In this week's roundup we also look at MassMutual’s expansion of its alternatives investment platform; the launch of an Amazon reforestation-linked outcome bond by the World Bank; and the addition of structured products to Singapore's WBroker stock trading app.
UBS Asset Management has agreed to transfer its Quantitative Investment Strategies (QIS) business with approximately US$1.5 billion in AuM to systematic investment manager Manteio Partners.
The transaction is expected to be completed in the fourth quarter, subject to regulatory and investor approvals and other customary closing conditions.
Upon completion, Manteio will assume responsibility as investment manager of the QIS funds and mandates. As part of the transaction, the QIS portfolio management team is expected to move to and operate as a distinct group within Manteio, ensuring continuity for investors, stated UBS.
The transaction is expected to be completed in the fourth quarter, subject to regulatory and investor approvals and other customary closing conditions.
This decision aligns with UBS Group CEO Sergio Ermotti's (pictured) overall strategy of streamlining its operations focusing on its core functions after acquiring Credit Suisse in 2023.
In June 2024, UBS Group announced that it is re-aligning its wealth management business to improve its offerings for ultra-rich clients. It also announced it would establish a division named GWM Solutions to consolidate different products for clients, starting 1 July.
This new unit will have alternative products from both its wealth and asset management businesses.
Hong Kong underlyings buyback pushes DLC trading
Daily leverage certificates (DLCs) traded on the Singapore Stock Exchange (SGX) recorded a total turnover of S$219m (US$167m) in July 2024, an increase of 36% month-on-month (MoM).
Meituan, DBS and SATs were the top traded underlyings among retail investors with Baidu long DLC leading the increase in trading activities, spurred by its new Apollo Go robotaxi services in major cities.
Alibaba and Meituan long DLCs followed as the next most traded DLCs, fuelled by share buybacks for both underlyings and upgraded analyst targets for Meituan. Tencent long DLCs were actively traded with analysts reiterating their buy ratings, citing strong growth in gaming and advertising revenues.
SATs long DLC was the top gainer with +87.63% price returns driven by the opening of its new executive lounge space in Singapore Airport Terminal 3 and supported by a 13.4% growth in passenger movements in Q2 24 compared to the same period a year ago.
On the structured warrants (SWs) segment, SWs linked to local banks benefitted from tailwinds with increased participation from retail investors. They recorded total turnover of S$356m in July, up three percent MoM.
Retail trading activity, however, decreased by 40% MoM and increased by six percent year-on-year, due to high base effects in June.
The Hang Seng Index continued to lead as the most traded index for SWs, with DBS and UOB emerging as the most active single stock underlyings. UOB’s core net profit for H1 2024 maintained at above S$3 billion, supported by double-digit fee income growth and lower credit allowances.
Amongst the local bank trio, DBS group performed the best with a 25.6% year to date gain after hitting its intra-day all time high of S$38.17 on 4 July 2024.
MassMutual beefs up alts shelf
US life insurance provider MassMutual has partnered with enterprise software solution Subscribe and will adopt its alternative investment platform to streamline and centralise private market offerings for financial advisors affiliated with its IBD subsidiary MML Investors Services.
The move is aimed at enhancing the advisor experience while expanding investment options for clients in the alternative investment space, said Vaughn Bowman (right), head of wealth management at MassMutual.
The Subscribe platform allows advisors to access a range of private market products, including private equity, private credit, real estate and hedge funds. The system also integrates seamlessly into firms’ existing software ecosystems, offering document processing support for 1031 Exchange funds, exchange funds, SMAs, and other direct or feeder private fund offerings.
It also offers compliance features including advisor monitoring, registration validation, and account suitability checks, helping firms maintain regulatory standards around investment concentration limits and state-specific restrictions for fund investments.
In May, MassMutual struck up similar partnerships with CAIS and iCapital, giving advisors under MML Investors Services access to an expanded product menu of alternative funds as well as structured notes and annuities.
World Bank Amazon reforestation-linked outcome bond racks up US$225m
The World Bank (International Bank for Reconstruction and Development, IBRD) has issued a nine-year US$225 million, principal-protected Amazon Reforestation-Linked Bond.
Private investors are eager to connect their financial return to positive development outcomes in the Amazon region - Jorge Familiar, World Bank
The largest outcome bond ever priced by World Bank offers investors a coupon that includes a fixed guaranteed component and a variable component linked to the generation of carbon removal units (CRUs) from reforestation projects in the Amazon rainforest regions of Brazil.
It is also the first bond linking investors’ financial return to the removal of carbon from the atmosphere, differing from past transactions linked to the sale of carbon credits from avoided emissions.
Through the transaction, approximately US$36m of capital has been mobilised to support the reforestation activities of Mombak, a Brazilian based company, which uses these funds to acquire or enter into partnerships with landowners in the Amazon rainforest to reforest the land with native tree species. In addition to removing carbon, the reforestation enhances biodiversity and fosters socioeconomic development in local communities. The innovative use of CRUs in this outcome bond structure introduces a new model for mobilizing private capital to support reforestation finance.
'As demonstrated by the historic level of participation, private investors are eager to connect their financial return to positive development outcomes in the Amazon region. With this largest ever outcome bond we continue to be encouraged by the growing interest in the structure as well as the expanded list of sectors supported,' said Jorge Familiar (right), vice president and treasurer, World Bank.
The bond is 100% principal protected with the US$225m proceeds used to support the World Bank’s sustainable development activities globally. Investors in the bond will forego a portion of the ordinary coupon payments, with the equivalent amounts instead being provided, through a hedge transaction with HSBC, to support the financing of the Mombak projects.
Singapore broker adds structured products to stock trading app
Singapore-based financial service provider WBroker has upgraded its stock trading app with a one-stop multi-asset management set up.
The platform has enhanced its functionality and user experience to allows users to manage a range of assets within a single platform. This includes stocks, cash management, funds, structured products, bonds, and crypto assets.
The app now also supports multi-currency transactions and offers analytical tools to help users track and optimise investment performance.
In addition, WBroker has integrated with various banks and brokers to receive automatic updates of transactions and portfolios and eliminate the need for manual entries.
'The platform is designed to empower users by providing a straightforward investment experience and access to user-friendly wealth management products,' said the company in a statement. 'WBroker aims to safeguard user assets, enabling them to achieve asset preservation and growth safely, conveniently, and flexibly.'
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