TIME Investments’ flagship long income PAIF, TIME: Commercial Freehold has moved to daily dealing,in response to adviser feedback. The fund, which offers investors the opportunity to access the only open ended long income property fund, has consistently delivered an annual income of over 4% plus capital growth.

The fund doubled in size in 2017 and now in its fifth year, it has seen its AUM grow to over £150 million.

This growth has been driven by investors increasingly looking for an investment providing “ballast” in uncertain times with secure income and low volatility of capital returns – two features offered by long income.

With traditional UK property funds significantly exposed to continued volatility caused by Brexit, advisers are increasingly looking to alternative investments for long term secure income to help make up the difference.Alternative property assets with long leases and strong covenants such as low service hotel chains, Premier Inn and Travelodge, in the right locations provide secure income, inflation linked rents and less volatile capital returns over the long-term.

Nigel Ashfield, fund manager of TIME:Commercial Freehold comments: “The move to daily dealing further enhances the liquidity of our fund, which is a key requirement for many advisers seeking income from alternative investments.

“Advisers are increasingly looking to diversify their allocation away from fixed income to property and other alternatives.  The assets held in TIME: Commercial Freehold have not only demonstrated a secure, predicable income stream but also a lower correlation with more volatile traditional commercial property asset classes, over a period that included the UK’s decision to leave the EU”.

“These characteristics are highly sought after in today’s economic climate and make them suitable for many types of investors, particularly those seeking a robust income stream and low volatility of capital values, such as individuals looking to supplement a pension or those looking to save for school fees.”

Citywire has just announced that TIME: Commercial Freehold fund manager, Nigel Ashfield, has been awarded the coveted Citywire AAA rating. Achieving the AAA rating puts him in the top 2.5% of the 16,000 fund managers that Citywire tracks globally.

David Lumley of London based Arena Wealth Management comments: “I have been a supporter of Nigel and his long income funds for many years now and I’m delighted to see his expertise recognised by Citywire. This triple AAA rating comes as no surprise as the performance of Nigel’s funds over the years has been outstanding. Long income is a popular sector with our clients and the TIME funds offer income security, inflation protection and lower volatility making them a good fit for many investors.”

Central Bank

The Central Bank of Trinidad and Tobago

Other Banks

Bank of Baroda Trinidad and Tobago Limited

Citicorp Merchant Bank Ltd
First Citizens Bank
Intercommercial Bank Limited
Royal Bank of Trinidad and Tobago (RBTT)
Republic Bank
Scotiabank Trinidad and Tobago Limited

Chicago-based RedRidge Diligence Services – a provider of due diligence services to investors and lenders – is pleased to announce the launch of its first international office in London, U.K. The new office marks the first step in a move to expand the company’s network of international client relationships, while offering the reliable service and quality deliverables existing clients have come to expect.

Matthew Reid, Associate Director, has relocated from the U.S. in order to lead the London operation.

“In the U.S. RedRidge has an excellent reputation for a bespoke approach that offers efficiency, flexibility, high-quality service and timely execution in both the lending and equity investment markets,” says Matthew. “Our role now is to transfer that excellence into new markets, starting in Europe from our London base.”

Andrew Robbins

Most recently, the London office has appointed Andrew Robbins as Director as they look to grow their European footprint. Andrew has more than 20 years of asset-based lending (ABL) and insolvency experience, earned at KPMG, Barclays, and most recently RBS Group. He has also worked for independent and high street lenders in audit, relationship management and leadership roles. His experience spans a variety of sectors including retail, finance, manufacturing and distribution, covering assets including receivables, inventory, plant and machinery, and property.

Andrew’s new role will involve leveraging his connections and industry insights to develop RedRidge’s diligence offerings as they expand outside of the U.S., with an initial focus on the U.K. and Western Europe.

“Adapting our due diligence services to the European markets will be a fantastic challenge and an extraordinary opportunity,” explains Andrew. “But given the exceptional level of service I’ve seen first-hand, I’m more than confident we can deliver. I’m honoured to be working alongside Matthew at the start of this exciting new chapter in the company’s story.”

Dave Norris, COO, comments: “Andrew’s knowledge and influence in the U.K. and wider European markets will support RedRidge on its mission to becoming a globally recognised brand.”

“Adding Andrew’s U.K. and European collateral expertise will prove immensely valuable to our clients,” says Managing Director Cory Ryan. “Coupled with RedRidge’s commitment to high quality and efficiency, we are well positioned to serve our clients within the region and those executing on cross-border transactions.”

