Products October 1, 2020

Investment Product and Service Launches

CTIM adopts Bloomberg PORT Enterprise, AIM solutions; SS&C Technologies introduces insurance marketplace; Franklin Templeton announces new all-inclusive fee structure; and more.

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Art by Jackson Epstein

Art by Jackson Epstein

CTIM Adopts Bloomberg PORT Enterprise, AIM Solutions

Bloomberg has announced that Charles Taylor Investment Management (CTIM), the fund management business of Charles Taylor plc, a professional services and technology solutions provider to the global insurance market, has adopted its Asset & Investment Manager (AIM) and PORT Enterprise solutions. 

AIM will serve as the firm’s order management system, providing data consistency, execution and end-to-end workflows. In addition, PORT Enterprise, Bloomberg’s portfolio and risk analytics solution, will deliver risk and attribution models and detailed portfolio analytics. PORT Enterprise also includes full valuation scenario analysis through an automated reporting solution to support CTIM’s portfolio management and assets and liabilities management workflow needs across a range of asset classes.

Anthony King, chief operating officer (COO) at Charles Taylor Investment Management, says, “Our work with Bloomberg has shown the firm’s ability to address the rapidly evolving business environment that asset managers are facing, and the need for new tools to stay ahead of the curve. By implementing AIM and PORT Enterprise into our investment process, we are able to adapt to the changing active management environment to better serve our clients.”

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“We are focused on providing clients like CTIM with solutions to streamline their investment processes,” says Ian Peckett, global head of buy-side solutions at Bloomberg. “Delivering an integrated offering enables us to support our buy-side clients throughout the investment process with the tools to make well-informed decisions while benefitting from highly efficient workflows.” 

SS&C Technologies Introduces Insurance Marketplace

SS&C Technologies Holdings Inc. has created the SS&C Advent Insurance Marketplace, a new way for advisers to access a wide range of fee-only insurance solutions. The marketplace is powered by DPL Financial Partners. 

“We are thrilled to work with DPL, a market leader in making insurance products accessible to advisers, to bring these enhanced capabilities and services to our clients,” says Steve Leivent, co-general manager of SS&C Advent. “Together, SS&C Advent Insurance Marketplace and DPL complement and integrate their respective offerings to provide advisers the first truly integrated and enhanced solution they need to service their client’s entire financial life.”

Through the agreement, the SS&C Advent Insurance Marketplace gives clients direct access to annuities, life insurance, long-term personal care and disability offerings through DPL membership and services. The platform will integrate DPL Financial Partners’ fee-only insurance technology with SS&C Advent’s advisory portfolio management and accounting solutions, including Black Diamond Wealth Platform, Advent Axys and Advent APX. The marketplace will offer insurance products from a select group of carriers. DPL’s licensed consultants will support fee-only advisers as they evaluate commission-free products in their clients’ best interest and open policies. 

“This partnership continues our mission to empower RIAs [registered investment advisers] to provide clients with insurance solutions that work within their practice from fee-based products to functional technology that is integrated into their desktop,” says DPL Founder and CEO David Lau. “SS&C Advent sees where the market is moving and is building the capability to meet the evolving needs of its users as they look to holistically serve their clients. Insurance is a meaningful and important component of that.” 

Advisers can also leverage the Advent Custodial Data feed to access enhanced insurance reporting within their respective SS&C Advent platforms. This integration will allow advisers to provide clients a complete financial picture with a full reconciliation of accounts, including position and transaction data, fee calculations and robust reporting. Black Diamond advisers can then incorporate these policies into their planning conversations using Black Diamond’s native capabilities or any of Black Diamond’s 50+ integrations.

The SS&C Advent Insurance Marketplace is anticipated to launch in early 2021.

Franklin Templeton Announces New All-Inclusive Fee Structure

Franklin Templeton has made eight municipal and taxable bond ladder separately managed account (SMA) strategies available at UBS Global Wealth Management, as part of a new “all-inclusive” fee structure.

The eight strategies will be available to UBS clients with no additional investment management fee and can be accessed through UBS Global Wealth Management’s SMA and unified managed account (UMA) programs that includes the ACCESS, Strategic Wealth Portfolio (SWP) and Advisor Allocation Program (AAP) platforms.  

“Inclusion in the platform is a significant step in our SMA growth plan as we will be among the first asset managers to participate with fixed-income products on the platform,” says Brian Silverman, senior vice president, head of SMAs, Franklin Templeton. “We anticipate strong demand by UBS financial advisers and clients looking for low-cost, laddered solutions. Franklin Templeton‘s investment strength in both municipal and taxable fixed income, along with the UBS all-inclusive fee structure, is a compelling value proposition which should help attract clients to the offering.” 

