News round-up: Enfusion doubles down on APAC prospects; Allocators committed to hedge fund investments; U.S. Bank Acquires PFM’s Asset Management Business

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Enfusion doubles down on APAC prospects

Software services provider Enfusion has formed a wholly foreign-owned enterprise (WFOE) in China, marking the first official step in the firm's expansion into mainland China.

The move comes as Enfusion announced it had onboarded 24 new fund managers in APAC so far in 2021, including 10 offshore funds of Chinese investors. 

"After a record year of growth in the APAC region, Enfusion established Enfusion Shanghai to respond to the increasing demand for innovative, digital solutions among mainland Chinese and global investment managers," said Thomas Kim, CEO of Enfusion.

"We have been catering to the offshore Chinese market for years, helping our clients solve evolving and complex challenges with our cloud native-platform and managed services solutions. We are thrilled to be taking this next step in our journey and bring our best in class offering, which has been disrupting the global asset management ecosystem, to the mainland."

Iris Xinwei Wang, who recently joined Enfusion as Global Head of Strategy, will drive the entry into the Chinese market, including the setup of Enfusion Shanghai. Wang has more than 12 years of strategy expertise, including six years at Bridgewater Associates in strategy and business planning, and prior with Boston Consulting Group on market entry and global growth strategies.

Allocators committed to hedge fund investments, says HFM/Aima report

More than a third of investors plan to increase their hedge fund allocations in the second half of 2021, according to new research from HFM and Aima.

A collaborative report from both organisations, Investor Intentions H2 2021, found that more than 80% of investors were satisfied with the performance from their hedge fund investments in the first six months of 2021. Additionally, a third of investors plan to increase their allocation to hedge funds in the coming months, while 51% plan to maintain their present allocation.

Beyond reaching target allocation, the existence of exciting new opportunities within the asset class is the principal reason investors plan on increasing their hedge fund allocation (38%), followed by strong return expectations (31%), said the study.

According to the research, global macro strategies are likely to see the strongest inflows in H2, with 32% of investors planning an increase. Investors are particularly interested in the strategy’s ability to hedge against rising inflation, revealed the report; long/short equity and multi-strategy funds can also expect significant investor interest, with 31% planning increases. Interest in allocation to private credit, first highlighted in the previous Investor Intentions report, was this time cited by investors as the most popular strategy to counter low fixed income yields.

For the first six months of 2021, funds reported their strongest first half to the year since 2009. Moreover, says the report, the sustained performance by hedge funds has been rewarded, with 2021 capital inflows up to May (+$57.8 billion) eclipsing outflows seen in 2020 (-$23.4 billion) by more than two-fold.

HFM’s Chief Data Officer Elias Latsis said: “Hedge fund managers posted the strongest first-half returns since 2009 during H1 and are on track to achieve the best Sharpe ratio since 2017. While investor satisfaction with performance remains high, the slight pullback witnessed since our last survey shows the bar for success has been set higher by managers’ outperformance during Q2 2020. ”

The research, conducted in Q2 2021, surveyed 108 investors (with US$7.6 trillion in total investor assets) and senior IR and marketing professionals from 128 hedge fund managers.

U.S. Bank Acquires PFM’s Asset Management Business 

U.S. Bank has bought PFM Asset Management LLC under its subsidiary, U.S. Bancorp Asset Management.

Through the acquisition, U.S. Bank’s second this year, PFM Asset Management will continue to operate as a separate entity.

“PFM Asset Management brings a wide array of client relationships and product offerings, including local government investment pools, outsourced chief investment officer services and separately managed accounts in both fixed income and multi-asset class strategies,” said Eric Thole, head of U.S. Bancorp Asset Management. “These services complement U.S. Bank’s current book of business and we’re thrilled to have the opportunity to increase our presence nationally and solidify U.S. Bank’s position as a leading provider of investment solutions.”

PFM’s financial advisory business is not part of this acquisition and will continue to operate independently. For the year ended December 31, 2020, PFM advised on 995 overall transactions totaling more than $69.7bn in par amount, according to Ipreo.

PFM Asset Management and U.S. Bancorp Asset Management had combined assets under management and assets under administration of more than $325bn on March 31, 2021.

The deal was signed on July 7, 2021 and is expected to close in fourth quarter 2021, subject to regulatory approval and satisfaction of customary closing conditions. Financial terms were not disclosed.

Stephanie Taylor

Head of Event Content, HFM

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