Distribution Technology and Indexx Markets announce new indices

Distribution Technology and iNDEXX Markets to provide the UK’s first risk-based investible indices for the retail market

20 November 2013 – Leading financial planning and risk profiling services business, Distribution Technology and iNDEXX Markets, the provider of bespoke managed indices, today announce a new and unique suite of six investible indices based on DT’s market-leading risk profiles.  The new indices, named “Dynamic Planner Goldman Sachs i-Select  Total Return Strategy indices” are provided by iNDEXX Markets and will have Goldman Sachs as pricing agent.

The partnership will see iNDEXX Markets launch six new multi-asset indices precisely matched to DT’s asset allocations and risk profiles. These innovative new indices have been designed to give managers and investors a daily benchmark which can be invested in, or used to assess relative performance, and are based on DT’s six most popular risk profiles. They are the first indices of their kind to provide relevant, risk-based benchmarks to an individual investor’s risk profile or investment objective, in contrast to the normal market or peer group-based indices which are not personalised. Dynamic Planner is licensed to over 5,000 financial advisers in the UK to profile, plan and manage their clients’ wealth.

Chris Fleming, Head of the Financial Analytics Team at Distribution Technology said, “DT now profiles in excess of 600 funds for more than 60 fund groups and is the UK market leader in fund risk profiling. We wanted to provide a means by which these communities could accurately track or manage investment performance against an agreed risk level; these new and unique indices allow our clients to do this.” 

Andrew Berry, Director at iNDEXX Markets, added: “iNDEXX Markets is a bespoke investment solution that caters explicitly to the designs and ambitions of its client base. This partnership with one of the leading technology and risk profiling firms will enable investors to 

have their investment need matched to DT’s already well-established and highly regarded risk profiling.”


For further information, please contact:


Ben Goss/Rohini Mehan

Distribution TechnologyTel:  0118 903 5850


Fiona Harris/Jo Stonier

Quill PRTel:  020 7466 5050


James Terry

TeamspiritTel:  020 7360 7877


About DT

Distribution Technology is a leading provider of financial planning & practice management technology. Founded in 2003 the organisation serves more than 200 intermediary firms from the largest nationals, networks and service providers, to high quality local and regional advisers and bank owned wealth managers.

Over 3,000 advisers regularly use DT’s award winning, core product Dynamic Planner® to profitably profile, plan and manage their wealth clients and on a busy day Dynamic Planner® will support the creation of over 1,000 pieces of wealth advice.

DT works with more than 60 asset management firms to risk profile over 600 of their funds, representing more than £50bn in invested assets and helping advisers assess their suitability.

Dynamic Planner® is integrated into a growing number of investment platforms, enabling advisers to gain straight through new business processing and valuations, dramatically reducing the cost and risk of servicing their clients.

For more information, or for a live demo, please call Distribution Technology on 0118 9035832. Or find out more at www.distribution-technology.com

About iNDEXX Markets

iNDEXX Markets is a full service firm, helping asset managers to develop indices and to access distribution channels using a wide range of appropriate instruments, including ETFs, ETNs, UCITs funds and Structured Notes.

For more information please see www.indexxmarkets.com


iNDEXX Markets Announces Strong Inflows To New Bespoke Indices Proposition

iNDEXX Markets, the provider of bespoke managed indices, today announces over $200m of investment since launch in December.

iNDEXX Markets creates innovative managed indices for fund management groups and advisory firms. Working with investment banks, the company launched a series of asset-allocated indices in December 2012, and has attracted over $200m of institutional investment since then.

iNDEXX Markets has also recently benefitted from investment by venture capital firm, Osprey Capital Limited.

Leon Diamond, Director, iNDEXX Markets, said: “iNDEXX Markets is a bespoke investment solution that caters explicitly to the designs and ambitions of its client base. The initial inflows are testament to our model, as is the backing of Osprey Capital, a firm which clearly appreciates the tremendous potential inherent within the proposition.

“On the back of this initial success, and the funding from Osprey, we are planning further indices to meet the needs of our clients.”

Ronan Kearney, Chairman, Osprey Capital Limited, said: “This is an exciting time for Osprey Capital and we are very pleased to be investing in iNDEXX Markets, demonstrating our preference and expertise for retail financial services. The demand for iNDEXX Markets’ offering is incredibly strong and we look forward watching it grow in the future.”

iNDEXX Markets is a full service firm, helping asset managers to develop indices and  to access distribution channels using a wide range of appropriate instruments, including ETFs, ETNs, UCITs funds and Structured Notes.

For more information please see www.indexxmarkets.com

The cult of the star fund manager is over

As the dust settles on the Retail Distribution Review, Advisers continue to fine tune their Investment propositions, with a likely outcome being that they adopt Discretionary Managed Portfolios (DMPs) as an integral part of their proposition.

Research recently commisions by CAERUS Capital group, confirmed something that may had believed for a long while. The cult of the star fund manager is over. Most Advisers have already embraced this and the research also confirms that only a small minority (6%) of clients expect Advisers to chase 'star' fund managers1, who, by their nature, need to continue to take additional risk in the chase for alpha. This is often achieved-or attempted- by taking tactical asset allocation decisions. Take, for example, a fund manager whose fund sites within the IMA mixed investments 40% - 85% sector; that manager is able to change the quity component of the asset allocation to as low as 40% or as high as 85%, depending on his/her outlook. The danger with this approach is that a client, who was matched to an asset allocation by virtue of their risk profile, could find, within a few months, as a result of the manager's decisions, that their investment and their attitude to risk are mis-aligned.

