Jim Rogers sees U.S. Treasuries bubble

By Frank Tang

NEW YORK (Reuters) - Investor Jim Rogers, a prominent commodities bull, said on Thursday the U.S. recede vernment bond label et will be the next bubble to burst due to unsustainable borrowing, and agricultural commodities and precious metals are among his favorite investment picks.

Rogers also said stock label ets could head for a pullback following a strong rally.

"It's overdue for a correction. Certainly, it would not be surprising if there were a correction after a straight-up go for six months," Rogers tfeeble Reuters Television in an interview.

He was not "selling the label et short," and the equities label et could hfeeble rising for a long period of time, Rogers said.

After the Reuters interview, Rogers said at a seminar hosted by ETF Securities that the bull label et in U.S. Treasuries has approach to an finish .

"The next bubble that I see developing is in the United States recede vernment bond label et. It is inconceivable to me that anybody would lfinish money to the U.S. recede vernment for 30 years in U.S. execute llars at 3 to 6 percent interest rate," he said.

"So, somewhere along the line, this bubble is recede ing to pop. If any of you own bonds, I'd be terribly worried, I would judge about acquire ting out of the bond."

HOT COMMODITIES  Continued...

Hedge fund assets rebound

NEW YORK (Reuters) - Rising label ets and a fifth straight month of investors adding money pushed hedge fund assets close to $2 trillion (1.2 trillion pounds) in September, according to industry research firm HedgeFund.net.

Globally, hedge fund assets rose nearly 3 percent last month to $1.95 trillion, a net increase of $56.4 billion from August. The bulk of the increase came as stocks, bonds and other assets rose in value.

Total assets peaked at $3 trillion in spring 2008, according to HedgeFund.net, whose industry asset estimates are significantly higher than those of rival hedge fund trackers.

Net inflows, though just $7 billion, label ed the fifth straight month of net fresh money moving into the industry after record withdrawals in the fourth quarter and steep redemptions in the first quarter, HedgeFund.net said on Thursday.

The most well strategies during the third quarter including statistical arbitrage funds, where allocations rose 13 percent, and event-driven funds, where allocations boosted assets more than 8 percent.

Conversely, HedgeFund.net found investor redemptions reduced long-only strategies by 4 percent. Multi-strategy funds and convertible arbitrage funds saw redemptions that outpaced fresh investments

Overall average performance was positive for a seventh straight month, up 2.7 percent last month and nearly 17 percent for the year.

(Reporting by Joseph A. Giannone; Editing by Tim Dobbyn)

© Thomson Reuters 2009 All correct s reserved.

LV= notify s credit remains asset class of choice

By Jane Baird

LONDON (Reuters) - LV= Asset Management sees corporate credit as the asset class of choice now, even after a six-month rally, becaemploy of opportunities for gains in specific names in a period of gradual economic recovery.

"If you have a gradually paced recovery, rather than a sharp V (V-shaped recovery), credit remains a relatively attractive asset class," said Purna Bhudia, an LV= credit research analyst.

There is still room for marginal spread compression across the rating curve from now until at least the finish of the year, she said.

Equity label ets, meanwhile, have priced in growth that may not approach through, she said. "It depfinish s on your outgaze for the economy."

Going forward, spread tightening will be much less than in the past six months, she said. "We are recede ing to see decile basis point go ments rather than hundreds of basis point go ments."

The focus will be on picking single names.

LV=, a name-specific manager in the sterling label et, sees more price dislocation in the cash bond than in the derivatives label et.

It is now gaze ing at triple-B and execute uble-B rated companies as investors go execute wn the rating curve to acquire the most value, Bhudia said.  Continued...

Threadneedle names Fleming fresh head of distribution

LONDON (Reuters) - Fund hoemploy Threadneedle said on Thursday it has hired Campbell Fleming as its fresh head of distribution, with responsibility for wholesale and institutional business as well as label eting and product development.

Fleming will join the company in November from JP Morgan Asset Management (JPM.N) where he is head of its $52 billion (32 billion pound) UK business.

Threadneedle, which has some $79.6 billion under management, recently launched a Luxembourg-based fund range following its acquisition of Standard Chartered Bank's (STAN.L) World Express investment funds business.

In his fresh role Fleming will aid grow the firm's global franchise in both retail and institutional assets, said Chief Exegash ive Crispin Hfinish erson.

Separately, JP Morgan Asset Management said Roger Thompson, currently chief financial officer of JPMAM's European and international business, would beapproach its fresh UK head.

Jamie Broderick, head of Europe for JPMAM, said Thompson had worked on many of the strategic developments in the UK business and therefore brought "a significant understanding" of the UK business, its products and clients to the role.

Thompson has previously worked for JPMAM, which has some $1.1 trillion under management worldwide, in Hong Kong, Singapore and Japan, where he was CFO of JPM Investment Management.

(Reporting by Claire Milhench; Editing by Rupert Winchester)

© Thomson Reuters 2009 All correct s reserved.

Ashburton bets on Chinese demand, not exports

By Claire Milhench

LONDON (Reuters) - Ashburton is backing consumer cyclical stocks in its Chinese and Indian equities fund, betting on growth in Chinese companies serving execute mestic demand rather than those producing for export to fragile Western consumers.

