Posted 29 February 2012 - 6:09pm by Mark Latham
Posted 29 February 2012 - 6:08pm by Fundamentals magazine
Posted 27 February 2012 - 2:44pm by Fundamentals magazine
New York: Investment groups are increasingly concerned that the next 20 years will bring higher inflation and slower growth rates than the last two decades. As such U.S. and Canadian-based pension schemes have once again been given a reminder of the threats faced by inflation and the need to develop inflation hedging plans quickly. The popularity of more varied portfolios and the use of strategies such as infrastructure are on the up as the market takes the necessary steps to safeguard its investments.
Increasing oil and health care prices, past weakness of the dollar and Asia exporting higher prices to the West are all contributing to inflation. Furthermore, the U.S. Department for Agriculture projects that 2012 will bring an overall food price spike of 2.5 to 3.5%. Inflation-hedging characteristics and global-listed returns equivalent to CPI plus 6.3% over 20 years champion the use of infrastructure assets. Regulation, concession agreements and contracts all link these assets directly to inflation.
The second annual Inflation Hedging for Institutional Investors in North America report by Clear Path Analysis brings together 20 U.S. and Canadian-based pension, endowment and asset management experts, who alongside their institutional investment peers, examine what a heightened inflation environment means, what can be done to limit the damaging effects on portfolios and what the optimal assets are for high or negative inflation scenarios.
Jeremy Lawson, Senior US Economist and Aaron Kohli, Interest Rate Strategist at BNP Paribas Corporate & Investment Banking, note: “The U.S. economy is in an unpredictable position and the Fed faces a serious dilemma; they must devise the perfect degree of monetary stimulus to make progress on their employment mandate without jeopardising their long-term inflation target”.
They predict that: “Going forward, we expect the Fed will continue to get the policy mix right and a gradual decline in unemployment takes place without a break out in wage growth, while inflation expectations remain anchored close to 2%.”
Lawson and Kohli also make it clear that investors and managers need to have plans prepared for both scenarios: “The market does not reward investors who prepare only for the expected outcome. It is vital to explore both risk scenarios for inflation and the possibility of a steady deflation.”
In an interesting roundtable Yigal Jhirad, Senior Vice President & Portfolio Manager at Cohen & Steers, warns of the global inflation threat: “Natural supply barriers and geopolitical issues are affecting commodities. Inflationary pressures exist and we have seen food, oil and gas prices rise. So our approach is to build a strategy that is well positioned to excel in periods of high inflation, but also offer an attractive risk/return profile over the long term. However, we are not trying to call the market.”
He goes on to explain the intricacies of hedging against inflation: “The drivers of inflation are very complex and they could be monetary, cost or demand induced. In order to try to target inflation as a whole, you really need to think about having a diverse mix of real assets that would be effective in providing purchasing power protection against multiple drivers of inflation.”
Jon Ruff, Lead Portfolio Manager and Director of Research─Real Asset Strategies at AllianceBernstein, offers a similar view: “Most inflation hedges vary significantly in their effectiveness across time and different inflationary episodes. Therefore, to build an effective portfolio of inflation hedges, it’s critical to understand the key drivers of each asset and its fundamental response to changes in inflation.”
Ruff goes on to note: “Our research shows that while many different asset classes could potentially hedge against inflation, their effectiveness varies, as does their reliability. A strategic real asset portfolio should be built upon a well-diversified mix of real assets that optimize the trade-offs between risk, return and inflation sensitivity.”
Notes to Editors
To obtain a full copy of the Clear Path Analysis report ‘Inflation Hedging for Institutional Investors in North America’ and/or speak with one of the commentators please email ClearPathAnalysis@humebrophy.com or call +44 (0)20 3440 5656.
About Clear Path Analysis
Clear Path Analysis is an impartial, independent publisher of high quality reports on pressing industry issues written by a cross-section of experts in the financial services, investments and pensions sector. Clear Path Analysis has a unique position in the market place – because of its model of using majority end users and buyers to contribute high quality papers. Clear Path Analysis, established by Noel Hillmann in January 2010, is headquartered in London and has plans to expand the business into New York, Sydney and Hong Kong over the next two years, substantially growing its headcount. For further information, please visit www.clearpathanalysis.com
+44 (0)20 3440 5656
Posted 22 February 2012 - 1:00am by Fundamentals magazine
Fran Thompson appointed as Head of Client Relationships and New Business for Asia for DST Global Solutions
Posted 21 February 2012 - 12:30pm by Fundamentals magazine
New York, Paris and London: QuantHouse, the leading provider of next generation trading solutions, announced the availability of its co-location and DMA services within the recently opened CME Group co-location facility in Aurora; allowing systematic trading firms to benefit from close proximity to the CME Globex match engine, reduced latency and direct access to the exchange’s liquidity centre.
