fine-tuning fund management

Briefing Notes 33May 2005

Fine-tuning fundmanagementThe second survey of the use ofderivatives in European assetmanagement

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Fine-tuning fund management:the growing use of derivatives

Contents

Executive summary 2

Fund managers fine-tune their investment engines 2

The second survey of the use of derivatives in European fund management 5

Fund managers eager to expand use of credit derivatives 9

Using derivatives: from static hedging to dynamic asset allocation 16

Methodology 19

List of respondents to in-depth questionnaire 20

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2 | Derivatives in fund management

● The proportion of European fund managers usingderivatives in their portfolios has increasedsignificantly over the past year

● One in four non-users expect to start usingderivatives in the coming year

● Fund managers from Germany, Italy and Spain aremost comfortable with derivatives. Nordic managersare generally the least inclined to use the products

● The biggest obstacles to greater use ofderivatives are explicit mandate restrictions andlack of understanding by clients. Non-users of

derivatives no longer regard internal risk guidelinesas a significant obstacle

● Respondents are generally optimistic about beinggiven greater opportunities to use derivatives in thecoming 12 months

● Equity index products continue to account for thelion’s share of outstanding derivatives exposure.Foreign exchange derivatives have seen a significantincrease in use. Credit products remain marginal

● The expected percentage increase in the use ofderivatives in the coming year is much lower than

The second survey of the use of derivatives in the European fundmanagement industry: Executive summary

Europe’s fund managers are increasinglyembracing derivatives as they strive tomatch the new demands of investors interms of both risk and return. This is theconclusion of the second survey of theuse of derivatives in the European fundmanagement industry, conducted byFinancial News in association withEurex, the derivatives exchange.

It revealed significant growth in thenumber of managers using derivatives intheir portfolios, with 62% of 210 firmssurveyed saying derivatives had a role intheir investment approach, compared tojust 47% last year. There was a near50% increase in the number of managersthat regarded derivatives as being vital totheir activities.

The creative destruction caused by thebursting of the equity market bubble ofthe late 1990s has prompted fundmanagers to explore the potential ofderivatives. They and their clients haverealised they can no longer bet theirfuture on double-digit returns fromequities. To deliver the performance theyrequire without taking disproportionate

risks, more creative and sophisticatedproducts are required.

Robert Hayes, head of the strategicadvice team at Merrill Lynch InvestmentManagers, said: “Genuine interest in, andphysical use of, derivatives has grownsignificantly in the last 18 months, bothwithin our investment teams and atinstitutional clients.” Nick Horsfall, asenior investment consultant at WatsonWyatt added that he had seen “multiplesof growth in clients wanting to consulton derivatives at a strategic level”.

Beyond the institutional arena, the newUcits III rules governing mutual fundssold within the European Union allowmore extensive use of derivatives. Manymanagers are gearing up to offer retailproducts that incorporate moresophisticated financial instruments.Aisling O’Reilly, derivatives manager atGartmore, said: “We are looking atintroducing credit derivatives in some ofour Luxembourg bond funds under UcitsIII. It won’t change the strategy but itwill give us a bigger toolbox. We arelooking to introduce them mainly as a

Portfolio management isbeing re-engineered, withderivatives playing anincreasingly important role,writes James Rutter.

Fund managers fine-tune theirinvestment engines

Derivatives in fund management | 3

12 months ago. Respondents are being moretargeted in expanding their use of derivatives.French, German and UK managers are focusing oncredit products. German and UK managers arealso targeting commodities

● Existing non-users who expect to enter themarket will do so across a surprisingly broad rangeof products

● Managers are attaching more importance toderivatives use for return enhancement and forabsolute return and hedge fund products. Liability-driven products have failed to take off as forecastlast year

● There is clear trend towards greater use ofoptions over the past year. Currencies and

commodities have seen a significant shift towardsoptions. Currency trading has moved on-exchangewhile commodities has moved off

● Relationships with banks and brokers havebecome much more important as a driver of OTCuse. However, lack of exchange-traded alternativesis the main reason why managers use OTCproducts, and has become a more influential factorin the past year. Cost has decreased in significance

● Fund managers see the lack of transparentpricing for OTC products as the biggest risk facingthe derivatives market, followed by a lack ofunderstanding by clients and mis-selling byinvestment banks

For survey methodology see page 19For list of respondents see page 20

hedging tool, although given where weexpect bonds and credit spreads to go,that could prove to be very lucrative.”

She added that Gartmore had only madeits funds compliant with the new rules inthe first quarter and she expected it to benext year before Ucits III funds reallystart to take off. “The new rules allow formore interesting strategies, althoughmuch will come down to investordemand,” she said. Fund managers haveto comply with Ucits III if they want tomarket and sell funds across theEuropean Union.

While retail demand for more complexinvestment strategies has yet to be tested,institutional fund managers arerefocusing their operations aroundproducts that rely heavily on derivatives.At one end of the risk spectrum this isbeing driven by liability-driveninvestment strategies that promise toneutralise the risk of pension fundsbeing unable to deliver on theirobligations to retired members. At theother, absolute return products demandfund managers master a broad range of

derivatives products in order to deliverconsistent returns regardless of marketmovements.

Paul Bourdon, head of investor solutionsat Threadneedle Investments in London,said: “Traditional fund managers aredelivering absolute return products andin doing so they are competing withpeople who are using derivatives in aserious way. If the traditional managersare not using derivatives then they aregoing into battle without a fullcomplement of weapons.”

While some fund managers have beenusing derivatives of some form for adecade or more (Gartmore, for example,has employed a dedicated derivativesmanager since the mid-1990s), most arefairly new to the game.

Expertise is therefore at a premium.Watson Wyatt’s Horsfall said thatmanagers are on a steep learning curvein using fixed income and creditderivatives. “There are a small numberthat are much more competent thanmost, although a lot of managers have

‘If the traditional managers are not

using derivatives then they are going

into battle without a full complement

of weapons’

Paul Bourdon, Threadneedle Investments


been getting more competent in thepast year,” he said.

Many have turned to the investmentbanking industry in the search forexperienced derivatives staff. BlueBayAsset Management, a London-basedspecialist in credit management, hiredAlex Khein from Morgan Stanley lastyear to build a structured productsteam that could add derivativesexpertise to its fund managementoperation. Hugh Willis, chief executiveof BlueBay, said: “Sticking a littleinvestment bank on to a portfoliomanagement company makes sense.”

