbon. By deploying contracts around market demand, we take friction out of the carbon markets. Investors, previously on the side lines, are discovering that it is now easy to gain exposure to the carbon asset class. Bringing price transparency and increasing liquidity is our driving force.”
Appital to partner with Turquoise to bring 'pioneering' bookbuilding technology to the buy-side
Appital has partnered with pan-European MTF Turquoise, which is majority owned by London Stock Exchange Group in partnership with the user community, to unlock latent liquidity opportunities and bring further efficiency to equity capital markets.
Appital gives the buy-side community greater exposure to deal flow opportunities they have not been able to access before. The Appital platform unlocks latent liquidity and efficiently drives a bookbuilding process, providing deal originators with opportunities to execute large volumes, often in excess of five days of ADV, with minimal market impact or risk of price erosion. At the same time, the platform enables deal participants to highlight the types and sizes of opportunities they are looking for, specifying market, sector, market cap and size of interest.
Block trading has become increasingly mainstream among institutional investors seeking access to liquidity, with block trading mechanism Turquoise Plato Block Discovery reporting record volumes over the last year.
The cooperation between Appital and Turquoise brings together complementary capabilities to the benefit of issuers and investors. 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. Additionally, institutional investors will be able to take advantage of an innovative and efficient way to access liquidity opportunities and trade in a market for size, at the best price.
Appital is actively building out its platform and technology infrastructure with forward-looking buy-side firms and vendors for a launch later this year.
Mark Badyra, CEO of Appital, says: “We are delighted to partner with Turquoise to provide the buy-side community with the ability to proactively source liquidity in the market and interact with like-minded institutions in the liquidity formation process. Working with a champion of innovation such as Turquoise is allowing us to realise our ambition to give institutional investors real-time visibility, full transparency and maximum control over the bookbuilding and deal distribution process.”
Badyra adds: “Both of our firms are committed to delivering technological solutions for the buy-side and we see this as a real opportunity to continue to promote London and the UK as a centre of excellence for innovation within global capital markets.”
Dr Robert Barnes, CEO, Turquoise Global Holdings & Group Head of Securities Trading at LSEG, commented: “Turquoise is committed to serving our customers through innovation. Connecting to Appital will bring additional transparency and automation to the process of liquidity discovery. I look forward to continuing our cooperation with Appital to unlock liquidity for investors.”
Brian Guckian, Chief Business Development Officer, Appital, adds: “The combination of Appital and Turquoise is a true evolution of the market and provides a venue for the buy-side to drive liquidity and efficiently trade the full spectrum of trade sizes.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Trading & ExecutionThe Covid bet: How the pandemic has disrupted the Momentum-Value equity equation
The traditional relationship between Momentum and Value factors is becoming increasingly blurred as the Covid-19 pandemic has upended equity markets, according to Unigestion.
New research from Unigestion’s equities team suggests investor confidence has been dented in recent weeks as the Delta variant has taken hold in several countries that had earlier been buoyed by the vaccine rollout. Earlier, the stock market rally towards the end of 2020 into 2021 – propelled by the vaccine push – had reversed the fortunes of certain so-called Covid “winner” and “loser” equities, such as healthcare and software.
Unigestion said this ‘winners and losers’ theme in equities, which emerged out of the disruption of the pandemic, has underpinned the performance of both Momentum and Value names for much of the past year – but is now being disrupted as investors shift their focus toward economic reopening and recovery.
“As sentiment changed following the ‘Vaccine Rally’, Value has enjoyed a strong run of performance. A natural conclusion might be that, as Momentum and Value have coalesced, Value’s relationship with the Covid bet has also weakened,” analysts observed in a market commentary.
“The result is an equity factor suite that is better diversified, capturing a greater set of effective bets.”
Unigestion data shows that, in January, Momentum still dominated the Covid bet, with roughly 60 per cent of longs and shorts remaining in their top and bottom deciles, respectively.
But by April, Momentum “had lost much of its Covid bet”, and by early July a large proportion of stocks held long basket in October had now been moved to the short basket – “a partial inversion of the portfolio held only six months earlier”, according to Unigestion’s data, underlining the extent of the shift.
“Healthcare stocks which might have benefitted from the pandemic have reverted sharply. Similarly, some software companies which initially benefited from the remote working scenario now constitute some of the poorest recent performers,” the note said. “While materials stocks may be considered more cyclical, we see precious metals miners transitioning from long to short.”
