Federated Builds Out Active Equity Team | Chief Investment Officer

(February 6, 2014) – Federated Investors has hired former Broadmark Senior Managing Director Michael Dieschbourg to lead its new alternatives/managed-risk group.

Dieschbourg started as managing director and senior vice president of the Philadelphia-based fund manager on January 6.

The new unit represents a major strategic push for Federated into downside-protected and highly liquid active equities products.

“What liability-driven investing (LDI) did for fixed income, we’re going to be doing for equity allocation strategies,” Dieschbourg told aiCIO. “LDI transformed fixed-income managers, and you had leaders emerge. Like LDI, in this group we’re looking at outcomes, solving clients problems in a conservative way, and changing the definition of risk to, ‘What’s the impact on the client portfolio?’”

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Dieschbourg will oversee the development and launch of Federated’s offerings in this space. His team of 13 has been assembled from two prior divisions at Federated. Dieschbourg reports directly to Stephen Auth, CIO for global equities.

“Michael’s management experience and deep knowledge of managed-risk portfolios from both the perspective of an investment manager and as a consultant make him an ideal leader for our recently formed alternatives/managed-risk investment group,” said Auth.

The division has four products on the market and plans to expand the suite over time. All seek to minimize drawdown risk and volatility without sacrificing (too much) upside.

“We’ve had this great bull run in bond markets, which is coming to an end,” Dieschbourg said. “But growth is still important. The key is staying focused and involved in the marketplace, but not getting killed in the mean time.”

Federated managed $376 billion in assets between 135 funds and various managed accounts at the end of 2013.

(February 6, 2014) — Asset managers, consultants, and other providers with a flair for innovation have been recognised as winners in their field in the aiCIO European Innovation Awards 2014.

Across a wide field of categories, the best were shortlisted through client nomination and selected by the aiCIO Advisory Board.

Winners will be honoured at the annual aiCIO European Innovation Awards dinner at London’s Savoy on May 15, when the victors of the asset owner categories will be revealed.

Some 31 pension funds have been shortlisted for eight prizes for innovation, with a further seven fund CIOs or investment heads nominated for an individual award. Nominations for these categories were announced yesterday.

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The asset manager/servicing awards are broken down into four broad categories: Core Investments, Alternative Investments, Strategy & Tactics, and Servicing.

For the full list of nominees—including details behind the nomination—click here.

Core Investments

Fixed-income: Twenty Four Asset Management

This group of (mainly ex-Morgan Stanley) bond traders burst on to the scene amid the chaos of the financial crisis. They have impressed investors with their innovative approach to fixed income instruments, explored the basis of duration—and secured some very high class clients in the process.

Equities: Nordea

The discerning North Europeans’ favourite, Nordea has made a name for itself around the rest of the continent. Its range of funds is huge and offers investors exposure to markets previously only (well) known to locals.

Emerging Markets: Lazard Asset Management

By combining multi-asset and emerging markets Lazard earned a place on this year’s nomination list. Aside from the Market Allocation Fund, the manager’s largest range of funds fall into the emerging markets bracket offering a wide range of options.

Strategy & Tactics:

Multi-Asset & Smart Beta: Amundi

This new arrival has gained several fans in the institutional investment community. “In multi-asset, you need to look for new, open funds with good ideas—and this is one of them,” said one investment consultant. Blackstone’s former head of distribution joined the firm in June coinciding with its acquisition of a US adviser to support the French asset manager’s reach across the Atlantic.

Liability-Driven Investing: Insight Investment

Arguably the godfather of the UK LDI market, Insight has gained more market share and pushed into the US market. Home clients are fans of its bond portfolio—and the investment experts who put it together.

Swaps/Buy-in: Pension Insurance Corporation

Not only does PIC push the boundaries on what was traditionally considered to be “too difficult” deals, the company’s portfolio allocations help to ensure the pension assets it takes on are spread across some of the most uncorrelated investments in the industry.

Fiduciary Management: Cardano

The Anglo-Dutch firm is the only one to report its clients’ results to the wider market for them—and prospective clients—to use as a benchmark. “This is our second year with Cardano and we have been impressed with their investment thinking and their performance to date relative to liabilities,” said one client.

Investment Consulting: Redington

“Redington continue to break down the barriers to effective investment consulting. They are continually innovating and providing properly frameworked holistic solutions to pension schemes’ funding,” said one CIO. “…they have continued to use innovative solutions to help pension schemes earn more attractive returns whilst rigorously managing their risk and have worked hard to make their solutions quick and easy to implement,” said another.

Manager Selection: Russell Investments

This global consulting power house effectively covers investors’ manager selection enquiries, they say. Wide-ranging and up to date – just what is required.

Alternatives

Overall: AQR

Appointing a former pension fund manager to its ranks did AQR no harm this year, and the manager continued to push out alternative premia funds to investors looking to match their various risks to uncorrelated income streams.

Real Estate & Infrastructure: Allianz Global Investors

After hiring a specialist team, AGI pushed out a UK-first: a fund to construct public buildings that should help boost jobs and the economy. Can’t get more innovative than that.

SRI/ESG: Generation Investment Management

Al Gore and David Blood’s ethically clean funds have impressed investors, chalking up large inflows in its decade of business and counting some of the largest pensions as clients. However, it is the commitment to long-term investing that CIOs appreciate, rather than the commonly heard lip-service on the topic from competitors…

Servicing:

Transition Management: BlackRock

Not just a popular choice for investing assets, BlackRock is one of the largest players in transitions too. It offers a full-scale service, including fiduciary management, securities lending and a range other options under its “solutions” banner.

Securities Lending: eSecLending

The specialist lending agent moved up a gear last year, after its purchase by a private equity group. A raft of ideas from new executive staff has seen the company target collateral transformation services and collateral optimisation, alongside its unique auction-based lending service.

Custody/Asset Servicing: State Street

State Street’s Global Exchange allows asset owners and their managers to access real-time, accurate data on liquidity, risks and overall exposure. It is data management 2.0, say investors.