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Video: Turner, Milligan, Adams Discuss Japanese Investments

by on March 29, 2011

March 29 (Bloomberg) — Mike Turner, head of strategy at Aberdeen Asset Management Plc, Andrew Milligan, head of global strategy at Standard Life Investments, and Ken Adams, head of strategy at Scottish Widows Investment Partnership, discuss investing in Japan. They spoke with Bloomberg’s Rodney Jefferson in Edinburgh on March 23. (Source: Bloomberg)

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Video: Turner, Milligan, Adams Discuss Japanese Investments

Video: Milligan Sees `Attractive Dividends’ Across Asia, U.K.

September 20, 2010

Sept. 20 (Bloomberg) — Andrew Milligan, the head of global strategy at Standard Life Investments, talks about his investment plans for equity and coroprate bond markets. He speaks from Edinburgh with Judith Bogner on Bloomberg Television’s “Countdown.”

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Video: Milligan Says Recent M&A Deals Appear Too Highly Priced

August 20, 2010

Aug. 20 (Bloomberg) — Andrew Milligan, head of global strategy at Standard Life Investments Ltd., talks about his investment strategy and a rise in merger and acquisition activity. He speaks from Edinburgh with Maryam Nemazee on Bloomberg Television’s “Countdown.”

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Video: Milligan Says ECB in `Watch and Wait Mode’ on Rates: Video

August 13, 2010

Aug. 13 (Bloomberg) — Andrew Milligan, head of global strategy at Standard Life Investments Ltd., discusses the outlook for European Central Bank monetary policy. Milligan speaks with Betty Liu from Edinburgh on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

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Video: Preston Says BP Oil Spill Will Evaporate ‘Very Quickly’

August 5, 2010

Aug. 5 (Bloomberg) — Martin Preston, a marine chemist at the University of Liverpool, talks about the environmental impact of the BP Plc oil spill in the Gulf of Mexico. He speaks from Edinburgh with Mark Barton on Bloomberg Television’s “Countdown.”

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Video: McLean Says BP `More Attractive’ With Dudley, Asset Sale

July 27, 2010

July 27 (Bloomberg) — Colin McLean, managing director at SVM Asset Management Ltd., talks about BP Plc’s appointment of Robert Dudley to replace Tony Hayward as chief executive officer and the expansion of the oil company’s program of asset sales. He speaks from Edinburgh with Bloomberg’s Maryam Nemaze on Bloomberg Television’s “Countdown.”

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Video: ING’s Kenney Says New BP CEO to Be `Positive’ for Shares

July 26, 2010

July 26 (Bloomberg) — Jason Kenney, an analyst at ING Wholesale Banking in Edinburgh, talks about the possible replacement of Tony Hayward as BP Plc chief executive officer by Robert Dudley, the director of BP’s oil spill response unit. Kenney speaks from Edinburgh with Andrea Catherwood on Bloomberg Television’s “The Pulse.”

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Greece Now, U.K. Next as Scots Investors Ready for 20-30% Plunge in Pound

