What: The Association of Professional Fund Investors (APFI) announces new additions to its leadership team, allowing representation in key North America, Middle East and Africa markets, as well as the creation of an Advisory Board.
About: The APFI has announced, with immediate effect, new members to join its leadership team, supporting the work of the current directors. The new members are Riad Daniels, Adam Choppin, and Bev Shah.
Read the full release here.
What: This response is provided on behalf of the Association of Professional Fund Investors in response to the Financial Conduct Authority (‘FCA’) final response MS15/2.3 to the interim paper MS15/2.2, part of the Asset Management market study, with responses for CP17/18 due by 28 September 2017.
About: The FCA interim report MS15/2.2: On 1 November 2016 the FCA issued a 200-page interim report assessing the state of the £7trn (€8.18trn) strong asset management sector in the UK, the FCA highlighted that investors in active funds often pay higher charges than necessary due to a lack of price competition. In addition, it highlighted that fund objectives were not always clear, and performance was not always reported against an appropriate benchmark. The study focussed heavily on the experience of the defined contribution pension schemes and investment consultant market and charges and performance of active funds. On 28 June the FCA issued its response MS15/2.3 to that consultation and also released CP17/18 for further consultation. The APFI notes the FCA’s observations set out are broadly consistent with the findings set out in the interim report.
Read the full response here.
Jon Beckett is UK director of the Association of Professional Fund Investors.
A Call to Asian Professional Fund Investors
What does it take to be a professional fund investor in Asia today? Asian professional fund investors find themselves amid a technological and regulatory revolution.
They face tough questions. To follow the journey of the Anglo-Saxon model or explore a new path? To embrace environmental, social and governance standards, or to exploit assets stranded by this concept? To go active or passive? To follow or to show leadership?
To this end, the Association of Professional Fund Investors (APFI) was formed to serve as a global body by and for its membership. It enables professional fund investors to share ideas, ensure best practices and network with peers, be they fund gatekeepers, fund buyers, manager research analysts or fund selectors.
Consequently, the APFI has already begun to build strong networks in the United Kingdom, Nordics and elsewhere in Europe. However our membership remains, frustratingly, lighter in Asia, Africa and the Middle East.
The APFI has held events in both Hong Kong and across Europe to debate the regulatory and technological future of fund research. We believe that due to the uniqueness of Asian fund markets, professional fund investors in these markets can share insights to the benefit of APFI members globally, and in return enjoy the experiences of like-minded professional fund investors from other regions.
The aim is shared global best practice.
A great example of this is the multi-year global Due Diligence Questionnaire project, which is rolling out in 2017 in association with Door, our technology partner.
The APFI seeks to be at the forefront of technological change within professional fund investing, and is looking for other technology and training partners to discuss the direction of the industry and opportunities.
More crucially the APFI is calling on professional fund investors in Asia to become engaged, to lead APFI initiatives in the region, to be a spokesperson, build membership, engage trade bodies and regulators, and champion professionalism in fund investing in Asia.
This is an opportunity to get involved with a growing professional body that is on the cutting edge of our field. It is an association created and run by professional fund investors, for professional fund investors.
APFI believes that the inclusion of the investors’ viewpoint is crucial to the sustainable growth of the asset management industry. To this end we act to ensure the continued recognition of the importance of professional fund investors and advance their role within the industry.
There are some simple truths that APFI members see as central. Certainly, there are others and we invite new members to add ideas, but here are the basics:
- Funds are bought by professional fund investors, not sold to them.
- Hot concepts are the basis for short-lived bubbles; APFI members seek to isolate funds and their managers that have sustainable investment merit.
- A strong competitive environment for funds is crucial, of which open architecture is a key component.
- A well thought out, sophisticated approach to fund research is forward looking and past performance is only a limited aspect of the selection process.
- There is no ‘right way’ to analyse and select funds – APFI members utilise a broad range of techniques and methodologies.
- Professional investors work most effectively in an environment of independence and objectivity.
One particular area of focus for APFI is responsible investing and how to bring this into the mainstream.
We are working with professional fund investors globally to consider, for example, the difference between socially responsible investing (SRI), which uses negative screening, and ESG approaches, and how investors should assess the differences.
That question in turn can vary between institutional investors and private banks, and also country to country depending on prevailing corporate governance conventions, for example, between Singapore and Japan.
Investors also have to establish whether there is a clear enough investment or risk management case for SRI/ESG. Other challenges include the lack of universally agreed standards for ESG. Without such standards, how do investors weigh up the investment case, cost, or the societal good? How important should an investor’s carbon and greenhouse gas footprint indeed become?
When considering responsible investing, should we also take a longer term approach to investing? The backdrop is the inescapable fact that assets are moving tectonically towards passive funds. Can an index tracking fund ever be a good steward of client assets?
In terms of changing behaviour, does activism, voting and corporate governance actually work? Ultimately, to bring responsible investing into the mainstream may require fund buyers, and all professionals in the value chain, to take a fiduciary oath to clients.
It is daunting to think that deciding these questions will prove less difficult than finding the answers. APFI is here to work with fund buyers through these challenges and we welcome Asian investors to join us in these endeavours.
This response is provided on behalf of the Association of Professional Fund Investors after having consulted members and Professional Fund Investors (‘PFIs’). The following details APFI’s final response to the Financial Conduct Authority (‘FCA’) consultation paper, relating to property and illiquid funds, with responses due by 8 May 2017.