Bourdon was a career investment banker,most recently at HSBC, before joiningThreadneedle last year. He expects to seea steady flow of investment bankersfollowing in his footsteps and switchingto the buyside. He said: “Once you givefund managers the green light to usederivatives you find that there is anexponential growth in use.”

The most-established use of derivativesat many fund management houses is forefficient portfolio management. O’Reillysaid that Gartmore has a range ofpossible derivatives strategies that arepresented to clients as a way of makingcost savings of between 50 and 100 basispoints by managing portfolios moreefficiently.

However, she added that it is often a bigleap for both clients and managers to gofrom using straightforward exchange-traded products to streamline theportfolio management process, to usingoptions and over-the-counter products toput on specific bets or trading strategies.

She said: “Calculating cost savings fromtrading efficiencies is far easier thancalculating potential returns fromoptions-based strategies. With the latter itis the active decision of the fund

manager, rather than the inherentadvantages of the underlying instrument,that determines success or failure.”

However, for managers that seederivatives as providing them with newweapons to beat the market, options-based strategies are likely to beattractive. Writing options on stocks togenerate income is one fairly standardapplication for managers who believe ashare price will not rise, or fall, beyond aspecific point.

Byron Baldwin, a consultant to Eurex inthe UK, said: “Options are the alphainstrument for fund managers as theycan capture their view of the market.”

There can, however, be resistance fromfund managers to using options, saidO’Reilly, as the cost of trading can beprohibitive if they want to unwind theirposition. She said that while futures andcontracts-for-difference have become run-of-the-mill products at Gartmore, shespends a lot of time advising fundmanagers on options strategies that willdeliver exactly what they want withoutincurring trading costs.

A further problem is that options aremore tricky from a risk managementperspective. Futures are fairlystraightforward as they have a linearpay-off related to the underlying asset orindex – their price movements mimicthose of the underlying one-to-one.Options have a non-linear pay-off that ismore difficult to model and manage andwhich requires sophisticated softwareand risk management systems.

Gartmore is planning to revamp itsderivatives operations next year with anew risk management system that willenable more thorough analysis of thedifferent scenarios that can arise whentrading options. It had originally

‘Sticking a little investment bank on to

a portfolio management company

makes sense’

Hugh Willis, BlueBay Asset Management

continued on page 18


Role of derivatives

Source: rd:ir/Financial News

How would you characterise theuse of derivatives as part of youroverall investment process?

0

10

20

30

40

50

60

Vital

Response (%)

Integ

ral

Useful

Seldom

Never

20052004

Q: How would you characteriseyour use of derivatives as part ofyour overall investment process?

European fund managers areincreasingly using derivatives in theirportfolios, although a significantminority – about 40% – continue to shunthem. Financial News’ second survey ofthe use of derivatives by European fundmanagers saw a significant increase inthe proportion of investors prepared touse the instruments. Last year, 52.5% ofthe 200 UK and European fundmanagers surveyed said they never usedderivatives. This year, the proportion ofnon-users dropped to 37.6% of 210firms.

Of the 102 companies, managing €5.7trillion in assets, that completed a morein-depth questionnaire, 43 said theynever used derivatives. Eleven of thesemanagers said they expect to startderivatives trading in the coming 12months. There was a significant increasein the proportion of managers thatregarded derivatives as being vital totheir investment processes. A small butgrowing group of asset managementfirms are rapidly developing expertise inderivatives, often by hiring staff frominvestment banks. Operating at the mostsophisticated end of the market, they aredeveloping products that rely heavily onderivatives, such as collateralised debtobligations, portable alpha products, andliability-driven investment strategies.Many of these traditional firms havealso launched hedge funds alongsidetheir long-only products.

However, the biggest group of users wasthose who find the products merelyuseful. These managers are unlikely tobe relying on derivatives to structurenew products, but rather using them forefficient portfolio management and tohedge unwanted risks. The gap betweenthe most sophisticated users of

derivatives and the rest, identified in lastyear’s survey, remains in place.

Fund managers from Germany, Italyand Spain appear to be the mostcomfortable with derivatives. Only fourfirms out of 38 surveyed in thosecountries said they never used them.However, of the 15 firms from Germanyand Italy that completed the full surveyquestionnaire, none said derivativeswere vital to their investment process,whereas four of the five Spanishrespondents said the instrumentsplayed a vital role in their strategies.The majority of German managers saidderivatives were integral to theiroperations, while Italian respondentscounted them merely as useful.Managers from the Nordic region aregenerally the least inclined to usederivatives. Of 25 companies fromFinland and Norway that responded toour general enquiry on the use ofderivatives, 17 said they never usedthem. Six out of 13 Swedish investorsalso shunned derivatives. However, six Swedish managers said derivativeswere either vital or integral to their investment operations, suggesting a wide gap between moresophisticated managers and others in the country.

Use of derivatives

*210 firms responding** 200 firms respondingSource: rd;ir/Financial News

No

37.6%

No

52.5%Yes

47.5%

Yes

62.4%

2005*

Do you use derivatives?

2004**

The second survey of the use ofderivatives in European fund management


Q: What most limits your ability touse derivatives in your funds?

Users and non-users of derivatives aregenerally agreed on the biggest obstaclesthey face: explicit mandate restrictionsand a lack of understanding by clients.The two are closely related. Clients whodo not understand derivatives are rightto make sure their fund managers are notusing them in portfolios by explicitlybanning them from mandates. Aboutone-in-five European pension funds donot use derivatives as a matter of policy,according to the Financial News PensionFund Barometer, a survey of 200European pension funds published inOctober.

Fund managers may claim that they areas a result missing out on the potentialfor greater returns, but clients are at thesame time making sure they are notexposed to unexpected and unintendedrisks. The burden of improving thissituation by better educating clientsmust fall squarely on fund managers andconsultants.

A big change from last year’s survey wasthat fund managers who do not usederivatives no longer regard internal riskguidelines as a significant obstacle.Respondents are generally optimisticabout being given greater opportunitiesto use derivatives in their portfolios overthe coming year.

Virtually none of the fund managerssurveyed expect to see greaterrestrictions on their use of theinstruments in the next 12 months.Rather, about one in four expectimprovements in the situation, with therest thinking it will stay roughly thesame.

