Fund Times: 26 - 30 January
Crédit Agricole and Société Générale to combine asset management business; Henderson bids for struggling New Star; F&C’s Scott extends leave; Allianz to launch European Equity Income fund; Funds under management soar 7% in December; Aegon appoints North American equities head.
Crédit Agricole and Société Générale announced this week they have come to a preliminary agreement to merge their asset management operations. Crédit Agricole is expected to own 70% of the new asset management entity and merge SocGen’s European and Asian operations with its own. SocGen will own the remaining 30%. This follows SocGen’s sale of its UK asset management arm to GLG partners.
Asset management groups across Europe find themselves running dramatically smaller pots of money in the face of market depreciation and outflows. We expect continued consolidation among asset managers and a rationalization of fund line-ups that were allowed to become bloated during the bull run. You can read more on this story here.
Henderson bids for struggling New Star
Henderson Global Investors has offered to buy New Star Asset Management for £115 million in a mix of shares and cash. The deal entails £22 million for New Star’s ordinary shareholders, equivalent to 2p per share. This represents a steep fall from the stock’s previous 480p peak close in 2007. Preference shareholders will receive 0.4 Henderson shares and 48.4p for each original share. Henderson will also pay around £20 million to cover the group’s debt. New Star owner John Duffield, who owns about 10% of the company, is not expected to remain following the acquisition. You can read more on this here.
F&C’s Scott extends leave
F&C fund manager Ted Scott has extended his sick leave for a further three months. Scott stepped down from the management of the F&C UK Growth & Income as well as F&C Stewardship Income and F&C Stewardship Growth last November, due to a recurring illness. Scott’s funds will continue to be managed by Phil Doel and Hilary Aldridge. Doel is responsible for the section of large cap stocks across the funds, while Aldridge manages the small and mid cap names. The news creates a degree of uncertainty over if and when Scott--easily the group's most prominent manager--will return.
Allianz to launch European Equity Income fund
Allianz Global Investors will launch a European equity income fund on the back of what the firm says are attractive valuations in the market. Allianz RCM European Equity Income will be sold across the UK and Continental Europe. The fund will invest in dividend-paying European blue chips. The fund will be managed by RCM, the global equity manager of Allianz and will launch in the first half of 2009.
Funds under management soar 7% in December
UK domiciled funds under management increased 7% between November and December 2008 to total £360.7 billion according to the latest figures from the IMA, the trade association that promotes the business interests of UK asset managers. The same pattern held true for overseas funds which saw a similar 7% rise in value to £16.1 billion over the same period. However, these figures represent declines of 23% and 11% from December 2007 levels for UK and overseas funds, respectively.
Net sales of UK domiciled equity funds fell by £368 million, compared with a £616 increase for fixed-income offerings in December 2008. Within equities, the IMA UK All Companies sector took the highest share of net sales. The IMA Sterling Corporate Bond sector was the best selling sector overall for UK domiciled funds, and IMA Specialist the worst.
Aegon appoints North American equities head
Aegon Asset Management has appointed Ian Cooke as head of North American Equities, replacing Simon Carter who has left the firm. Cooke will manage a team of five US specialists and will run the firm’s North American equity portfolios, including Aegon American Equity. The fund has struggled in the last few years and ended last year with a loss of 30%; that is 13 and 16 percentage points behind its average peer in the US Large-Cap Blend Equity category and MSCI US index, respectively. Cooke has 25 years’ experience in managing North American funds. He was head of US equities at Allied Irish Bank and held a number of portfolio management roles at Schroders and Legal and General.
