One bullet to start: I’m Brooke Masters, US Financial Editor, writing again before Harriet Agnew returns. But she has already reported this British fund manager Bailey Gifford saw assets under management fall by a third, or more than £100bn, in 2022 as rising interest rates hit the growth stocks that had propelled its performance over the past decade
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Broader impact of turmoil in Adani Group
As concerns grew about the Indian conglomerate Adani group Last week the turbulence sucked in the FSTE 250 group Jupiter Wealth Management.
Jupiter was the only UK-listed company among an anchor group of investors who agreed to help the conglomerate as it attempted to raise about $2.5 billion through its listed unit Adani Enterprises, writes Emma Dunkley. Through its India fund, Jupiter had committed £3.4m of total fundraising, representing just over 1 per cent of anchor investors.
But short sellers Hindenburg issued a scathing report alleging fraud and market manipulation claims that Adani Group denies. As of Friday, Adani-controlled companies had lost more than $100 billion and co-founder Goatam Adani was no longer Asia’s richest man.
Meanwhile, Adani Enterprises first claimed that the fundraising, a result of the public share sale, had been successful and then went through with the deal. The company said it was protecting investors who had been left under water by the sharp drop in the share price. The investors’ cash was held in trust and was to be returned.
But Jupiter’s move to back the share sale amid such scathing allegations, despite holding back from other UK companies, has thrown the spotlight on his rationale and leadership. Jupiter fund manager Avinash Vazirani And Colin Croft say they have done very well with previous investments in Adani companies. Jupiter’s only current holding is Adani Ports and Special Economic Zone: the £9.4m stake was one of the fund’s largest purchases over the past year.
A modest proposition for Goldman
Goldman Sachs The partners are meeting in Florida this week after a rough patch that has included 3,000 layoffs, falling profits and a major strategic U-turn by the CEO David Solomon to consumer banking.
If Solomon, whose salary has fallen 29 percent (to $25 million) from 2022 levels, is to avoid another humiliating cut, he must help the bank regain its swagger, writes Bill Cohan in an op-ed column. Of course, as a former investment banker, Cohan’s answer includes M&A deals that would rock not just banking, but the entire fund industry.
To better compete with Morgan Stanley and JPMorgan Chase, Goldman would benefit from having access to cheap capital that more deposits provide. Cohan argues that it should buy a big commercial bank. For him that would be the logical goal Bank of New York Mellonwhich has $1.8 trillion in assets under management and a whopping $44.3 trillion in assets under custody or under management.
Regulators may not be that keen on a combination. Both institutions are already on the global list of 30 systemically important banks and BNY is the world’s largest custodian.
graph of the week
The largest US companies are on track halfway through the earnings season, reporting the first year-on-year decline in quarterly earnings since the onset of the Covid-19 crisis, writes George Steer.
According to FactSet, companies included in the blue-chip S&P 500 index are expected to report a 5.3 percent year-over-year decline in earnings over the last three months of 2022. It took into account the 252 groups that have reported so far and used analyst estimates for the rest. The last time the group saw earnings fall was in the third quarter of 2020.
Consumer discretionary stocks, consumer services, materials and IT are the worst-performing sectors so far, but energy companies and industrials stocks posted record numbers in the last quarter of last year, posting annualized earnings per share growth of 58 percent and 37 percent, respectively.
10 unmissable stories this week
Black Rock has closed a deal with European Mobile Broker A book to offer low-cost savings plans aimed at attracting more retail clients into exchange-traded funds. Investors can invest in up to 10 BlackRock iShares ETFs for as little as €1 per month.
Liquidity is no longer the worry that keeps most traders up at night. For the first time in six years, volatility tops the list of market fears as investors worry about a central bank crash.
AIG fired his interim chief financial officer Markus Lyon about a breach of confidentiality rules. A legal settlement awarding Lyons a $7.5 million payout says it has not used or disclosed any confidential information “except in relation to sharing access to company-issued communications devices.”
Banks that lost more than $10 billion in the meltdown Bill HwangThe family office of Archegos capital management in 2021 it will recoup just 5 cents on the dollar from its reorganization, with brokers such as Goldman Sachs Financing the payouts with leftover money from his account.
The UK wealth management industry experienced its worst year on record in 2022. Net outflows rose to £50.1bn as rising inflation and the cost of living crisis forced retail investors to plunder their buckets. Retail investors took up £25.7bn, the first annual net outflow since at least 2002.
Black Stone just a quarter of the much-vaunted $69 billion Blackstone Real Estate Income Investment Trust’s January redemption requests. Breit, a private trust company, slammed its doors in early December after a spate of withdrawal requests.
The lines behind the main derivatives markets were blocked this week after a cyber attack on the financial markets group ion markets, Highlighting the computer security risks for commerce.
Bankrupt Crypto Lender Celsius ran a “very Ponzi-like” scheme to use client funds to control the price of its own token, CEL. So says one of the company’s former employees in memos uncovered by a court-appointed investigator.
It’s been a big week for job changes in the City of London. Law & General general manager Mr Nigel Wilson will retire after more than a decade in the top job. Headstrong wealth manager adjust recreated the post of CIO, typing Peter Burner as it hunts for growth. In the US, Bridgewater appointed a third CIO, Karen carniol drum.
Goldman Sachs agreed last year to transfer part of its privately held Russian investments to two former employees as the Wall Street firm winds down operations in the country following Moscow’s war with Ukraine.
And finally
Lea Michele as Fanny Brice and Tovah Feldshuh as Mrs Brice make their first curtain call in ‘Funny Girl’ on Broadway at the August Wilson Theater © Bruce Gilkas/WireImage/Getty Images
Funny Girl, the New York revival of the musical based on the life of comedian Fanny Brice, is one of the hottest tickets in town right now. Although it received mediocre reviews when it opened last April, the show has found a new lease of life Leah Michele took on the title role in the fall. Not only did Michele’s performance garner critical acclaim, her performance paralleled a story arc on Glee, the television show that made her famous. In it, Michelle’s character, Rachel Berry, gets her dream role in a Broadway revival of the same show. The show is currently selling tickets through the end of May.
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