Existing users of derivatives are muchmore optimistic than non-users. Thiscould suggest that once managers take

n/a

Constraints on using derivatives (non-users)

What most limits your ability to use derivatives in your funds?*

Score 1 to 51= no obstacle5 = significant obsticleSource: rd:ir/Financial News

Explicit mandate restrictions

Lack of understanding byclients

Lack of understandingby consultants

Lack of understanding bytrustees

Availiability of suitablederivative products

Cost

Market regulations

Lack of internal expertise

Lack of internal systems

Internal risk guidelines

Answers

2005

2004

Average score (%)0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

(3.3)(2.6)

(2.3)(1.2)

(2.3)(3.3)

(2.1)

(2.1)

(2.0)(1.1)

(1.9)

(1.9)

(1.7)

(1.6)(1.1)

(1.2)

(1.2)

(1.2)

(1.4)

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

N/A

(3.5)(3.6)

(2.7)(2.3)

(2.6)(2.5)

(2.4)(2.2)

(2.3)(2.0)

(2.2)(1.5)

(2.1)

(1.9)

(1.8)(1.7)

(1.6)(1.4)

(1.5)

Constraints on using derivatives (users)

Score 1 to 51= no obstacle5 = significant obsticleSource: rd:ir/Financial News

Explicit mandate restrictions

Lack of understanding by clients

Lack of understandingby consultants

Lack of understanding by trustees

Availiability of suitablederivative products

Market regulations

Lack of internal expertise

Cost

Lack of internal systems

Internal risk guidelines

Answers

What most limits your ability to use derivatives in your funds?*

Average score

2005

2004


the initial decision to use derivatives,their expertise develops rapidly as theybecome aware of the benefits theproducts can bring to portfoliomanagement. Users of derivatives areparticularly confident that their internalexpertise and systems will improve overthe coming year.

Q: By percentage of youroutstanding derivatives exposure,how is your use of derivatives splitbetween different products?

Equity index products account for nearly40% of the outstanding derivativesexposure at European fund managementcompanies, about the same as last year’sfigure. Slightly surprising is theextensive use of foreign exchangederivatives, accounting for an average ofmore than 10% of fund managers’outstanding exposure. Currency hedgingis almost always conducted usingforwards, a fairly basic derivativeinstrument, so this does not necessarilymean that managers are usingsophisticated options-based strategies.

However, dedicated currencymanagement, usually in the form ofoverlay strategies, has becomeincreasingly commonplace in Europe.Mercer Investment Consulting said itconducted more searches for managers ofcurrency overlay than for any otherstrategy last year. Increasingly, thesestrategies are not being employed tosimply hedge currency risk, but to addexcess return to portfolios.

Tactical asset allocation overlays havealso enjoyed a renaissance. A poll of 193European institutional investors lastSeptember by JP Morgan Fleming AssetManagement found that 81% wereinterested in using tactical assetallocation to deliver higher returns –making it the most popular newinvestment strategy. Having fallen out of

favour during the early 1990s, tacticalasset allocation has made a comebacklargely on the back of the use of liquidderivatives that have dramaticallyreduced the cost of trading and increasedthe returns on offer.

Credit derivatives remain only a marginalproduct for fund managers, despite therapid growth in the market’s size andmoves towards introducing morestandardisation and transparencythrough electronic trading platforms andindex products (see article on page 9).Only German-based managers appear tobe embracing credit products, with morethan 5% of their outstanding exposurebeing in the sector.

Perhaps this should not be surprising.Traditional fund managers (as opposed tohedge fund managers), have not beenquick to embrace new derivativeshistorically. The interest-rate swapmarket, for example, has been establishedfor more than a decade yet fundmanagers remain only marginal players.

Average exposure (%)

Most-used products


Other

Equity index

Individual equity

Interest rate

Credit

Foreign exchange

Fixed income

Money market

Commodities

Hybrid stategies

Answers

By percentage of your outstanding derivative exposure, how is your useof derivatives split between products?

0 5 10 15 20 25 30 35 40 45

n/a

n/a

2005

2004

(39.2)(38.8)

(18.7)(9.2)

(15.7)(16.6)

(10.9)

(9.4)(19.1)

(2.6)

(1.3)(2.2)

(1.2)(1.1)(0.9)(1.9)

(0.1)(10.1)


Q: In which areas, if any, do youexpect your use of derivatives toincrease in the next 12 months?

Equity index and fixed-incomeproducts will see the biggest increase intrading by fund managers in the next12 months. The expected percentageincrease in the use of derivatives issignificantly lower than last year, whenthe majority of respondents wereexpecting to increase their activityconsiderably across a broad range ofproducts.

For the coming year, respondents arebeing much more targeted in expandingtheir derivatives use. This suggestsfund managers, having rapidlydeveloped their expertise in derivativesover the past year, are now being moreopportunistic in expanding their use.

Fund managers in France, Germanyand the UK are particularly keen to

expand their use of credit derivatives,with UK managers leading the way byraising their exposure by 36%. Germanand UK respondents are also expectingto increase their exposure tocommodities products by more than20% in the coming year. With bothcredit and commodities markets havingexperienced lengthy bull runs, this mayindicate that managers are becomingwary of market corrections and arelooking to use derivatives to hedgesome of their positions. Equally, itcould suggest that managers arechasing returns and looking to launchnew credit and commodities-basedproducts on the back of the recent bullmarkets.

The threat of motor companies Fordand General Motors having their creditratings downgraded to junk status(below triple-B), prompted a dramaticincrease in trading in credit derivativesin March and April, as investors lookedto hedge their exposure. Those thatwere able to do so will have insulatedthemselves from losses when Standard& Poor’s, the rating agency, cut the car-makers credit ratings in early May.

Eleven of the 43 non-users ofderivatives are intending to starttrading in the products in the comingyear. As might be expected, themajority of these managers will includeequity index products in their firstforays into the market, however manyalso intend to use a broader range ofderivatives. Credit, foreign exchange,individual equity, fixed-income andinterest-rate products will all be usedby at least four firms moving intoderivatives strategies for the first time.This intention to begin trading across abroad range of instruments suggeststhese fund managers will be makingdecisive changes to their investmentoperations.

Average increase of exposure (%)

Product trends for next 12 months


Equity index

Individual index

Credit

Fixed income

Foreign exchange

Interest rate

Money market

Hybrid strategies

Commodities

Other

Answers

In which areas and by how much (in percentage terms) do you expect toincrease your use of derivatives in the next 12 months?

