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CIO Tapes 2: two warnings and a lot of optimism

Our group of leading asset management CIOs see a lot of opportunities – and overseas investors are buying UK too

CIO Tapes 2: two warnings and a lot of optimism

Five investment officers of asset management groups got together in the Citywire Studio. The result? A lot of optimism for equities, with particular bright spots highlighted. And two warnings of dangers on the horizon.

First the good news.

The CIOs see a lot of opportunities – and overseas investors are buying UK too. Watch the film to see where.

And they think they are going to do much better than passive active managers going forward. Passive has helped sort the wheat from the chaff in terms of fund manager talent, and has brought down fees.

This is combined with a little bit of self-criticism in this film.

But there always has to be an ‘elephant’ – or two – in the room. And this discussion did indeed find two.

The first film highlights what one participant called the ‘fool’s gold’ of fixed income exchange traded funds, which they admitted were a cause of ‘sleepless nights’. Other participants agreed – to a point.

And the other warning? The return of covenant-light lending – strings-free borrowing granted to higher risk businesses.  Some of the participants are fearful this might ultimately come home to roost, in a negative way, as  it did in the credit crisis.

The discussion was led by Citywire executive chair Lawrence Lever and Citywire’s head of investment research Frank Talbot.

Joining them in the studio were:

·         Piers Hiller – CIO, Royal London Asset Management

·         Lucy MacDonald – CIO Global Equities, Allianz Global Investors

·         Guy Monson – CIO, Sarasin & Partners LLP

·         Peter Elston – CIO, Seneca Investment Managers

·         Eoin Murray – Head of Investment, Hermes Investment Managemen

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