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Trading in investment products and leverage products on European financial markets fell slightly in the third quarter of 2014. At EUR26.2 billion, the trading volume was down one per cent compared to the previous quarter.  However, exchange turnover was up 9 per cent compared with the same quarter of 2013. This is one of the findings of an analysis by Derivative Partners Research AG of the latest market data collected by the European Structured Investment Products Association (EUSIPA) from its members. The members of EUSIPA include: Zertifikate Forum Austria (ZFA), Association Française des Produits Dérivés de Bourse (afpdb), Deutscher Derivate
New capital and leverage ratios being mandated by the Basel III rules will penalise prime brokers whose securities financing operations will be incrementally included as risk exposure that requires a capital buffer.  TABB Group says that the rules, treatment of collateral and divergent cost of financing in prime brokerages are forcing a reassessment of internal benchmarking at a time when hedge funds and long-only funds are using fewer prime brokers since the financial crisis, a trend that continues downward, says Radi Khasawneh, a London-based TABB research analyst who wrote “Equity Prime Brokerage: Exploring Uncharted Territory.”   As brokers are focusing
Intercontinental Exchange is to sell approximately 4.2 million shares in Euronext NV, representing approximately 6% of Euronext’s share capital, by way of an accelerated book-building to institutional investors. Following the sale, assuming all shares are sold, ICE will no longer hold any of Euronext’s share capital and voting rights. This transaction marks the final exit from Euronext by ICE, in line with its previously announced strategy. ICE received a waiver of the lock-up agreement entered into at the time of the Euronext initial public offering in June 2014, which was due to expire on 21 December, 2014.   The shares
A change to Jersey’s legislation will help bolster the jurisdiction’s standing as a centre for hedge fund business, according to Jersey Finance. The introduction of a new exemption in Jersey’s Financial Services Law, designed to simplify and encourage the establishment of hedge fund management businesses in Jersey, was signed into law by Jersey’s Chief Minister in late November. The change enables Jersey-registered hedge fund managers to be regulated solely under Jersey's 'funds' regulations and not also its ‘investment business’ regulations, provided the managed accounts meet certain criteria to be 'qualifying segregated managed accounts'.  In enabling hedge fund managers to offer
Allianz Global Investors has launched a new Alternative Investments group within its global investment platform.  For the first time, AllianzGI’s diverse mix of alternative investment strategies, some of which have track-records stretching back nearly a decade, will be brought into one organisational group within the firm to provide more dedicated organisational support and visibility.   The creation of a new alternatives group reflects the increasing importance of these strategies to AllianzGI’s clients in an environment of financial repression. Assets under Management in AllianzGI’s alternative strategies have more than doubled over the last year, from 2.1 billion Euros in October 2013
Asset managers have told TABB Group that they are focusing more attention on index derivatives as market structure changes in both OTC and cash markets are impacting their portfolio decisions.  As they change the way they manage cash flows and risk exposures, index derivatives are seeing greater growth as part of the evolution of existing strategies, already generating record level volumes on multiple days in October 2014. According to Matt Simon, a TABB principal, head of futures research and author “US Equity Index Derivatives: The Next Phase of Institutional Discovery,” traditional drivers of equity-index based derivatives usage will persist, evolving
SEI has expanded the regulatory compliance component of its global operating platform to meet Annex IV transparency reporting requirements under the EU’s Alternative Investment Fund Managers Directive (AIFMD).  SEI’s Investment Manager Services division is a global supplier of customised operating infrastructure and services to investment organisations, representing more than $13 trillion (USD) in assets under management. The new reporting requirements apply to all asset managers who manage and/or market alternative funds (other than UCITS) within the EU, including private equity and hedge funds. For managers who  registered with regulators by 22 July 2014, their initial Annex IV reports must be
By Louise Guillemette (pictured, above) and Poseidon Retsinas (pictured, left), both Legal Counsel at Innocap Investment Management – The managed account space is evolving from the traditional standardised and commingled offering toward customisation for single investors. Innocap offers its investors dedicated investment vehicles of multiple types, across multiple jurisdictions, featuring multiple fund administrators and service providers. As part of this customisation, Innocap focuses on matching the brokers, clearers and counterparties (“BCCs”) used by the hedge fund manager (“Trading Customisation”). The goal is to create a trading environment that allows the manager to effectively implement its strategy. Meanwhile, agreements with BCCs (“Trading Agreements”) are negotiated by Innocap’s
Despite the decision by CalPERS to divest their hedge fund investments, for the vast majority of institutions they remain a crucial part of their asset allocation. Some of the more sophisticated pension plans are building in-house capabilities to strengthen their expertise in manager selection. Indeed, as Bruce Keith (pictured), CEO of InfraHedge, an open architecture MAP owned by State Street, comments: “Quite a few of our clients already had existing private managed account platforms but wanted better risk management, better operational oversight.”   InfraHedge, whose assets under management have grown from USD11.45bn in 2013 to USD15.2bn, was launched in 2011
CTAs are up 1.5% over the week as short positions on commodities, including oil, once again proved to be a driver of performance, according to Lyxor. CTAs had nonetheless a diversified source of gains, posting profit on equities, rates, and FX. This implies the strategy could prove resilient if oil prices experience a (short lived) rebound. Global Macro managers, in turn, are long energy on the back of their constructive outlook on global growth. Yet, the strategy is up 0.3% this week as most energy bets are played via relative trades on the curve or between Brent and WTI, rather

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