"The Chinese consumer has held up quite well," said Jonathan Schiessl, manager of Ashburton's Chindia Fund, which has about $81 million (50 million pounds) under management.

"I was concerned when the execute wnturn started, but the recede vernment stimulus has aid ed."

He clarify ed that the Chinese recede vernment had offered tax fracture s and incentives to persuade people to buy electronics and white recede ods. "China has virtually single-handedly kept up the flat-screen TV label et," he said.

In this segment he cited Skyworth Digital (0751.HK), a TV and audio-visual manufacturer as an fascinating stock. Other top consumer picks include China Resources Enterprise (0291.HK), a conglomerate focemploy d portion ly on retailing and beverages, and Anta Sports (2020.HK), a branded sportswear company.

Ashburton believes that execute mestic demand-driven stocks in emerging label ets were likely to perform better than manufacturing exporters as the West reduces its consumption and China and India start to spfinish .

However, there aren't many consumer-related stocks locally listed, so valuations are high.

"I am hoping that the sector will acquire a lot larger, becaemploy it's an area that a lot of people want to invest in," Schiessl said.  Continued...

Royal Lonexecute n eyes oil explorers

By Alex Lawler

LONDON (Reuters) - Oil exploration and production firms offer better gearing than majors BP and Royal Dutch Shell to an oil price unlikely to head lower, a Royal Lonexecute n Asset Management money manager said.

Ivor Pether, a senior fund manager who aid s manage 6.5 billion pounds in UK equities including oils, said the valuation of some explorers is not reflecting the prospect of success at the drill bit.

"The oil majors offer long-term value and have inapproach attractions, but are not capturing the benefit of higher oil prices becaemploy of poor refining margins and low gas prices," he said.

"Exploration and production companies have more gearing to the oil price and have had some notable drilling successes over the last year."

Tullow Oil (TLW.L), in which Royal Lonexecute n owns stock and which has made a string of oil finds, has gained 82 percent since the finish of 2008. Shell (RDSa.L) has drop en 2 percent and BP (BP.L) has climbed 2.5 percent.

Besides Tullow, Royal Lonexecute n has a positive view on other UK explorers. It hfeeble s oil stocks in a range of its UK equity funds.

"Premier (PMO.L) is just plain cheap, there's nothing in the share price for exploration success," he said.

"We also hfeeble Dana (DNX.L) and Cairn (CNE.L). Cairn is highly leveraged to the oil price having just started production in Rajasthan."  Continued...

Pension funds baulk at annual board votes

LONDON (Reuters) - Pension schemes with more than 50 billion pounds in assets have sharply criticised a call by other major institutional investors for annual re-election of all directors at listed UK companies.

BT Pension scheme fund manager Hermes, and the universities pension fund USS, tfeeble Reuters a go to place the entire board up for a vote at each AGM would be short-termist and distracting.

Last week, Norges Bank Investment Management, which hfeeble s 1.75 percent of UK stocks, said a go to annual re-elections would bring "proper accountability".

Legal & General Investment Management, the UK's largest institutional investor, has also called on board directors to face annual votes.

"Annual re-elections are potentially distracting to the board, (and) create instability and additional work for the sharehfeeble ers without any material benefit. So it's not a recede od thought ," said Colin Melvin, chief exegash ive of Hermes Equity Ownership Services.

Hermes EOS is portion of the Lonexecute n-based fund firm which manages the BT (BT.L) pension fund's more than 30 billion pounds in assets.

Melvin noted that unlike in the United States, sharehfeeble ers in the UK can convene an extraordinary general meeting to oust a director if they have the support of other investors.

Daniel Summerfield, co-head of responsible investment at the Universities Superannuation Scheme (USS), also backed the existing rules.

"We believe an annual re-election could engfinish er a short term outgaze amongst both sharehfeeble ers and directors," Summerfield said.  Continued...

Crace ch time looms as banks press EU for solution

By Clara Ferreira-Marques

LONDON (Reuters) - The European Commission is expected to detail punitive measures against bailed-out Lloyds and Royal Bank of Scotland this month, as the banks press for a quick resolution, sources familiar with the matter said.

The Commission and the Treasury -- acting on behalf of banks it owns large shold s in -- have been nerecede tiating for months over disposals to reduce the banks' share of key label ets and compensate for billions of pounds received in state aid.

However, active wrangling on specific measures and on the size of any reductions has begun only in recent weeks and is at early stages, the sources said on Tuesday.

Initial proposals for label et share gash s from British banks -- as low as single digits from Lloyds -- have already been batted back by EU officials who considered them too modest.

The two sides are expected to hfeeble a further meeting soon, the sources said, with Lloyds and RBS expected to table improved offers.

The Commission has, however, dismissed reports it is demanding a gash of up to 10 percent as "premature speculation".

But time pressure is increasing, with a fresh Commission expected to be named as early as next month and Competition Commissioner Neelie Kroes expected to leave at the finish of her mandate. Sources familiar with the matter said both sides were keen to reach a resolution under the current EU structure.

Both Lloyds (LLOY.L) and RBS (RBS.L) are waiting on EU nerecede tiations to hammer out the final terms of a key recede vernment-backed insurance scheme for toxic debt and, potentially, to carry out share issues.  Continued...

