This week's top stories from Investment Officer - 2 November
Investment Officer Luxembourg
The platform for investment professionals in Luxembourg.
Welcome to the Asset Owner News Brief, a weekly summary of some of the most important stories published on Investment Officer Luxembourg, and with a glance at some of the main IO articles in the Netherlands and Belgium.
Amundi, Europe’s biggest asset manager, has informed investors that it is moving seven of its ESG funds out of Luxembourg to consolidate them with new umbrella ESG funds that it has created in Ireland. The move is aimed to achieve “a greater degree of operational efficiency,” the Paris-based firm said.
Collectively, the switch means that some 10.7 billion euro in assets under management will leave Luxembourg to find a new home in Dublin. The biggest fund is the Amundi Index MSCI USA SRI PAB Ucits ETF, which holds about 5.64 billion euro.
Raymond Frenken pieced together the story based on Amundi's notices to investors. In September Amundi already shifted 6.57 billion euro from Luxembourg to Dublin.
Ireland is favoured for ETFs with US equity exposure due to its tax treaty with the US. US dividends to Irish funds are taxed at 15%, compared to 30% in Luxembourg and other European nations.
Private credit is in focus in Luxembourg and elsewhere. Long-term expectations are upbeat, with the AIMA - The Alternative Investment Management Association projecting strong growth in asset-backed lending and into what some call "a fixed income replacement market." Mike Gordon spoke to Aima's Jiri Krol .
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“My sense is that private credit will eclipse private equity in the next decade,”? Król told Investment Officer. “It has a much broader addressable market.”
On a shorter term, private credit is clearly less favored than fixed income, according to PGIM's Gatekeeper survey of top asset allocators: Fixed income is the favorite
Global financial markets saw renewed interest in US treasuries and other bonds this week after several major asset managers, including BlackRock, Janus Henderson and Vanguard, bolstered stiff hopes for a quick Fed pivot. Max Severijns however found that not everyone shares this enthusiasm.
“We are still heading towards a downturn, one that should slash inflation, demand a pivot of some kind from the Fed, and create a turning point for bond markets,” said Fidelity’s global fixed income CIO Steve Ellis. “But we aren’t there just yet.”
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Frank Schnattinger