Terminating public equity asset managers is a cumbersome act to do for sovereign wealth funds and public pensions. It sticks to the forefront of public investors’ conscience. It is less complicated than terminating private equity relationships, but still requires significant time resources. Fund manager retention and termination decisions involve high costs. Public investors need assurances that if they proceed to terminate a fund manager, they are not doing it prematurely. Some investment strategies require a cycle or two to see results. Timing is everything for a trader, not for a long-term oriented fund manager.
The step before termination involves a watch list step. The targeted fund manager is usually informed of the situation or current concerns held by the public investor. In reality, public pensions and sovereign wealth funds desire their external managers to succeed in managing their assets. Like picking trophy race horses at the track, senior public investment officers and investment consultants hope their picks to be successful. Several noteworthy factors in motion can affect termination of an external manager. The first obvious reason that comes to mind is under-performance. This is a common cause for termination.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
Atlas Merchant Capital LLC and Singapore’s GIC Private Limited acquired just under a 25% equity stake in Dresher, Pennsylvania-based Ascensus, the largest independent recordkeeping services provider, third-party administrator, and government savings facilitator in the United States. San Francisco Genstar Capital LLC and New York-based Aquiline Capital Partners LLC were the sellers of the shares in Ascensus and will maintain control over the company.
Atlas Merchant Capital LLC was founded by Bob Diamond and David Schamis. Diamond is the former group chief executive of Barclays plc.
GIC is an investor in Alight Solutions, a provider of human capital solutions.
Barclays acted as the lead financial advisor and J.P. Morgan acted as financial advisor to Ascensus in connection with this transaction. Willkie Farr & Gallagher LLP acted as legal counsel to Ascensus.
Debevoise & Plimpton LLP acted as legal counsel to Atlas Merchant Capital and Sidley Austin LLP acted as legal counsel to GIC.
In 2015, JC Flowers sold Ascensus to Genstar Capital and Aquiline Capital Partners.
The Value of Research: Skill, Capacity, and Opportunity
This article is sponsored by S&P Dow Jones Indices.
How much should a portfolio manager be willing to pay for research? The question is of importance to any manager, but has become particularly pertinent since newly imposed European rules require that the costs of investment research—previously offered by many investment banks as an in-kind consideration in return for brokerage business—be unbundled from trading.
Unfortunately, attempts to determine a fair value for research in the most general circumstances are doomed to fail. Even if we only consider direct recommendations to buy or sell certain securities, the value of such recommendations to a portfolio manager will vary according to the absolute size of positions taken in response. Instead, we provide a framework for estimating relative research values across markets and constituents, under certain stylized (but reasonable) assumptions.
REPORT: The Value of Research: Skill, Capacity, and Opportunity
Malaysia’s Khazanah Nasional Berhad is prepping to declare more than 1 billion MYR in a dividend payout to the Malaysian government for 2019. Khazanah Nasional is undergoing a significant strategy shift to focus more on domestic assets, while selling off venture tech investments, overseas real estate, fund investments, and other non-strategic assets. The wealth fund also plans to scale back its overseas presence in markets such as San Francisco and London.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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