Most of the time, Bryan Gray is a mere custodian, barely distinguishable from the thousands of other men in suits making their way around the metropolis. But once a year, a strange power comes over this mild-mannered middle manager.
Residential property – the bulletproof bubble
Unbalanced recently went very long Sydney property, so it calmed jangled nerves last month to hear Australian residential mortgagebacked securities described as “bulletproof ” by Aberdeen Asset Management’s head of Australian fixed income, Victor Rodriguez.
Meet the funds manager with no strategy
Unbalanced has never met a fund manager who didn’t claim some sort of ‘unique’ value-adding edge. However we’ve never heard a fundie say their big strategy is to not have a strategy at all, until we met Yves Choueifaty, of the appropriately- named Think Outside the Box Asset Management (TOBAM on his business card).
Jeremy, our members are profiting
Assuming Cooper’s key recommendations are effectively implemented most Australian workers should – at least in theory – be better off in retirement. One of Jeremy Cooper’s central aims was to design a system that delivered low-cost, commission-free super to most Australians regardless of their level of engagement. If Cooper succeeds on this front, then he will have achieved a fundamental shift in the way our compulsory super system operates. Already we have seen some retail funds respond to the Review’s preliminary findings by launching new products that replicate the key features of not-forprofit funds.
Family offices: it’s worth becoming a friendly neighbour
The top 250 Family Offices in Australia account for approximately $181 billion as at May 2010, with the largest 20 accounting for $67.7 billion. The range within that top 250 is from $7.17 billion to $200 million. There are a significant number of smaller Families in the $30 million to $200 million range that do not have the economies of scale to establish standalone Family Offices, rather they either use multi-family offices such as the Myer Family, with about 50 families apart from the Myer Family, or other service providers to provide the outsourced services. This sector is a significant user of private banking, accounting, taxation and investment management services.
Superpartners moves rapidly to advise
The GFC had an unexpected side-effect for Superpartners: members’ demands for general and personal advice forced the administrator to consider new software to deliver better advice more quickly. Provisio Technology’s software was put in place at first to address transition-to-retirement enquiries, says Marianne Walker, National Contact Centre Manager for Superpartners.
Keeping the lid on custodians’ liability caps
One Madoff aftershock that has hit the backoffice is custodians’ caution towards hedge funds domiciled overseas. The service providers want to ensure they can’t be liable for any fraud or investment risk involved with the offshore managers’ actions. This carefulness follows moves to limit, or ‘cap’, their liabilities for unit pricing errors and managers’ breaches of investment mandates.
Custodian propagates benefits
Propagation is the next ‘big thing’ for custodians looking to optimise tax parcels to reduce funds’ tax liabilities. It’s a process, developed by DST Global Solutions, where in a multiportfolio fund all investment transactions recorded at the portfolio level (that is, the actual transactions of a fund manager) are also recorded at the fund level. The benefit is that all tax and accounting can be done at the fund level as opposed to what has traditionally been done at the portfolio level. This means the fund can use the most efficient tax parcel allocation, maximising the capital gains tax discount (called ‘tax free gains’) on domestic shares and maximising any tax deferral opportunities (dubbed the ‘time value of money’).
Custodians’ chance to master all trades
As a concept, master manager custody blazed a new trail for Australia’s institutional investors when it arrived from overseas. It‘s a progressive asset servicing model originated by Richard Ennis, co-founder of US consultancy EnnisKnupp, that aims to break down some of the silos through which investment programs are usually implemented.
Cut fees to keep the couch potatoes
There are very few benefits to having more than one superannuation fund, yet for around two in five Australians, this is the case. In fact, just under half of those members with multiple accounts are no longer contributing to at least one of their funds. In other words, hundreds of thousands of accounts are sitting there, dormant, while administration and investment management fees are deducted from them.
Investors move on affordable housing
The third round of applications in the National Rental Affordability Scheme closes on August 31, with the financial services industry finally taking a serious look at the project, two years after its launch. The scheme, which is jointly funded by the Commonwealth and State and Territory Governments, was launched in July 2008 with the promise of assisting construction of 50,000 new dwellings, or redevelopments, for low-income renters by 2012.
Winning funds when the good times end
Asset managers will need to run a fiduciary overlay to attract flows from the most prominent sources of new capital – sovereign wealth funds (SWFs), national pension funds, central bank reserve funds and defined contribution (DC) vehicles – finds Professor Amin Rajan of CREATE Research, in a global survey of asset managers overseeing US$29.1 trillion, entitled Exploiting uncertainty in investment markets. “The fund pie will be noted for its subdued growth,” Rajan writes, adding that the next three years will be particularly tough. “Dog fights will be inevitable.”
