IMI ‘s Monthly Manager Newswire
This manager newsletter covers new and current thinking relevent to investments and strategies. It includes domestic and international product introductions, along with what investor trends are emerging.
The information covers corporate and public funds, endowments and foundations as well as where wealthy families are currently investing. These timely articles discuss where managers are being allocated funds, and what investors expect from managers.
This monthly manager newsletter will keep you informed on the developments and happenings. You’ll quickly learn about changes to asset allocation and what assets are gaining investor attention.
With asset managers competing in what many believe is an overcrowded market, you’ll learn how to stand out and how to get your firm into consultant searches.
To receive a complimentary subscription please contact Rosa McCoy at 203-622-5851 Ext. 10 , rmccoy@imi-ct.com
(Samples of previous articles)
IMI is launching a New Products Website for managers
In response to IMI’s institutional investor surveys on new thinking and ideas IMI is launching November 15th a new products website for managers. This free unique service will allow investors to link onto managers quickly and efficiently. With more than 5000 new products introduced annually, this free service will afford users an opportunity to learn of new ideas from managers. Traditional as well as non-traditional products will be available for viewer use. With consultants overwhelmed from new product introductions, we hope this will serve as a way to sort through the many new offerings as well as educate investors. Managers from all disciplines are invited to participate in what IMI hopes is a valuable new service.
Hedge fund are becoming more aggressive in Marketing
The beneficiaries of the hedge fund marketing campaigns are consultants. It wasn’t but a few years ago that you ever saw a hedge fund “tooting” their strategies to consultants. Today that all but changed. Consultants are critical to alternative manager asset growth. In fact, Preqin Ltd., a London based research organization, found 52% of institutional investors rely on their consultants to screen potential hedge fund managers. Why the change? Hedge fund returns aren’t what they were, fees are often a stumbling block, hedge fund strategies don’t often repeat their stellar performance annually and key personnel turnover doesn’t breed investor loyalty. This has all resulted in hedge funds building large marketing teams to overcome these hurdles. With investors diversifying more, they are finding receptive audiences. And with over 9000 hedge funds competing, look for them to standout with new sales and marketing campaigns.
Commercial real estate could be seeing a ray of investor sunshine
If the recent research survey from Institutional Real Estate Inc. and Kingsley Associates is correct, 2010 will see a real jump from institutional investor allocations. Pension funds and other large institutions are expected to pour in $34 billion, almost double from 2009. Why the change? Real estate has seen valuations drop as much as 70%. If the economy should rebound (some experts see a V-shape turn happening), along with companies continuing to report strong revenues and earnings, we could be in for some surprises. Commercial real estate, including distressed properties, are already experiencing marked improvement, while private equity real estate funds are seeing much more attention, as pension fund administrators begin balancing their equity portfolio exposure following exceptional returns in 2009 and 2010.
Asset Management Firms Continue to Report Record Profits
Wall St. Firms are once again bragging about record sales and profits. For years the pros have realized to own an asset management firm is a superb business decision, especially if you are a brand new firm. One need not go any further than to see the tremendous performances of Franklin Resources and Lazard for either firm to “cry wolf” is just plain ridiculous. These two firms represent cultures and superb management that tells the world they have each achieved robust results. Asset management is a great, great business. It provides stability and enormous profits to those who engage in the more volatile financial advisory business giving management advice that is so valuable in these uncertain global times, is like feeding “candy to babies.” Wall Street recognizes that many institutions need a comforting arm and advice to work through these unchartered investment waters and who is better than the best management.
While Institutional Investors are Cautious about Gold, not so said a number of hedge funds
If your institution is looking for an inflation hedge, they might consider gold, which for years has been an excellent diversifier. Since 2002, the price of gold has risen four-fold. While wealthy individuals have been purchasing gold for years, only now have we been witnessing institutional investors climb on board, especially hedge funds. One of the better approaches is gold stocks like the SPOR gold shares, a listed instrument which is backed by the Gold Bullion. It is simple and cost effective. What’s interesting is over the past twenty five years, the gold price has tracked the world money supply. Clearly, the expectations are that if interests continue to remain low, gold could well be a beneficiary. Investors should be reminded that gold is not a liquid instrument even though some professional investors see it as a “safe haven” whose appeal continues to expand. It’s hard to ignore the correlation between gold and inflation; many hedge fund managers seem to agree.
Around the world car sales are up
Good news for the auto industry both in the US and elsewhere. All three US automakers from GM to Ford to Chrysler have reported an increase in US sales. Perhaps GM’s numbers are what has Wall Street rejoicing. Remember it wasn’t but a few months ago that people were burying GM. Now many including some obstinate politicians are calling this a US turnaround and a statement to the world that Detroit is reclaiming its auto making skills. It’s amazing how soon people forget how just a few months ago many were suggesting Detroit should go the way of the Dinosaurs. But let’s not forget that Toyota’s, Nissan’s, Volkswagen, Honda’s, Renaults are also loud noises. Their unit sales are also raising restirring confidence in their country’s economies and while the US can be proud of its turnaround. Let’s not forget China and India represents enormous car markets for everyone. In fact, China has seen a 45% increase in sales year-on-year through July 2010.
Look for companies to put Cheap Dollars to Work
2010 is one of the best years for issuing corporate bonds. Having to pay just 30BP to 50BP over US Treasuries, companies are rushing, not walking to the borrowing windows. Taking advantage of the continued low interest rate environment courtesy of the FED, companies are borrowing billions of cheap dollars to improve their balance sheets and expand their production capabilities. When interest rates are around 1% (down some 7.5 BP of a year earlier) it is no wonder companies are on the move. It is most likely these three to five year bonds will continue to be available as the economy tries to get its legs. Also weighing heavily on the FED is lost momentum and their stepping through these economic mine fields is a real test. So far the FED has been nimble and successful in side stepping the lost job path and the soft spending from consumers. For those consultants who believe protecting client portfolios from inflation, this might be just the time to rethink this strategy. Inflation is now only at 1% and unlikely to go over 2% through 2012, at the earliest, leaving investors with ample time to tweak their investment allocation strategy.