0� 10� 20� 30� 40� 50� 60� 70� 80�

N/A

N/A

2005

2004

(22.0)

(17.3)(63.0)

(25.9)

(13.5)(41.7)

(11.1)(29.3)

(8.5)(55.6)

(6.5)(24.4)

(2.6)

(2.4)

(0.8)

(0.0)

(16.3)

(40.6)

Results continue on page 11

Eleven of the 43 non-users of derivativesare intending to starttrading in the productsin the coming year


Mainstream fund managers havebeen slow to embrace creditderivatives, despite the explosivegrowth of the market. Whilehedge funds have beenenthusiastic users, helpingdouble the volume of creditderivatives traded to $8.42trillion last year according to theInternational Swaps andDerivatives Association, mostother buyside players haveremained on the sidelines. Thatlooks set to change.

With credit markets expected toexperience more volatile tradingconditions, following a prolongedbull market, fund managers arelooking to use credit derivativesto hedge exposures and protectthemselves against defaults anddowngrades to corporate creditratings.

Jim Reid, a director in thefundamental credit strategygroup at Deutsche Bank inLondon, said: “So far it wouldappear that few real moneyinvestors are actively using theinstruments, either because theirmandates prohibit it or becausethey are naturally risk-averseand perceive the instruments asbeing risky.”

Instead Reid said the bulk ofactivity has come from bankshedging their loan portfolios andfrom hedge funds that are moreactively trading them. “At some

point many more real moneyinvestors will be able to usethem and we would expect themto take up the opportunity, asthey are very useful adjuncts tocash credit investments,” headded.

London-based Barclays GlobalInvestors is one of the fewtraditional fund managers tohave embraced the instrumentswholeheartedly. Tim Webb, headof fixed-income advanced activestrategies for Europe at BGI,said it has only been in the pasttwo years that the creditderivative market has becomesufficiently standardised andliquid for BGI to participate in ameaningful manner. Since then ithas been active in both the USand Europe. The group tradedabout £9bn worth of derivativeslast year and a further £5bn inthe first quarter of this year – agood quantity of which werecredit default swaps (CDS), thesimplest of the credit derivativeinstruments.

BGI’s long-only funds activelytrade CDS, using them as longer-term portfolio overlays and forhedging purposes. Its long-shortcredit fund uses them for pairsand relative value trading, aswell as curve trading – thingsthat Webb said were not fullypracticable in the credit marketsbefore the advent of a liquidcredit derivatives market.

Frederic Favre, a trader in thefixed-income advanced activestrategies group at BGI inLondon, added: “The CDSmarket is also incredibly usefulto us as a research-intensivehouse – we are able to extractvast amounts of information,which is enormously valuable inour research processes.”

Another big institutional user ofthe market is Paris-based AXAInvestment Managers. PhillipeBerthelot, AXA’s head of euroinvestment-grade fixed income,is certain about the benefits ofcredit derivatives. He said: “Toaccurately manage a creditportfolio today you must usecredit derivatives either as aprotection buyer or as aprotection seller. That is becausethe risk in a corporate bond isasymmetric and by using a CDSyou can transform it to a moresymmetric asset. Thesederivatives also allow you toincrease your expected return –you can take short or longexposures to the market muchmore efficiently andeconomically than by shortingcorporate bonds where you facethe challenge of short-coveringyour positions in an illiquid andunpredictable repo market.”

An additional benefit pointed toby Berthelot, is the ability thatcredit derivatives give traders toput on name-specific trades. Forinstance, he said that sellingfive-year protection oncarmakers BMW or Peugeot andbuying five-year protection onVolkswagen was a profitabletrade at the start of the year.

Fund managers eager to expand use ofcredit derivatives

Investors have been slow to take advantage of productsthat can insure them against defaults in the corporate bondmarket, but that is set to change, writes Natasha de Terán


“Not only that, someone doingthis trade would have beenmaking a pure play on thespread differential and wouldhave benefited, irrespective ofthe direction the rest of themarket or rates took in theinterim.”

The dealer community is hopingthat the launch of creditderivative indices will encourageinstitutional investors to getinvolved in the market. Theindices trade under the iTraxxand CDX banners and weredeveloped over the past twoyears by dealer-owned groups.Based on CDS, the tradeableindices are designed to increasetransparency and serve asbenchmarks for the Asian,European, US and emergingmarket areas.

BGI’s Favre said: “We mostlyuse single-name CDS, but alsouse the indices because of thehigh liquidity and tight bid-offerspreads in the products. TheiTraxx indices offer an efficientand easy means of allocationand in the future the plan is to

use structured credit productssuch as tranched iTRaxx indexproducts within our long-shortfund.”

AXA’s Berthelot added: “TheiTraxx indices are incrediblyuseful. They offer investors avery quick and efficient methodof getting into or out of themarket or its sub-sectors. In asingle trade we can put on orreduce exposure to 125reference entities and with thesectoral indices make relativevalue plays between industries.The bid-offer spread is nowbetween 0.25 and 0.75 basispoints, which makes them avery, very interesting tool for us.”

Berthelot said the indices enablemanagers to put on trades thatwould previously have been verycomplicated and costly toexecute. “An investor wanted toincrease his market exposure,without increasing the level ofhis cash exposure. Using theiTraxx route we were able to dojust that in a single trade – byselling protection on the iTraxxindex he immediately hadexposure to the 125 names, buthis cash position wasunaffected.” Without the index,Axa would have had to execute125 separate trades – anunfeasible proposition.

Liquidity, market, credit andoperational risks are keyconcerns for any investorconsidering using creditderivatives or any other form ofover-the-counter derivative.Regulators, including the UK’sFinancial Services Authority,

have raised concerns about themarket’s associated risks, whilerating agency Fitch and othershave questioned the market’sliquidity. Yet those involved inthe market are confident theconcerns are overblown.

BGI’s Webb believes that theadvances in the ISDAdocumentation and referenceentity cleaning processes willhave reduced the risks that wereonce more prevalent in themarket, and will serve toeliminate the sort of disputesthat occurred during its earlierstage of development. He said:“Now that the market anddocumentation are verystandardised, there are no morerisks involved in trading theseinstruments than there are intrading corporate bonds.Naturally there is counterpartyrisk, but we operate within strictcounterparty limits – and alwaysensure we have gooddiversification across allcounterparties and derivativeproducts.”