February 28, 2010

By Rodney Jefferson March 1 (Bloomberg) — While the eyes of the world focus on Greece’s debt crisis, investors in Edinburgh are busy preparing for the U.K. to be next. Turcan Connell , which caters to rich families, expects the pound to lose between 20 percent and 30 percent against the dollar once investors turn their sights on Britain as the government sells a record amount of debt. Concern that Greece won’t be able to cut its budget deficit helped send the euro 5 percent lower against the dollar this year. “Alarm bells were ringing in Greece for a long time and when it happened, it happened very quickly,” Haig Bathgate , head of strategy at Turcan Connell, said at the company’s offices in the Scottish capital. “The U.K. is in a similar predicament. It could be hit very hard.” Money managers in Edinburgh, where investment decisions have been made on behalf of insurers, pensioners and the wealthy for two centuries, are maneuvering to protect assets from the U.K. economy as it limps out of its worst recession on record. Bruce Stout , whose Murray International Trust Plc in Edinburgh has doubled over the past five years, said the chance of a plummeting pound are “better than even” and his biggest holdings are in Asia and Latin America. He called sterling a “very vulnerable currency.” U.K. fund managers at Aegon Asset Management and Scottish Widows Investment Partnership, together responsible for more than 30 billion pounds ($45 billion), said in January they are buying companies that do the bulk of their business abroad. ‘Very Dire’ “When there’s a fiscal crisis, the markets tend to punish that country very quickly,” said Bathgate, who is responsible for 560 million pounds. “I don’t think Britain is in nearly as bad a position as Greece. We’ve got a good taxation system, however the position of the economy is very dire.” The U.K.’s budget deficit is roughly the same as Greece’s, both exceeding 12 percent of economic output. Moody’s Investors Service and Standard & Poor’s said last week they may cut Greece’s credit rating as the five-month-old government struggles to curb spending and control its debt. British Prime Minister Gordon Brown’s government in December increased its planned gilt sales for the financial year ending this month to a record 225.1 billion pounds from the 220 billion pounds announced in April. Moody’s Investors Service said in December the U.K. may “test the Aaa boundaries.” Brown must call an election by June and some polls signal that no party will emerge with a clear majority. Hung Parliament A so-called hung parliament or signs retail sales and economic growth aren’t recovering as expected might be the catalysts for the pound to accelerate declines, Bathgate said. The Office for National Statistics last week revised up the rate of economic growth for the fourth quarter to 0.3 percent from a previous estimate of 0.1 percent. “There could be a number of triggers,” he said. “If there’s indecision about how you deal with a problem, that’s when things start to fall apart. We could be in the position where the spotlight turns to the U.K.” The pound may fall below parity with the euro and drop to the lowest level against the dollar since the mid-1980s should the U.K. cut spending too quickly, Mansoor Mohi-Uddin , chief currency strategist at UBS AG, said in a Feb. 24 report. Sterling slid to a nine-month nadir against the dollar last week, trading at $1.52. Zurich-based UBS, the world’s second- biggest currency trader, predicted it could fall “quickly back” to $1.05 or below. ‘Devalue the Currency’ The pound may come under further pressure with the Bank of England resuming its quantitative-easing program, a process of injecting new money into the economy, within the next three to four months, Bathgate said. Policy maker Adam Posen said Feb. 24 the central bank may expand the 200 billion-pound asset-purchase plan should the economic recovery prove weaker than expected. “If it comes back then we’re likely to be the only people doing that in the world at that time,” said Bathgate. “My strong view is the government is trying to create inflation and devalue the currency.” Bathgate said he sold conventional U.K. government-bond investments at the end of 2008 and only holds index-linked securities because of concern inflation may accelerate. The firm also has reduced holdings in corporate bonds because of the potential “knock-on impact” from a decline in government securities. The yield on the benchmark 10-year gilt dropped 24 basis points to 4.03 percent last week. The yield on Greek 10-year bonds fell 6 points to 6.39 percent. German bunds, the region’s benchmark debt, declined 18 points to 3.10 percent. Turcan Connell, whose clients typically have at least 5 million pounds to invest, was founded in 1998 and oversees about 1 billion pounds in total. Bathgate is responsible for allocating money to different funds, and half is currently in stocks portfolios with 30 percent in hedge funds and other so- called alternative investments. To contact the reporter on this story: Rodney Jefferson in Edinburgh at r.jefferson@bloomberg.net

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RBS, Lloyds Banking Get $51 Billion From U.K. Taxpayers in Second Bailout

November 3, 2009

By Jon Menon and Andrew MacAskill Nov. 3 (Bloomberg) — Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc will receive 31.3 billion pounds ($51 billion) from the U.K. taxpayer in their second bailout. The Treasury will inject 25.5 billion pounds into RBS, for a total of 45.5 billion pounds, making it the costliest bailout of any bank worldwide. Lloyds will raise 21 billion pounds from investors, with the government providing 5.8 billion pounds. The rescue, which follows the 37 billion pounds the two lenders received last year, will bring the government closer to full ownership over RBS, while Lloyds will escape government control by raising money from institutional investors. In return for state aid, the banks will sell assets and accept limits on pay. The two banks said they won’t pay cash bonuses to workers earning more than 39,000 pounds a year. “We don’t want to demonize people in banking,” City Minister Paul Myners said in an interview with BBC television today, adding that most people in banking are not highly paid. “But at the top of banking, we’re going to bear down on remuneration.” The government will buy 25.5 billion pounds of “B” shares in RBS to strengthen the lender’s capital, the bank said in a statement today. The agreement will increase the government’s stake in the lender to 84.4 percent from 70 percent today. The lender will sell its insurance division and some bank branches after negotiations with the European Commission and the U.K. Treasury. RBS also agreed to put 282 billion pounds of assets into the government’s Asset Protection Scheme, the Edinburgh-based bank said today in a statement. ‘Acceptable Result’ “The agreement in principle reached with the EC is clearly more material for the structure of our Group than we had hoped, increasing risk to both execution of the plan and earnings dilution,” Chief Executive Officer Stephen Hester said today. “But this is still an acceptable result for RBS.” Lloyds, the U.K.’s biggest mortgage lender, plans to raise 21 billion pounds, denying the government majority control. The bank will raise 13.5 billion pounds in the U.K.’s biggest rights offering, and 7.5 billion pounds in exchange offers, the London- based bank said in its statement. The U.K. owns 43 percent of Lloyds. To contact the reporters on this story: Jon Menon in London at jmenon1@bloomberg.net Andrew MacAskill in London at amacaskill@bloomberg.net

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RBS Won’t Call Four Subordinated Bonds After Objection From U.K. Regulator

September 4, 2009

By John Glover Sept. 4 (Bloomberg) — Royal Bank of Scotland Group Plc , the largest bank controlled by the U.K., said it won’t call four subordinated bonds after an objection from reglators. The Financial Services Authority told RBS not to exercise its option of redeeming the notes early after the European Commission said banks shouldn’t use state aid to repay equity and subordinated debt, the Edinburgh-based lender said in a statement today. All four of the bonds have call dates in October, according to the statement. Two of them, with a combined face value of 500 million euros ($715 million), are so-called upper Tier 2 bonds while the other two securities, totaling A$1 billion ($840 million), are more-senior lower Tier 2 notes, RBS said. To contact the reporter on this story: John Glover in London at johnglover@bloomberg.net