The SMAs are managed by portfolio managers within Franklin Templeton Fixed Income, led by Chief Investment Officer (CIO) Sonal Desai, with $148 billion in assets under management. Franklin Templeton’s municipal bond team is led by Ben Barber, director of municipal bonds for Franklin Templeton Fixed Income overseeing $66 billion in municipal bond strategies, specifically.

SMArtX Adds Investment Strategies from Fidelity, Northern Trust and Vanguard  

SMArtX Advisory Solutions has expanded its roster of available investment strategies with the addition of Fidelity Institutional Asset Management, Northern Trust Investments and the Vanguard Group. Collectively, SMArtX is adding more than 60 investment strategies across a broad range of asset classes, available immediately.

SMArtX’s technology provides for automated trading functionality to reduce the performance dispersion between model portfolios and client accounts. SMArtX states that access to traditional, alternative and direct indexing strategies in a managed account structure can enable a full range of investment products and an array of third-party investment strategies all in one account.  

The firm also licenses its proprietary managed accounts technology to help firms replace legacy technology and power several investment platforms for registered investment advisers (RIAs), broker/dealers (B/Ds) and asset managers. More information about SMArtX Advisory Solutions can be found at www.smartxadvisory.com.

Compliance October 1, 2020

MTA Sues Investment Manager for Not Protecting Funds During COVID-19

New York transit worker pension plans say the firm's mismanagement caused 'astonishing' losses.

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New York’s Metropolitan Transportation Authority (MTA) Defined Benefit Pension Plan Master Trust, Manhattan and Bronx Surface Transit Operating Authority Pension Plan and MTA Other Post-Employment Benefit Plan have filed a lawsuit against Allianz Global Investors U.S. alleging mismanagement of an AllianzGI Structured Alpha (SA) fund caused “astonishing” losses.

As alleged in a similar case filed by the Blue Cross and Blue Shield Association National Employee Benefits Committee, the lawsuit says the investment manager “failed to act as a reasonably prudent manager would act in the face of an historic market dislocation, and failed to follow the ‘all-weather’ hedging and risk-management strategies that it repeatedly touted as capable of ‘perform[ing] whether equity markets are up or down, smooth or volatile.’”

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The MTA plaintiffs claim they “reasonably relied on AllianzGI’s representations that it would manage the fund with an eye toward managing risk, in particular the specific approach of buying put options to guard against market downturns,” and that they “relied on these representations when they invested, continued to invest and when determining to remain invested in the fund at various times throughout their investment.”

The lawsuit also alleges that AllianzGI was motivated by an “incentive allocation.” The complaint states, “If the fund had no positive returns for the quarter and investors began to withdraw their funds, AllianzGI would receive no compensation. Moreover, because of the structure of the fund, AllianzGI knew that if it adhered to its investment strategy, it would take multiple quarters, if not years, to get back to even, meaning it would take multiple quarters, if not years, for AllianzGI to see any revenue for itself. At the beginning of March, with only one month to go before quarter-end, AllianzGI therefore disregarded its strategy and took unreasonable risks with its investors’ money to generate at least some returns, which in turn would generate some revenue for itself.”

The complaint says that, in effect, “AllianzGI bet the house that the market would rebound.” It says this decision was at odds with the advice of Mohamed El-Erian, chief economist at Allianz SE. Allianz SE is also a defendant in the case.

On April 23, the MTA plaintiffs redeemed what was left of their investments in the fund. According to the lawsuit, the MTA Other Post-Employment Benefit Plan redeemed $644,124.00 (from an account balance of $23,540,148.14 on December 31); the MTA Master Trust redeemed $5,246,860.64 (from an account balance of $191,751,709.49 on December 31); and the Manhattan and Bronx Surface Transit Operating Authority Pension Plan redeemed $3,157,774.78 (from an account balance of $115,404,001.35 on December 31). “As a result of AllianzGI’s negligent and imprudent mismanagement of the fund, the MTA plaintiffs lost an astonishing 97.26% of the value of their investments between December 31, 2019, and the final redemptions on April 23,” the complaint states.

AllianzGI told PLANADVISER, “As we set out at the time, the Structured Alpha portfolio sustained losses during the severe market rout in late February and March. While the losses were disappointing, the allegations made by claimants are legally and factually flawed, and we will defend ourselves vigorously against them.

“The claimants are professional investors, most of whom were advised by a sophisticated investment consultant to evaluate the Structured Alpha strategy,” AllianzGI continued. “They bought these hedge funds in the knowledge that they sought to deliver substantial returns, net of fees, of as much as 10% above the returns of the fund’s benchmark, an index like the S&P 500. As was fully disclosed, the Structured Alpha funds involved risks commensurate with those higher returns. The MTA determined that the Structured Alpha Portfolio fit with their overall investment goals and risk tolerances.”

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