Webb is equally confident thatthe market is now sufficientlymature for liquidity to remainrobust in times of stress as itproved earlier this year. He said:“Liquidity always variesespecially after sharp intradaymoves, but during March whenthere was a marked increase involatility and credit specificevents, we were able to tradethroughout and the bid offerspreads on the CDS indices didnot really widen. Even on someof the more troubled namesthere were good two-wayspreads in reasonable size.”

Berthelot: indices enable managers

to put on trades that would

previously have been very

complicated, and costly, to execute


Q: In which investment strategiesdo you make most use ofderivatives?

Fund managers are generally attachinggreater importance to derivatives,suggesting they have grown morecomfortable with using them over thepast year. General product trends remainthe same, the most popular strategiesbeing overlays, hedging and cashmanagement. These could all be seen asbeing at the more conservative end ofthe spectrum of derivatives strategies.Overlays and hedging strategies areoften used for risk management(although currency and tactical assetallocation overlays are increasinglybeing used to add excess returns), whilecash management strategies tend toinvolve the straightforward equitising ofcash through the purchase of futures.

However, managers are attachingconsiderably more importance to the useof derivatives for return enhancementand for absolute return and hedge fundstrategies. A simple return-enhancementstrategy might involve a fund managerwriting calls on individual stocks intheir portfolio that they believe havepeaked for the time-being, but continueto favour as a long-term investment. Themanager receives a premium for the call,although gives up any upside if thestock rises above the call price.

There is a steady stream of traditionalfund managers launching hedge fundsalongside long-only products, whichinevitably involve greater use ofderivatives. The new Ucits III rules thatgovern funds distributed across bordersin Europe have opened the door togreater use of derivatives in retail-targeted products. Morley FundManagement, Baring Asset Managementand Merrill Lynch Investment Managersare among the companies that havealready launched Ucits III funds that can

use derivatives to hedge or take shortpositions. Managers expect next year tosee a greater number of such fundlaunches.

Given the focus that fund managershave been putting on liability-driveninvestments, it is surprising that thesestrategies have not become moreimportant over the past year. Thiswould suggest slow take-up from clients.Respondents last year were expecting tosee growing demand for liability-drivenderivative strategies. This has clearlyfailed to materialise, although fundmanagers reported a considerableupturn in execution of such strategiesduring the first quarter.

For non-users of derivatives, thepotential to better manage risk is clearlythe primary attraction of moving intothe market. Hedging is by far the mostenticing strategy for those managers notyet using the products.

Average score

In which strategies do you use derivatives?*

2005

2004

Most popular derivative strategies

*Score 1 to 51=do not use5=use constantlySource: rd:ir/Financial News

Liability driven investments

Cash management

Hedging

Return enhancement

Improving trading efficiencies

Overlay

Transition management

Absolute return/hedge funds

Alpha transport

Tax efficiency

Answers

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

n/a

4.0

(3.3)(2.9)

(3.2)(2.7)

(3.1)(2.9)

(2.8)(2.3)

(2.5)(2.2)

(2.2)

(1.9)

(1.8)(1.8)

(1.5)(1.0)

(1.3)(1.3)

(1.8)


What proportion of yourderivatives trading is donethrough exchange-tradedproducts and what proportion isdone through OTC products?

Fund managers continue to favourusing exchange-traded products for thevast majority of their derivativestrading. The main reasons they prefertrading through exchanges rather thanin the over-the-counter market are thebenefits of having a centralcounterparty and clearing house; thetransparency in trade and settlementprices; and the additional liquidity thatcomes through standardisation ofderivatives contracts.

However, one-in-10 managers citedmandate restrictions as the reason whythey tend to use exchange-tradedrather than OTC products. Institutionalinvestors are often concerned about thecounterparty risk they are exposed toin the OTC market, as well as thedocumentation and cost involved intransactions.

Only in the foreign exchange market ismore business conducted away fromexchanges than on them, as was thecase last year. The liquidity in the OTCcurrency forwards market continues toovershadow that provided byexchange-traded futures, althoughthere has been a slight shift towardstrading on exchanges in the past year.

The biggest trend suggested by thisyear’s survey is a shift away fromexchanges for commodities business.The proportion of derivatives tradingdone in the over-the-counter markethas more than doubled in the pastyear as managers have looked toexecute tailor-made strategies to takeadvantage of, or hedge against,surging commodities prices.

German managers conduct themajority of their commoditiesbusiness in the OTC market, and morethan 30% of fixed-income businessoff-exchange.

For individual equity derivatives,Swedish and Swiss investors use OTCproducts for the majority of theirtrading while Italian managersconduct nearly 40% of their businessoff-exchange. Dutch managers look tothe OTC markets to conduct twothirds of their interest-rate derivativesbusiness.

Exchange traded vs OTC products


Individual equity

Equity index

Fixed income

Money market

Foreign exchange

Interest rate

Commodities

Areas

What proportion of your derivatives trading is done through exchange-traded products and what proportion is done through OTC products?

Exchange 2005 (%) OTC 2005 (%)

Exchange 2004 (%) OTC 2004 (%)

0 20 40 60 80 100

n/a

73.7

86.2 13.8

85.1 14.9

77.2 22.8

70.3 29.7

61.4 38.6

74.5 25.5

76.1 23.9

38.8 61.2

34.5 65.5

62.2

83.8 16.2

37.8

26.3

75.1 24.9


Spanish managers are the biggestusers of OTC products for equityindex derivatives, conducting morethan a third of business away fromexchanges. UK-based managersexecute more than a third of theirfixed-income and interest-rate businessin OTC markets.

What are the reasons for usingOTC rather than exchange-traded derivatives?

The lack of exchange-tradedalternatives is the main factor drivinginvestors to the over-the-countermarket and has become moreimportant over the past year.

Fund managers are often reluctant toshoulder the larger execution costs towhich they are exposed in the OTCmarket, particularly if they want tounwind a position before it expires.

Market impact and discretion is asignificant factor in choosing OTCproducts for a minority of respondents– mostly the more sophisticated usersof derivatives – while the cost benefitsof trading off-exchange have decreasedin importance since last year’s survey.

Relationships with banks and brokershave become a much more importantfactor in driving managers to the OTCmarket. As fund managers becomemore sophisticated users of derivativesthey are likely to develop muchstronger relationships with a smallgroup of banks.

An informal poll of the surveyrespondents revealed Deutsche Bank,JP Morgan and Merrill Lynch as thethree most-favoured counterparties,followed by Citigroup, DresdnerKleinwort Wasserstein and UBS.

