Showing papers on "Investment management published in 1993"
TL;DR: This article analyzed a proxy solicitation and subsequent restructuring at Honeywell Inc. in 1989 and found that banks and insurance companies were significantly more supportive of management-sponsored antitakeover proposals than public pension funds adding independent investment managers.
85 citations
TL;DR: In this article, the authors derived the optimal brokerage commission schedule for a risk-neutral information seller faced with risk-averse purchasers who may differ in their risk aversion, and compared the revenue from the brokerage commission with those from a fixed charge for information and the optimal mutual fund management fee.
Abstract: It is generally optimal for risk-sharing reasons to base a charge for information on the signal realization. When this is not possible, a charge based on the amount of trading, a brokerage commission, may be a good alternative. The optimal brokerage commission schedule is derived for a risk-neutral information seller faced with risk-averse purchasers who may differ in their risk aversion. Revenues from the brokerage commission are compared with those from a fixed charge for information and the optimal mutual fund management fee. THE BROKERAGE INDUSTRY IS a significant source of information for investors about prospective security returns. One indication of this is that of the 11,817 members of the Association for Investment Management and Research who listed their occupations as investment management or research in 1991, 21 percent worked for brokers and investment dealers; another is that since the abolition of fixed commissions a distinction has arisen between full service brokers who provide investors with investment information, and discount brokers who charge lower commissions and provide only transaction services.1 The information produced by broker research is typically provided free of charge to investors in the expectation that it will stimulate trade, rewarding the brokerage house with commissions.2 This paper compares the sale of investment information in return for a brokerage commission with direct sale for a fixed payment, and indirect sale through the provision of investment management services in return for a
73 citations
TL;DR: A FIMAG Working Party was set up in 1989 to consider the stochastic investment model proposed by A. D. Wilkie, which had been used by a number of actuaries for various purposes, but had not itself been discussed at the Institute as mentioned in this paper.
Abstract: A FIMAG Working Party was set up in 1989 to consider the stochastic investment model proposed by A. D. Wilkie, which had been used by a number of actuaries for various purposes, but had not itself been discussed at the Institute. This is the Report of that Working Party. First, the Wilkie model is described. Then the model is reviewed, and alternative types of model are discussed. Possible applications of the model are considered, and the important question of ‘actuarial judgement’ is introduced. Finally the Report looks at possible future developments. In appendices, Clarkson describes a specific alternative model for inflation, and Wilkie describes some experiments with ARCH models. In further appendices possible applications of stochastic investment models to pension funds, to life assurance and to investment management are discussed.
21 citations
18 citations
01 Jan 1993
TL;DR: The CAPM Controversy: Policy and Strategy Implications for Investment Management as discussed by the authors was the first AIMR conference to discuss the CAPM controversy and its implications for investment management.
Abstract: This paper presents an overview of the AIMR conference, The CAPM Controversy: Policy and Strategy Implications for Investment Management" held March 9-10, 1993.
11 citations
TL;DR: Skandia Fonds, the Norwegian mutual funds management company affiliated with Skandia Group, pioneered the concept of green mutual funds in Norway as mentioned in this paper. But it is not an optional add-on, but part of the job of being a financial agent and fiduciary.
Abstract: Investment Management makes heavy ethical demands which are not an optional add-on, but part of the job of being a financial agent and fiduciary. The author is founder and President of Skandia Fonds, the Norwegian mutual funds management company affiliated with Skandia Group which pioneered the concept of green mutual funds in Norway. This paper was delivered at the Sixth Annual Conference of the European Business Ethics Network, held in Oslo last month. Its views are those of the author, and do not necessarily represent his company's policy.
10 citations
TL;DR: The authors analyzes the investment performance associated with these different approaches, showing that while a significant number of foundations are performing well, many others lag in their investment returns, and concludes that most foundations follow an inactive, risk-averse style, focusing on income maximization rather than total return.
Abstract: Foundations divide roughly into two groups in their investment behavior. Most follow an inactive, risk-averse style, focusing on income maximization rather than total return. Another, smaller group of foundations are more activist and aggressive, focusing on total return. This article analyzes the investment performance associated with these different approaches, showing that while a significant number of foundations are performing well, many others lag in their investment returns.
8 citations
5 citations
Posted Content•
TL;DR: The CAPM Controversy: Policy and Strategy Implications for Investment Management as mentioned in this paper was the first AIMR conference to discuss the CAPM controversy and its implications for investment management.
Abstract: This paper presents an overview of the AIMR conference, The CAPM Controversy: Policy and Strategy Implications for Investment Management" held March 9-10, 1993.
3 citations
Journal Article•
TL;DR: Trench as mentioned in this paper argues that affluent customers are better served by interacting with one organization and one relationship manager than multiple ones, and that trust and fiduciary services with private banking can't just take place on paper.
