>>> Saint-Gobain in acquisition talks in Spain

Saint-Gobain in acquisition talks in Spain

French construction and glass materials manufacturer Saint-Gobain expects to grow by 7% in Spain and is in acquisition talks, Expansion reported. The Spanish-language paper cited Gianni Scotti, head of Saint Gobain’s newly set up Mediterranean division, which also includes Italy, Greece, Portugal, Morocco, Algeria, Tunisia and Libya.

At the end of 2015 Saint-Gobain acquired Glassdrive and this year it has bought eight Thisa plumbing distribution warehouses in Madrid. The company is in talks to acquire an unidentified company located in Catalonia within the next few months, Scotti said.

Saint-Gobain’s Mediterranean division expects a turnover of EUR 1.9bn in 2016, up 5.6% on the previous year, of which 63% will come from Spain and Portugal, Scotti told Expansion. In Spain, Saint-Gobain reported sales of about EUR 1bn in 2015.

Expansion

>>> What to look at today - 6th of June 2016

Asian equity markets are mixed, even with investment sentiment soured by extremely underwhelming 6-year-low non-farm payrolls out of the US on Friday. Recall that while ADP payrolls and weekly claims data maintained the altitude of recovery in the labor market, other indicators such as Conference Board Online job ads data have been turning from bad to worse. Numbers were also likely impacted by the ongoing Verizon strike as was forecast in recent US press. Report from Fed watcher Hilsenrath over the weekend suggested that June is now "almost surely off the table" and July is still possible though less likely. Futures markets for Fed Funds see less than 5% chance of a rate increase in June, 31% on a move in July and 48% on a move by September. USD was hit hard by the soft jobs data, particularly USD/JPY which extended its declines below 106.40 at the open before recovering to 107 handle. GBP/USD was also under severe strain with a number of Brexit polls all showing the camp in favor of Brexit picking up support ahead of June 24th referendum.

Nikkei -0.67% Hang Seng -0.26% CSI -0.44% Shanghai -0.36%

Eur$ 1.1346 CNH 6.5667 CNY 6.5647 JPY 106.98 GBP 1.4384 CHF 0.9769 RUB 65.7669 WTI $ 49.11 (+1.01%)

S&P -0.01% EuroStoxx +0.23% Dax +0.32% SMI +0.26%

Macro :
- Fed’s Mester Sees Gradual Rate Increases Despite Weak Jobs Data
- U.K. Poll on EU Shows 43% Remain, 41% Leave: Opinium Poll
- Bill Gross Says Chance of Fed Raising Rates 25%: Nikkei
- SNB Vice President Zurbruegg: SNB could cut rates further and could intervene in FX market at any time it deems necessary
- U.S., China Make Great Progress in Currency Talks, Lew Says, Lew: U.S., China Will Discuss Ways to Promote Balanced Growth
- French Deficit Will Be 2.7% of GDP in 2017, Sapin Tells Echos