Reasons for using OTC products

The required products are notavailable as exchange-traded

products 58% (45.3%)

There is a measurable indirectcost benefit (bid/offer spread)

6.5% (13.5%)

There is a measurable directcost benefit 11.3% (16.3%)

Market impact/dicsretion1.6% (n/a)

Other1.6% (n/a)

There is a strong relationshipwith the bank or broker inother areas 9.7% (2.3%)

When you choose to use OTC rather than exchange-traded derivativesis it because?

2005 (2004)


Reasons for using exchange-traded products

Benefits provided by thecounterparty/clearing house

22% (22.2%)

Trade anonymity3.3% (9.9%)

There is a focus of liquiditythrough standardisation

22.7% (30.2%)

Mandate restrictions10.7% (n/a)

Credit risk9.3% (n/a)

Other3% (2%)

Transparency in tradeand settlement prices

30% (37.7%)

When you choose to use exchange-traded rather than OTC is it because?

2005 (2004)



What proportion of your exchange-traded derivatives business is doneif futures and what proportion isdone in options?

There is a clear trend towards thegreater use of options over the past year.Futures continue to be the preferredproduct for fund managers, but only inequity index products has the use offutures increased. In all other areas therehas been a shift towards options.

Given that options are more complexproducts than futures, with valuationand risk management both moredemanding, it underlines the growingsophistication of fund managers.Trading in individual equity products isagain the only area where the use of

options is more common than futures,with options becoming more dominantover the past 12 months. Single stockfutures have clearly gained a significantfollowing, but the arguments in thefavour are far from compelling for manymanagers.

The biggest shift towards greater use ofoptions is in the currencies andcommodities markets.

What do you perceive to be thebiggest risks in derivativesmarkets?

The lack of transparent pricing for over-the-counter products is regarded as thebiggest risk in the market by both usersand non-users of derivatives. Fund

0 20 40 60 80 100

n/a

Futures vs options


Individual equity

Equity index

Fixed income

Interest rate

Money market

Foreign exchange

Commodities

Areas

What proportion of your derivatives trading is done in futures and whatproportion is done in options?*

Average (%)

Futures 2005 (%) Options 2005 (%)

Futures 2004 (%) Options 2004 (%)

30.0 70.038.9 30.0

75.1 24.970.7 29.3

77.1 22.981.7 18.3

78.7 21.3

73.6 26.480.2 19.8

59.0 41.065.2 34.8

52.5 47.564.4 35.6


managers feel that the opaque nature ofthe OTC market invariably plays intothe hands of investment banks, whichcan cream off fat spreads for buying,selling and creating products. It alsomeans that the risk involved in the tradecan be hard to assess and priceaccurately from the clients’ perspective.

Investment banks clearly have someway to go before buyside users ofderivatives are convinced that theirconduct is above-board. The danger ofbanks mis-selling complex products isseen by users of derivatives as the thirdbiggest risk in the market, behind thesystemic risk that a counterparty mightcollapse.

Non-users of derivatives regard a lackof understanding by end clients asbeing jointly the biggest risk facing themarket. Arguably, this is a safe refugefor fund managers that do not usederivatives, as it gives them an excusefor not exploring the potential of themarket – that they are acting in the best

interests of clients. However, the factthat users of derivatives also see this asa significant risk suggests thatparticipants in the derivatives marketneed to increase their efforts to educatepension funds and other end clientsabout the benefits and risks associatedwith the products.

UK-based managers saw operationalfailures and the rapid growth in creditdefault swaps and collateralised debtobligations as being jointly the secondmost significant risks after lack ofunderstanding by end clients.

Respondents’ concerns over CDOsproved well-placed given that thesubsequent downgrades to the creditratings of car-makers Ford and GeneralMotors caused problems in the CDOmarket. The focus on operational issuescame on the back of a warning by theFinancial Services Authority, the UKregulator, that more could be done toreduce operational and settlement risksin the credit derivatives market.

0.0� 0.5� 1.0� 1.5� 2.0� 2.5� 3.0� 3.5

(2.8)(2.8)

(2.7)(2.8)

(2.6)(2.6)

(2.5)(2.4)

(2.4)(2.5)

Biggest risk

Score 1 to 51= no risk5 = big riskSource: rd:ir/Financial News

Lack of transparent pricing forOTC products

Systematic risk (promoted bycollapse of counterparty)

Investment banks mis-sellingcomplex structured products

Lack of understanding leading clientsto purchase inappropiate products

Operational/back office failures

Answers

Non-users Users

What do you think is the biggest risk in derivatives markets?*

Average score

Investment banksclearly have some wayto go before buysideusers of derivatives areconvinced that theirconduct is above-board


Fund managers are making increasinguse of derivative products. Academicstudies have found that roughly one thirdof retail investment funds make use ofderivatives1. In the European Union, theUcits III reform governing mutual fundshas brought about important changesfacilitating investment in exchange-traded and OTC derivatives. It isexpected that the use of derivatives willassume greater importance in the futureas a result of this and other newregulations. In addition, hedge funds,which make intensive use of derivativeinstruments, are continuing their stronggrowth in assets under management. Asa consequence, a wide range of players inthe asset management industry areasking if and how derivatives can beused for the benefit of investors.

A simple way to benefit from derivativesis to employ stock index options to hedgean equity portfolio. Such protectivederivatives strategies allow a fund toprofit from the equity risk premium andthus generate returns for investors,without being fully exposed to thedownside risk associated with investingin the stock market.

Active asset allocationGoing beyond simple hedgingapproaches, derivatives may be used inactive asset allocation. While mostinvestors favour a static approach toasset allocation where the weightsattributed to different asset classes stayconstant over long periods, academicstudies suggest that investors can reapsignificant benefits from dynamicallyrebalancing their holdings as marketconditions change. In particular, suchstrategies allow the investor’s views onfuture returns, as supported byeconometric models, to be exploited.Shifting exposure to asset classes overshort horizons is sometimes referred to astactical asset allocation (TAA). Such

dynamic asset allocation is typicallyconsidered for inclusion in the satelliteportfolio by investors since the goal is togenerate alpha. Derivatives have a rangeof different uses in such strategies.

