I met yesterday with a Swiss firm whose business is to reduce the investment costs for large investors (typically with €500m +).
The model is simple, no retainer – they receive 50% of the savings from their work.
They are a very succesful business. A sort of “twitcleaner-(RIP)” for the asset management business.
It will come as no surprise to hear that they most enjoy working for clients who employe hedge fund managers , especially when those hedge fund managers are investment banks. But their bread and butter is the day to day active equity or bond fund and they can even extract juice from passive managers by renegotiating stock lending agreements and the terms of box management.
Their arrival on our shores has been unheralded and I am quite sure that they will be as welcome as a fart in a lift in the City. As you might imagine, they are poachers turned game keepers but they’ve been at their work for nearly a decade now so the Kool-aid is clearly out of the system.
It seems more likely that it will be firms like this that will create immediate change than any number of market reviews by the OFT, tPR and FSA. Frankly, the time has come for a little ghostbusting…
Who you gonna call?
- Who’s been sleeping in my bed? Shocking stuff on stock lending. (henrytapper.com)
- Is this what your savings are paying for? (henrytapper.com)
- Bonus cap will hit banks’ asset management arms (news.efinancialcareers.com)
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