Keep an eye on :
- AC FP : Accor in talks with Chinese group HNA to counter Jin Jiang -JDD
- ACKB BB : Belgium to Extend Concessions of Offshore Wind Projects: De Tijd
- ALPH SW : Alpiq Is Struggling to Find Buyers for Hydropower Plants: SZ
- BMPS IM : Profumo Says Worst Over for Italy’s Banking Crisis: La Stampa
- BP IM : ECB Urges Banco Popolare to Reduce NPL Stock: Offering Documents
- BAYN GY : Bayer Chairman Indicated Willingness to Raise Bid Somewhat: FBN
- BAYN GY : Bayer Chairman Said to Hold ‘Secret’ Meeting With Investors: Fox
- BAYN GY : Bayer May Have to Sell Units After Monsanto Deal, FAZ Says
- CSGN VX : U.K.’s FCA Probes Credit Suisse, VTB Over Mozambique: WSJ
- CDA FP : Fosun in Talks to Buy 10% of Compagnie Des Alpes: Figaro
- CNX US : Greenlight Capital’s Einhorn Confirmed Selling 7m Consol Shares
- CFEB BB : Belgium to Extend Concessions of Offshore Wind Projects: De Tijd
- DL NA : Delta Lloyd Attracts Buyers for Stake in Van Lanschot: Telegraaf
- EDF FP : EDF, RTE, CDC Choose Banks to Prepare RTE Sale, Figaro Reports
- EDF FP : CEZ submits indicative offer to buy French EDF's Polish assets
- EDF FP : EDF Energies, EREN Renewable May Exit Acme Solar Venture: ET
- ENI IM : Eni to Compete for Central Role in Libya, CEO Tells La Stampa
- FRA GY : Frankfurt Hahn Regional Airport Sold to Chinese Investor: DPA
- KER FP : In the Land of the Rising Sun, Luxury Sales are Fading: Chart
- KU2 GY : Kuka will not see bid arranged by German Economy Minister - Boersen-Zeitung
- KU2 GY : Kuka CEO Would Evaluate Potential Counterbid to Midea Plan: FAS
- LISN SW : Lindt’s Tanner Eyes Expansion Into Chocolate Bar Segment: SZ
- EMG LN : Man Group Promotes CFO Sorrell to Co-President, FT Says
- MC FP : In the Land of the Rising Sun, Luxury Sales are Fading: Chart
- MFRM US : Mattress Firm Holder Berkshire Partners Boosts Stake to 14.1%
- MRK US : Merck & Co. Starts Two Phase 3 Studies in First-Line Lung Cancer
- NESN VX : Nestle Temporarily Halted Venezuela Production Lines: SZ
- RCS IM : RCS public offer by Investindustrial consortium likely to get regulatory clearance on 10 June
- ROTH FP : Rothschild & Co., Martin Maurel to Merge, Les Echos Says
- RDSA NA : Shell Confirms Leak on Nigeria Farcados Pipeline After Attack
- SAB LN : Asahi Explores $7.3b Bid for SABMiller Beers, Sunday Times Says
- SGO FP : Saint-Gobain in acquisition talks in Spain - Expansion
- SHA GY : Schaeffler to Replace Wincor Nixdorf in MDAX
- SoftBank (9984 JP) : Softbank plans to sell 248M shares back to Gungho Online (3765 JP) at ¥294/shr - press - Softbank said to be selling most of its stake in Gungho to help raise money to shore up its balance sheet, and comes on the heels of its announced sale of $10B of its Alibaba stake.
- SAZ GY : Stada Says CEO Retzlaff to Take Leave for Medical Reasons
- UHR VX : Swatch Group Signs Battery Deal With Geely, Hayek Tells NZZamS
- SREN VX : Swiss Life’s Signer: Aim at Property Buys of ~CHF1B/Year: FuW
- TEF SM : Telefonica to Offer Mobile Banking Service, Expansion Reports
- TSLA US : Tesla May Purchase Batteries From Samsung SDI, Nikkei Says
- TKA GY : Thyssenkrupp to Restructure Wharfs as Submarine Deal Fails: Welt
- LANS NA : Delta Lloyd Attracts Buyers for Stake in Van Lanschot: Telegraaf
- VBLT US : VBL Therapeutics Rises 76% Post-Mkt; Study Met Primary Endpoint
- VIV FP : Canal+, BeIN Accord Under Threat From Regulator, Echos Says
- VOW3 GY : VW to Recall 190,000 Cars in India to Fix Emissions Issue: PTI
- VOW3 GY : VW’s Skoda Considering Return to North America: Handelsblatt
- WIN GY : Schaeffler to Replace Wincor Nixdorf in MDAX
- WPP LN : WPP Holders Set to Protest CEO Sorrell’s Pay Package: Telegraph

>>> Europe : Brokers Upgrades & DOwngrades - 6th of June 2016

>>> Up
*BRISTOW GROUP RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*CNH INDUSTRIAL RAISED TO BUY, ADDED TO CONVICTION LIST: GOLDMAN
*EXXARO RESOURCES RAISED TO OVERWEIGHT AT BARCLAYS