Implementing timing strategiesIndex derivatives are a natural way ofgaining short-term exposure to an assetclass. For example, if the managerpredicts that equity returns will be highin the coming months, he may buy anindex futures contract in order to increasehis portfolio’s exposure to equities. Ratherthan just using such simple markettiming strategies, a manager may usefutures on different segments of the stockmarket (investment styles or industrysectors) or bond market (maturitysegments or rating categories) in order toimplement bets on the relativeperformance of such segments. The mainadvantage of using futures is lowtransaction costs in comparison to buyingbaskets of securities. Futures thus offer acost-efficient tool for strategies thatfrequently change exposure.

For example, Amenc, Malaise andMartellini (2005)2 present a timingstrategy between maturity segments ofthe bond markets using the Eurex EuroBund and Eurex Euro Schatz futures.They emphasise that derivatives can beemployed not only for generating anddelivering abnormal performance (alphabenefits), but also for packaging suchperformance in a way that is consistentwith the modern core-satellite approachto institutional portfolio management. Infact, the alpha generated from rotationstrategies can be transported to a coreportfolio invested in a broad-based index(possibly through a derivatives position)such as a medium-term bond index.

Neutralising active betsAnother use is to neutralise the bets thata manager takes unintentionally. One

Using derivatives: from static hedging todynamic asset allocation

Fund managers arelooking to make greateruse of derivatives for thebenefit of investors,writes Felix Goltz,research engineer withthe Edhec Risk and Asset Management Research Centre


example is the case of long/short equityhedge fund managers. Since themajority of these managers favour abottom-up process of pure stockpicking, they do not generally activelymanage their market exposure and thushave a net long bias. This can be seenfor example from the correlation of theHFR Equity Hedge index (a prominentindex for long/short hedge fundmanagers) with the S&P 500, whichwas 0.63 based on monthly data overthe period from 1990 to 2000. This longbias, which is not the result of an activebet on a bullish market but merely theresult of a lack of perceivedopportunities on the short-selling side,has undoubtedly explained a largefraction of the performance of thesemanagers in bull market periods. On theother hand, it has hurt theirperformance very significantly inperiods of market downturns.

Similarly, long/short managers, eventhose who target market neutrality, haveunintended time-varying residualexposure to a variety of sectors orinvestment styles resulting from theirstock picking decisions. Futurescontracts can be used to correct for suchunintended biases and ensure that theportfolio’s factor exposure is consistentwith the manager’s active views. In thecase where the manager has no viewson systematic risk factors, it isrecommended that managers usederivatives products to neutralise theexposure of the portfolio with respect tosuch factors.

Complementing timing strategiesIn addition to exposure to asset classesthrough futures, options may be used inthe context of dynamic tradingstrategies. A possible use of optionsarises from the fact that tactical assetallocation usually performs well inperiods of high volatility and poorly in

periods of low volatility. The value ofan option, on the other hand, increaseswith volatility. This suggests thatsuitably designed option strategieswould allow global portfolio risk to bereduced when they are added to adynamic allocation strategy.

There are actually a number of reasonswhy trendless periods of the marketcycle are typically difficult marketenvironments for tactical assetallocation strategies. Obviously, it iseasier to predict significant marketmoves, as opposed to small changes intrends that can easily be confused withnoise. Also, if the market experiences aseries of short-term reversals within agiven time frame, the model’s prediction,based on the previous subperiod, willfail to forecast the right direction.Finally, even if the model yields correctpredictions, they are of little use if thereturn spread between assets is small.

In order to have an options strategythat yields positive returns in calmmarkets, it has to involve shortpositions in options. Amenc, Sfeir,Malaise and Martellini (2004)3 proposeto construct a strategy that is suitablefor addition to a European markettiming strategy that has the Dow JonesEuro Stoxx 50 Index as a benchmark.The options strategy they chooseinvolves a “top strangle”, which allowsan investor to take a short position onvolatility. So as to control the risk ofpotential loss in the case of a largechange in the underlying asset value, a“bottom strangle” position is added. Byconstruction, the options strategy willperform well in periods of lowvolatility, and will perform poorly inperiods of high volatility, while limitinglosses. For the European market timingstrategy, adding this options strategyleads to an increase in the Sharpe Ratiofrom 0.58 to 0.8 and allows the

percentage of months with negativereturns on the strategy to be reduced.

ConclusionDerivatives have long been regarded ashedging instruments, in part becauseregulation limited their use to this. Morerecently, however, the value ofderivatives as asset allocation tools hasbeen noted. Cost-efficientimplementation of tactical assetallocation strategies through futuresand diversification of such strategiesthrough short volatility optionsstrategies are but two examples. Theincreasing range of new derivativescontracts such as credit derivatives orderivatives on volatility means thatinvestors will have new tools to explorefor use in their investment decisions.While these instruments are currentlyused mostly for hedging motives, thepotential use in asset allocation willcertainly raise new questions oninvestment practices and on thesuitability of current regulations.

Footnotes1 Koski J and J Pontiff, 1999, How arederivatives used? Evidence from themutual fund industry, Journal ofFinance, 54, 2, 791-816

2 Amenc N, P Malaise and L Martellini,2005, From delivering to the packagingof alpha, illustration of active bondportfolio management: using fixed-income derivatives to design hedge fundtype offerings that better fit investors’needs, working paper, Edhec Risk andAsset Management Research Centre

3 Amenc N, D Sfeir, P Malaise and LMartellini, 2004, Portable alpha andportable beta strategies in the euro zone –implementing active asset allocationdecisions using equity index options andfutures, Journal of PortfolioManagement


planned to introduce the system for its€6bn of hedge funds but given theadvent of Ucits III decided it would beneeded across its whole business.Operational issues can often be a bigconstraint for fund managers seekingto use derivatives. Respondents to thisyear’s Financial News survey said theyhad become more of an obstacle overthe past 12 months. “Often it comesdown to whether your operations, yoursystems, your legal team, can cope withderivatives,” said Bourdon.

Installing systems and procedures tohandle derivatives is high on agenda ofmany traditional fund managementhouses, according to Nick Kent,managing director at Business Fidelity,a London-based consultancyspecialising in asset management. Hesaid fund managers are particularlykeen to be able to use credit defaultswaps – derivatives through whichusers can buy and sell insurance oncorporate bond issuers defaulting ontheir debt.

The Financial News survey suggestedthat the use of credit derivatives has yetto take off among traditional fundmanagers, despite the huge volumesbeing traded in the instruments byinvestment banks and hedge funds.Credit derivatives accounted for only1.3% of outstanding derivativesexposure on average, althoughmanagers in the UK and Germanyexpect to increase their activitysignificantly in the sector over thecoming year.

