The following is an article from Citiwire Global and provides some interesting reading...

Fund: Marlborough Special Situations

Kicking off our top ten best performing managers over the last ten years is renowned UK equity manager Giles Hargreave.

The Citywire AAA-rated manager has been running the £496 million (€615 million) fund since 1998 and focuses on the UK's small cap equity sector.

The UK-domiciled fund currently has industrials as its top sector allocation, accounting for 30% of its assets, followed by consumer services (18%) and tech (16.4%).

His current top holdings are tech group Anite and industrial firms RPC Group and Ashtead Group.

Note: All performance data is over ten years to the end of October 2012 and in euro currency terms. Only managers who have been continuously running their fund over the last ten years and outperformed their benchmark according to the Citywire database were included in this analysis.

If you would like to read the entire artilce and view the Citiwire Global graphs, please click here.

Close to $1 billion dollars worth of new Australian equities mandates have been handed out by industry superannuation fund VicSuper as part of an investment overhaul.

AllianceBernstein, Perpetual, Tribeca Investment Partners, SG Hiscock and Vinva will now run actively managed Australian equities for VicSuper, which funded the new mandates by taking money away from passive Australia equities mandates run by BlackRock and the SSgA Australian SAM Sustainability Fund.

All the mandates are worth $165 million each, except Vinva's which is worth $330 million, and collectively they represent approximately 10% of VicSuper's total funds under management.

VicSuper only used BlackRock and the SSgA Australian SAM Sustainability Fund for its Australian equities investments and the decision to fund the new ones through a drawdown was not performance based, Oscar Fabian, VicSuper chief investment officer told Financial Standard.

"These new mandates had to be funded from somewhere. We didn't have a great deal of choice as there was only two," he said.

To read the entire article by Ben Collins at Financial Standard, please click here.

BLINK and you'd have missed it. Cautious investors have been cowering in cash while the more adventurous types have sought out high-yielding defensive stocks.

But in the past six months a change has taken place on the Australian stockmarket. Companies typically classified as cyclical, relying on a strong economy to increase earnings, have come to life and are rocketing higher.

The benchmark All Ordinaries Index has registered a 12 per cent gain since bottoming out in early June this year.

The high-yielding defensive darlings of the market continued to perform strongly in this period, with Telstra clocking up a 21 per cent capital gain, Commonwealth Bank rising 24 per cent, Westfield 15.9 per cent and Tatts 16 per cent.

LONDON—At least six hedge-fund firms announced plans to close in November and two more joined the list this week, underscoring the shakeout hitting the industry from uncertain markets, tighter regulation and what some fund managers say are investors with ever-shorter time horizons.

Some funds were hit by large requests from investors for cash, but others were just struggling to make money, fund managers and industry consultants say.

"If you look at the managers that have closed, there is not much commonality," said Michele Gesualdi, a fund manager at Kairos Partners, a fund of funds firm that invests in a range ...

To read the entire article from The Wall Street Journal, click here.

Report highlights the dangers of adopting a piecemeal rather than systematic response to changing compliance

Following a wave of regulations coming out of Europe and the US in the past two to three years, research into the Australian investment funds industry has found that local firms have limited awareness of the full impact of the regulatory reforms and that many are lagging behind their European and US contemporaries in adjusting to the new requirements. Furthermore, although the compliance changes have significantly increased the need for reporting, many firms continue to struggle with data that is distributed across multiple systems.

The findings are contained in 'Impact of Global Regulation on Australian Investment Managers', a research report based on interviews with senior executive management representing local investment funds firms.   The report was prepared by specialist investment management consultancy, Investit, and sponsored by SimCorp, a leading provider of investment management software and services for the global financial services industry.

Australia's fund management industry potentially stands to gain an influx of new investors under the government's recently announced Significant Investor Visa (SIV) program. The new Visa requires high net worth potential immigrants to invest a minimum of $5 million in a specific range of asset classes including ASIC approved managed funds which invest in Australian equities.