Analysts believes Momentum has changed character dramatically, partly as a result of the “neutralisation” of the Covid bet that dominated 2020.
“While its relationship with Value has also shifted, we do not see evidence that Value has lost its sensitivity to the Covid bet.”
Unigestion added: “Where Momentum gains would have once offset Value losses – and vice versa – the relationship between the two is likely to be much more blurry going forward. At the factor portfolio level, rather than having two broadly cancelling positions, we should enjoy a more diversified set of returns.”
Like this article? Sign up to our free newsletter Related Topics Comment Coronavirus Surveys & researchTHETA appoints Strategic Sales Advisor
THETA, a specialist provider of buy-side trading technology as a service, has appointed Paul Flanagan as Strategic Sales Advisor, managing relationships with asset managers, hedge funds, fund managers and pension funds.
Flanagan has worked in Fixed Income sales to financial institutions for over 30 years. Most recently he was Managing Director for Institutional Investor sales at Lloyds Bank in London, where he worked for over five years. Previously he has worked in Fixed Income sales management at Societe Generale, HSBC, Citi and Deutsche Bank.
Flanagan joins as THETA is due to launch its trading system for the buy-side, Apollo, later in 2021. Apollo is a cloud native SaaS super aggregator, designed from the ground up to address the gaps and challenges faced by firms as market structures and trading landscapes evolve.
Abdullah Hiyatt, THETA Founder & CEO, says: “As we move closer to launching Apollo we continue to raise awareness among buy-side trading firms and grow our sales pipeline. Paul’s appointment accelerates this process, as he provides us with unrivalled Fixed Income knowledge, business development expertise and a wealth of senior industry relationships.”
Flanagan says: “As the trading landscape evolves at speed, buy-side firms are increasingly demanding more flexible, modern and efficient electronic trading technology. THETA provides an ideal technology platform to automate electronic trading workflows together with actionable integrated pre-trade pricing data. From initial discussions with market participants, there is already a great deal of interest in THETA’s super aggregator, Apollo. I am confident that by introducing Apollo to my industry relationships we will quickly extend distribution to an extensive group of institutional investors.”
The Apollo platform provides multi-channel liquidity aggregation and trading, initially for Fixed Income. FX trading will be added later in 2021 and Equities during 2022. THETA has already built trading and data connectors for MarketAxess, Tradeweb, MTS BondVision, UBS Bond Port, Neptune, BondCliQ, IHS Markit, ICE Data Services, and Refinitiv amongst others. The SaaS platform integrates with clients’ existing P/OMS systems via FIX and REST APIs.
Engaging with niche and leading asset managers, equivalent to USD5 trillion AUM, THETA plugs the gap between current EMS capabilities and the evolving new trading landscape demanded by traders and regulators.
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsDimensional strengthens EMEA investment leadership team
Dimensional Fund Advisors, a specialist in systematic factor investing, is bolstering leadership in its affiliate’s London-based EMEA Investment team, effective 1 August 2021.
Paul Foley will be assuming the role of Head of EMEA Portfolio Management, while Kipp Cummins becomes Head of EMEA Fixed Income.
As Head of EMEA Portfolio Management, Foley will oversee all portfolio management activities in London for Dimensional Fund Advisors Ltd. (Dimensional UK), reporting to Nathan Lacaze, Co-Chief Executive Officer at Dimensional UK. Lacaze previously held these responsibilities in addition to his Co-CEO role.
Foley previously served as Senior Portfolio Manager and Vice President of Dimensional UK. Prior to that, he was a Portfolio Manager. Foley joined Dimensional in 2003 on the Trading team. He holds a bachelor’s in business studies (first class honours) from the University of Portsmouth and is a CFA® charterholder.
Cummins assumes the newly created role of Head of EMEA Fixed Income. He will have responsibility for fixed income portfolio management and trading for Dimensional UK, reporting to Foley in London and Dimensional’s Head of International Fixed Income Joel Kim, who is based in Singapore.
Cummins was previously a Senior Portfolio Manager and Vice President of Dimensional UK. He joined Dimensional in 2012 as a Fixed Income Trader, having spent several years as a trader at a Texas-based asset manager. A CFA® charterholder, Cummins earned an MBA from the University of Texas at Austin and a BS in business administration with a finance concentration from Trinity University in San Antonio, Texas.