The survey also showed that the use ofderivatives for liability-driven investmentstrategies had failed to grow as quicklyas managers expected 12 months ago.Kathleen Currie, director of structuredsolutions at Axa Investment Managers,said there was a degree of inertia among

pension funds when it came to usingderivatives that needed to be overcome.“It is a matter of them getting used tothe fact that more than 90% of theFTSE 350 companies use derivatives, sowhy aren’t their pension funds?”

There are, however, clear signs of anincrease in activity this year. Thelaunch of pooled swaps funds by thelikes of Barclays Global Investors andFortis Investments, with more in thepipeline, has given investors an easyentry point to the market that does notrequire them to closely manage bestexecution, counterparty risk and legaldocumentation – although they stillneed to get comfortable with theconcept and risk of swaps.

Currie believes this battle is largelybeing won: “Most people are buyinginto the fact that plain vanilla swaps area more efficient tool for matchingliabilities than bonds,” she said.

Merrill Lynch’s Hayes said it wasinevitable that take-up of liability-driven investment strategies would befairly slow, not only because of theeducation required to get pension fundtrustees comfortable with the concept,but because execution depended onunderlying markets being at attractivelevels.

He said: “Growth in derivatives volumesis currently being driven by our targetreturn product area. Do I still expectconsiderable growth in interest rate andinflation swaps? Absolutely. It is aquestion of timescale, rather than ofwill they or won’t they be used.”

Watson Wyatt’s Horsfall is dismissive ofthose institutions that continue to resistthe greater use of derivatives by fundmanagers: “Saying it is too hard, toocomplex or too opaque is just not goodenough in this day and age.”

Continued from page 4

‘Saying it is too hard, too complex or

too opaque is just not good enough in

this day and age’

Nick Horsfall, Watson Wyatt


Country Respondents

Respondents by country

Source: rd:ir

Belgium 3

Denmark 4

Finland 5

France 7

Germany 8

Ireland 3

Italy 7

Netherlands 8

Norway 9

Spain 5

Sweden 8

Switzerland 13

UK 22

Financial News commissioned Richard Davies Investor Relationsto poll European fund managers on their use of derivatives. Theaim was to receive a completed survey questionnaire from 100senior investment professionals based at UK and continentalEuropean fund management houses.

A total of 210 investing institutions responded to our initialenquiry as to whether or not they used derivatives in theirinvestment process. We received responses to an in-depthquestionnaire from 102 fund managers.

Combined assets under management at the 102 respondents tothe in-depth questionnaire were €5.7 trillion.

We aimed to receive responses from investment professionalsdrawn from the following positions:

Head of derivatives

Head of risk

Chief investment officer

Head of strategy

Head of compliance

The majority of respondents held one of the above positions. Wealso received responses from other senior investmentprofessionals in roles such as Head of Equities, Head of FixedIncome and senior fund managers who used derivatives.

The respondents were initially contacted by phone and, whenthey agreed to participate in our survey, they were e-mailed thesurvey questionnaire.

Respondents who did not use derivatives were interviewed byphone.

Methodology

Richard Davies Investor Relations

Balfour House

46-54 Great Titchfield Street

London W1W 7QA

+44 20 7436 2100

www.rd-ir.com


BelgiumCapital & Finance AssetManagementDIAMSG Asset Management

DenmarkAlfred BergDanske InvestInvesteringsforeningen Egns-InvestNordea Asset Management

FinlandAktia Asset ManagementAlfred BergEvli Investment ManagementFides Fund ManagementFIM Asset Management

FranceAXA Investment ManagersBDF GestionBNP Paribas Asset ManagementComgestGROUPAMA Asset ManagementIXIS Asset ManagementRothschild & Cie Gestion

GermanyAmpega Asset ManagementDelbrück Bethmann MaffeiDITDWSFrankfurt TrustGerling InvestmentKapitalanlageSEB InvestTCM

IrelandAGF ManagementAIB Investment ManagersSetanta Asset Management

ItalyAletti Gestielle

AnimaBipielle FondicriBPU PramericaGenerali Asset ManagementRAS Asset ManagementSan Paolo Asset Management

NetherlandsABN Amro Asset ManagementAtradiusBNG Capital ManagementDelta LloydLaSalle InvestmentManagementOptimixRobeco GroupVan Lanschot AssetManagement

NorwayDanske Capital NorgeFolketrygdfondetNorfundOrkla Finans KapitalforvaltningParto ForvaltningRomsdals FellesbankSkagen FundsStorebrandWarrenwicklund

SpainBanco UrquijoCaja España FondosIbercaja GestionKutxagestSogeval

SwedenAktie-SnvarAlectaAlfred Berg KapitalforvaltningCatellaDnBNOR Asset ManagementHandelsbanken AssetManagementROBURSEB Asset Management

SwitzerlandAdvanced InvestmentTechniquesAIG Fund ManagementAllianz Asset ManagementATAG Asset ManagementBank Sarasin & CieBaumann & CieBellevue Asset ManagementClaridenCommerzbank (Suisse)Fisch Asset ManagementGruebler InvestmentManagementUnigestionZurcker Kantonalbank AssetManagement

UKAbu Dhabi Investment AuthorityAllianz CornhillBaillie GiffordBaring Asset ManagementCapital GroupDaiwa SB InvestmentsFranklin TempletonGartmore InvestmentManagementGoldman Sachs AssetManagementInvescoInvestec Asset ManagementLiontrust Asset ManagementMorley Fund ManagementNomura Asset ManagementRathbone InvestmentManagementRoyal London AssetManagementSarasin ChiswellSchroder InvestmentManagementState Street Global AdvisorsThreadneedle InvestmentsTilney Investment ManagementWesleyan Assurance

List of respondents to in-depth questionnaire

Financial News would like to thank all theinstitutions named above for participating in thesurvey. We expect to repeat the research nextyear, and establish it as the benchmark annualstudy of the use of derivatives in the Europeanfund management industry.

If you have any questions regarding this year’ssurvey, or any suggestions of how we mightimprove the research in future, please contactJames Rutter, managing editor of businesspublishing at Financial [email protected]

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Key Account Belgium, France,LuxembourgLaurent OrtizT +33-1-5527-6772F +33-1-5527-6750

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