Investors unite in Canary Wharf dispute

Subsidiaries of insurance giants Aviva and Legal & General are among a group of investors that have been cleared to act together in a case against Canary Wharf Group related to early bond repayments. 

The dispute centres on CWG’s sale of 10 Upper Bank Street to Qatar Holdings and China Life in June, proceeds from which were used to partly repay debt worth around £577 million held by noteholders. The bonds were issued as part of a mortgage-backed security known as Canary Wharf Finance II.

Deutsche Bank, acting as a trustee on behalf of the noteholders, has argued this should have triggered an additional payment of £168.8 million to reflect a so-called "Spens clause".

Buyout firms disclose more fees

More than a dozen private equity firms have revised their regulatory filings amid pressure from federal securities regulators, publicly disclosing for the first time some fees and expenses charged to public pension funds and other investing clients.

The new disclosures—made in unusual midyear revisions to documents required to be filed annually by investment advisers—cover an array of buyout-firm practices that the Securities and Exchange Commission has scrutinised over the past six months. Among those revising their disclosures are large publicly traded investment shops such as Apollo Global Management and KKR.

The disclosures reflect a cat-and-mouse game now playing out between regulators and the buyout-firm industry. The SEC, which gained new power to regulate the industry under the Dodd-Frank financial-overhaul law in 2010, took the unusual step earlier this year of publicly accusing the industry of having widespread problems.

Goldman Sachs sweeps the board at FN Awards

Goldman Sachs was the big winner at Financial News's annual Awards for Excellence in Investment Banking last night, retaining its title as the top investment bank and picking up five other awards.

Some of Europe's most senior banking executives attended last night's private dinner at Boisdale of Belgravia.

Goldman Sachs took home six prizes including European Investment Bank of the Year, a category in which it pipped long-time rival JP Morgan for the second year running.

FICC cuts set to continue

Despite an uptick in third quarter revenues within the fixed income businesses at the largest global banks, downsizing within the units is poised to continue over the next two years, according to new research.

Front office headcount within fixed income, currencies and commodities businesses at the 10 largest banks has fallen sharply in recent years, down 25% or about 5,900 roles over the last three years, according to consultancy Coalition.
Front office FICC staff at the banks was down 10% year-on-year to 17,600 at the end of the third quarter.

But those cuts have even further to run, according to the UK consultancy. FICC headcount could decline a further 10% in the next 12 to 24 months, according to research manager Eric Li. He said: “We think fixed income is the most vulnerable area.”

Fund fees droop at Allianz

German insurer Allianz’s asset management business suffered a two-thirds drop in performance fee income to €126 million in the nine months to September, including a 4.8% drop in the third quarter.

Performance fee income was down significantly from 2012, as well as 2013. Allianz generated €396 million from performance fees in the first nine months of 2013 and €383 million in the corresponding period of 2012. In the nine months to September 2011, its performance fee income was just €182 million.

Total fee income at Allianz's fund division fell 11% to €5.82 billion and expenses were cut by 3% to €1.08 billion. Performance fees only contributed to part of the decline, but their receipt is viewed as an important test of asset manager virility.

Career Clinic: Bonus clauses to look out for before resigning

As your boss reflects on your input for the year, are you getting itchy feet and thinking of resigning? If you do wish to be considered for a bonus and receive any award, you may want to hold off on quitting your job.

Many contracts of employment and company bonus rules state you will only be eligible for a bonus if you are in employment on bonus payment date. Often eligibility is also subject to you or your employer not having given notice before the payment date. In these circumstances, should the bonus be worth waiting for, perhaps, do not resign until the cash hits your account.

Many bonuses are discretionary. Common wording may be that payment of a bonus in one year does not guarantee payment in subsequent years, bonuses may be dependent on a number of factors and the bonus rules may change from time to time. It is important to know though that even where your employer has discretion, that discretion must not be exercised arbitrarily, capriciously or unreasonably. While it is not a very high threshold for the employer to pass, in some instances, the courts have held that discretion has not been exercised properly.

Career Clinic: Caught out lying about your salary

I lied about my previous salary to get a better deal with my new employer. Could there be repercussions if they find out?

The simple answer is “yes”. It would probably be construed that you deliberately misled at interview and that there are significant trust and integrity issues.

There is a big difference between being vague about your pay package – many people talk about their total compensation and try to lump together salary, bonus, pension contribution and any other benefits that they get – and deliberately lying about your salary level. Bear in mind that when you join the firm you will have to bring your P45 tax document with you – which details your pay – so they will find out your real pay eventually.