>>> Down
*ASSORE CUT TO EQUALWEIGHT AT BARCLAYS
*CAIRN ENERGY CUT TO SECTOR PERFORM AT RBC CAPITAL
*NEXANS CUT TO NEUTRAL, OFF CONVICTION LIST AT GOLDMAN
*PORTLAND GENERAL CUT TO SELL VS NEUTRAL AT GOLDMAN
*SEMPRA ENERGY CUT TO NEUTRAL, OFF CONVICTION LIST: GOLDMAN
*WOLSELEY CUT TO NEUTRAL AT JPMORGAN

>>> PT Change


>>> Initiation
*DOMINION RATED NEW BUY AT SOCIETE GENERALE, PT EU3.25
*SYNOPSYS RATED NEW OUTPERFORM AT RBC CAPITAL
*TELEPIZZA RATED NEW OVERWEIGHT AT BARCLAYS, PT EU7.8
*TELEPIZZA RATED NEW BUY AT UBS, PT EU9.1

>>> Call
>> Stock
*ENTERGY ADDED TO CONVICTION BUY LIST AT GOLDMAN
*SEMPRA ENERGY CUT TO NEUTRAL, OFF CONVICTION LIST: GOLDMAN

>>> Martin Maurel to be acquired by Rothschild for EUR 240m

Martin Maurel to be acquired by Rothschild for EUR 240m
Martin Maurel, one of the last remaining independent and family-owned banks in France, has agreed to be sold to bigger competitor Rothschild & Co, French daily Les Echos reported. The report said that the project was presented to yesterday Sunday to members of the two companies and that it has not been approved by the relevant authorities yet. The report cited David de Rothschild and Lucie Maurel as confirming the news.
The deal, which could be finalised by the end of the year, values the target at EUR 240m, including 2015 dividend.

According to the report, about 60%-65% of the deal would be made via paper, with an exchange ratio of 1 Martin Maurel share against 126 Rothschild & Co shares, and the remainder in cash.

Martin Maurel, founded in 1825, reported net profits of EUR 19.06m on revenues of EUR 102m in 2015.

Les Echos

>>> Asian Update

Asian Mid-session Market Update: Nikkei225 lags on USD/JPY drop after NFP shocker; Sterling plummets on rising Brexit momentum

***Economic Data***
- (AU) AUSTRALIA MAY ANZ JOB ADVERTISEMENTS M/M: +2.4% V -0.6% PRIOR; 8-month high
- (AU) AUSTRALIA MAY TD SECURITIES INFLATION M/M: -0.2% (3-month low) V +0.1% PRIOR; Y/Y: 1.0% (multi-year low) V 1.5% PRIOR

***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 -1.1%, S&P/ASX +1.0%, Kospi closed, Shanghai Composite flat, Hang Seng -0.1%, Jun S&P500 flat at 2,096

***Commodities/Fixed Income***
- Aug gold +0.1% at $1,244/oz, Jul crude oil +0.9% at $49.07/brl, Jul copper +1.1% at $2.14/lb
- GLD: SPDR Gold Trust ETF daily holdings rise 6.2 tonnes to 881.4 tonnes; highest since Oct 2013
- (SA) Saudi Aramco said to have raised most of its Asia and US oil prices for July due to strong demand - financial press
- (SA) Saudi Arabia lowers oil prices to Europe in response to ramp-up of exports from Iran - financial press
- (CN) PBOC SETS YUAN MID POINT AT 6.5497 V 6.5793 PRIOR; strongest setting since May 27th
- (CN) PBOC to inject CNY40B in 7-day reverse repos
- (AU) Australia MoF (AOFM) sells A$300M in 3.75% 2037 Bonds; avg yield: 2.7993%; bid-to-cover: 2.48x

***Market Focal Points/FX***
- Asian equity markets are mixed, even with investment sentiment soured by extremely underwhelming 6-year-low non-farm payrolls out of the US on Friday. Recall that while ADP payrolls and weekly claims data maintained the altitude of recovery in the labor market, other indicators such as Conference Board Online job ads data have been turning from bad to worse. Numbers were also likely impacted by the ongoing Verizon strike as was forecast in recent US press. Report from Fed watcher Hilsenrath over the weekend suggested that June is now "almost surely off the table" and July is still possible though less likely. Futures markets for Fed Funds see less than 5% chance of a rate increase in June, 31% on a move in July and 48% on a move by September.