As the identification and classification of clients' risk profiles have developed, Advisers have moved away from single fund solutions and adopted their own model portfolios. Not only do these offer additional diversification and spread ,they allow costs to be reduced by holding a mixture of tracker and active funds to achieve the desired asset allocation.

As the portfolio's starting position changes due to out-performance of one or more of the constituent parts, they are rebalanced back to the starting position. This may sound like an ideal solution; however there are an number of problems with model portfolios which will ultimately drive more advisers towards the use of DMPs.

A number of events can require an Adviser to make changes to their model portfolio(s).

  1. Out performance by one or more funds resulting in 'portfolio drift'.
  2. Fund events - i.e. closures and mergers.
  3. Underperformance from a manager, resluting in the need to switch to a new fund.
  4. A need to realign the portfolio to the original asset allocation, as tactical decisions taken by underlying fund managers have resulted in a significant change in the original set allocation.

While the first of these can be achieved by a simple rebalance, the next three generally require a fund switch. Although fund events may be relatively infrequent, research suggests that the majority of clients2 want their portfolio to be re-balanced continuously to match their risk profile.

With only a minority of Advisers have the required permissions to perform a discretionary switch, the remainder of Advisers who need to make a change to a model portfolio require the written agreement of each and every client in the portfolio. In the post RDR world, this is going to become more of a regular event due to client demand, and therein lies the problem. With every switch requiring client agreement, there will be a small but significant proportion of clients who, for one reason or another, fail to respond in time. the only option will be to create a new version of each portfolio and manage both. So what starts out as maybe five portfolios, can soon grow exponentially, becoming 10,20, then 40 as clients fail to respond to each raft of changes. This, of course adds to the complexity and cost of running Adviser businesses, both in terms of managing a myriad of portfolios and in continuing to communicate with clients in different versions of the the portfolio.

Traditionally, a discretionary fund manager (DFM) would have built a bespoke portfolio for lients. Typically this would have been with the preserve of high net worth clients, those with upwards of £250,000 to invest. However, they could hold the solution to Adviser propositions, going forward. By putting in place a DFM agreement at outset, and allowing the DFM to manage portfolios, am Adviser can side step the need to contact clients whenever a fund switch is required.

Research suggests there is still a demand amongst the vast majority (78%) of investors3, for a portfolio tailored to their personal requirements, as opposed to a 'one size fits all' approach. Part of this will, of course, be matching their attitude to risk to the correct portfolio, but investory may also have a preference for an active or passive investment style and sensitivity to price4.

A solution to this is to use a DFM to manage an active and passive portfolio for each risk profile. The Adviser can then blend these to meet the client's preferences. By leaving the work behind the scenes to the DFM the Adviser can streamline the investment offering and reduce the risks that are inherent in running multiple portfolios, freeing up additional time to advise clients. As advisers start to look in more detail at their investment propositions it is likely that a solution which involves DFMs will become an increasing part of adviser business modles, going forward.

Research commissioned by CAERUS Capital Group: Sample size 100(November 2012)

  1. Of all investors, only 6% thought that they should be chasing 'star managers'.
  2. Of those investors who have portfolios, 60% believed that it should be re-balanced continuously to match their risk profile
  3. Of investors who wanted professional management of their portfolio, 78% speceifically wanted a portfolio tailored to their personal requirements
  4. Table showing how much an investor is willing to pay for the management of pensions and investment by an investment professional, on an annual basis, expressed as a percentage of the overall value of the investment.

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UK VC firm Osprey Capital eyes two investments, partial exit

UK venture capital firm Osprey Capital is preparing to announce two investment deals, AltAssets has learned.

A source with knowledge of the situation said terms had been agreed to invest into a national independent financial advisor firm and a Malta-based hedge fund developing an innovative structure for the onshore retail market.

Both deals are expected to be announced later this month.

In addition the firm – which today exited its investment in Allium Capital for a massive 12x return – expects to make a partial exit from another portfolio company in the second quarter, according to a second source.

Osprey Capital chairman Ronan Kearney said the investment strategy of the firm would remain the same and it will continue focusing on the UK retail financials.

Up to now the company has focused on seed and founder-stage investments. Kearney said that the early stage of investment was the prime reason  the company received such good returns from Allium.

Osprey invested an unspecified amount into Allium four years ago, and has seen the company’s assets grow to more than £400m during its ownership.

Kearney said, “When you make investments at the (seed and founder) stage, you get very attractive returns.”

However, he added that he will now also look at expansion capital investments. “Our investment model is twofold. We invest our own capital and charge directors’ fees, which builds up cash quickly. We are now looking to deploy our cash,” he said.

Kearney also said that he is not looking to hold a fundraiser and will retain the current investment model as it has worked out well so far.

The firm claims to be unique in the UK as it was established as a limited company rather than limited liability partnership.

As such it only invests shareholder capital, with returns measured solely on a cash-to-cash basis rather than on notional values of underlying holdings.

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