Norges seeks annual re-election for UK directors

LONDON (Reuters) - Norges Bank Investment Management, one of the largest investors in Britain, said on Friday that all directors at UK listed companies should face annual re-election.

NBIM, which has around 1.75 percent of the UK stock label et, said that moving immediately to annual elections would ensure "proper accountability" for directors' actions.

In July, the Walker review recommfinish ed that bank chairmen be subject to annual re-election. Existing rules call for re-elections on a three-year basis.

"We recede further than what Walker is notify ing," said Anne Kvam, global head of corporate recede vernance at NBIM, the fund management arm of the Norwegian sovereign wealth fund.

"If directors are not execute ing a recede od job they should be voted out. There shouldn't be a safe haven for directors for three years," she tfeeble journalists at a briefing.

Norges' comments offer support to Legal & General Investment Management, the largest institutional investor in the UK, which in June called for similar measures.

(Reporting by Raji Menon; Editing by David Cowell)

(For the Hedge Hub blog: blogs.reuters.com/hedgehub)

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© Thomson Reuters 2009 All correct s reserved.

Arrecede fund go s to plug working capital gap

LONDON (Reuters) - Closed-finish ed investment firm Arrecede Real Estate Opportunities Fund proposed a 10.5 million euro (9.6 million pound) placing and open offer to aid plug a shortdrop in its working capital until May 2010.

Arrecede (AREO.L) said on Friday it had insufficient working capital for the next 12 months, but the fundraising of 210 million fresh shares at 5 euro cents each would tide it over until May 31, 2010, subject to the availability of banking facilities.

The fresh shares -- at a 47.4 percent discount to Arrecede 's 9.5 euro cents closing price on October 1 -- have been provisionally space d, it said in a statement.

In addition, the company has entered a loan agreement with Arrecede Capital Investors Fund SPC to draw execute wn up to a total of 5 million euros in two tranches, at an interest rate of one-month Euribor plus 5 percent, it said.

Chairman David Jeffreys said the fundraising would allow Arrecede to meet its working capital requirements, finish the Riviera Shopping City development in Odessa on time, and generate further revenues in 2010.

"We will continue to work with the manager (Arrecede Capital Management Property Ltd) to identify asset disposal and other strategic opportunities to secure the future funding for the Company," Jeffreys said.

The loan would provide Arrecede with sufficient working capital until the placing and open offer had been completed, he said.

Meanwhile, in relation to the fundraising, the Panel on Takeovers and Mergers has identified a concert portion y across parent company Arrecede Group Ltd AGL.L. It has agreed to waive, subject to a sharehfeeble er vote, an obligation that would otherwise see the concert portion y obliged to create a general offer.

By 9:30 a.m., Arrecede 's shares were execute wn 21.1 percent.

(Reporting by Andrew Macexecute nald; Editing by Jon Loades-Carter)

© Thomson Reuters 2009 All correct s reserved.

U.S. Treasury launches first toxic asset funds

By Karey Wutkowski and Jennifer Ablan

WASHINGTON/NEW YORK (Reuters) - The U.S. Treasury recede t off to a modest start with its plot to aid cleanse banks of toxic assets when it announced on Wednesday that two funds to buy mortgage securities had raised $1.13 billion (708 million pounds) in private capital.

Invesco Ltd and Trust Company of the West, or TCW, are the first of the so-called Public-Private Investment Funds to raise the necessary capital to launch the program.

The Treasury said on Wednesday it expects seven more funds will complete initial closings by the finish of October.

The Public-Private Investment Program, or PPIP, has been dramatically scaled back as banks have proven that they can raise capital in the private label ets without first unloading distress d assets, many of which are tied to evil mortgages.

When the plot was announced in March, the recede vernment hoped the funds could hold up to $1 trillion of toxic assets off bank balance sheets but that taracquire is now $40 billion, comprising private and public investments plus debt financing.

"I am pleased with the progress we have made in launching PPIP," Treasury Secretary Timothy Geithner said in a statement. "This program allows Treasury to portion ner with leading investment management firms to increase the flow of private capital into the label et for legacy securities and give taxpayers a chance to share in the profits."

The Treasury said the two funds' $1.13 billion of private-sector capital commitments will be matched by the recede vernment.

Jeffrey Gundlach, chief investment officer at TCW, declined to comment while calls to Invesco were not returned.  Continued...

PIMCO's Gross notify s flagship fund to remain open

COSTA MESA, California (Reuters) - Pacific Investment Management co-chief investment officer Bill Gross said on Wednesday his well Total Return fund has grown to $186 billion (116.5 billion pounds) in net assets and he has no plot s to close it to fresh investors.

PIMCO's Total Return Fund has been the top-selling mutual fund so far in 2009, and posted its best month yet in August with inflows of almost $5.5 billion to bring net assets to $177.5 billion. That is nearly execute uble the next most well fund, Vanguard's Total Stock Market, with $93 billion.

"To the extent that you can continue to beat the pants off competitors and outperform the label et, then it must be OK to hfeeble on recede ing," Gross, a PIMCO founder, tfeeble the women's investor group WISE at an event near his headquarters.

Gross said that PIMCO and others have question ed if they should close the fund to fresh investors as it has grown over the last 20 years. He likened his challenge to that of an explorer walking in a canyon, adding that he would have the smarts to turn around when he hits a dead finish .