Andrew holds a Bachelor of Science degree in Economics from Loughborough University. Andrew Robbins (FCA) is a Chartered Accountant with the Institute of Chartered Accountants in England and Wales (ICAEW).

In his latest note, Eoin Murray, Head of Investment at Hermes Investment Management, discusses the four words he dreads more than anything.

There are plenty of words people in investment use to convince themselves – or others – that things are going to be OK. “This trade can’t fail”, “the market is rational”, “equities always go up”, are prime examples.

But for me, the worst is: “This time it’s different.” Why? It invariably isn’t.

The latest use of this maxim is by people unconcerned about the possibility of the yield curve inverting. The yield curve tracks short and long-term interest rates that fuel the traditional banking model. Short-term rates are usually lower, so it is cheaper for banks to take deposits, and the longer-term rates are higher, so they can issue loans and take a turn on the difference. Any disruption to this system sees the model break down. An inversion of the yield curve occurs when short-term interest rates are higher than long-term ones – it has been a reliable predictor of recessions.

Of course there are many different ways of measuring the steepness of the yield curve, or the term spread.  A recent paper by the Federal Reserve Bank of San Francisco suggests that it doesn’t actually matter whether we use 30-year minus 3-month, 10-year minus 2-year, or even attempt to include expectations:

Figure 1: Predictive power of different term spreads:

Source: Federal Reserve Bank of San Francisco, Hermes Investment Management

All are excellent predictors of future recession, even excluding the period of potential distortion given by unconventional monetary policies post the global financial crisis (GFC).

The bad news for those worrying about the current yield curve inverting is that it may be too late, because some versions already have and the direction of travel is pretty clear. Setting aside the nominal yield curve and looking at the real one, calculated by discounting breakeven inflation at each point of the curve, it inverted earlier this summer:

Figure 2: Nominal vs real yield curve (10y-2y):

Source: Bloomberg, Hermes Investment Management

Additionally we know that corporate bonds trade at a slight premium to government-issued debt, and the corporate yield curve has also already inverted. 

Figure 3: Corporate yield curve:

Source: Bank of America Merrill Lynch, Hermes Investment Management

Similarly, the global nominal yield curve is also inverted, suggesting a global recession is on its way.

The counter theory is that there are quite good reasons why long-term rates are being pushed down and causing this phenomenon. Dynamics from QE may be depressing the term premium component of long-term yields – “some part of the flattening may not be worrisome at all”[i].  However, there is sufficient uncertainty around the effects of QE on interest rates that there really is no clear empirical evidence to suggest that “this time it’s different”.

At the same time, in the US, the Fed is raising short term rates as its economy improves – inflation (core PCE has at last reached the magical 2% and earnings are accelerating beyond a comfort zone).  So why is nobody concerned about this potential inversion? Historically, the yield curve inverting has been a phenomenal predictor of recessions – it has usually taken between six and 18 months to filter through after it occurs.

For investors, the anticipated economic malaise associated with a recession can easily erode wider confidence and tends to push down risk assets. Investors also abandon higher-yielding but less sound investments that seemed attractive in good times, favouring a flight-to-quality approach. In credit markets, investors should expect to see covenant weakness exposed, as defaults mount and recovery rates fall from the current relatively high bar. So what can investors do?

History suggests several areas, while not outright prospering, will fare better than others in times of recession. For example, in the property sector, stocks and bonds associated with renovation activity are more likely to prosper than new builds – this holds true for other industries too. Utilities and consumer staples tend to outperform in tougher times. Quality earnings and long-term cash flows become even more valuable, and hint at companies less likely to default. And there will always be opportunities for savvy, long-term investors to pick up the debt stock in good businesses that become undervalued.

Looking on the bright side, there are reasons why we might avoid recession. For the moment, earnings are quite strong globally despite the effects of increasing protectionism and anti-globalisation, and recession prediction based on the nominal yield curve requires an actual inversion, not simply getting closer.

So will it be different this time? Maybe – but not thinking about the possibility is a big risk to take if it’s not.

The above is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instrument. The views and opinions contained herein are those of the author and may not necessarily represent views expressed or reflected in other Hermes communications, strategies or products. 

