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Reuters – Wealth management firms are counting on new business from the moderately rich as they play down the impact of a possible exodus of the ultra wealthy from tax-hungry Britain.
The likes of steel magnate Lakshmi Mittal and Russian owner of Chelsea football club Roman Abramovich are coveted by firms, but the vast bulk of assets actually come from comfortably-off clients — the so-called mass-affluent — less able to relocate.
The report identifies demand for hedge funds, capital protected funds, private equity funds and real estate funds from high net worths, The scope of the report covers France, Germany, Italy, Spain, UK, Nordic region, Belgium/Netherlands, Switzerland, Australia, China, India, Hong Kong, Singapore and Taiwan.
Includings hedge funds, capital protected funds, private equity funds and real estate funds (open ended and closed ended) thr peport shows the results of the Wealth Management Market Leaders survey of 280 wealth management companies worldwide, and on high net worths (those with more than $1m in onshore liquid assets)
HNW alternative investment asset allocations are expected to decline slightly in both Australia and France in the next two years, as high net worths reposition their portfolios. Real estate allocations and commodities allocations will decline among Australian HNWs while both hedge fund and derivative allocations will increase.
While British HNWs plan to increase their exposure to capital protected products and private equity funds, and their wealth managers will devote significant resources to the development of these product areas, they are failing to anticipate their clients demand for closed-ended real estate funds.
At the same time German wealth managers are focusing strongly on capital protected products which, while certainly in demand by most HNWs, will not see a significant increase in terms of portfolio allocations.
Earthtimes – Julius Baer, one of Switzerland’s largest wealth managers, reported Monday a net profit of 324 million Swiss francs (303 million dollars) in the first half of the year, down 37 per cent compared to the same period in 2008.
The private bank said it had 299 billion Swiss francs of assets under management at the end of June, 25 per cent less, year-on-year. Compared however, to the end of last year, when the financial markets were in turmoil, the bank said its position had improved and was experiencing inflows of new capital.
The bank dropped 2 per cent of its workforce, which now stands at 4,255 staff, and personnel expenses fell by 13 per cent to 587 million francs, reflecting a lowering of performance-related bonuses.
Private Equity Hub – Wealth managers at Citi are telling their clients to watch for a burst of hedge fund activity in bad assets.
The wealth investor says in its most recent note that the biggest opportunity for hedge funds is probably around the Public-Private Investment Fund, which is part of the huge U.S. plan to stabilise the financial sector.
The idea is that the U.S. government will lend money to investors to buy up toxic assets from banks, thus setting a market price.
Stuff - Wealth managers at Citi are telling their clients to watch for a burst of hedge fund activity in bad assets.
The wealth investor says in its most recent note that the biggest opportunity for hedge funds is probably around the Public-Private Investment Fund, which is part of the huge U.S. plan to stabilise the financial sector.
The idea is that the U.S. government will lend money to investors to buy up toxic assets from banks, thus setting a market price.
Citi notes that the loans are non-recourse ones, which means that any default is limited to the actual cost of whatever collateral is require.
West Palm Beach (HedgeCo.net) - Hedge fund manager, Aberdeen Asset Management PLC, has entered into an agreement with Credit Suisse to acquire their £40 billion ($58 billion) long-only asset management arm, making Aberdeen the the UK’s largest listed fund manager.
Credit Suisse sold the fund arm for approximately 240 million shares in Aberdeen, valued at £250 million ($363 million). The closing of the deal is to take place on 30 June 2009, subject to shareholder and regulatory approval.
Aberdeen’s largest hedge fund shareholder, Martin Hughes, Chief Executive of Toscafund, said, “Toscafund has already confirmed its support for this transformational acquisition, which has been made possible by the excellent operating platform offered by Aberdeen. Toscafund believes that the transaction is of clear benefit to the clients and shareholders of Aberdeen Asset Management and Credit Suisse.”
The acquired business is a long-only traditional asset manager with a leading presence in Europe, Asia and Australasia. It offers a broad product range, diversified predominantly across fixed income, money market and equities, with a variety of investment styles that will be integrated into Aberdeen’s investment processes. Its products are sold primarily to third party clients, with a significant minority of assets sourced through Credit Suisse’s Private Banking division, one of the world’s largest wealth managers.
Aberdeen has agreed an extension of the existing distribution agreement with Credit Suisse, this will give Aberdeen greater access to the banking network of Credit Suisse.
With the new acquisition, Aberdeen has opportunity to achieve greater scale in certain markets where the Group already has a presence, such as the UK, Australia, Germany, Switzerland and Japan. The Acquisition will also strengthen Aberdeen’s offering in certain product areas
“The acquisition confirms Aberdeen’s position as a leading global asset manager and provides us with greater access to the distribution network of Credit Suisse and its Private Banking division, one of the world’s largest wealth managers." Martin Gilbert, Chief Executive of Aberdeen, said, “This transaction fits perfectly within our strategy, a key part of which has been to make earnings enhancing acquisitions which give the business critical mass in our core competencies, complementing our organic growth."
“Given our proven track record of integrating businesses, we are well placed to ensure a smooth transition of the Credit Suisse assets to Aberdeen. We look forward to welcoming our new colleagues and clients, and also to welcoming Credit Suisse as a significant shareholder in Aberdeen. We believe that this transaction will be for the long-term benefit of all our shareholders.”
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