“With extensive knowledge of the industry and Dimensional’s investment approach, Paul and Kipp bring significant experience to their new roles as we build strength in leadership in our London-based Investment team,” says Lacaze. “Both have the focus and integrity required to manage money for Dimensional, and it is a pleasure to work with them as they strive to deliver the best outcomes for our clients. They are valuable additions to our senior Investment team.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsRopes & Gray advises on sale of WellSky International to System C Healthcare
Ropes & Gray has advised WellSky Corporation – a portfolio company of TPG Capital and Leonard Green & Partners – on the sale of WellSky International to System C Healthcare, a provider of information technology implementation software and services to the health sector – and portfolio company of CVC Capital Partners.
Headquartered in Essex, UK, WellSky International is a UK-based medicines management company best known for clinical software in Pharmacy and Electronic Prescribing and Medicines Administration (EPMA). Its product portfolio encompasses critical care, emergency care, theatres, controlled drugs and mobile solutions for provision of bedside closed loop solutions and are used by a large number of NHS Trusts and Health Boards across England, Scotland, Wales and Northern Ireland, in addition to a number of international clients.
Its chemotherapy software is widely used internationally, particularly in Benelux and Scandinavia. Its pharmacy solutions also have an international footprint, with a large-scale solution covering some six million people deployed across 45 hospitals and 80 clinics in Western Cape, South Africa.
The Ropes & Gray team was led by private equity transactions associate Matthew Martindale working alongside associate Ashleigh Morton, counsel Victoria McGrath and partner John Newton, all based in London. Other members of the team included: privacy, data protection and cybersecurity partner Rohan Massey and counsel Clare Sellars (London); tax partner Andrew Howard (London); executive compensation & employee benefits partner Danna Kivell (New York); private equity real estate associate Nick Steynberg (London), litigation & enforcement counsel Sean Seelinger (London) and associate Brendan Kearney (Washington DC) and trainees Chad Parkinson, Emilio Fabrizi William Radcliffe and paralegal Matthew Rice (London).
SEC looking to strengthen whistleblower programme
Gary Gensler, Chair of the US Securities and Exchange Commission (SEC), has revealed that the SEC is reviewing its whistleblower programme.
Delivering keynote remarks at the National Whistleblower Center’s (NWC) National Whistleblower Day 2021 celebration, Gensler spoke of the critical role whistleblowers play in SEC enforcement efforts and reemphasised his commitment to the agency’s whistleblower programme. He also revealed that he has directed staff to review the whistleblower programme in order to improve its efficiency and effectiveness.
“The tips, complaints, and referrals that whistleblowers provide are crucial to the Securities and Exchange Commission as we enforce the rules of the road for our capital markets,” said Gensler. “Each week, when I see the Commission’s enforcement actions, I’m reminded how the whistleblower program helps us be better cops on the beat, execute our mission, and protect investors from misconduct.
“I’ve asked staff to examine whether and how the programme can be further strengthened to ensure misconduct within the remit of the SEC is identified, addressed, and stopped. We must ensure that whistleblowers are empowered to come forward when they see misbehaviour and that they are appropriately compensated according to the framework established by Congress, and that those who report wrongdoing are protected by retaliation. I also believe we should look for opportunities to continue to reduce processing times in SEC whistleblower award determinations.”
"We are pleased to hear that Chair Gensler and his staff are reviewing the SEC's highly successful whistleblower program," said NWC Executive Director Siri Nelson. "While the programme has been an immense success, there are areas, such as the processing time for award claims, which need improvement. The SEC Whistleblower Program should be consistently reviewed to ensure that it best protects whistleblowers and serves the interest of the American public."
“NWC plans on engaging in the discussion around potential reforms and will issue formal comments soon after National Whistleblower Day,” adds Nelson. “We would be happy to meet with the Chairman, the Commissioners, and other members of the SEC Commission Staff.”
In the decade since it was established, the SEC Whistleblower Program has been an immense success. Whistleblower disclosures have allowed the SEC to recoup nearly $3 billion in monetary sanctions and the whistleblower program has awarded approximately USD942 million to 186 individuals.
