Capital Markets Corporate

February 14, 2020

Our Weekly Newsletter

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Across Instinctif Partners’ Financial Services team, we are always keeping an eye on the key developments taking place across the sector to evaluate their impact on the many businesses we work with. Here we share our picks of the week’s most interesting news, and our expert views.

Banks are closing thousands of free ATM machines
Big banks are closing thousands of free ATM machines across the UK forcing withdrawal fees to increase drastically for customers. Last year  withdrawal fees rose from £29 million to £104 million which understandably hitting poorer communities who heavily rely on cash. The banks however are benefiting from the closure of cash machines, reporting £120m in savings since shutting 8,700 free ATMs. Some citizens believe they have no choice but to request a government intervention, claiming the closures are impacting their right to access their own finances. (From Financial Times, 7 February 2020)

Tech stockpicker launches a hybrid fund
Stockpicker Henry Ellenbogen of Durable Capital is using a “hybrid” fund model that focuses on the stocks of smaller companies, and invests in both public and private businesses. Durable’s inaugural fund raised $6bn despite asking investors to lock up their money for at least three years, according to people familiar with the matter. Due to the decline in publicly listed companies in the US over the course of his career, Ellenbogan stated that “The idea of a public and a private company has become blurred. Investors need to have the flexibility to do both,”. (From Financial Times, 10 February 2020)

Financial advice should be a family affair
73% of Brits have not discussed financial matters with their immediate relatives a survey of 1,000 adults conducted by Openwork reported. Financial advisers say it is discouraging as many adults will be shocked by the reality of their financial futures if action is not taken soon. Mike Morrow of Openwork calls for help from the financial advice industry and the government to encourage families to seek financial advice together so that everyone can be on the same page regarding their current and future finances. (From International Adviser, 11 February 2020)

Nationwide to help mortgage borrowers go green with £1bn fund
Nationwide Building Society’s latest initiative is to reduce the carbon footprint of Britain’s homes as it calls on the government to make the Help to Buy scheme greener, review council tax and create incentives for housebuilders to build more EPC A-rated homes. Nationwide have claimed that incentives for consumers are “the only realistic way” to help people make their homes greener. Other reforms that nationwide have proposed include urging the government to commission an independent review of council tax to explore how linking taxation to a home’s energy efficiency can incentivise green home improvements. (Your Money, 13 February 2020)

More than €1tn of investor money is stuck in ‘zombie’ funds
Close to €1.2tn of investor money is sitting in subscale “zombie” funds globally, raising uncomfortable questions for the asset management industry. Research from Broadridge, the data provider, shows more than two-thirds of newly launched funds fail to raise €100m — the minimum required for a fund to break even. However, newer funds attract more capital so older, smaller funds are increasingly ignored by investors and successful fund managers. Asset managers are coming under increasing pressure from policymakers and regulators to close these funds. (Financial Times, 10 February 2020)

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