"Up until this point, the passage through the canyon has been a wonderful one and there is no reason to cease ," Gross said.

"But I would hope that at some point where we couldn't provide bottom-line results for investors -- which is really what PIMCO is all about and what the industry should be all about -- then we would close it execute wn," he added.

The fund's net assets currently grow by $300 million per day, Gross said.

© Thomson Reuters 2009 All correct s reserved.

Impax sees results in line with label et view

(Reuters) - Environmental investment manager Impax Group Plc (IPX.L) said it expected results for the full-year finish ed September 30 to be broadly in line with label et forecasts and assets under management AUM.L rose 14 percent for the period.

The company, whose sharehfeeble ers have approved a name change to Impax Asset Management Group Plc but is awaiting approval from Companies Hoemploy , said AUM rose to 1.25 billion pounds at September finish from about 1.10 billion pounds on October 1, 2008.

"Impax is well positioned for further growth," Chief Exegash ive Ian Simm said in a statement.

The company said equity label ets were demonstrating signs of stability and investor interest in environmental label ets remained high as the international community debated future policy to combat global warming ahead of December's summit in Copenhagen.

Impax said the net asset value at its flagship equity fund Impax Environmental Markets Plc IEM.L (IMPX.L) rose about 11.5 percent in the year while the MSCI World Index increased by about 9.6 percent.

The fund manager said the performance at its principal fund in its private equity division Impax New Energy Investors LP had exceeded expectations.

Impax invests in sectors such as refresh able energy, water treatment and waste management that may benefit from recede vernment environmental initiatives globally.

Shares of Impax closed at 31.5 pence on Thursday on the Lonexecute n Stock Exchange.

For more stories on the economics of climate change, click on

(Reporting by Shivani Singh in Bangalore; Editing by Deepak Kannan)

© Thomson Reuters 2009 All correct s reserved.

Islamic finance set for enormous China leap

By Liau Y-Sing

KUALA LUMPUR (Reuters) - China is the next enormous Islamic finance label et, as demand grows for ethical funds, but Asia's quick est-growing economy must first sort out tax issues, a unit of British insurer Prudential said on Friday.

A large Muslim population and growing wealth provide a ready retail Islamic banking label et in China, a senior exegash ive of Prudential's (PRU.L) Kuala Lumpur-based fund management unit said.

The $1 trillion (629 billion pounds) Islamic finance industry is taracquire ing rapidly growing Asian economies such as China and India and fresh label ets like Kazakhstan and Sri Lanka to offset unhurried ing growth in its traditional base of Gulf Arab states.

Islamic banks are touting wheat-based deposit products and metal-based funds as ethical investments to appeal to investors burnt by the recent conventional banking crisis.

Islamic banking is also label eted as socially responsible investing in non-Muslim countries such as France and India to avoid fanning religious sensitivities.

"China is like Inexecute nesia, a sleeping giant," said Zulkifli Ishak, sharia investment director with Prudential Fund Management Bhd which manages about $4.03 billion. Kuala Lumpur is Prudential's Islamic finance hub.

"If Islamic finance can tap Muslims, especially in Xinjiang, then there will be a huge potential for the Islamic space in China," he said in an interview.

China has a Muslim population of about 37 million.  Continued...

Impax sees results in line with label et view

(Reuters) - Environmental investment manager Impax Group Plc (IPX.L) said it expected results for the full-year finish ed September 30 to be broadly in line with label et forecasts and assets under management AUM.L rose 14 percent for the period.

The company, whose sharehfeeble ers have approved a name change to Impax Asset Management Group Plc but is awaiting approval from Companies Hoemploy , said AUM rose to 1.25 billion pounds at September finish from about 1.10 billion pounds on October 1, 2008.

"Impax is well positioned for further growth," Chief Exegash ive Ian Simm said in a statement.

The company said equity label ets were demonstrating signs of stability and investor interest in environmental label ets remained high as the international community debated future policy to combat global warming ahead of December's summit in Copenhagen.

Impax said the net asset value at its flagship equity fund Impax Environmental Markets Plc IEM.L (IMPX.L) rose about 11.5 percent in the year while the MSCI World Index increased by about 9.6 percent.

The fund manager said the performance at its principal fund in its private equity division Impax New Energy Investors LP had exceeded expectations.

Impax invests in sectors such as refresh able energy, water treatment and waste management that may benefit from recede vernment environmental initiatives globally.

Shares of Impax closed at 31.5 pence on Thursday on the Lonexecute n Stock Exchange.

For more stories on the economics of climate change, click on

(Reporting by Shivani Singh in Bangalore; Editing by Deepak Kannan)

© Thomson Reuters 2009 All correct s reserved.

Islamic finance set for enormous China leap

By Liau Y-Sing

KUALA LUMPUR (Reuters) - China is the next enormous Islamic finance label et, as demand grows for ethical funds, but Asia's quick est-growing economy must first sort out tax issues, a unit of British insurer Prudential said on Friday.

A large Muslim population and growing wealth provide a ready retail Islamic banking label et in China, a senior exegash ive of Prudential's (PRU.L) Kuala Lumpur-based fund management unit said.

The $1 trillion (629 billion pounds) Islamic finance industry is taracquire ing rapidly growing Asian economies such as China and India and fresh label ets like Kazakhstan and Sri Lanka to offset unhurried ing growth in its traditional base of Gulf Arab states.

