What do banks, asset managers, and asset owners do wrong when trying to calculate (estimate?) their financed emissions? Generally, they underestimate the importance of good data and low data quality score calculations. Sounds trite, but its true. Let me give you a few examples: The PCAF standard allows for estimating emissions with simply a sector-average approach. So let's say you have a basket of equities including an investment in the NAICS sector code 441222 (boat dealers). You can simply use the market value of your investment amount, say $10 M, the average emissions per $ of revenue in that sector, and a asset turnover ratio to calculate the emissions of that holding. Now you've correctly licensed an EEIO model (or hired a consultant who does that for you) calculated sector-based asset turnover ratios, and repeated in a spreadsheet for all of your investments. You can probably get close to 100% coverage of your investments, and you have a number. But is any of that data useful? If you have a financed emissions reduction goal, and you engage with that boat dealer with success and convince them to reduce their emissions. But your financed emissions can't actually reflect that reduction, because it's only measuring a sector average. If you get good data on that company, your spreadsheet needs to be redone. And what about next year - will you update all of those sector averages? The fact is, to get meaningful data, you will need to have a tool that can handle multiple calculation models, multiple data inputs, across several asset classes. Want more information? Contact us!
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Quam Asset Management Limited 2H Outlook summary by Mark Perrin, CFA Please feel free to let us know if you want to get the full version. The first half of 2024 saw global equities surge, with the MSCI World Index rising 12%, driven by U.S. tech giants riding the AI wave. Japan, Europe, and the UK saw mid-single digit gains, while Hong Kong equities returned 6%. Despite high interest rates, U.S. economic resilience continued, with inflation trending down and the Fed maintaining its stance. China faced challenges with a real estate downturn but saw gains in high dividend stocks and tech sectors. Looking ahead, market performance is expected to broaden. As interest rates ease, small caps and emerging markets could outperform. The U.S. Dollar may weaken, benefiting non-U.S. markets. The U.S. Presidential election will be pivotal; a Trump win could boost oil, financials, and real estate, while a Democrat victory might favor green energy. Mega cap tech companies are expected to thrive regardless of political outcomes due to strong business fundamentals. In China and Hong Kong, valuations remain attractive despite sluggish growth. Government initiatives may provide a boost, potentially driving up valuations. We see opportunities in semiconductor manufacturing, e-commerce, social media, and local delivery sectors. Financials, telecoms, and conglomerates in Hong Kong also present deep value plays. Overall, we anticipate a more diversified and robust market in the second half of 2024.
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#SuisseTechPartners supports Niche Alternative Assets Management Niche Alternative Assets Management: PMplus enables managers to integrate niche assets, like farmland, art, and collectibles, into broader portfolios. With custom valuation models, performance tracking, and detailed reporting, PMplus supports a wide range of alternative investments, offering greater portfolio diversification. Infrastructure Investment Support: PMplus facilitates infrastructure investment management with tools for handling illiquid assets, long-term cash flow modeling, and risk analysis, particularly for projects in renewable energy and transportation. The platform’s analytics and forecasting tools allow managers to evaluate the long-term performance and impact of these assets. Private Credit Management: PMplus offers comprehensive tools to manage private debt portfolios, including credit analysis, loan management, and risk assessment capabilities. The platform helps track interest payments, loan maturity schedules, and provides insights into credit performance, supporting the growing demand for private credit investments. Digital Assets and Tokenization: With multi-asset support, PMplus can manage digital assets alongside traditional investments, offering tools for real-time tracking, valuation, and compliance. The platform can also handle fractional ownership and tokenized assets, making it easier for managers to integrate tokenized investments into portfolios and manage them in a secure, compliant manner. For more information please visit: https://lnkd.in/gUkVC3Gr
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One of the major concerns for investors regarding bonds is their accessibility. Common questions include: How quickly can I purchase bonds? How can I convert my bonds back into cash? Like other forms of investment, bonds are easily accessible. How to Buy Bonds You have two primary options for purchasing bond securities: individual bonds or bond funds. Individual Bonds Individual bonds can be acquired through brokers, banks, or directly from the issuer. However, certain individual bond securities may not be accessible to private investors due to various reasons: 💥High minimum purchase requirements: Some bonds demand a substantial initial investment, typically beyond the means of individual investors. 💥Limited availability: Certain bonds, particularly exotic or international ones, are not readily accessible on the retail market. 💥Regulatory constraints: Certain bonds, such as municipal or specific corporate bonds, may be restricted to institutional investors. Bond Funds On the other hand, bond funds are investment vehicles, such as mutual funds or bond ETFs, that aggregate funds from numerous investors to purchase a diversified portfolio of bonds. This offers enhanced diversification and professional management but entails ongoing fees. The decision between individual securities and bond funds hinges on your investment objectives, risk tolerance, desired level of engagement, and the investment exposure you seek,example of bond fund is the Eurobond Fund. Bonds can be procured through various asset management companies, including Fbnquest Asset Management, ARM Asset Management, PAC Asset Management, Cardinal Stone Asset Management, FSDH Asset Management, United Capital Asset Management, Stanbic Asset Management, and Chapel Hill Denham Asset Management.