- USD was hit hard by the soft jobs data, particularly USD/JPY which extended its declines below 106.40 at the open before recovering to 107 handle. Friday's weakness is USD/JPY pair has dragged down the Nikkei225 index below 16,400 - a 3-week low. Japan currency chief Asakawa and Chief Cabinet Sec Suga both noted that the govt is closely watching FX moves, reiterating that excessive volatility is undesirable. Concurrently, Japan's ruling LDP party is preparing for next month's Upper House elections, and a report in financial press noted that party's campaign platform curiously makes no mention of monetary policy or BOJ action.

- GBP/USD was also under severe strain with a number of Brexit polls all showing the camp in favor of Brexit picking up support ahead of June 24th referendum. The most stark contrast was in the poll of Daily Telegraph subscribers showing just 29% planning to vote for staying in EU and 69% for leaving. Opinium poll saw Brexit supporters gain 1pt to 41% v 43% for Stay, TNS poll saw Brexit camp gain 2pts to 43% vs 41% for Stay, and YouGov Brexit support rose 4pts to 45% vs 41% for Stay. GBP/USD fell below 1.4360 - down about 150pips from Friday close - even as UK trade unions implored its 6M members to vote in opposition of Brexit.

- In economic data, Australia Melbourne Institute / TD Securities inflation figures were soft, hitting a 3-month low m/m and a multi-year low of 1% y/y - well below 2-3% RBA's target range. MI researcher said the "May result was driven by falls in fruit and vegetable prices, as well as falls in non-durables and international holiday travel." Separately, ANZ job ads data were surprisingly strong at an 8-month high, though ANZ economist noted "ongoing weak wage growth" supporting employment gains amid economic transition to lower-paying non-mining activity. AUD/USD was little changed on the reports, trading within about a 50pip range above 0.7320.

- Bilateral annual US-China summit in Beijing yielded some tough rhetoric from both sides, particularly as it pertains to the tense situation on South China Sea. China Admiral Sun Jianguo noted the region has become overheated because of the provocations of certain countries for their own selfish interest, adding he was still confident that China has become overheated because of the provocations of certain countries for their own selfish interest. US State Sec Kerry said recent China plans to set up a air defense identification zone (ADIZ) over the disputed South China Sea would be "a provocative and destabilizing act." In terms of economic issues, US US Treasury Sec Lew noted great progress made in currency talks with China, as it committed to moving in an orderly way to a more market oriented exchange rate. Lew added that PBoC should work on its communication, referencing the August devaluation giving " rise to fears that China's economy was in a much weaker place than it actually appears to be."

***Equities***
Notable movers by sector:
- Consumer discretionary: Wanda Cinema 002739.CN +10.0% (trading resumes following restructuring)
- Financials: Biostime 1112.HK -1.2% (repurchase convertible bonds)
- Industrials: FAW Car Co 000800.CN -10.0%, Tianjin FAW Xiali Automobile Co 000927.CN -10.0% (Parent company delays plan); UGL UGL.AU -31.9% (delays projects)
- Technology: Taiwan Semiconductor Manufacturing Co 2330.TW % (to raises R&D expense); TCL Corp.000100.CN +0.9% (to privatize unit); GungHo Online Entertainment 3765.JP +3.0% (Softbank plans stake sales); AU Optronics Corp. 2409.TW +1.6% (speculation for panel makers may see narrower losses)
- Materials: Zhaojin Mining Industry 1818.HK +6.2%, Newcrest Mining NCM.AU +10.9%, Northern Star Resources NST.AU +13.2% (gold gains)

(JDD) Accor serait en contact avec le groupe chinois HNA

Accor serait en contact avec le groupe chinois HNA
Mis sous pression par son actionnaire chinois Jin Jiang, AccorHotels cherche une parade… en Chine.