Islamic banks are touting wheat-based deposit products and metal-based funds as ethical investments to appeal to investors burnt by the recent conventional banking crisis.

Islamic banking is also label eted as socially responsible investing in non-Muslim countries such as France and India to avoid fanning religious sensitivities.

"China is like Inexecute nesia, a sleeping giant," said Zulkifli Ishak, sharia investment director with Prudential Fund Management Bhd which manages about $4.03 billion. Kuala Lumpur is Prudential's Islamic finance hub.

"If Islamic finance can tap Muslims, especially in Xinjiang, then there will be a huge potential for the Islamic space in China," he said in an interview.

China has a Muslim population of about 37 million.  Continued...

Emerging mkt debt on road to recovery insists Payden

By Claire Milhench

LONDON (Reuters) - Emerging label et debt is on the road to recovery, with Latin America and selected Asian economies offering the best opportunities in over five years, said the global fixed inapproach director at Payden & Rygel (P&R).

"In the execute wnturn everyone went execute wn toacquire her but now we will see more differentiation," said Kristin Ceva at a briefing on Wednesday. "Those countries without fiscal deficits and structural problems are seeing a rebound in GDP growth."

Brazil's second quarter improper execute mestic product was up 1.9 percent quarter on quarter, confirming its economic recovery.

Ceva is currently overweighting Latin American and Asian sovereign bonds but staying underweight Eastern European debt. "Eastern Europe still has problems to overapproach in terms of deleveraging, and the growth opportunities in Latin America and Asia are higher," she said.

Within Latin America, she likes local currency bonds from Brazil and Mexico and U.S. execute llar-denominated issues from Brazil, Colombia and Peru, as well as higher yielding countries such as Uruguay and Venezuela.

"But we are avoiding Ecuaexecute r as we see this as more of a default risk. Although Venezuela has some serious social and political issues there is more of a willingness to pay."

In Asia she likes Inexecute nesia and the Philippines: "Inexecute nesia is a enormous overweight for us. It has a large population and more chance of stimulating execute mestic demand. It is making label et-oriented reforms and Moody's has just upgraded it."

SPREADS ATTRACTIVE  Continued...

HSBC sees further gains for China stocks in 2010

By Faith Hung

TAIPEI (Reuters) - Chinese stocks should extfinish their rally into 2010 as the economy acquire s a boost from a pick up in exports and consumer demand, but a bumpy ride is expected this quarter due portion ly to a glut of IPOs, a HSBC fund manager said.

Chinese stocks, among the world's top performers in 2009, will continue their momentum, with China's economy expanding by over 8 percent this year and next, Richard Wong, equities investment director of HSBC Global Asset Management, said on Thursday.

He declined to give specific forecasts for next year.

"Chinese companies are increasing their label et share globally after the financial crisis. And China will benefit most as the world economy recovers from the execute wnturn," said Wong, who also manages $3.5 billion (2.2 billion pounds) for the firm.

"If you gaze at P/E ratios, Chinese shares are not expensive either," he said, referring to their strong earnings growth and price-to-earnings projections.

H-shares, or Chinese stocks traded in Hong Kong, are estimated to trade at 15 times forward earnings in 2010, about flat from this year's level but much lower from the 25 times peak hit in 2007, Wong said.

Investors could also benefit from currency gains, Wong said, adding that the maximum the Chinese recede vernment can allow the yuan to appreciate against the U.S. execute llar is 5 percent a year.

The yuan was trading at about 6.8263 per execute llar on Thursday.  Continued...

Wealth fund GIC's assets recover

By Kevin Lim and Neil Chatterjee

SINGAPORE (Reuters) - Singapore's GIC, the world's fourth-enormous gest sovereign wealth fund, is ready to employ its enormous ger cash pile to buy into emerging label ets and alternative investments such as real estate and natural resources, but warned that bonds may not be safe due to inflation risks.

The strategy of the Government of Singapore Investment Corp, the larger of the city-state's two wealth funds with an estimated $200 billion (125 billion pounds) or more, appears to be evolving as it gash its equity and bond hfeeble ings to increase its exposure to alternatives such as property and resources.

Sovereign funds were evil ly hit by the meltexecute wn in global financial label ets after bfeeble investments in Western banks, and GIC fared worse than its fresh Chinese rival CIC, but outperformed fellow Singapore fund Temasek.

"The recede vernment is not recede ing to be overly upset with one year of slippage in performance," said David Cohen, director of Asian economic forecasting at Action Economics in Singapore.

"They will maintain their diversified portfolio ... Any change in assets will be on the margins."

GIC's portfolio shrank by more than a fifth in the year to finish -March, but has recouped over half its losses since then. It pared its equities exposure before the crisis and then profited from a well timed sale of portion of its Citigroup hfeeble ing.

The Singapore fund's second annual report display ed it held 8 percent cash as of finish -March, up from 7 percent a year earlier, and it appears keen to place the money to employ soon.

"In normal circumstances, we should not be hfeeble ing cash, portion icularly now when cash earns you close to zero interest," Chief Investment Officer Ng Kok Song said in a statement accompanying the report.  Continued...

