AMMF #63: Quant fund newbie, ESG problem, life on Bitcoin

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Welcome to our asset management marketing focus

This week’s edition brings you a new quant funds player, fintech’s forward thinking, the ‘S’ in ESG, and living life on only Bitcoin.

Movers & Shakers

Derek Brander headshotDerek Brander
Is now ➜ Head of UK Distribution at Candriam
Was: UK Wholesale Director at Candriam Asset Management


Faisal El-Hakim headshotFaisal El-Hakim
Is now ➜ Business Development Director at HANetf
Was: Head of Asia Pacific & Middle East ETF Business at Invesco Ltd.

Corinne Massuyeau headshotCorinne Massuyeau
Is now ➜ Global Head of Client Services at BNP Paribas Asset Management
Was: Global Head Institutional Client Services at Amundi
Kurtosys expresses their best wishes to all starting in their new positions.

Fund in Focus: FP Octopus UK Multi Cap Income Fund

Octopus- GroupThe investment tentacle of the over-arching Octopus Group of companies is aptly named Octopus Investments, and is set to launch its UK Multi Cap Income Fund to suit high investor demand for income in a low interest rate market. It acts as a sister fund to the FP Octopus Micro Cap Growth Fund, following a similar bottom-up investment strategy.
It will aim to deliver better-than-market returns from a portfolio of UK quoted companies from the FTSE 100, across the entire market cap spectrum, targeting a yield of 4% to deliver growing dividends on a quarterly basis.
It will be managed by Octopus Group’s Quoted companies team, led by Richard Power who has 20 years’ experience of investing with smaller companies, and the day-to-day management will be led by Octopus Fund Manager Chris McVey, who also has 20 years’ experience in small and mid-caps.
Vey says, regarding the launch: “Small and mid-size companies consistently outperform their larger peers, while also demonstrating faster growth in earnings and dividends.
“By harnessing this growth potential and blending it with exposure to larger, more established businesses, we believe we can offer investors an attractive and more diversified route to income, while providing scope for better than market capital performance.
“Octopus’s long-established expertise in finding attractive businesses with strong fundamentals makes us uniquely placed to create growth and income for our investors through this strategy.”
The fund’s offer period began this Monday, offering a limited share class with a discounted 0.30% annual management charge, but the full launch will take place shortly on 10th December.
Further information: Institutional Asset Manager | International Adviser

Firm in Focus: BlueCove

Robin-Hood-BlueCoveA bit of daylight robbery from the world of quant funds now, with the news that systematic investing specialists BlueCove are looking to take on bonds, like AQR Capital Management, with the poaching of quant investment teams from such firms as BlackRock, Vanguard, Citadel and Robeco.
With AQR known as revolutionaries in the quant world, this act shows a bold act from Hugh Willis’ BlueCove, a business he formed with former BlueBay chief executive Alex Khein. Willis himself was co-founder at BlueBay, and has looked to harness the power of computers for investment strategies. He notes that the bond market is poised for disruption, with only 0.2% of its $52 trillion is assets being managed in the quant strategies. This is opposed to the global equity market, whereby 10% of its $54 trillion is managed as such.
Willis is currently applying for licenses from the Financial Conduct Authority in the UK, and states that: “Actively managed scientific fixed income is set to be the next major growth market for the industry […] It has the potential to be the most important product development in fixed income markets since Vanguard launched the first passive bond fund in 1986.”
Most of the new staff taken from rival firms (around 80%) so far have been done so due to their knowledge of coding and computer science, and BlueCove is setting a target of acquiring up to 10 more hires before launching its first products in 2019.
Much like the Robin Hood of the quant fund sector, Willis has managed to gain nine workers from BlackRock’s systematic investing team for his team in London, which includes former deputy chief investment officer of systematic fixed income Benjamin Brodsky. He will now be head of investment, research and portfolio management at his new dig, alongside other BlackRock managing directors Ralph Smith, Michael Harper, Benoy Thomas and Heather DeGarmo.
Elsewhere, Citadel’s head of technology for global quantitative strategies Ian Howard has joined BlueCove as head of engineering, with Robeco’s Jeroen van Zundert becoming a quantitative researcher and Vanguard’s head of fixed income Nick Pierce is now the head of the investment process group.
It’s a large-scale hiring operation, and one acting to shake up the industry, not just in the shifting of personnel, but also looking to become one of the most pivotal new movements in the fixed income market.
Further information: Citywire Wealth Manager | Financial Times