In September 2020, the SEC approved a number of rule changes to its whistleblower program. A number of these changes, including altered rules on “related-action” awards and stricter guidance on awards for independent analysis, were criticised by whistleblower advocates.
Akin Gump appoints new partner
Akin Gump has added John P Hamilton as a Partner in its investment management practice in New York. Hamilton comes to Akin Gump from Stradley Ronon Stevens & Young, LLP.
Hamilton’s practice focuses on advising private fund managers on the formation and operation of a broad range of investment vehicles across the liquidity spectrum, including hedge funds, private equity and credit funds, as well as funds of funds and managed account structures. He also advises clients on the incorporation of sustainability and impact-focused investment themes into their product offerings. In addition, Hamilton works with clients on transactional and regulatory matters in connection with the operation of their businesses.
“Adding top-tier talent to our industry-leading investment management team continues to be a strategic priority for us,” says Akin Gump chairperson Kim Koopersmith. “The global hedge fund market is experiencing a period of rapid growth and there is an increased need from our fund manager clients for sophisticated advice and counsel. John provides exactly what our clients need and is an ideal addition to our team. I am delighted to welcome him to Akin Gump.”
Hamilton previously served as the Asia head of Hedge Fund Consulting at Morgan Stanley in Hong Kong, where he provided strategic guidance to hedge fund managers in launching and scaling their businesses. Earlier in his career, he served as in-house counsel at Highbridge Capital Management, LLC.
“John’s experience in the prime brokerage industry, particularly through his work in Asia, will be invaluable, giving him the perfect vantage point from which to work with clients on their fund formation needs,” says Prakash H Mehta, co-head of Akin Gump’s investment management practice. “He has shown a strong record of success throughout his career, and I am thrilled to have him with us as we look forward to even further growth in the coming weeks.”
Hamilton says: “Akin Gump has a market-leading global funds platform that spans the industry’s key business centres. This is a terrific opportunity to work with clients in what is presently a very fertile market for the hedge fund industry, and I am incredibly excited to be here.”
Hamilton received his JD from New York University School of Law and his BA from the University of Virginia.
Hamilton is the second recent significant addition to Akin Gump’s investment management team in New York. In April, the firm welcomed partner Brian Daly, a leading advisor to hedge fund managers and private equity fund sponsors.
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsState Street partners with Lukka to expand digital asset fund admin capabilities for alt investment clients
State Street Corporation is to provide digital and cryptocurrency asset fund administration capabilities for the firm’s private funds clients.
In partnership with Lukka, an enterprise crypto asset data and software provider, State Street will support its private fund clients with collection, standardisation, enrichment, reconciliation, processing and reporting related to crypto and other digital assets.
The partnership is State Street’s latest effort in the digital and crypto asset space following the launch of State Street Digital, a division focused on addressing the industry’s evolving shift to digital finance, and comes after Lukka’s Series C funding round in December of 2020, which was led by State Street.
“The growth in popularity of digital assets is showing no signs of a slowdown and State Street Digital is committed to continuing to build out the necessary infrastructure to further develop our digital assets servicing models to help meet our clients’ growing demands,” says Nadine Chakar, head of State Street Digital. “Our work with Lukka will leverage their software and data in order to help expand our digital and crypto asset fund administration capabilities to alternative managers is just another advancement in our digital solution set and marks a very exciting development.”
State Street will leverage Lukka’s product suite, which includes a proprietary middle and back office data management solution, purpose-built for blockchain and crypto asset data, as well as Lukka Reference Data, and Lukka Prime Pricing Data. This will enable State Street to consume crypto assets that are comingled within a private client’s traditional alternative investments portfolios.
“As our clients continue to adopt digital assets, such as crypto, we’ve seen increasing interest among investors for institutional quality middle and back-office offerings that support diversified portfolios,” says Jen Tribush, alternatives lead for State Street Digital. “Lukka was the ideal partner to help provide these services given their leading position in crypto asset data as State Street continues to add to our growing offering in the digital asset space.”
“State Street is leading the charge to usher in the next generation of fund administration,” says Robert Materazzi, CEO of Lukka. “Large, traditional funds are rapidly looking to add crypto to their offerings, which leads them to ask their existing, trusted service providers such as State Street for fund administration. State Street was quick to recognise the importance of building capabilities to support crypto assets and we are proud to partner with them as funds quickly look to diversify their portfolios.”