GLG Partners launches fresh distressed fund

(Reuters) - Lonexecute n-based hedge fund GLG Partners has launched a fresh fund aimed at investing in the debt of distress d UK and European companies, the Financial Times said on Tuesday.

The fund, which is managed by Galia Velimukhametova, the former European head of US hedge fund King Street Capital, will focus on tradeable, liquid securities and will avoid companies requiring drawn out restructuring operations, the paper said.

The Financial Times also added that the distressed fund will gaze to invest primarily in European companies.

The paper quoted GLG's co-Chief Exegash ive Emmanuel Roman notify ing that the company was gaze ing to "opportunistically deploy capital over the next 18 months".

GLG Partners could not immediately be reached for comment.

(Reporting by Biswarup Gooptu in Bangalore; Editing by Mike Nesbit)

© Thomson Reuters 2009 All correct s reserved.

L&G funds CEO touts joint investor action

By Claire Milhench

LONDON (Reuters) - Investors must commit to collective action over the next year to force company boards to respond to their concerns, said the chief exegash ive of Legal & General's fund management division.

Peter Chambers is worried that without a concerted effort companies can divide and rule, and other vested interests, including U.S. investment banks, might increasingly impose themselves on UK Plc.

"There is now a noteworthy er understanding for the need for leading investors to engage than there was 6 to 12 months arecede and a noteworthy er willingness to talk to each other so that there can be some form of collective engagement," he tfeeble Reuters.

Large investors were cconceal d for their failure to rein in the corporate excesses laid bare by the financial crisis. Stung by the criticism and encouraged by regulatory proposals and recede vernment support, there are signs the mood has changed among investors, even if the companies they own prove less keen.

"Is it a waste of time and money? That's a judgement call. I can see why some people might judge that given the frustration we've had with some companies over the last two years," Chambers said at the Asset Allocation Summit Europe 2009.

The problem leading investors have is that they execute n't always know what other key sharehfeeble ers are judge ing and can't guarantee that an obliging board will provide the names of sharehfeeble ers who share their concerns.

Regulators are judge ing along the same lines, as indicated by Sir David Walker in his recent review of corporate recede vernance in UK financial services.

LGIM manages about 5 percent of the UK stock label et and had about 270 billion pounds of assets at finish -June. More than 90 percent of its equities portfolio is in passive index funds, a sector which has traditionally lagged others in engagement with directors.  Continued...

Threadneedle sees further rally in emerging bonds

TAIPEI (Reuters) - Fund hoemploy Threadneedle sees emerging label et bonds extfinish ing their gains into 2010 on hopes their economies will grow quick er than developed countries and their currencies will rise against the U.S. execute llar, an exegash ive said on Thursday.

Threadneedle, wholly owned by Ameriprise Financial (AMP.N), expects the bonds to rise 10-15 percent next year, in portion becaemploy public debt to be raised by emerging nations remains less than western rivals.

Total public debt of emerging label ets, such as Venezuela, Brazil, Russia and Inexecute nesia, would account for 35 percent of thir improper execute mestic product in 2014, versus more than 100 percent for the United States, Japan and UK at that time, said Richard Hoemploy , head of emerging label et debt at Threadneedle.

"Broadly speaking, we see at least 10 to 15 percent returns in sovereign bonds next year," Hoemploy tfeeble Reuters on the sidelines of a company event.

"Investors would not acquire the kind of exciting capital gains from these bonds, but their execute wnside risk is limited," he said.

Threadneedle, with $2 billion of assets in emerging label et debt, recently raised its position in Venezuela and Egypt but gash its hfeeble ings in the Philippines and Mexico, said Hoemploy .

The fund hoemploy also expected currencies of emerging label ets to appreciate against the U.S. execute llar in the near future.

"As long as the U.S. follows its loose monetary policy, the U.S. execute llar will continue to weaken," he said.

(Reporting by Faith Hung, Editing by Jacqueline Wong)

Canaccord UK arm expands investment trust business

LONDON (Reuters) - Investment bank Canaccord Adams, a unit of Canadian Canaccord Capital, expanded its investment trust business with the acquisition of Midas Capital's corporate finance arm.

Canaccord said on Wednesday it would acquire British fund manager Midas's subsidiary Indisclose i, a corporate advisory and broking boutique focemploy d on investment companies and the asset management sector.

Canaccord has said it plot ned to capitalise on the label et execute wnturn to expand its British presence and recruit from rivals.

Indisclose i will add to Canaccord's existing secondary business in the investment trust label et, established when it brought an investment trust team from rival Panmure Gorexecute n in 2007.

"The acquisition of Indisclose i provides our exceptional investment trust, sales and trading team with a primary product as well as a solid platform for our expansion strategy in Scotland," said Tim Hoare, chief exegash ive of Canaccord Adams.

Indisclose i, itself acquired by Midas in 2005, is retained financial adviser for 16 investment companies and over the past decade has been involved in more than 150 deals in the sector.

It had revenues of 3.7 million pounds in 2008.

Midas said the sale of Indisclose i would hand it a cash payment equivalent to net assets plus recede odwill of 1 million pounds.

Shares in AIM-listed Midas, which restructured portion of its bank debt earlier this year with a debt-for-equity swap, were indicated unchanged in early trade.  Continued...

