Regulation
FCA: Richard Lloyd for interim chair
The Financial Conduct Authority is to announce the appointment of Richard Lloyd, a non-executive director at the regulator, as interim chair, Investment Week reports here. Lloyd led Which? as executive director from 2011 to 2016 and joined the board of the FCA in April 2019. He is currently chair of the risk committee and the oversight committee. At the time of writing, the FCA had declined to comment.
ETFs
Hi-five
Doubling in five years comes from the standard forecasting playbook, but in this instance PwC which reckons that ETFs will double in the next five years to US$20 trillion could actually be right. The report, titled ‘ETF 2026: The next big leap’, found that ETFs had a compound annual growth rate (CAGR) of 22% since 2005, and predicted slower growth (relatively speaking) of 17% for ETFs to reach their forecast of US$20 trillion. Read Investment Week’s reportage here.
ESG tilt
From the same PwC report, the Financial Times focuses on the fact that the majority of ETFs launched in Europe over the next year will use an ES or G tilt for their construction. Here is their coverage.
Mutual funds to ETFs
In a move that appears to be largely restricted to the US for now, JP Morgan is starting to convert US$9 billion of mutual funds to ETFs, and has started waiving the distribution (12b-1) fees. Financial Times has the coverage here.
ESG/Stewardship
Repurposed funds
Researcher Broadridge estimates that some 60 per cent of sustainable fund assets are in products that have been repurposed to incorporate environmental, social and governance factors. In Ignites Europe’s coverage here Broadridge shows that €2.6 trillion of ESG assets are managed by funds that have been “realigned” to abide by the EU’s Sustainable Finance Disclosure Regulation or have “enhanced” disclosures to demonstrate their ESG credentials.
On notice
Aviva Investors has told companies it will be focusing its engagement activities on climate change, biodiversity, human rights and executive pay this year, and will divest from those that are not up to standard. Reported widely, the coverage from Portfolio Adviser can be read here.
‘Greenwashing litigation’ – the next big thing?
Litigation risk for climate-related claims could be big … Bloomberg reports on it here, and for a comprehensive research report on the same subject, read this.
Green push exposes conflicts of interest
U.S. firms in the financial-services sector have spent more than US$3.5 billion buying green-ratings companies and data providers, a review by The Wall Street Journal finds here. The Big Four audit firms are also moving into the ESG arena, the WSJ adds.
Wealth management/Distribution
Lloyds embarks on wealth
Lloyds Banking Group has completed the acquisition of investment and retirement platform business Embark. It is part of Lloyds’ plan to capitalise on the mass market and self-directed robo-advice wealth segment, according to Money Marketing here.
‘No-brainer’
Abrdn’s leadership believes Interactive Investor, the UK’s second-largest funds supermarket with just under £55bn in assets under administration, is the key to building a third leg in a lucrative segment that will secure the struggling manager’s future. The Financial Times has the story here.
M&A for WMs
Financial News reports that Tilney, Smith & Williamson has appointed bankers to explore options for the future of the business. The same article also points to £10 billion Ascot Lloyd having hired investment bankers to advise on corporate and debt issues in a mandate that could include a potential sale. Read the Financial News coverage here.
Going direct
M&G is partnering with digital investment firm Moneyfarm to launch its own direct investment service, reports Investment Week here. M&G Wealth, the company’s UK wealth management arm, is to use Moneyfarm’s existing technology and digital capabilities to underpin its own branded proposition.
Martin Gilbert
We don’t often dedicate a whole section to one individual, but then industry doyen and serial dealmaker Martin Gilbert has been out and about a lot recently. Here is a collection of news reports over the past fortnight all linked to the man who continues to be a force to reckon with.
AssetCo/River & Mercantile
Getting it over the line is what Mr Gilbert does best, and according to the reporting in Portfolio Adviser here, after two false starts, AssetCo has finally moved forward with its acquisition of River and Mercantile.
Beware of inflation
In a column for Financial News, Mr Gilbert warns that inflation might not look like an issue for fund managers, but wage demand and an increase in cost bases could hit home soon. Read his views here.
Being future ready with Mr G and friends
In an hour-long interview moderated by FBC senior adviser Alan Chalmers for Calastone, Martin Gilbert along with M&G chair Massimo Tosato, former EFAMA head Peter de Proft and Calastone chief Julien Hammerson have a jolly good chin wag on some pretty weighty subjects. The full discussion can be viewed here
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