Sébastien Bazin, le PDG d'Accor­Hotels, est entré en mode défensif. Le groupe hôtelier qu'il dirige depuis l'été 2013 est victime de son succès. Redressé à coups d'investissements et d'acquisitions, il a attiré dans son tour de table le chinois Jin Jiang, contrôlé par la ville de Shanghaï. Passé de 5% à 15% du capital depuis janvier, celui-ci a proposé au fonds Colony Capital et à la société d'investissement Eurazeo de leur racheter les parts qu'ils détiennent de concert (11,8%). Et il serait prêt à grimper jusqu'à 29%. Pour freiner les ambitions de Jin Jiang, Sébastien Bazin agit sur plusieurs fronts avant l'assemblée générale des actionnaires du 12 juillet qui doit entériner l'achat de Fairmont Raffles.

Première urgence : convaincre ses actionnaires financiers qu'il connaît de longue date – il présidait jusqu'en 2013 Colony Capital Europe – de ne pas céder leurs parts dans l'immédiat. L'action cotait vendredi 40 euros, le groupe chinois leur propose 45, Eurazeo et Colony ont cédé un bloc de titres l'an dernier à 49. Ensuite, négocier un accord avec Jin Jiang sur le modèle forgé chez PSA avec le chinois Dongfeng et chez Vallourec avec le japonais NSSMC. En clair : moyennant un plafonnement de sa participation ou de ses droits de vote pour une durée donnée, Jin Jiang monterait au capital et obtiendrait un siège d'administrateur au conseil.

HNA en embuscade
Le schéma n'est pas assez rassurant pour Sébastien Bazin, qui redoute une perte de contrôle et pousserait le scénario d'une bataille boursière. Selon nos informations, le PDG d'AccorHotels, qui n'a pas souhaité commenter, serait en contact avec un autre groupe chinois, HNA, un conglomérat qui affiche des ambitions mondiales.

En France, il a pris 10% de Pierre et Vacances en mars et est en négociations exclusives pour reprendre Servair, la filiale de restauration d'Air France. "Une bataille boursière entre deux groupes chinois à l'étranger serait une première. Elle aurait l'avantage de faire monter le cours d'Accor, ce qui satisferait tout le monde", analyse un connaisseur du dossier. Autre piste, l'État s'impliquerait pour sauver un fleuron national en prenant un ticket de 10%. Défendu par Manuel Valls, Ségolène Royal et Matthias Fekl, le schéma n'aurait pas les faveurs d'Emmanuel Macron qui veut flécher les deniers de l'État vers la filière nucléaire.

WSJ : The Unexpected Regulatory Threat to Global Trade

The Unexpected Regulatory Threat to Global Trade

EU has included trade finance instruments in list of bank liabilities that could be at risk if a bank goes under

From the Chinese Tang Dynasty in the eighth century to Lombard Street in Victorian London, trade finance has always greased the wheels of global commerce. But this legacy is now under threat in Europe from new regulation aimed at preventing another bank bailout.

Banks and commerce bodies are increasingly jittery about the potential effects of European Union regulation on the short-term financial instruments that connect buyers and sellers of goods across countries.

EU authorities have included trade-finance instruments, such as letters of credit, in the list of bank liabilities that could be written down if a bank goes under. This decision, the banks say, creates an enormous compliance headache and a competitive disadvantage, and could leave unsuspecting parties holding the bag if foreign buyers fail to pay their bills.

The spat comes amid a challenging backdrop. The World Trade Organization warned in a report this month that a “trade finance gap” is hurting global commerce, especially for smaller companies. The Bank for International Settlements estimated that “reduced trade finance could have accounted for as much as two-fifths of the fall in export volumes” between the 2008 financial crash and 2014.