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Hedge Funds in Edinburgh Feel Madoff Effect as Clients Demand to Know More

September 3, 2009

By Rodney Jefferson Sept. 3 (Bloomberg) — Hedge funds in Edinburgh say they escaped any direct losses from Bernard Madoff ’s Ponzi scheme. That doesn’t mean they’re not living with his legacy. Clients are demanding more disclosure, quicker access to their money and individual, rather than pooled, accounts after Madoff hurt the loosely regulated business, according to managers in the Scottish capital. “The Madoff thing was a stunner for the market and it did lead to some pretty serious questions being asked by some investors,” said Andrew Kelly , who helps oversee 550 million pounds ($900 million) at Cartesian Capital Partners . “The industry as a whole probably overplayed the secrecy element, saying ‘leave us to run the money, we’re the smart guys here.’” Hedge funds, which managed $1.43 trillion at the end of June, are competing for clients by disclosing more about their investments as well as trying to ensure returns keep up with global stock prices. The funds should be required to register and disclose data to regulators, the International Organization of Securities Commissions said in June. The industry’s assets climbed $100 billion in the second quarter as funds advanced by an average 9.1 percent, the biggest gain in more than nine years, Chicago-based Hedge Fund Research Inc. reported on July 21. The MSCI World Index , a measure of developed stock markets, rose 20 percent in the same period. “What Madoff’s done is throw into sharp relief what happens if you don’t do your proper due diligence,” said Allan MacLeod , managing director of hedge funds at Martin Currie Investment Management Ltd. in Edinburgh. “The bar was being raised anyway, and then Madoff has raised it again.” Not Geneva Edinburgh’s financial industry was built on managing money for pension plans and insurance companies. Geneva, whose institutions lost about $7 billion from investments with Madoff, by contrast is centered on private banking for the wealthy. Madoff, 71, is serving a 150-year prison term in Butner, North Carolina, after pleading guilty in a $65 billion fraud. Martin Currie , the largest manager of hedge funds in the Scottish capital, and city rival SVM Asset Management have been attracting money from institutions. Martin Currie’s hedge fund assets rose about $400 million to $1.2 billion since January as investors become “more diligent and selective,” MacLeod said. The company hired two people for hedge fund sales this week, one based in London and the other in New York, he said. SVM received about 20 million pounds from U.K. investors during the past four months for a new regulated retail hedge fund, Chief Executive Officer Colin McLean said. ‘Regulatory Cover’ “Family offices and others, particularly post-Madoff, have really looked to try to protect themselves from being sued and look for that regulatory cover ,” said McLean, 56, whose company has about 100 million pounds in so-called long-short strategies, funds that can bet on rising as well as falling markets. Cartesian is trying to make up the assets it lost last year as clients pulled money, Kelly said. The company has 90 million pounds in hedge funds. “I am not completely convinced the industry is seeing huge inflows,” said Kelly, 44. “There probably are now net inflows overall, but not significant ones and they are nothing like as significant as the outflows last year. That was devastating. “We had strong performance last year and had outflows in the order of 20 percent,” he said. “That’s tough.” Hedge funds, which are designed to do better when markets fall and tend to lag when they rise, must now show they are worth investing in as stocks rally, according to McLean. ‘More Pressure’ Investments in hedge funds declined 18 percent on average last year, the most since Hedge Fund Research started collecting the data in 1990. The MSCI World Index slumped 42 percent as economies went into recession and the financial industry imploded. “At lot of people who generally do shorting did quite well last year and all of those have found this year quite difficult,” said McLean. “For funds that fell a bit last year, they are under a bit more pressure to show that they can keep up with markets and do better than conventional equity funds.” Those regulated stock funds also aren’t coming under the same scrutiny as the hedge fund industry. While not a hedge fund manager, Madoff’s scheme led to questions about the reviews carried out by firms that manage funds of hedge funds. These so-called funds of funds were among Madoff’s biggest clients. Madoff demanded anonymity as a cost of doing business, according to PBS’s “The Madoff Affair” aired on May 12. Funds of Funds Funds of funds from Geneva fell 22 percent last year, according to Eurekahedge and Hedge Fund Research. Their assets sank to $15 billion in May from $54.2 billion at the end of 2007, the figures showed. “There’s no doubt Madoff was a bad thing for hedge funds, particularly for the fund of funds industry,” said MacLeod, 43. “The better quality funds whose due diligence process kept them out of Madoff will prosper.” That means fund companies have to show more clearly what they are doing with a client’s money, publish more data on holdings and offer cheaper terms for trading stocks, according to the Edinburgh managers. “If we’re not prepared to tell people what we’re doing, then we have a problem,” said Kelly. To contact the reporter on this story: Rodney Jefferson in Edinburgh at r.jefferson@bloomberg.net

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