MiFID II research exemptions ‘will support fixed income’, says BI report

Asset managers in the UK will see a softening of the MiFID II ban on using dealing commissions to fund research ahead of EU counterparts, with fixed income research the most likely beneficiary, a new report published by Bloomberg Intelligence (BI) suggests.

The Financial Conduct Authority recently proposed allowing exemptions to the ban on using commissions to fund research for fixed income, currencies, and commodities as well as companies with a market capitalisation of less than £200m.

Research from BI through its report UK Changes Approach to MIFID II estimates that asset managers in the UK could save up to £6.7m in compliance costs every year with research costs included in trade spreads again. EU firms would have to wait until at least 2024.

However, it is unlikely that the proposals will have much impact on small company research as the £200 million market capitalisation is too low to make research economical. EU rules will change from next year, to allow unbundling on firms worth up to £870m.

“The small company research payment exemption may have a limited impact on UK asset managers. With industry costs to run a dual research system estimated to top £11m at the outset and £5m a year it may prove uneconomical,” said BI Senior Government Analyst Sarah Jane Mahmud.

The BI report suggests that independent research providers such as Autonomous Research and TSL Research will also benefit from the changes, as the FCA plans to exempt them from MiFID II rules on trial periods and marketing.

NYDIG lures in Bridgewater CFO

Bitcoin services provider NYDIG has hired Bridgewater Associates’ CFO John Dalby to its team.

Dalby joins the firm, which recently raised $300m from a group of strategic partners including Stone Ridge Holdings Group, Morgan Stanley, New York Life, MassMutual, Liberty Mutual, Starr Companies, and FIS, as its CFO.

"The growth of NYDIG has been incredible,” said Dalby. “Every day, more industries come to understand Bitcoin's potential and more clients seek ways to safely access it. Personally, I share NYDIG's vision for Bitcoin's ability to propel economic empowerment for all. I eagerly look forward to doing my part to help NYDIG deliver innovative Bitcoin solutions to institutions and individuals."

Prior to joining Bridgewater, Dalby was CFO and COO of D.E. Shaw Renewables Investments. His role at D.E Shaw followed a more than 20-year career at UBS where he most recently held the role of CFO of UBS Americas.

NYDIG recently announced the launch of a global Insurance Solutions practice led by former CEO of TransRe, Mike Sapnar, who will spearhead the creation of bitcoin-powered products and services for the global insurance industry.

Unigestion unveils Classic Strategic Fund launch

Specialist asset manager Unigestion has launched a balanced multi-asset fund aimed at institutional investors with a target annualised return of cash + 7% .

The Unigestion Classic Strategic Fund, domiciled in the Cayman Islands, has a minimum investment of US$5m, and aims to deliver strong adjusted returns to investors through economic cycles.

Unigestion said the fund, which launched with a commitment from an unnamed strategic investor, is a key component of its suite of multi-asset strategies.

Cyrille Urfer, Head of Sovereign Wealth Funds at Unigestion, said: “The launch of this fund has been a collaborative effort between Unigestion and our client, addressing their desire to work with a team that has a deep understanding of maximising long term risk adjusted returns over multiple business cycles and economic environments.

“We are pleased to have launched the fund in a structure that meets their requirements and that will enable others to invest given its wider appeal.”

Unigestion Classic Strategic is the second fund to be launched in this range, following the launch of the Delaware domiciled Unigestion Risk Premia Fund in 2020. The Fund is managed by Unigestion’s Cross Asset Solutions team, led by Jerome Teiletche. The team is responsible for managing over US$1.7bn in multi asset strategies.

Further launches in this range are planned in the coming months, confirmed Unigestion.