[i]Bauer, Michael D and T M Mertens, ‘Information in the Yield Curve about Future Recessions’, Aug-18, Federal Reserve Bank of San Francisco Economic Letter

Tony Tarquini, Director of Insurance, EMEA, Pegasystems

The increase in the minimum employer contribution to auto-enrolled pensions from 1% to 2% in April 2018 represented an unmissable opportunity for the UK workforce to prepare for a comfortable retirement. However, the simultaneous rise in the minimum staff contribution from 1% to 3% has led to industry-wide concern that auto-enrolment opt-outs will grow, threatening the future of insurance companies.

Despite these concerns, there is no doubt whatsoever that technology can be used to educate, cross-sell, upsell, nudge, influence and encourage customers to understand the need to save, both for a rainy day and for their old age.

Millions of vulnerable consumers

Since auto-enrolment was introduced in 2012, nearly 10 million workers have been auto-enrolled in pensions according to figures from The Pensions Regulator. However, data released by the ONS as part of its Wealth and Assets Survey in August found auto-enrolment has not led to a noticeable change in attitudes towards saving.In the period July 2016 – December 2017, just 17% of 16 to 24s felt that they knew enough about pensions to make decisions about saving for retirement. When taking into account all non-retired respondents, less than half (42%) felt they knew enough.

Insurance group Zurich’s own research found some alarming statistics of its own. The company recently discovered 24% of adults have no savings to fall back on and that 17.6m people in the UK would struggle to recover from a financial shock or loss of income. This suggests that regulatory reform isn’t enough to alter consumer behaviour and highlights the need for inspiring change in other ways before it is too late.

I still get people asking me if auto-enrolment is a “good idea”. Nobody is talking about the upside benefits of employers’ contributions doubling from 1% to 2%. This is all free money and all the contributions are tax free. One way I have previously explained why auto-enrolment is a good idea is by asking the person to put £10 on the table and noting that I would then match it with £10 of my own money. I would then point out that they would receive 100% interest on day one and query how old they would have to grow to match that through normal interest. The answer is infinity at today’s rates! I would also point out that you only have to put up a maximum of £7.50 not £10, as it is pre-tax. It would take (literally) a lifetime to recoup the lost money if people opted out – doing so is like walking into the street and burning £10 notes. They then understand immediately.

Communication is key to behavioural change

I believe the key to behavioural change is effective marketing. Technology can be used to mass personalise every individuals’ pension product and show them how they can protect their lives and not live in penury in their old age. It just needs motivation, good customer engagement and the right tech!

Insurers should be using all forms of omni channel marketing technology to change behaviours. They can do this by providing business-friendly technology interfaces that help companies provide customer-centric, high-value engagements to improve every customer experience, enable more effective retention and achieve high response rates. This can include mobile apps, social media and artificial intelligence-based interactions to foster better engagement and buy-in.

For example, from August 2018, Aviva has been enabling customers to check how much money they have saved towards their pension by asking their Amazon Alexa, an easy way for the insurer to make the idea of saving for retirement much more engaging. Tech such as this can also help contextualise the importance of saving for a pension at every life stage, especially for those at the start of their careers with lots of short-term costs such as rent that they might prioritise over pensions.

AI can help identify the best time to talk

Artificial intelligence is a particularly useful technology in communicating the benefits of auto-enrolment as it can help insurers decide the best time to talk to their customers about pensions – at points of their lives consumers actually want to talk to their insurers. These points are known as “Life Events”. If a consumer is approaching a milestone, whether it be the placing of a deposit on a new home, engagement or new baby, they are far more likely to be ready to review their financial situation and be thinking about the future than they would if they were just thinking about the short-term. Expectant mothers and fathers may also be prompted to change their thinking about saving, as they realise that it is no longer just their futures that would be affected by financial shock but their children’s too.

The future of auto-enrolment

The minimum automatic enrolment contribution from employers is set to rise again on 6 April 2019 from 2% to 3%, but the minimum contribution from staff is due to rise from 3% to 5% on the same date. Insurers should take the opportunity to work with businesses now in an effort to prevent further auto-enrolment opt-outs.

Maya Angelou once famously said “people will forget what you said, people will forget what you did, but people will never forget how you made them feel”. The intelligent application of AI insurers can appeal to people at just the right moment to help guide them to good decisions around auto-enrolment and have the potential for quite significant success.

Technological innovation will be key not only to reducing the number of consumers opting out but also encouraging more to change the way they think about pensions and savings in general.

