Asset management roundup: M&G Prudential to split from insurer parent

Insurance giant Prudential plc is to spin off its UK and European arm, the company announced this morning.

M&G Prudential – created last year as part of a major reorganisation of the insurer’s UK businesses – will be formally separated from the rest of the company by the end of next year, according to a notice to the stock exchange.

John Foley, M&G Prudential’s chief executive, will continue in this role as the firm seeks to deliver annual savings of £145m a year by 2022.

As part of the restructuring, M&G Prudential also announced a deal with Rothesay Life to offload £12bn worth of legacy annuity business. It has already reinsured the annuity book with Rothesay and plans to transfer it completely by the end of next year.

“The capital benefit of this transaction will be retained within the group to support the demerger process,” the stock exchange notice said.

Both M&G Prudential and Prudential plc aim to remain headquartered in the UK and have targeted inclusion in the FTSE 100 index.

Foley said the demerger would allow M&G Prudential to “play a broader leadership role in the fast-changing savings and investments market within the UK and Europe”.

The restructure is subject to shareholder and regulatory approval.

China A-shares indices offered by MSCI

Index provider MSCI has launched 12 China equities indices to track the developing A-shares market.

The company announced plans to introduce A-shares in its main global benchmarks for the first time last year, with effect from 1 June 2018.

The new indices include large cap, mid cap and “smid” cap (small and medium) benchmarks denominated in US dollars and renminbi.

Theodore Niggli, head of Asia-Pacific index products at MSCI, said: “With the increased liberalisation and internationalisation of the China market, investors have expressed a clear need for more insight and tools to make better informed investment decisions.”

He added that the company would provide a “full suite” of services connected to the new indices, including risk models and ESG ratings.

A-shares are stocks accessed on China’s domestic markets, rather than via Hong Kong (H-shares) or other jurisdictions.

Analytics firm launches investable hedge fund benchmarks

Investment analytics firm Markov Processes International (MPI) has launched the first of a planned series of investable hedge fund indices.

A new subsidiary of the company, MPI Hedge Fund Indices, aims to provide benchmarks to help measure “elite” hedge fund performance, split by investment style.

The first index has been developed in partnership with BarclayHedge and tracks the performance of the 20 largest managed futures funds.

Sol Waksman, president at BarclayHedge, said: “We’ve been approached in the past by firms looking to deliver on a similar promise. In those cases, and despite valiant efforts, index performance quality fell short of our standards. MPI, however, has delivered what we think will be a game-changer.”

MPI’s main business is performance analysis. Using its “dynamic style analysis” model it aims to identify the main drivers of an investment fund’s performance. The same analysis forms the basis for the new indices, MPI said in a statement.