EUROPE - Investment manager GMO has picked up three emerging market accounts in Europe totalling E153m (£104m), as investors seek shelter from volatile conventional global stocks and bonds.
The Baden-based ABB Investment Foundation - which comprises 36 Swiss pension funds, including those of engineering giant ABB - has appointed GMO to manage a E60m portfolio in global emerging markets.
LGT Capital Management has also hired GMO to manage a E29m global emerging markets portfolio. And an undisclosed large German company has hired appointed the firm to a E60m portfolio with the same remit.
Recent research showed that emerging markets equities did suffer a setback at the beginning of the year, with many investors sidestepping out of the sector in favour of emerging market debt. But the sector is now experiencing a resurgence of interest.
Alex Orus, head of European business development and client services since November 2002, said: “We are also particularly pleased that clients are investing in emerging markets now because GMO believes emerging markets are currently undervalued as an asset class.”
The 20-strong team emerging markets team is led by Arjun Divecha, in San Francisco.
GMO puts its recent success down to the strength of its asset allocation strategies, whereby assessments are made over a strategic timeframe of seven years.
It predicts that over seven years - relative to UK inflation - emerging market equities will return 8.7%, UK equities 6.4% and US equities just 0.7%.
GMO also sights additional opportunities in global small caps and debt.
GMO has US$27bn under management and offices in Boston, London, San Francisco, Sydney, and now Singapore and Zurich.
A suite of liability driven investment (LDI) indices has been launched by STOXX and RiskFirst to aid trustees and consultants select, monitor and challenge managers.
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