The trend for co-location services, particularly in the US, has increased significantly in recent years due to the growth of low latency trading internationally. Exchange operators, including NYSE Euronext, NASDAQ and most recently CME Group (all QuantHouse partners), have responded by opening their own data centres, thus assisting brokers and trading firms in meeting client demands.
The Aurora, Illinois-based offering, which launched live trading on January 29, 2012, provides the lowest latency connectivity possible for all products traded on the CME Globex platform and the highest level of support and security for the electronic trading environment while maximising the reliability and availability of its clients’ IT infrastructure.
Pierre Feglioni, COO and co-founder at QuantHouse, commented:
“It is essential that QuantHouse continually expands the backbone of its infrastructure which includes leading the latest round of exchange migration. CME Group’s data centre offering was the next logical step for us in providing enhanced market data and the lowest latency possible when accessing the US market and therefore addressing client demand from around the globe.”
Stephane Leroy, Head of Global Sales and Marketing at QuantHouse, concluded:
“By locating our technical structures to capture and standardise exchange migration within Aurora, we can provide our clients with the ability to leverage the data and remain one step ahead of their competitors, in what is a very competitive market. We look forward to speaking with industry participants in the coming weeks and months to see how we can help grow their businesses.”
Notes to Editors
Established in 2005, QuantHouse is the leading provider of next generation trading solutions. From offices in New York, London and Paris (an Asia office is scheduled to open in 2012), the business provides low latency market data, an automated trading platform and trading infrastructure to buy- and sell-side and technology companies as well as exchanges and MTFs. QuantHouse has over 120 clients, 16 global data centres, 45 direct exchange connections and 90 total exchange data feeds. The firm was recently shortlisted as Best FX Trading Platform by Wall Street Letter (2012), Best Data/Product Service by Financial News (2011) and Best Automated Trading Product: Strategy Development by Technical Analyst (2011).
For more information please visit www.quanthouse.com.
Adam Honeysett-Watts and Ellie Fixter
+44 (0)20 3440 5656
Callataÿ & Wouters signs an agreement with Sopra Group, entailing the formation of a new company that constitutes a major European player
Brussels, February 17 – Callataÿ & Wouters, a leading developer of core banking software, is proud to announce a new step in the company’s growth. Belgium’s Callataÿ & Wouters has signed an agreement with France’s Sopra Group, entailing the formation of a new company. The new Franco-Belgian company will count 1.200 specialists and will de facto become one of the major European players in banking software.
Founded in 1983, Callataÿ & Wouters has seen almost three decades of consecutive growth, with the most recent years showing an especially strong increase in revenue, EBIT and employees. The company was looking to increase its scope even further, and after a careful deliberation process, decided to sign an agreement with Sopra Group’s banking software business that will integrate both entities into one company.
“The combined size, expertise, customer base and know-how of the new company will allow us to achieve a strong, strategic leadership position in Europe. Our expanded scope, including a workforce of 1.200 people and an aggregate reference list of hundreds of customers around the world, will also enable us to serve our clients better,” comments Marc De Groote, CEO of Callataÿ & Wouters, “At the same time, we keep all strengths that Callataÿ & Wouters already had, and are determined to continue our 100% implementation track record. We believe that our flagship product, Thaler, will be strongly enhanced by Sopra’s Evolan suite of products.”
Neither partner is planning to proceed rashly. “More details of the integration process will be hammered out in the time to come. In the meantime, we will base our integration especially on business opportunities where we see the synergy between Thaler and Evolan working really well,” adds Mr. De Groote, “What’s especially important here is that Callataÿ & Wouters and Sopra’s Evolan business share a company culture in general, and have a lot of values in common when it comes down to customer focus and dedication in particular.”
“It is an entirely new chapter in our history, with a lot of opportunities for our customers and employees alike. But we also want to emphasize a lot of continuity,” says Mr. De Groote. Mr. De Groote himself will be one of the principal directors of the new entity, and Callataÿ & Wouters’ founders, Didier de Callataÿ and Godefroid de Wouters, will also be part of the new Board of Directors.
Posted 10 February 2012 - 3:34pm by Fundamentals magazine