Important Report

Human-RightsTime for a spot of the academic in light of ESG investing now, courtesy of Harvard Kennedy School in a specialised report entitled Money, Millennials and Human Rights: Sustaining ‘Sustainable Investing’. 
As outlined in this hefty report’s introduction, with the multiple cases of data breaches that can occur with the world’s biggest companies (Facebook’s Cambridge Analytica being the main story highlighted here), there is a serious issue of maintaining trust with customers that are pivotal to the business. Hence why the ‘S’ of environmental, social and governance investing is so important, and the most difficult for firms to standardise.
This paper takes a look into what constitutes areas of ESGs, and why it is so difficult for ESG rating agencies to standardise indicators for the ‘social’ funds, which in turn creates misleading data which reflects badly for investors. It also goes into detail specifically about the duty for businesses to fully understand and be mindful of human rights in all that they do, calling for further due diligence on the topic.
For those that are mindful of whether the ESG investing phenomenon is as fully realised as many believe, this excellent, thorough piece of investment research can help to paint a full picture.

Fintech News: Breaking Historical Barriers

Gender-equalityWhen gender equality in the financial services industry is brought up, it usually spells bad news. However, for the past year, things seemed to have stepped up a notch in the hiring of more female talent, and the promotion of far more women in the C-suite for major financial players.
Similarly, Investment News relates the fact that technology is also a fair way away from having gender balance within Silicon Valley’s largest companies; indeed, it highlights 66-75% of jobs within the tech world are held by men. They therefore asked the question – with the two combined in fintech, what’s the gender equality situation there?
Luckily, it seems financial technology is the main industry best suited to fostering female employees and encouraging leadership roles, ready to flip the stereotype of tech firms being run by the computer science graduates from the end of the 20th century. Instead, the Silicon Valley working lifestyle, which garners kudos for its respect to work/life balance rather than more set-in-stone businesses (particularly in finance), and the fact that it is constantly evolving with new, fresh ideas and startups, means that many have been more inclined to grasp new opportunities and become experts in a new space.
It has become evident that fintech’s customer-centric strategy has pertained particularly well to female employees, and when this links to the finance world, many women have since become advisors in their own right. Fintech becomes not only a springboard for innovative applications, but it also serves to initiate a cultural shift.
Whilst the article and those interviewed believe that fintech is a far cry away from the “old boys’ club” it’s usually associated with, it’s certainly looking to take the two elements from its portmanteau and improve the representation of them both.

Industry Insights

The Future of Business
Modern-OfficeThe worlds of finance and Silicon Valley now look to be combining even more than we think, according to The Financial Brand.
Culturally speaking, too. Gone are the days of stuffy, corporate offices for fresher open spaces filled with foliage and foosball tables. Well, at least that’s for these examples: 7 innovation labs established by some world leading banks, and the ones taking them to new heights.
From this article, it’s clear that these innovation centres/incubators/labs etc. need to cater to working lifestyles from many different industries: software engineers, bankers, fintech staff, design teams etc. Hence, what you can see on show are the usually brainstorming walls and fashionable eating areas, but also involved in these fairly ground-breaking office spaces are free-standing screens, office-wide writeable surfaces, and interactive pods.
When businesses are looking more towards the inclusion of creativity and technological development, these office spaces and collaborative workstations are the way forward, serving as inspiration to all companies worldwide.
Sports Star to Finance Star
Bowls-Wealth-ManagementFund management is a funny place. More and more, we notice (of all people) sport stars that have made a transition from the field to the FTSE. Some, like Manchester City’s Vincent Kompany for example, have even completed a part-time qualification already, planning for their lives after a fairly early retirement in comparison to other industries.
Citywire Wealth Manager has collated a slideshow specifically centred on the footballers, rugby stars, tennis maestros and even bowls players that have made their way into the fund and wealth management space. Allister Hogg spent time working as an investment manager whilst playing rugby for Newcastle Falcons, whilst others work as advisors for firms’ female clients (the irrepressible Maria Sharapova) or have built up their own boutiques.
If you reach the top of your game in the most competitive of spaces, why not make the leap into the investment management world?

And finally…

bitcoin…what happens when you’re wrapped in the Bitcoin bubble and decide to change the lives of you and your family by surviving just on the cryptocurrency?
If that sounds crazy to you, check out this investigative video from the Wall Street Journal, who spends some time with Didi Taihuttu, a family man who decided to leave behind his home, possessions and own business to move his family to a trailer park whilst his initial investments in Bitcoin continued to ramp up (towards the end of last year specifically), but also tanked in the downward direction more recently.
It’s an interesting discussion from a man who, now living a more humbled experience, now acts as an evangelist for the success of cryptocurrencies, but there’s plenty in this short documentary to still question whether this decentralised currency is the future of money exchange.
That’s all for this week, but be sure to check back soon for more asset management marketing highlights and fintech snippets from Kurtosys.

Elliot Burr

Elliot Burr

Fervently chatting about the future of funds and fintech.