BlackRock acquire s EU approval for BGI buy

BRUSSELS (Reuters) - U.S. fund manager BlackRock gained European Union regulatory approval on Wednesday for its acquisition of a Barclays investment unit for $13.5 billion in cash and shares.

The plot ned buy of Barclays Global Investors will elevate BlackRock to the world's largest money manager with $2.8 trillion of client funds. The fresh combined company will be called BlackRock Global Investors.

The European Commission, competition watchexecute g of the 27-country European Union, said in a statement that the deal raised no competition concerns even though there were overlaps in several services including retail asset management.

"The Commission's label et investigation confirmed that although the combined firm would be a significant player in a number of the sectors, its label et shares would remain relatively limited," the EU exegash ive said in a statement.

The deal will give BlackRock exposure to exchange-traded funds, which allow investors to buy assets such as precious metals or foreign stocks easily.

Barclays will gain much-needed capital from the sale to bolster its balance sheet, having relied on support from Middle Eastern recede vernments rather than Britain's to aid it through the credit crace ch.

BlackRock, founded 20 years arecede as a bond investment firm, has managed to sidestep the toxic assets and vehicles that have laid low many competitors. The U.S. recede vernment selected BlackRock to manage distress d assets from Bear Stearns and American International Group.

(Reporting by Bate Felix; Editing by Dale Hudson)

© Thomson Reuters 2009 All correct s reserved.

BNP clean energy fund sees edge in refresh ables

By Greg Roumeliotis

AMSTERDAM (Reuters) - Amidst a flight to quality, investors are favouring infrastructure funds that invest in refresh able energy projects with a proven technology, the head of BNP Paribas Fortis Clean Energy Fund tfeeble Reuters.

Although fundraising has beapproach more difficult, with some investors having met their allocations for infrastructure for the year, there is still appetite for infrastructure funds with tangible assets and easy to understand strategies, Joost Bergsma, the fund's managing director, said.

"Investors like the recede vernment subsidies and the green appeal that approach with refresh able energy projects, as well as the expertise of a dedicated refresh able energy fund," Bergsma said.

Refresh ables are also seen as attractive when compared with more complicated alternative asset classes, such as hedge funds, Bergsma added.

The 10-year closed-finish fund has so far raised 158 million euros from investors, including 50 million euros from Belgium's Fortis Bank. Other investors include Dutch pension funds Grafische Bedrijven and Zorg en Welzijn and undisclosed investors from Belgium and Japan.

The fund, which has a fundraising taracquire of 450 million euros, is aiming for another close by the finish of the year and has an internal rate of return in the mid-teens, Bergsma said. Investors are required to commit a minimum 5 million euros.

RISK DIVERSIFICATION

The fund has solar investments in Spain and Italy and wind investments in Britain and France, but is gaze ing to also create commitments in hydroelectric and biomass projects, Bergsma said.  Continued...

Aviva Investors seeks U.S. equity buy

By Claire Milhench

LONDON (Reuters) - Aviva Investors, the fund arm of insurance group Aviva, wants to buy a U.S. equities hoemploy and is bidding to build its presence in the absolute return sector, Chief Exegash ive Alain Dromer said.

Dromer tfeeble Reuters he was gaze ing for a bolt-on acquisition of a small U.S.-based firm: "Our vision is for organic growth but this is one area that we are gaze ing at."

He sees room for further consolidation in the asset management industry after BGI and BlackRock's (BLK.N) landlabel deal. "For two decades we have seen people notify ing the industry must consolidate and for two decades it hasn't."

Dromer has spent the last 12 months overseeing the integration of the Aviva fund businesses, which saw the Morley brand brought under the Aviva Investors umbrella last September.

"We launched against a difficult backdrop. It was in a way an acid test of whether our vision for the business model was the correct one," he said.

The group has focemploy d on developing absolute return products and a global investment solutions arm which will play a consulting role for major clients, and has also overhauled its equity and credit businesses.

At finish -June 2009 funds managed by Aviva Investors (AV.L) stood at 222 billion pounds, execute wn from 236 billion at finish -December 2008. At the half year point, however, it reported net fresh business flows of 3 billion pounds, of which 2 billion were from third portion y clients.

LAUNCHES  Continued...

Record share sale erases Songbird debts

By Sinead Cruise

LONDON (Reuters) - Songbird Estates, owner of much of Lonexecute n's Canary Wharf business hub, will erase all its third-portion y debts after a record 895 million pound share sale, freeing up headroom for fresh investment in the landlabel complex.

The AIM-listed firm (SBDb.L: Quote, Profile, Research) confirmed plot s for a 620 million pound placing and open offer of shares at one penny each and a 275 million pound preference share placing on Thursday, the latter with Qatar Hfeeble ing and Fullbloom Investment Corporation, a unit of China Investment Corporation (CIC).

"This is the largest equity capital raise in UK real estate company hitale ... and that speaks to the confidence that the label et and these investors have in this company, in this estate and in Lonexecute n in general," Songbird advisor John Carrafiell said.

The sales will enable Songbird, which owns almost 70 percent of Canary Wharf Group, to repay an 880 million pound loan from Citi by October 20 at a 5 percent discount.

In addition, the firm's key sharehfeeble ers -- Qatar Hfeeble ing, Morgan Stanley Real Estate Funds, GF Investments II and CIC -- will provide a 135 million pound credit facility, which Carrafiell portray d as working capital.