The FCA discussion paper DP17/1, in February 2017 the FCA highlighted recent price and gating actions by property funds following the EU Referendum, and sought industry views on the use and practices around the use of property funds and other funds invested in non-daily tradable asset classes, particularly by funds (including unit-linked) that are themselves daily traded. “This paper considers some of the risks created when consumers use open-ended investment funds to gain exposure to assets that may be difficult for the fund manager to buy, sell, or value quickly. In this paper we refer to these assets as ‘illiquid assets’: they may include land and buildings, infrastructure, and financial assets such as unlisted securities.” 1.1, Page 5, DP17/1.
The Association of Professional Fund Investors (APFI) welcomes the FCA examining this area of great interest on behalf of fund buyers and customers. The APFI supports greater transparency relating to the liquidity and trading practices of fund management and how they impact customer outcomes.”
Following the EU Referendum and series of actions by property fund providers, and following engagement with the Association of Real Estate Funds (AREF) directly, the APFI issued the following press release.
Read the full response here.
‘The Association of Professional Fund Investors (APFI) today announces changes to its board. This includes the resignation of director Roland Meerdter and the new appointment of Jon (‘JB’) Beckett, UK Director, to the board. These changes follow the ongoing growth of the APFI membership and the launch of the DOOR proposition.
The APFI Board wishes to thank Roland for his tireless efforts to promote the APFI, professionalism in fund investing and global due diligence project, which has culminated in the successful launch of DOOR. The first truly global on-demand electronic due diligence questionnaire (E-DDQ) platform. DOOR is endorsed by the APFI, which will continue to identify and advise best practice on behalf of its members. The Board also welcomes JB, as newly appointed director, who has been a long supporter, technology advocate and UK Lead for the APFI.
Read the full release here.
You are likely aware that APFI has collaborated on an initiative to save our members time in collecting and organising fund information for due diligence, using a standard questionnaire built on best practice. Finally, the due diligence information gathering process is moving out of the age of Word and Excel documents traded through emails – the Standard Questionnaire is digital!
The due diligence platform has launched and we have secured priority access for APFI members and their teams.
After one of APFI’s regular events during which the idea of standardisation was discussed and endorsed, a group of APFI members created a working group to create a series of standard due diligence questionnaires.
The potential benefits of standardisation were clear, but there were still major limitations in the way that information is exchanged. An obvious solution was to go digital. But to create a platform would require investment to flourish and it needed the support of the asset management community.
Door – a digital platform for fund due diligence.
Early in 2016, Roland Meerdter, one of APFI’s founders, began working to create a digital solution. To ensure that the platform would also benefit asset management companies and gain strong adoption, Rob Sanders, formerly Aberdeen’s Global Head of Marketing, joined with Roland to work on the process and secure necessary support. It was recognised that the highest likelihood of success would be through collaboration across the industry.
Door collaborated with 10 fund investor firms and 12 global asset managers to streamline the due diligence process and deliver value for all stakeholders. Jauri Hakka and JB Beckett, members of the APFI leadership team, have worked as part of the collaborative group, ensuring that APFI members’ interests were represented.
Door has recently launched the first version of the digital platform. 20 global and boutique asset managers have committed to providing up to date, robust information on their funds in the standard format. 37 fund investor firms have already registered to use Door. Recognised as a much-needed driver of efficiency, this initiative has received strong support across the industry.
Door is free for fund investors to use.
Your free access to Door
APFI is endorsing the Door initiative as a means to reduce the workload of professional fund investors allowing for more time to be spent on analysing rather than gathering basic information. As a service to members, we will register you and your fund investor colleagues for free priority access.
Door is currently onboarding fund investors in groups of 100 in order to ensure a smooth launch process – we understand that those spots are filling quickly. If you do not wish to be registered, please let us know.
We need your business contact information
So that Door can register you, APFI will need your business email address for identity and information security reasons. Please send this to email@example.com. Door will contact you directly once you provide APFI with this information.
If you would like to register any colleagues, please let the Door Team know directly: firstname.lastname@example.org. Please remember that Door will only provide access to professional fund investors – those involved in the research and selection of funds. We recommend that you get your team access at this early stage so that you may all benefit from the efficiencies the Door platform will provide.
Mussie Kidane, Jon “JB” Beckett & Jauri Hakka
A new digital due diligence platform aims to save time for fund selectors and help asset managers to respond in a timely fashion. Nordic Fund Selection Journal investigates the latest developments in creating a standardised due diligence process.
For more information on the Nordic Fund Selection Journal or Tell Media Group visit: www.tellmediagroup.se.
Leading fund investors and asset managers collaborate to streamline, digitise and standardise fund due diligence processes
The processes used by fund investors to gather information from asset managers has always been a time consuming exercise. But their need for transparency, speed of analysis and the ability to compare across qualitative information sets has never been greater!
The industry is coming together to co-create a new solution. Supported by the Association of Professional Fund Investors to represent industry best practice, key Fund Investors from 10 leading Distributors, such as Mediolanum, Santander, EFG and Pictet Bank are collaborating with 12 major asset managers, such as Aberdeen, Columbia Threadneedle, Franklin Templeton, M&G, Nordea Asset Management, Pictet Asset Management and Schroders. They aim to solve a common problem.
See the full press release here.
Personality of the Year Awards:
Switzerland: Mussie Kidane, Global Head of Fund & Manager Selection, Banque Pictet & Cie
Nordics: Jauri Häkkä, Managing Director, Widhaby Advisors
UK: JB Beckett, Author of New Fund Order, Scottish Widows and the Association of Professional Fund Investors
Read the full piece on Investment Europe: Fund Manager of the Year Awards – Winners!