There has been no sign of a summer lull in the investment world this year. Investment companies have been launching new funds, there have been mergers and acquisitions, plus changes to the way a couple of leading asset managers are run.
Elsewhere financial markets digested the news of the first interest rate cut for seven years, rising inflation and new industry-wide figures showing how millions of consumers were utilising the new pension freedom rules.
Cofunds Bought by Aegon
Aegon has bought the platform Cofunds from rivals L&G in a £140 million deal.
Cofunds is the main platform for financial advisers in the UK, offering them access to more than 2,000 retail funds. The platform can’t be accessed directly by private investors.
This deal will make Aegon the largest advised platform in the UK, with the £77 million assets Cofunds has under management on its platform being added to the £9 million already managed through Aegon’s platform. As part of the deal Aegon has also bought L&G's execution only platform Investor Portfolio Service.
Cofunds will be continue to be run by chief executive David Hobbs. Staff working at the platform will be transferred to Aegon.
Morrissey Steps Down from CEO Role at Newton
Helena Morrissey is to step down as chief executive of Newton Asset Management as part of a management shake up at the group.
Morrissey, one of the most recognisable and influential figures in the City, will take on the role of non-executive chair of the company’s board.
She will be replaced by Hanneke Smits, who is currently chief investment officer at Adams Street Partners.
Morrissey has held the position of chief executive at Newton for 15 years, since the company was bought by BNY Mellon. She is also chairman of the trade body the Investment Association, a role she will continue to hold.
Morrissey helped launch the 30% Club, which lobbies companies to appoint women to 30% of their board positions.
Woodford Scraps Bonus Payments
Fund managers and other employees will no longer earn annual bonuses at Woodford Investment Management. The firm, set up by respected equity income fund manager Neil Woodford, said these bonus payments, which can far exceed annual salaries, were “largely ineffective” and could encourage “wrong behaviours”.
There have been concerns in recent years that bonus culture has prompted some fund managers to focus solely on short-term gains on which renumeration may be based. This can be detrimental to longer-term investors.
All staff at Woodford Investment Management will now be placed on flat annual salaries, which will be raised this year to ensure key employees do not suffer a pay cut. Many will now be watching to see if other asset managers follow this lead.
Craig Newman, chief executive of Woodford Investment Management, said: “While bonuses are an established feature of the financial sector, Neil and I wanted to take the opportunity to do something different that supports the firm’s culture and ethos of challenging the status quo.”
T. Rowe Price Launches New Funds
The US asset manager, T. Rowe Price plans to launch a new range of five open-end funds in the UK this Autumn. In recent months the company has been registering its Luxembourg-based range of SICAV funds with both the Investment Association and various UK-based platforms, to increase appeal to UK investors and the IFA market. The new range of OEICs will complement this range.
John Yule of T. Rowe Price said the first "obvious choice" for the new range was the launch of the Continental European Equity fund, which will be a direct replica of the existing €147 million SICAV, managed by Dean Tenerelli.
T. Rowe Price will also launch OEIC versions of its $2.4 million Asian Opportunities Equity fund, a concentrated strategy run by Hong-Kong based Eric Moffett, and its $1.4 billion Emerging Markets Equity product, managed by Gonzalo Pángaro. The funds are expected to launch in October, subject to regulatory approval.
Octopus launches new VCT
Octopus is targeting pension savers with a new £70m fundraising round for its Titan Venture Capital Trust.
Titan, which already has £309 million assets under management, is the biggest VCT in the UK. It will be the first VCT to accept monthly contributions.
Last September the trust launched a £80 million fundraiser, which ended up raising £100 million and closing five months early.
In this round of fund-raising the minimum investment will be £3,000. The plan is for this offer to remain open until August next year, but if demand is high it could again close earlier.
£8.2bn ‘Freed’ From Pension Pots
People withdrew more than £8 billion in the first year of the first year of the new ‘pension freedom’ rules, according to data from the Association of British Insurer. These figures cover the first complete year of this new pensions regime, which came into force in April 2015.
The figures show that £4.3 billion was paid out through 300,000 lump sum payments. The average lump sum withdrawal was £14,500. In addition a further £3.9 billion was released from pension pots through more than one million drawdown payments. The average drawdown withdrawal was £3,800.