• Investment brings AMX’s AUM to over $6bn
• AMX launches first Fixed Income offering
• Brandywine is the fifth new manager onboarded by AMX in Q3 

AMX, the first open architecture marketplace for the buying and selling of asset management services, has announced that the Sal Pension Scheme and the Royal Insurance Group Pension Scheme (SALPS and RIGPS respectively), both of which are sponsored by RSA Insurance Group (RSA), have onboarded their Brandywine holdings onto the platform.

This $750 million investment brings AMX’s total assets under management (AUM) to over $6bn.

The addition of the Brandywine Global Sovereign Credit Fund also marks AMX’s first fixed income offering.

Commenting on this announcement, Oliver Jaegemann, Global Head of AMX, said:

“We are thrilled that SALPS and RIGPS have signed up to AMX as testament to the efficiencies afforded by our platform. The addition of Brandywine marks our first fixed income offering as well as helping us to break through the $6bn milestone.

“Since launch just 18 months ago, our AUM has grown fivefold and in this quarter alone, five new managers have onboarded onto AMX. We are also pleased to announce that we now have over 40 pension fund clients using our platform. These figures demonstrate the appetite in our industry to embrace new, innovative measures to save on time and costs and we look forward to continuing to grow and develop our offering.”

Nick Deahl, Head of Trustee Investment at RSA added:

“We share AMX’s goal of reducing inefficiencies in the pooled fund industry, along with achieving greater cost transparency and operational simplicity. We are therefore pleased to have entered into a strategic partnership with AMX as it provides the opportunity to achieve these efficiencies as well as support innovation in the marketplace.”

Snowflake Computing, the only data warehouse built for the cloud, today announced that nonprofit organisation Parkinson’s UK is using Snowflake’s cloud data warehouse to become more data driven; supporting those with Parkinson’s, carers, volunteers, fundraisers, and researchers more effectively. Snowflake technology will help create even greater transparency into how funds are deployed – all through the power of data.

Formed in 1969, Parkinson’s UK was created to help patients and their families suffering from the disease through research, while also raising money from events and donations to support its work in the field.

Parkinson’s needed a data warehousing solution to support fundraising initiatives by easily ingesting different data sets into one single source of truth and adding intelligence.

Historically, data has been siloed, and access to data across different departments has been especially difficult. In moving from its series of current databases, Parkinson’s UK will capitalise on the cost effectiveness, flexibility and scalability of Snowflake’s data warehouse.

“The aim for our charity is maximising the amount of funding to help those that are suffering the most. What is often overlooked is the central role that data plays in furthering these goals. Since partnering with Snowflake, we’ve been able to accumulate all the different data sets across our divisions into one central space, and easily analyse all available data in real-time”, said Julie Dodd, Director of Digital Transformation, Parkinson’s UK.

Julie continued: “We strive to keep costs as low as possible. As responsible stewards of funds, the Snowflake consumption model was a great fit, as was the self-managing Snowflake platform. As a result, our IT team could focus on high value tasks rather than the need to manage multiple databases, all while giving users faster access to data.”

Parkinson’s UK will now focus on new data initiatives and how to share relevant insights of its research with other research institutions in real-time. This will help to speed up advancements and communication around the condition.

“We are thrilled to support the data needs for Parkinson’s UK to help drive its funding and research initiatives”, says Thibaut Ceyrolle, VP of EMEA at Snowflake Computing. “This is only the start of our relationship. By working closer with Parkinson’s UK we want to help the charity achieve its aims by sharing relevant data insights such as new research or ground-breaking improvements for Parkinson’s sufferers. Data can now be simply and securely shared with relevant external shareholders, boosting collaboration and all in real-time.”

Snowflake Computing recently took part in Parkinson’s UK London to Paris bike ride, on August 28^th 2018, in order to support the charity and raise money for those suffering from Parkinson’s.

Health Insurance Company Accelerates the Implementation of New Services and Strengthen Business Applications

Talend (NASDAQ: TLND), a global leader in cloud data integration solutions, today announced that La Mutuelle Générale, a leading provider of insurance solutions for businesses and individuals, has chosen Talend Cloud Platform to support the company in their project to build an Amazon Web Services (AWS)-based cloud data lake, the foundation of all their data initiatives.

With Talend, La Mutuelle Générale provides self-service data access for its data scientists to improve customer relations and offer innovative services.

