Institutional allocators, wealth managers and family offices want the best performance possible from their portfolios, but what does “best” really mean for these firms? When they allocate towards hedge funds or other alternatives, are they looking for improved returns or for portfolio diversification? And what are the trends that will drive allocation decisions in 2019?These are amongst the key questions that will be addressed by a panel of seasoned allocators at the upcoming Profit & Loss New York conference on March 27.
Galen Stops takes a look at the new launch from Elwood Asset Management that is targeting institutional investors wanting exposure to digital assets – without holding cryptocurrencies.London-based Elwood Asset Management, which is backed by Brevan Howard co-founder, Alan Howard, has partnered with Invesco to launch its first product aimed at investors looking for exposure to digital assets, the Invesco Elwood Global Blockchain UCITS ETF.The central problem identified by staff at Elwood prior to this launch is that currently there is a distinct lack of ways for institutional investors to gain exposure to digital assets. Right now, these firms can either buy cryptocurrencies – such as bitcoin – or invest in a venture capital fund, both of which can be problematic for institutional investors given the liquidity and regulatory issues surrounding cryptocurrencies and the limitations dictated by firms’ investment mandates
LMAX Exchange Group has reported financial results for 2018 showing that its gross revenues, profits and EBITDA were all up year-on-year.The firm reported gross revenues of $50 million, gross profits of $45 million and statutory EBITDA of $18.6 million – increases of 27%, 35% and 62%, respectively, from 2017. Operating profit was $13.4 million in 2018, up 135% from the previous year.LMAX cites a 21% increase in trading volumes across the platforms that it operates as the driver of these figures, although the platform does not publicly report the actual volumes themselves. In particular, the firm highlights Asia Pacific as a major growth area in 2018.
Rob Catalanello has joined B2C2 as CEO of the OTC cryptocurrency liquidity provider’s Americas business, a newly created position, based in New York. Immediately prior to joining B2C2, Catalanello was working as a consultant, advising financial institutions on the setup, structure and day-to-day operation of capital markets, e-commerce, FX, commodity, cryptocurrency, and blockchain businesses in the US.Catalanello spent nearly a decade at Credit Agricole, where he was managing director, head of fixed income markets sales, Americas. He also held FX sales roles at Merrill Lynch, Goldman Sachs and JP Morgan, and spent a brief stint at Edgewater, which he joined in 2016.
Refinitiv has introduced Deal Tracker as a Service (DTaaS), a Cloud archiving and compliance tool for FX post-trade flow sourced from Refinitiv FXT. DTaaS is an extension of Refinitiv Deal Tracker, which is designed to help firms monitor and process FX trades on all major FX platforms globally, both in the front and back office, by allowing them to monitor trade activity in real time, track net positions, and archive data for easy searching as well as compliance needs.“As a Cloud-based service fully managed by Refinitiv, DTaaS can help eliminate the need for local software deployment, reducing total cost of ownership – a key benefit as financial companies look for ways to reduce spending, particularly on technology,” says Refinitiv in a release issued today.
The European Venues and Intermediaries Association (EVIA), formerly known as the Wholesale Markets’ Brokers Association (WMBA), has published its response to a call from Germany’s Finance Ministry for feedback on MiFID II and MiFIR one year on from their implementation. In the feedback, EVIA makes a number of points and stresses its belief that foreign exchange swaps should not be covered under the regulation. EVIA does note that whilst its feedback sets out some of the difficulties and remedies in response to the premise of the call for evidence, it states that MiFID2 delivered a “great many benefits".
Data from BarclayHedge confirms previous Profit & Loss reporting that CTAs saw overall positive results in February, with the BarclayHedge CTA Index showing a 0.32% return last month.Five of eight of the CTA sectors tracked in the Barclay CTA indices were in positive territory for February, though the agriculture and currency sectors were a drag on performance.“CTA funds got in step with equity markets in February, and those able to sit out a week-long energy reversal at the beginning of the month were rewarded by month-end,” says Sol Waksman, president of BarclayHedge.
In recent years there has been a significant re-pricing of credit, but are there more adjustments to come?This will be one of the key themes addressed by speakers at the upcoming Profit & Loss conference on March 27.Senior figures at Eaton Vance, Citi and JP Morgan will discuss some of the key factors impacting how credit is priced in the FX market, and discuss the major trends shaping post-trade decisions amongst trading firms.Talking points for the event will include:How are the structures of FXPB businesses changing in response to client demands?
Will improved performance from hedge funds in early 2019 help shift the perspectives of prospective allocators to these funds?At the end of last year investors were seemingly nervous about stock market volatility, global economic uncertainty and major commodity price downturns - with hedge fund redemptions reaching $42.3 billion in December, according to data from BarclayHedge, a division of Backstop Solutions. This was the largest monthly outflow in five years and represented the fourth straight month of net redemptions.This data comes from the Barclay Fund Flow Indicator, published by BarclayHedge, a division of Backstop Solutions, and shows that this was the largest monthly outflow in at least five years, and a fourth consecutive month of straight redemptions. In total, hedge fund outflows in 2018 stood at $89.2 billion, or 3.1% of total industry assets.
Profit & Loss understands that Danny Wise has left Citi in London where he was a managing director and head of European G10 spot FX trading.
Sources say that Wise was part of a round of cuts at the bank he joined in 2014 from Credit Suisse in London, where he was head of spot FX trading. Prior to Credit Suisse, Wise worked at Barclays in London for almost 10 years, most latterly as European head of spot trading, he joined the UK bank from Lehman Brothers.