UK pensions giant backs auditor shake-out

The Universities Superannuation Scheme, the UK’s second-largest pension scheme and an advocate of audit reforms, has welcomed steps taken by the country’s Competition Commission to loosen the stranglehold of the Big Four.

 

The UK Competition Commission this morning proposed to increase the frequency of audit tendering by FTSE 350 companies but stopped short of requiring them to change firms regularly.

Under the proposed rules, FTSE 350 firms will have to re-tender their audit work every five years. The Financial Reporting Council, the UK’s corporate governance regulator, currently says firms must do this every 10 years or explain why they are not doing so.

Banks to find creativity stifled on 'whacky' pay

Banks to find creativity stifled on 'whacky' pay

 Pay consultants in the City of London said investment banks would be hard pressed to find imaginative ways of offsetting the impact of incoming European Union rules on bonuses, after a report from the consultancy Mercer hinted banks could be getting creative.

 Under the rules, which come into force next year, banks will have to cap bonuses for their highest earners at no more than 100% of fixed salary, or 200% given shareholder approval.
A survey of 78 financial services organisations published today by Mercer suggested that banks were looking at “creative compensation alternatives” as well as base salary increases in order to maintain the high levels of rewards for top bankers.

Hedge funds bet against emerging markets

Hedge funds bet against emerging markets

Hedge fund managers are positioning themselves to profit from a slowdown in developing economies, led by overheated credit markets in China. A number of them are buying protection on sovereign debt through credit default swaps.

Since the start of the 2008, China’s ratio of credit-to-GDP has exploded. London-based hedge fund investor Noster Capital believes it is now at higher levels than those seen on the cusp of the credit crises in the US and UK in 2007, Japan in 1990 and Korea in 1998.

Noster’s estimation is based on levels of business, household and local government debt in China but does not include bonds issued by the central government.

Trade of the Week: Porto shorto

Trade of the Week: Porto shorto

The fate of Portugal’s bailout returned to the top of policymakers’ concerns this week, as the resignation of a key government minister prompted market falls in the country's banks.

Trade of the Week: Porto shorto

With stocks in Portugal’s domestic banks facing significant pressure, the country’s stock-market regulator on Wednesday introduced a 24-hour short-selling ban until midnight on Thursday to protect three beleaguered institutions – but wily traders who acted quickly could have got away with a healthy profit.

Deutsche Bank adds UK dealmaker

Deutsche Bank adds UK dealmaker

Deutsche Bank has hired a veteran UK coverage specialist, who has previously worked on high-profile deals for Cookson Group and Logica, as it looks to build on a positive first half for UK investment banking revenues.

Simon Gorringe, a managing director in UK investment banking at Bank of America Merrill Lynch, left the bank late last month, according to the UK's Financial Services Register.

He is set to join the UK coverage team at Deutsche Bank in September, following a period of gardening leave, according to three sources. Gorringe could not be reached for comment.

Liontrust evokes spirit of ‘09

Liontrust evokes spirit of ‘09

 Strong net inflows at Liontrust Asset Management over the past three months have lifted the boutique investment firm to within touching distance of an AUM figure last held in 2009 – just before the departure of two star fund managers.

The UK-listed group said in an interim management statement this morning that assets had hit £3.3bn at the end of June, thanks in part to its 12th successive quarter of net inflows.
The £302m figure for the second quarter was more than three times the inflows for the same period last year and was driven by retail investors, who allocated £134m. Offshore funds brought in a net £179m, but institutional accounted for £11m of net outflows.