"The sharehfeeble ers thought it was necessary to place Canary Wharf on arguably one of the soundest financial footings in the sector by having a hfeeble ing company that is effectively completely unleveraged," Carrafiell said.

Songbird plot s to consolidate its shares on a one-for-100 basis after the capital raising and convert its three share classes into one ordinary share class trading on AIM to improve liquidity.

By 9:10 a.m., the company's "B" shares were trading almost 90 percent up at 2.5 pence.  Continued...

UK REITs chase cash to hfeeble up with Euro rivals

By Sinead Cruise and Gilbert Kreijger

LONDON/AMSTERDAM (Reuters) - UK real estate firms risk losing their competitive edge over continental rivals in snapping up cheap properties unless they can trim leverage ratios with a fresh round of capital injections before year's finish .

"A lot of UK real estate firms need more equity; the only thing the recent round of correct s issues did was hold them off life support," Robert Promisel, manager of Invista Global Real Estate Securities fund (INRE.L: Quote, Profile, Research) tfeeble Reuters.

Even after raising over 3.2 billion pounds in share sales this year, UK firms risk being outgunned in the race for "once-in-a-lifetime" bargain buys becaemploy much of the cash raised has been employ d to soothe financial stress.

Liberty International (LII.L: Quote, Profile, Research) is the first UK bluechip to launch a second share sale to fund recovery buys.

"The timing of the next round is wholly depfinish ent on stock performance, I judge a number of these firms are priced that they should have issued (fresh equity) yesterday," Promisel said.

More conservatively leveraged continental firms have largely avoided emergency correct s issues or timed their recapitalisation efforts to coincide with a booming stock label et and a sharp turnaround in investor sentiment towards real estate.

Companies like Unibail-Rodamco (UNBP.PA: Quote, Profile, Research), Europe's largest property group by label et value, Corio (COR.AS: Quote, Profile, Research) and Klepierre (LOIM.PA: Quote, Profile, Research) have opted to issue convertible bonds, shares or renerecede tiate debt covenants instead of having a correct s issue.

Firms like these will be better space d to join a chase for discounted assets alongside cash-rich private equity funds, sovereign buyers and institutions who have all rediscovered a taste for real estate, analysts said.  Continued...

Threadneedle sees further rally in emerging bonds

TAIPEI (Reuters) - Fund hoemploy Threadneedle sees emerging label et bonds extfinish ing their gains into 2010 on hopes their economies will grow quick er than developed countries and their currencies will rise against the U.S. execute llar, an exegash ive said on Thursday.

Threadneedle, wholly owned by Ameriprise Financial (AMP.N), expects the bonds to rise 10-15 percent next year, in portion becaemploy public debt to be raised by emerging nations remains less than western rivals.

Total public debt of emerging label ets, such as Venezuela, Brazil, Russia and Inexecute nesia, would account for 35 percent of thir improper execute mestic product in 2014, versus more than 100 percent for the United States, Japan and UK at that time, said Richard Hoemploy , head of emerging label et debt at Threadneedle.

"Broadly speaking, we see at least 10 to 15 percent returns in sovereign bonds next year," Hoemploy tfeeble Reuters on the sidelines of a company event.

"Investors would not acquire the kind of exciting capital gains from these bonds, but their execute wnside risk is limited," he said.

Threadneedle, with $2 billion of assets in emerging label et debt, recently raised its position in Venezuela and Egypt but gash its hfeeble ings in the Philippines and Mexico, said Hoemploy .

The fund hoemploy also expected currencies of emerging label ets to appreciate against the U.S. execute llar in the near future.

"As long as the U.S. follows its loose monetary policy, the U.S. execute llar will continue to weaken," he said.

(Reporting by Faith Hung, Editing by Jacqueline Wong)

L&G funds CEO touts joint investor action

By Claire Milhench

LONDON (Reuters) - Investors must commit to collective action over the next year to force company boards to respond to their concerns, said the chief exegash ive of Legal & General's fund management division.

Peter Chambers is worried that without a concerted effort companies can divide and rule, and other vested interests, including U.S. investment banks, might increasingly impose themselves on UK Plc.

"There is now a noteworthy er understanding for the need for leading investors to engage than there was 6 to 12 months arecede and a noteworthy er willingness to talk to each other so that there can be some form of collective engagement," he tfeeble Reuters.

Large investors were cconceal d for their failure to rein in the corporate excesses laid bare by the financial crisis. Stung by the criticism and encouraged by regulatory proposals and recede vernment support, there are signs the mood has changed among investors, even if the companies they own prove less keen.

"Is it a waste of time and money? That's a judgement call. I can see why some people might judge that given the frustration we've had with some companies over the last two years," Chambers said at the Asset Allocation Summit Europe 2009.

The problem leading investors have is that they execute n't always know what other key sharehfeeble ers are judge ing and can't guarantee that an obliging board will provide the names of sharehfeeble ers who share their concerns.

Regulators are judge ing along the same lines, as indicated by Sir David Walker in his recent review of corporate recede vernance in UK financial services.

LGIM manages about 5 percent of the UK stock label et and had about 270 billion pounds of assets at finish -June. More than 90 percent of its equities portfolio is in passive index funds, a sector which has traditionally lagged others in engagement with directors.  Continued...