“Every bank is squirming, thinking about how they can avoid [the regulation],” said Geoffrey L. Wynne, London-based partner at American law firm Sullivan & Worcester. But banks and trade associations don’t have high hopes of getting a last-minute opt-out.


Data for trade finance is scarce, but the BIS says banks intermediate between $6.5 trillion and $8 trillion of it a year. It makes up roughly 4% of the revenue of the world’s 12 largest banks, according to figures by analytics firm Coalition Development Ltd.

A spokeswoman for the European Commission said members would be “considering these concerns,” among other issues, when the results of a consultation on the new financial regulation are published at a date yet to be confirmed.

The new rules are designed to shield taxpayers from bailing out distressed financial institutions again, shifting the brunt to a “bail-in” by investors instead.

All EU bank contracts that fall outside the bloc’s jurisdiction are now mandated to include a clause obliging liability holders to accept the possibility of a bail-in. This regulation, introduced in January, was intended to stop creditors seeking the protection of foreign courts.

Trade credit is usually provided by a long chain of financial institutions across different countries, meaning each of those banks needs to hold another’s liability. EU banks worry that a “bail-in stamp” would put them at a disadvantage relative to U.S. banks.

U.S. trade credit faced its own uncertainty last year, when the U.S. Export-Import Bank’s charter was allowed to expire for five months before finally being renewed in December. A lobbying effort by business groups, and the vocal complaints of large exporters including General Electric Co. and Boeing Co., eventually overcame opposition to the Ex-Im Bank from congressional Republicans who insisted that its existence unfairly put taxpayers at risk.

Deutsche Bank AG’s global head of trade finance, Michael Spiegel, warned “there’s a possibility that non-EU counterparties would be reluctant to accept such clauses, because many of them won’t understand them.”

Banks also argue that logistical complications are insurmountable, as these decades-old contracts don’t operate under any specific law. Furthermore, they are usually transmitted over the Swift network, which banks use to send information to one another in a standardized way, making them difficult to amend.

Commerce bodies are highly critical of the regulation, as well, saying it could especially hurt smaller companies with less access to trade credit.

“It’s a poorly thought-out regulation that will hurt EU businesses,” said Emily O’Connor, senior policy manager at the Paris-based International Chamber of Commerce.

Letters of credit guarantee a seller will get paid even if the buyer fails to make good, which enables unknown parties in different countries to trade by putting their faith in banks rather than one another.

A bank issues the letter of credit against a promise by the importer that it will pay up and then sends it to a confirming bank, which is the one the exporter uses. A specified time after presenting proof the product was shipped, the confirming bank will pay the exporter.

While sellers are promised payment by both buyer and confirming bank, the latter—more often a chain of them—is directly exposed to the risk of the issuing bank going under. Even though this risk was there before, traditional bankruptcy procedures used to be protective of trade finance, whereas the new regulation pinpoints it as liable to be written off.

People familiar with the matter say banks across different EU countries are testing the waters and slowly starting to phase in these rules in some trade-finance instruments, while still intensively lobbying European regulators. But there is little sign it has affected their corporate clients.

“We aren’t aware of these new regulations,” said Aner Garmendia, general manager at EGA Master SA. For this Bilbao, Spain, industrial manufacturer, which exports 85% of its sales, trade finance is essential, Mr. Garmendia said.

Implementation of the EU directive is dependent on each country’s regulators. There, results have been uneven.

In the U.K., regulators have suggested letters of credit could be exempted from the European directive because they “may not be practicably amendable by firms.” The final decision will be made public later this month.

In France, amendments to national legislation to allow the rule to be applied in a “proportionate” manner have been proposed, but the timing is unclear.

But other major EU countries have taken no such actions. This means British and French banks would have little reason to cheer, even if their own regulators exempted them from the rules, because different measuring sticks in every country would pose hefty complications.

“It’s just a huge documentation nightmare,” said Adam Cull, director of financial policy at the British Bankers’ Association. “Trade finance is about certainty.”