While the requirement that the funds specifically invest in Australian equities or other approved assets will limit some local absolute return managers, the opportunity for those that do qualify is significant. AFM understands there are a number of plans to market to the new investor/immigrant group which is expected to focus on China's high net worth demographic.

Administration of the program seems significantly simpler than many other government programs, and this will be welcomed by both the Visa holders and fund managers, particularly given the ongoing delay and lack of clarity about tax breaks for offshore investors in Australian managed funds announced following the Johnson report recommendations.

Emerging managers boosted by Volcker rule.

The ranks of Australian early-stage managers have been further boosted by a number of new funds in the past few months. Some of the new start-ups can be attributed to the ongoing implementation of the Volcker rule initially announced in January 2010 by President Obama and due to be implemented on 1 January 2013 in a crackdown on investment bank's proprietary trading and ownership of hedge funds.

While not all the new funds can be attributed to the new regulations, there are certainly some traders who have departed large global investment banks due to the new rules, including MST Capital, established by Gerard Satur (ex UBS) which has attracted over 100 million in seed capital from a local institution, and Auscap, founded by ex-Goldman prop traders Matthew Parker and Tim Carlton.

Emerging managers face a range of challenges in their early stages, as without a definable track record gaining new investors is difficult to overcome. What is apparent is that many of the new start-ups, including quantitative Asian equities manager Alpha Beta Capital founded by Andrew Barry, have established the necessary structure and processes to satisfy investors of their operational and risk management frameworks.

While gaining institutional investors in the early stages is particularly difficult, many family offices and high net worth investors understand and recognise that performance from early-stage managers is frequently significantly better than larger or more established competitors. The focus on due diligence compliance and institutional grade back-office systems has become a significant barrier to capital raising for early-stage managers, but this new breed and their focus on structure is welcome.

November returns

It's early days for returns from many managers for November, but in what has been described as a "tricky" month, most that we have seen have been positive. Politics continue to drive global headwinds, with the current challenge being negotiations of the fiscal cliff in the United States. China appears to have leveled out, while Australia's chances of avoiding a deficit seem unlikely.

Have a good week-end.

Regards,

Chris.

According to an article in the Telegraph, when Alfred Nobel bequeathed his fortune to peace prizes in 1895, he restricted investments to "safe securities" - but then, even he hadn't anticipated the latest financial crisis.

On Thursday, January 21, 2010, US President Barack Obama vowed American taxpayers would never again foot the bill for the risky activities of commercial banks. At a White House press conference, flanked by a council of high-powered economic advisers, Obama unveiled the Volcker Rule, named after the former chairman of the US Federal Reserve, Paul Volcker, who was towering over the President's right shoulder."

Banks will no longer be able to own, invest, or sponsor hedge funds, private equity funds or proprietary trading operations for their own profit, unrelated to serving their customers," Obama said.

more here.

At UBS's Australian office, one of local head Matthew Grounds's most trusted lieutenants, Gerard Satur, who ran the Sydney dealing desk at the ripe age of 29, had assembled a team of macro traders in 2011. The unit, housed within UBS, aimed to profit from trading opportunities thrown up by the exit of US banks from prop trading. But after the Adoboli trading blow-up, UBS issued a global directive banning prop trading. Satur's fund was forced out, leading to the formation of MST Capital.

While the banks are no longer taking proprietary risks onto their own balance sheets, they can still back their former stars with seed capital. None have done so yet. With the new Basel III capital requirements, the economics hardly stack up. There are, however, other ways to support their former traders. MST is on the UBS Australia wealth management platform, so UBS financial advisers can direct their clients to invest in the fund.

MST is off to a good start. Since setting out on their own in July, the fund has returned 3.17 per cent net of fees in a soft market, and it has already secured a $100 million investment from a superannuation fund. The challenge for MST - and the other hedge funds run by former prop traders - is reproducing the goods outside of the banking system. Working inside a bank is vastly different to managing capital for third parties, which involves fund raising and client pressures, and a less fluid flow of information.

Read the entire article here.