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My two cents on emerging trends in forex brokerage business: Why I fail to get the IB opportunity right! n the ever-evolving world of forex trading, brokers need to adapt their market entry strategies in order to stay competitive and profitable. One strategy that is gaining traction is shifting from traditional Introducing Broker (IB) models to asset management services. The traditional IB model involves brokers partnering with individuals or companies to bring in new clients in exchange for a commission. While this model has been successful in the past, the forex market is becoming increasingly saturated with brokers, making it harder to attract new clients and generate revenue. On the other hand, asset management services allow brokers to manage clients' funds on their behalf, taking a percentage of the profits as compensation. This model not only provides brokers with a more stable source of income, but also allows them to build long-term relationships with clients and establish themselves as trusted financial advisors. By shifting their focus to asset management, brokers can differentiate themselves from the competition and attract a wider range of clients, including high-net-worth individuals and institutional investors. Additionally, asset management services can help brokers weather market fluctuations and regulatory changes, as they are less reliant on client acquisition and trading volumes. In conclusion, forex brokers need to rethink their market entry strategies in order to survive and thrive in the competitive forex market. By transitioning from IB models to asset management services, brokers can secure a more stable source of income, attract a wider range of clients, and establish themselves as trusted financial advisors. Failure to adapt to these changing market dynamics may result in brokers closing shop in the near future.
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🌐 How can innovative strategies help tackle market volatility? 🌟 The II Annual Report of the Asset Securitization Sector 2024-2025 reveals why alternative assets are gaining traction in portfolio management 🚀. 📊 Key insights: • 43% of surveyed experts allocate up to 20% of their portfolios to alternative assets. • 17% of surveyed experts invest more than 30% of their portfolios in assets such as real estate, private equity, and credit. Why? These assets exhibit low correlation with stocks and bonds, providing greater protection against volatility. 🌟 The challenge? Their lack of liquidity and limited access... Until now! Thanks to securitization, solutions like FlexFunds’ ETPs are making these assets more accessible than ever. 👉 Discover how to build more resilient portfolios by reading the full article here: https://lnkd.in/eYPQEbqE
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Here's another example of DiligenceAI (unedited output based on Form ADV data) A rapid increase in assets under management (AUM) can present several operational due diligence issues for asset managers. 17.2% of asset managers (2,680 out of 15,532) have experienced an increase in regulatory AUM of more than 25% between March 2023 and March 2024, with total AUM increasing from approximately $17.4 trillion to $24.0 trillion. This rapid growth can lead to the following concerns: Operational scalability: Asset managers may struggle to scale their operations effectively to handle the increased volume of trades, reconciliations, and reporting requirements. This can lead to errors, delays, or other operational issues. Investment process adherence: With a sudden influx of new capital, asset managers may be tempted to deviate from their stated investment process or take on excessive risk to deploy the funds quickly. This can lead to style drift or inconsistency in the investment approach. Compliance and regulatory challenges: Rapid AUM growth can strain compliance resources and increase the risk of regulatory breaches. Asset managers must ensure they have adequate compliance controls and oversight to handle the increased scale and complexity of their operations. Staffing and expertise: Asset managers may need to quickly hire additional staff to manage the increased workload. However, finding and integrating qualified personnel can be challenging, and there is a risk of compromising on quality or experience. Technology and infrastructure: The existing technology infrastructure may not be sufficient to handle the increased volume of data and transactions. Asset managers may need to invest in upgrading their systems and technology, which can be costly and time-consuming. Counterparty risk: With increased AUM, asset managers may have larger exposures to individual counterparties, such as brokers, custodians, or prime brokers. This can increase the potential impact of counterparty failures or disruptions. Liquidity management: Rapid AUM growth can make it more difficult for asset managers to maintain adequate liquidity, particularly in less liquid strategies. This can lead to challenges in meeting investor redemption requests or managing portfolio rebalancing. Valuation and pricing: With a larger asset base, valuation and pricing errors can have a more significant impact. Asset managers must ensure they have robust valuation processes and controls in place to handle the increased scale. Key person risk: The rapid growth in AUM may place increased reliance on key investment personnel, raising concerns about key person risk and succession planning. Operational due diligence teams should closely examine asset managers experiencing rapid AUM growth to ensure they have the necessary controls, resources, and infrastructure to handle the increased scale effectively while maintaining the integrity of their investment process and operations.