“As many industries, the insurance sector is in the midst of a transformation from a technical to a service industry. As part of our global business approach, we place digitalization, data and innovation at the heart of our strategy and customer satisfaction,” said Yan Truong, BI, Big Data and Data Engineering Manager at La Mutuelle Générale. “Mastering, exploiting and making data usable quickly is critical. In order to serve business needs as closely as possible, we therefore chose to equip ourselves with a cloud data lake, and to rely on the Talend Cloud platform which operates throughout the data value chain, from its integration to its preparation by business users.”

At La Mutuelle Générale, the data initiatives began with the desire to facilitate the work of data scientists and enable them to operate a self-service database of trust, without the need to solicit IT teams. The mutual insurance company therefore initiated the cloud data lake project in September 2017, wishing to take advantage of the data processing for the benefit of its customers and its development. By accelerating innovation cycles while retaining the full potential of the original data integrity, the cloud data lake is intended to be the foundation for all its data initiatives, whether for improving customer relationships or creating new services.

With Talend Cloud, La Mutuelle Générale benefits from a data preparation and integration platform that is compatible and complementary with AWS’ technological ecosystem, while producing code that can be reused in its own development. By reducing hand coding, La Mutuelle Générale is thus able to concentrate on its data engineering mission without worrying about the management of complex infrastructures required for big data approaches. Beyond implementing a cloud data lake, the mutual gains agility with Talend by quickly delivering prototype use cases across the platform, enabling business teams to be included right from the data preparation phase with Talend Data Preparation, and subsequently automating data integration jobs with a few clicks via Talend Data Integration.

“La Mutuelle Générale is developing an ambitious project based on data with the aim of creating new uses cases,” said Jacques Padioleau, VP Sales France, Talend. “We are proud to support them in the development of these new practices aimed at putting data at the heart of their strategy, and thus be able to provide new innovative services to their customers.”

From now on, data scientists and business analysts have access to the cloud data lake and its richness of data to support business teams in their decision-making and the implementation of innovative services for their customers.

This democratization of data among the company’s various businesses also enabled La Mutuelle Générale to be rewarded by the Big Data 2018 Innovation Trophy in the B2C category, which rewarded their project to optimize incoming mail management, through a form of artificial intelligence (deep learning).

For more information about Talend’s portfolio of solutions, including Talend Cloud Platform, visit www.talend.com or the Talend blog.

Thales, a leader in critical information systems, cybersecurity and data security, announces its nShield hardware security modules (HSMs) now support Edwards and Brainpool elliptic cryptographic curves (ECC) to meet the security and data integrity requirements for the latest connected cars, FinTech, and enterprise-class IoT solutions.

Patrick Daly, research analyst at 451 Research explains:

“Elliptic curve cryptography (ECC) is used for exchanging small cryptographic keys which require less resources to obtain the same levels of security provided by Public Key Infrastructure (PKI) protocols.

The explosion of the IoT and connected devices that require secure, high-scale, and often lightweight communication has accelerated the adoption of ECC protocols far beyond SSL webpages. Currently there is no clear winner for ECC protocols for IoT security because of patents, concerns around standardization, and competing options. It is a wise practice to invest in infrastructure with broad ECC support as we expect the market to remain dynamic for several years.”

A modern vehicle houses around 100 electronic control units (ECUs), each relying on dedicated digital certificates to authenticate in-car networks and external management services. For the system to deliver a safe and responsive customer experience, rapid cryptographic computations are required from devices with limited processing power and memory. Brainpool and Edwards ECC solutions, which can be optimised to reduce processing requirements, are becoming more commonly deployed to meet this need.

Paul Jarvie, Director, Automotive Electronic Systems Innovation Network (AESIN) says:

“As the automotive industry continues to innovate at a dynamic rate, it is important that security technology does not lag behind or data speed and integrity can be extremely vulnerable. Solutions that offer advanced capabilities such as ECC support will allow automotive applications to thrive by ensuring optimal efficiency and performance are maintained.”

Peter Galvin, chief strategy officer for Thales eSecurity says:

“At Thales, we are constantly innovating to meet the dynamic changes in the market, and to add important features to our products based on the needs of our customers. With our latest nShield release, we address the demand for a higher degree of efficiency in emerging cloud-based applications in industries such as automotive, FinTech and IoT.

Support for Edwards and Brainpool ECC and new secure logging capabilities are available in the latest version of Thales nShield Hardware Security Modules (HSMs). For more information, visit our website.

Industry insight and views on the latest data security trends can be found on the Thales eSecurity blog at blog.thalesesecurity.com.

Follow Thales eSecurity on Twitter @Thalesesecurity, and on LinkedIn, Facebook and YouTube.