James Williams, Hedgeweek

Regulatory costs might inhibit non-European fund houses from starting UCITS funds… asset manager Erste-Sparinvest restructures its Austrian equity funds…

Sun, 28/04/2013 - 18:42

SPDR ETFs, the ETF platform of State Street Global Advisors (SSgA), announced this week that it had launched the SPDR Barclays EM Inflation-Linked Local Bond UCITS ETF on the Deutsche Borse; the world’s first ETF to offer pure exposure to EM inflation-linked debt. The physically-backed ETF tracks the Barclays EM Inflation-Linked 20 per cent Capped Index, which includes inflation-linked sovereign bonds issued by Brazil, Mexico, Chile, South Africa, Poland, Turkey, Israel, Korea and Thailand. 

Scott Ebner, global head of product development for SSgA, said: “The SPDR Barclays EM Inflation-Linked Local Bond UCITS ETF gives investors simplified access to a diversified portfolio of local currency inflation-linked bonds for the very first time. Investors are increasingly looking for ways to diversify their emerging markets exposure beyond traditional equity allocations and are cognisant of prospective inflationary pressures. This new launch is the latest example of SSgA’s leadership in providing simple solutions for European investors to difficult segments of the fixed income market and an extension of the spirit of innovation that has been part of our global SPDR ETF business for over 20 years.”

International fund houses might be inhibited from establishing UCITS platforms in Europe by the “preponderance and cost of new waves of regulation”, according to Joe McDevitt, Managing Director at PIMCO’s London office, reported the Financial Times. McDevitt said that the US-based fund house – and one of Europe’s top-selling fund groups – would struggle today to build the same UCITS capabilities because of rising regulatory costs. “If the environment had been like it is now 15 years ago, we may not have started as we had. I expect the hurdles today mean many new managers will decide to hold off on starting UCITS funds,” McDevitt was quoted as saying.   

Asset manager Erste-Sparinvest is planning to restructure its equity funds to become more closely aligned with the broader European market. Michael Kukacka is to replace Manfred Zourek as portfolio manager of the ESPA Vienna Fonds reported Citywire Global this week. From 6 June 2013 onwards, the ESPA Stock Vienna fund will become a feeder fund with the Austrian equity fund, RT Österreich Aktienfonds, becoming the Master fund. Previously both funds ran separate strategies. The restructuring will now see both funds coming under one umbrella to make it easier to market outside of the firm’s traditional client base in Austria and Germany. A spokesperson for the firm was quoted as saying: “Putting it into the new UCITS IV structure will mean that it gives us a platform outside of a base in central Europe. This change hasn’t happened overnight – there’s a push to expand the Austrian equity strategy.”  

Finally, Martin Currie Global Funds Ltd this week announced that it had selected Kinetic Partners to provide management services to its UCITS funds based in Luxembourg. Kinetic Partners will provide third party services management and hosting using its Lux-based Management Company (MANCO) platform. Kinetic Partners launched the MANCO service in March 2013 and currently serves fund assets of more than EUR1.2billion. The service provides fund operations management services for third party UCITS funds, ensures adequate risk oversight is in place, as well as maintaining corporate governance and compliance of fund structures in line with local and international laws. “We are extremely pleased to add Martin Currie to our third party management company platform and look forward to working closely with them going forward,” commented Julian Korek, CEO, Kinetic Partners. Zvi Hoffman, Chairman, Martin Currie Global Funds Ltd, added: “After a through due diligence process, we are delighted to select Kinetic Partners as our third party management company.


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