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How will global policy shifts shape the role of alternatives in portfolios? J.P. Morgan Asset Management - "Alternatives can offer compelling solutions to portfolio challenges while capitalizing on a shifting policy backdrop" • 📈 Policy Shifts Driving Opportunities: Pro-growth policies, trade tensions, and interest rate dynamics are reshaping the investment landscape. • 🏗️ Alternatives Shine: Private equity, real estate, and infrastructure are uniquely positioned to address inflation and diversification needs. • 🌍 Global Perspective: Alternative strategies must adapt to regional policy impacts, from U.S. deregulation to European easing. • 🔍 Key Takeaway: Alternatives are essential in navigating today's complex markets, offering alpha and protection against volatility.
J.P. Morgan Asset Management Alternatives 2025 Outlook 1. Pro-growth Policies and Return Enhancement U.S. tax reform and deregulation expected to boost growth More favorable environment for IPOs, M&A and lending activity Potential benefits for private equity and private credit Real estate poised to benefit from stronger fundamentals 2. Trade Tensions and Inflationary Impact New tariffs and protectionism could drive persistent inflation Transport assets uniquely positioned to benefit from trade route changes Real assets provide natural inflation protection Industrial real estate could benefit from supply chain reconfiguration 3. Divergent Monetary Policy and High Rates Higher rates likely to persist in many regions More expensive leverage affecting private equity deals Pressure on lower-quality borrowers in private credit Opportunities for hedge funds from market volatility Key Investment Opportunities 1.-Global Transport: Well-positioned for trade route changes Natural inflation protection Benefits from longer shipping distances 2.-Private Equity Secondaries: More efficient capital deployment Reduced J-curve risk Attractive pricing vs pre-pandemic levels 3.-U.S. Real Estate: Compelling valuations at potential bottom Growth tailwind from pro-growth policies Built-in inflation protection features The outlook emphasizes the importance of manager selection and highlights how alternatives can provide differentiated sources of alpha, inflation protection, and diversification in portfolios.
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In data we analysed recently, we found that 98% of asset managers have unnecessary manual processes. That seems extremely high, is it true? and what is "unnecessary"? Allow me 47 seconds to explain: -- -- Portfolio Managers and Operations both "leverage" investment systems. Their usage can be divided into two types: A. Passive usage, which only applies to Portfolio Managers. This is monitoring portfolios, scanning if there is a need to act on market changes. B. Active usage, which is performing a workflow. For Portfolio managers it can be a rebalancing and for Operations it can be resolving a reconciliation break. -- -- You might have noted that I didn't list the following examples: * Portfolio managers: Scan for when the deposits/redemptions import that failed this morning is resolved * Operations: Perform the actual reconciliation. This is because in an exception-based context, with strong notifications, no user has to perform those tasks. The system does it and alerts a human when they're needed. -- -- In an exception-based setup, active usage declines. The less time you spend in an investment management system, generally the better it is. To recap: 98% of asset managers have unnecessary manual processes. That's a huge financial and opportunity cost
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European asset managers are under considerable pressure. While their assets under management are increasing again, helped by positive market performance, their underlying profit margins are further decreasing. Their average costs/income ratio has reached a historically high level of 70%. Medium-sized managers are particularly vulnerable. #assetmanagement #cost #income