FT : Man Groups promotes CFO Sorell to co-president

Man Groups promotes CFO Sorell to co-president

Man Group has promoted chief financial officer Jonathan Sorrell to co-president of the listed hedge fund after he led its efforts to diversify its core quant and stockpicking strategies and lessen its reliance on single funds.
The 38-year-old former Goldman Sachs investment banker has been at the forefront of Man Group’s string of acquisitions over the past few years, which have included Numeric, a Boston-based quant fund, that added a sizeable presence in the US. About a quarter of the London-based company’s assets under management are now from America.

He will be responsible for further US expansion and developing the company’s private markets asset management business, which will include investing strategies that lock up capital for longer than Man Group’s hedge funds, such as private equity, real estate and infrastructure.
“Over the past five years, Jonathan has made a significant contribution through a period of transition and growth for the business,” said Manny Roman, Man Group chief executive, in an email to staff.
“During this time, we have restructured the firm, diversified our offering and expanded our global footprint. Jonathan’s role at the helm of these changes has far exceeded the demands and scope of a traditional CFO.”
While the company’s share price has fallen from about 178p a year ago to 133p now, it was trading at about 95p three years ago and has benefited from a restructuring led by Mr Roman, which reduced costs by $270m.
Following the group’s first-quarter results, Mr Roman said Man Group would continue to seek acquisitions.
Performance across a range of funds at AHL, Man Group’s core quant strategy, and GLG, its discretionary trading arm, have been mixed during a tough year for global hedge funds. Analysts have said that the company has become less reliant to a degree on AHL, where its share price was once closely correlated with its funds’ performance.
Man Group’s funds under management rose 38 per cent to $78.7bn from 2012 to last year. Most of that is down to acquisitions, which added $22.2bn in assets between May 2014 and January 2015. Close to half is in quant strategies.
The company, which offered almost solely hedge fund strategies in 2010, has spent the past few years adding more lower-cost long-only strategies. About 45 per cent of its assets under management are now in long-only funds.
Mr Sorrell joined Man Group in 2011 as the head of strategy and corporate development from Goldman Sachs, where he was a managing director. He became Man’s CFO in 2012, with responsibility for finance, strategy, human resources, operations, property, technology and communications.
He will be co-president alongside Luke Ellis, who joined Man Group in 2011 after taking four years off from the hedge fund industry to raise pigs.

FT : McKinsey’s secret $5bn fund in spotlight

McKinsey’s secret $5bn fund in spotlight

McKinsey, one of the world’s most influential consulting firms, has built up a secretive $5bn internal investment arm that manages the fortunes of its past and present partners, raising questions over possible conflicts of interest.
Known as McKinsey Investment Office Partners, it is overseen by a 12-strong board of the consultant’s most senior partners and advisers, according to documents seen by the Financial Times.

The firm’s partners on the board — which include the heads of the Americas, energy, investment banking, and private equity divisions — do not disclose their work at the fund in their corporate biographies, and they are not named on MIO’s website.
The existence, size and investments of the highly profitable internal trading fund, which was set up three decades ago, have until now remained largely unknown outside a circle of former and current McKinsey insiders. Ex-partners at the prestigious firm have gone on to run some of the world’s largest companies or have taken up important government positions.
“Given the size of the internal investment fund, it raises the question of whether there’s a conflict of interest here between McKinsey’s investment strategy and its clients’ needs,” said Fiona Czerniawska, director of Source Global Research, an authority on the consulting industry.
MIO said the board delegated investment decisions to the division’s management, adding that it had “a rigorous policy to avoid conflicts of interest”.
The little-known partners’ investment group was designed to retain McKinsey’s top talent and has generated hundreds of millions of dollars in profits for its clients over three decades. Its flagship offering, called Compass Special Situations, has made money for 24 of the past 25 years — only suffering a loss at the height of the global financial crisis in 2008, according to an investor.
MIO has total assets of $9.5bn — around half are partner investments while the rest is invested on behalf of the McKinsey group pension plan.
“MIO is managed independently, and all its activities are separate from McKinsey’s consulting operations,” McKinsey said.
In its fund documents MIO said it was permitted to make investments in the securities of companies for which McKinsey acted as a consultant.
One disclosure stated: “MIO’s parent, McKinsey, is an internationally recognised consulting firm that has a variety of business engagements with numerous issuers of securities,” and that MIO’s funds were “not required to refrain from investing in such issuers”.
MIO said it was regulated by the US’s Securities and Exchange Commission and the UK’s Financial Conduct Authority.
The McKinsey investment fund employs 80 people in several countries — rivalling some of the world’s largest hedge funds in terms of personnel and assets under management. Its offices and IT systems are separate from those of McKinsey’s consulting business to avoid any possible leakage of information between the two operations.
MIO makes use of sophisticated proprietary trading strategies and external hedge fund and private equity managers, and has seeded some of these funds with its own capital.
The fund does not invest directly in publicly quoted securities, but has specialised in macro strategies as well as complicated illiquid trades alongside hedge funds including Elliott Management and Paulson & Co.
In 2014 it made 14 per cent for McKinsey partners, compared with a 3 per cent average for hedge funds in the same year.