Abstract: Banks that have not yet begun the process of merging their trust, investment management, and private banking groups into a single business unit may soon wish they had. Such is the consensus of current and former executives of banks undergoing the sometimes awkward transition from yesterday's way of serving the affluent client to what works today. Integrating trust and private banking units boils down to one basic premise: affluent customers are better served by interacting with one organization and one relationship manager than multiple ones. The hard part, note bankers and the consultants helping them, is persuading entrenched management and customer-contact staff to see the light and participate in what amounts to a sea change in many institutions. On one point all parties agree: the merging of trust and fiduciary services with private banking can't just take place on paper. Successful efforts include steps to mix within offices the staffs that specialize in particular products. "We've pulled together those people not only organizationally but physically," says Alan Trench, senior vicepresident of Buffalo-based Marine Midland Bank, which has $16 billion in assets. Trench heads the bank's Private Clients Group in New York City. "Now the trust officers and investment managers and municipal bond dealers and private bankers are together, talking about the issues their clients are concerned about." Customer is king. Cultural differences and cumbersome client-referral policies can complicate affluent market integration efforts. But even those issues are giving way to the need to satisfy customers and retain their business, because nonbank competitors are just as interested in serving the affluent market as banks are. Integration of trust and private banking efforts conveys to affluent customers a genuine interest in being the management team responsible for handling their assets. "Banks traditionally have organized their businesses for their own convenience rather than for the convenience of their customers," notes Trench. "Customers are saying to us that they really want a relationship with the bank," says Trench. "In order to provide a relationship, we have to have all the services that a high-net-worth client would be interested in under one roof." Marine Midland made the decision early last year to integrate the bank's investment management, trust and estate services, custody, and private banking businesses. It's still too early to gauge accurately the effects of the decision on the division's clientele, but Trench senses some subtle effects nonetheless. Customers told the bank they wanted more contact from the bank, says Trench. Therefore, "We're starting to manage the customer-contact people very much the way we manage the salespeople. We monitor who they call, why they call them, and what they actually discuss with the client." Fee-based revenue. Driving efforts to improve trust and private banking product delivery in the first place was the potentially higher revenue that could be earned from fee-based services compared to credit-based ones. The idea was not to replace one with the other, but to broaden the scope of services available to the trust or private banking client. "Historically, private banks have been credit driven," says Michael Cassell, the former executive vice-president in charge of private banking at Manufacturers Hanover Trust Co., New York. "We recognized that to be successful, the private bank was going to have to be more investment driven." Cassell was responsible for merging MHT's trust and private banking businesses, which resulted in MHT's integrated Private Bank. Cassell continued his work for a time during the institution's merger with Chemical Bank. A growing number of industry experts, including Cassell, think the private banking market should be viewed as a life cycle/wealth continuum, where the focus is on meeting customers' financial needs as they evolve. …
2 citations
Book•
01 May 1993
TL;DR: In this paper, the authors discuss the impact of technology and its impact on the investment management industry: investment management technology quantitative analysis indexation, and future directions in indexation technology.
Abstract: Part 1 Technology and its impact on the investment management industry: investment management technology quantitative analysis indexation custody. Part 2 An industry forum: the genesis of the arbitrage pricing technique - Allingham Anderson Roll Ross using quantitative techniques to beat the index - Barr Rosenberg using customized benchmarks to improve fund performance - Barra global advanced technology - using key rate duration to replicate a treasury index Investment Managers Regulatory Body (IMRO) - the regulation of the investment management industry - future directions London Stock Exchange - TAURUS National Association of Pension Funds (NAPF) - the role of the NAPF today and tomorrow Scottish Widows - how Scottish Widows made scottish widows beautiful the WM company - improving the effectiveness of peformance measurement vista concepts - future directions in custody technology. Part 3 Investment management around the world: Australia Austria Belgium Canada Denmark Eire Finland France Germany Hong Kong Italy Japan Korea Luxembourg Malaysia Mexico The Netherlands New Zealand Norway Portugal Singapore South Africa Spain Sweden Switzerland United Kingdom United States.
01 Jan 1993
TL;DR: The new distribution of functions between banks, insurances, and in-house financial services is currently driving and will continue to drive the global consolidation of the financial services industry as discussed by the authors.
Abstract: It is my belief that the new distribution of functions between banks, insurances and in-house financial services is currently driving and will continue to drive the global consolidation of the financial services industry. International banking and finance are living and breathing the worldwide trend of convergence between the activities of banks and insurance companies. However the so-called new distribution of functions within the financial landscape is not just confined to the twin peaks of banking and insurance. There is another large and growing peak which is the investment management industry. It is simply not possible to be the best in the financial services business unless you have the investment management skills to underpin the quality of your product offerings.
01 Jan 1993
TL;DR: One of the most widely quoted numbers in the City is the FT-SE 100 share index: the aggregate measure of the value of the UK’s 100 largest stocks as discussed by the authors, which represents the most accessible way to measure the performance of UK shares within a trading day or over a period, and has become a base for some of the OTC instruments discussed in this chapter.
Abstract: One of the most widely quoted numbers in the City is the FT-SE 100 share index: the aggregate measure of the value of the UK’s 100 largest stocks. The FT-SE 100 represents the most accessible way to measure the performance of UK shares within a trading day or over a period, and, along with other popular indices, has become a base for some of the OTC instruments discussed in this chapter.
01 Jan 1993
TL;DR: In the UK, the two largest fund managers in the UK are Prudential Portfolio Managers and Mercury Asset Management, a subsidiary of S.C. Warburg, the merchant banking group as discussed by the authors.
Abstract: Non-bank financial institutions in Britain are dominated by the insurance companies and pension funds, two groups which invest actively in property alongside their larger holdings in equity shares and bonds. Nowadays portfolios are managed by professional fund managers, some of which are branches of these institutions (managing their own funds as well as those of other institutions) whereas others are branches of banking conglomerates. For example, the two largest fund managers in the UK are Prudential Portfolio Managers, an arm of the Prudential which is primarily a life assurance company, and Mercury Asset Management, a subsidiary of S.C. Warburg, the merchant banking group. Other major fund managers are Barclays de Zoete Wedd, part of the Barclays Bank group, Standard Life which is primarily a mutual life assurance fund, and Postel the fund management arm of the Post Office and British Telecom pension funds.