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    Global Distribution Conference highlights including video and pictures! september 18, 2013    
          in this edition      
    1. Global Distribution Conference highlights
2. ALFI Autumn Newsletter - focus on global distribution
     
 
 

1.

Global Distribution Conference highlights

Take a look at this short video which covers both days of the conference

View the video on ALFI's Youtube channel ALFILuxembourg!

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Some figures to start with...

The ALFI Global Distribution Conference on September 12-13 in Kirchberg, Luxembourg, was attended by around 650 delegates.

This edition was supported by 59 exhibitors and sponsors. The conference was also promoted by 12 media partners.

Numerous Twitter followers contributed on the @ALFIfunds Twitter account. More than 80 tweets mentioned conference's hashtag #ALFIGlobal13. Thank you all for following us and sharing your insights!

We also published several discussions in our LinkedIn group - we hope you found them interesting!

The participants had an opportunity to win 15 mini iPads thanks to an Exhibitors game. Congratulations to the winners!

View the photos from the conference by clicking on the picture below:

 

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Regulatory pressures

The biggest preoccupation of distributors is still regulation. The mushrooming of fund rules and the globalisation of the funds industry mean that dialogue to align provisions, incentives and punitive measures will continue for many years. “This is the direction of history and there is no going back,” Edouard Vieillefond, Secretary General of the French financial market regulator AMF, told delegates.

Picture on the left: Edouard Vieillefond (AMF), Freddy Brausch (Linklaters)

 

The implementation of FATCA is currently a major focus. The Intergovernmental model 1 Agreement between Luxembourg and the US should be complete within two to three weeks, said Alphonse Berns, the Luxembourg FATCA negotiator. 

Newly-enacted Swiss regulation means that managers will have to jump more hurdles to access this segment. The new Qualified Investor regime forces relationship managers to clarify and document the status of all their clients. Anton Commissaris, head of wholesale distribution for Switzerland and EMEA at Credit Suisse Core Investments (picture on the right), said: “We will have to redraft all our distribution agreements which will be a huge and costly task.”

So how do asset management firms deal with rising regulatory and competitive pressures? Massimo Tosato, chief executive, Schroder Investment Management, said the asset management model has to change. Current industry margins are not sustainable, he says. They are likely to fall to 25%-35% at best. “This means finding economies of scale, niches with high margins and industrialising our processes through technology,” said Tosato.

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Trends in distribution

A number of long-term factors are being overlooked by many asset managers, according to PwC. These include: the rise and increasing interconnectivity of emerging markets; ageing populations; social, behavioural and technology changes; the fight for natural resources; and the rise of state-directed capitalism.

Social media is set to revolutionise how funds are marketed and sold, but few firms are ready for the shift. A poll at the conference found that while delegates used on average five digital devices per person, just 58% of the asset management industry has a social media presence.

Picture: Panel on Social media (Troy Bankhead - Kneip, Baldwin Berges - Silk Investment Limited, Theresa Hamacher - NICSA, Mary Hunter Hieronimus - Thomson Reuters).

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Emerging market distribution

UCITS are a big success story in Asia as well as in Europe but recent developments are threatening their popularity. “UCITS must keep Asia in mind,” said Lieven Debruyne, Chairman of the Hong Kong Investment Funds Association (picture on the left).  “95% of the UCITS changes are related to specific European issues and impose no burden on Asian asset managers and distributors. But they create uncertainty - Asian managers want to make sure what they are selling today is the same as tomorrow.”

 

 

 

Peng Wah Choy, CEO of Harvest Global Investments in Hong Kong (picture below) pointed out that Chinese managers are developing increasingly sophisticated ranges of investment strategies in domestic and foreign asset classes alike. This increases the competition for foreign managers. Breaking into the institutional market in Asia is no easy task, said Shiv Taneja, Managing Director of Cerulli Associates.Brazil’s funds industry is coming of age too.
"There has been a reallocation to higher returning assets which means larger exposures to less liquid assets and diversification of assets and types of fund,” said José Carlos Doherty, chief executive, Brazilian Financial and Capital Markets Association (ANBIMA), Sao Paulo (picture below). As investor preferences change and greater sophistication is sought, so new asset management companies are entering Brazil.

 

However, the opportunities for UCITS in Brazil may be limited because Brazilian authorities seek to create their own vehicles, said Lina Medeiros, President of MFS International. The best opportunities for UCITS in Latin America lie in Chile, Colombia and Brazil, she added.

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Long-term savings/retirement provision

Some 40% of the European population has no long-term or retirement savings and will have to rely on state pensions. How can we persuade more people to save for their old age? Two solutions were proposed at the conference. The first, The Officially Certified European Retirement Plan (OCERP), is an EFAMA plan and was championed at the conference by Freddy Van den Spiegel, a professor at the University of Brussels. The Simplified Employee Pension (SEP), on the other hand, was championed by Allan Polack, head of investment management at AB Nordea, Copenhagen.

 

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Economic analysis

To what extent are strong recent US growth and the rise in asset prices sustainable? Jerry Webman, chief economist of OppenheimerFunds said a number of factors will make US growth sustainable, including:

  • Demand for housing.
  • Energy certainty thanks to shale gas/oil
  • Increasing credit demand.
  • Employment to rise further.

Even the ever-present fiscal cliff and tapering should not derail the recovery. “Tax increases and spending cuts have not been well publicised but they have stabilised the US debt position,” said Webman.

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2.

ALFI Autumn Newsletter - focus on global distribution

Next edition of our Newsletter has been published!

Make sure you get your free copies! You can order them by contacting info@alfi.lu or simply download the newsletter using the link below.

ALFI Autumn Newsletter.

In this edition:

- Ambition Plan 2.0

- Impact of regulatory changes on global distribution models

- Update on cross border fund distribution

- AIFMD

- Financial services as part of trade agreement

- Long-term investment funds

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