FT : Billionaires back new shipping quant fund

Billionaires back new shipping quant fund

Google’s Eric Schmidt and a clutch of billionaires have backed a new quantitative hedge fund that mines global shipping data to track and trade international commodity flows, underscoring the burgeoning interest in new, technology driven approaches to investing as traditional hedge funds fall out of favour.
About 90 per cent of global trade moves by sea, and Boston-based CargoMetrics uses VHF radio transmissions to track the movements of more than 120,000 ships across the world, monitoring where they dock to gauge their type and size of cargo. The data are used to trade commodity prices and, occasionally, currencies and stocks via automated algorithms.

“Humans are better than machines at some stuff, but there’s an explosion of data around the world that if you exploit it scientifically you can find a lot of alpha,” said Scott Borgerson, the founder who is a former Coast Guard officer.
As well as Mr Schmidt, the company is backed by Israeli shipping billionaire Idan Ofer; former Lotus chief executive Jim Manzi; Texan automotive billionaire Billy Joe “Red” McCombs; and Genel Energy founder Mehmet Sepil. The advisers include former senator Bill Bradley; Ed Morse, head of commodities research at Citi; and Gerald Rosenfeld, vice-chairman of investment banking at Lazard.
Mr Schmidt, who also owns a big stake in DE Shaw, a pioneer of the quantitative investment industry, declined to comment on his backing of CargoMetrics, but a spokesman confirmed that his family office, Hillspire, had invested in the company. CargoMetrics has so far raised about $20m, and its most recent funding round in September 2012 valued the company at more than $100m.
Blackstone, the alternative investment firm, is invested in the fund itself, but Mr Borgerson declined to give its size and performance since it began trading in March 2015 because of regulatory and legal constraints.
But Mr Ofer, Israel’s richest man, said that the returns had been “more than acceptable”.

“That gives me confidence that this machine can continue to learn and make serious progress and become a financially successful quant fund,” he told the Financial Times.
Mr Manzi, one of the firm’s earliest backers, said that CargoMetrics was “still scratching the surface of the proprietary data generated”.
The hedge fund industry has come under increasing pressure in recent years because of high fees and underwhelming returns, with investors pulling money from the industry in six of the past eight months.
But a survey by Morgan Stanley showed that investors were happier about the performance of their computer-powered “quantitative” hedge funds than any other strategy.
“Right now there’s a whole sea change in how people view hedge funds . . .  Since last summer they’ve run into some real challenges,” said Patrick Daly, a partner at Park Hill, a firm that helps introduce investors to asset managers. “But the quantitative world has generally been performing well.”
Mr Borgerson said that CargoMetrics planned to integrate other data sources such as satellite images to better trade commodity price movements, such as by scanning crops around the world to gauge their yield.
“We’ve built a platform that can be deployed on other unstructured data sets,” he said. “It might sound a little Orwellian, but we want to measure everything, and create a real time map of the global economy.”