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Pair of Scoops to Begin: Prime Minister Rachel Reeves has reversed his decision to claim UK inheritance tax on non-dome world assets following the departure and lobbying by the city of London.
Hedge Fund Millennium Management is working with Goldman Sachs’ Peter Sill division to sell 10-15% stake to outside investors at a $14 billion valuation.
In today’s newsletter:
Trump SEC Chair Scrap proposed market rules when he charts new paths
Scottish widows reducing UK equity exposure
Emerging markets are shaking down the darkness of investors and covering developed countries
Using the old SEC rules. . . With something new?
Donald Trump’s top Wall Street police officers have abandoned more than a dozen rules proposed by his predecessor. It was hailed as a victory for a group of merchants in a move described by advocacy groups as “very harmful to investors.”
Securities and Exchange Commission Chairman Paul Atkins wrote my colleagues Stefania Palma, Harriet Kralfeld and Eric Pratt, 14 rules that had not been enacted before Gary Gensler left office earlier this month, as a fresh sign of the new administration’s laissez-faire attitude towards the new administration’s investment regulations.
The withdrawal has been praised by the investment industry and eliminates discussion about the plan proposed by the SEC in the Gensler era being put into practice before the next one.
“It doesn’t mean they’ve abandoned policy goals,” says Lance Dial, a partner at law firm K&L Gates, who says the SEC can reintroduce measures in a variety of ways. Still, he added that there is a “good redance” for most of the 14 rules. “They weren’t the kind of thing the industry really liked.”
Among the discarded proposals by Atkins, the champion of Light Touch Regulation, were measures that attempted to manage how artificial intelligence would be used to provide financial advice to investors.
Another rule would have required investors to disclose their position in opaque derivative transactions because of the possibility of concealing divergent holdings that pose a systematic risk. The rules were opposed by activist investors, including Elliott Management.
Digital assets advocate Atkins has retracted its proposal to define a “exchange” of securities in a way that has acquired a decentralized, peer-to-peer digital currency platform.
However, the investment industry is rooting for Atkins’ withdrawal as an indication that the SEC is currently back within the parameters of its delegation, but it is still waiting to see the new chair’s own regulatory schedule.
“I don’t know what direction Atkins will take the rulemaking agenda,” said Aaron Schlafoff, Paul Weiss’ partner. “There’s been little said about that.”
For a complete list of 14 disposal rules, click here
Scottish widows reducing UK equity exposure
After Donald Trump’s volatile tariff policy has improved global market outlook, one of the UK’s biggest pension fund managers is diving into the trend, just as many large investors reassess and reduces their exposure to the US.
The Lloyd-owned Scottish widow who manages £72 billion workplace pension assets in the default fund is looking to achieve major improvements in his asset allocation, writes Mary McDougal of London. This has resulted in North American equity exposure increasing from 46% to 65% by January, according to a document reviewed by the Financial Times.
Its low-risk portfolio will increase its U.S. stocks from 17% to 25%, according to planned allocations described as still potentially changing “metrics.”
The move includes plans to sell billions of pounds worth of UK stocks. This is the latest blow to the UK’s sick stock market. In this stock market, listings outweigh the early public offerings, with a Gulf Coast between UK and US listed companies. The minister is about to persuade the domestic retirement fund to invest more in the company he owns.
The 210-year-old company plans to reduce its UK share allocation from 12% to 3% by January next year, but the low-risk portfolio will reduce its exposure from 4% to 1%.
The Scottish widow said the new approach “incorporating market weight allocation by default by default, in line with similar proposals from other pension providers.”
The planned changes came after the Scottish widow refused to sign pledges by 17 providers last month and refused to invest at least 5% of the default fund of UK private market assets in Mansion House Accord by 2030. It was the only UK pension fund manager to do so.
This week’s chart
The currencies, stocks and bonds in developing countries write London’s Joseph Cotteril and Emily Herbert in 2025, in the shadow of a strong dollar for many years, in order to outperform global markets in 2025, against President Donald Trump’s trade war and conflict in the Middle East.
The JPMorgan Index, a large emerging market local currency bond, and the MSCI gauge, a stock, have each won around 10% so far this year. In comparison, the MSCI World Index, which covers large stocks in 23 developed countries, has risen by 4.8%, while the FTSE World Government Bond Index has risen by 6.6%.
Despite initial expectations that developing countries will be hit hardest by the World Trade War, these markets have warmed as investors are trying to diversify away from dollar assets amid concerns over volatile US policymaking.
“All of a sudden, it makes local currency debt in emerging markets great again,” said Damien Buffett, Principal Finister’s Chief Investment Officer.
Investors are now returning to a market that previously had a very positive and low rating. Or they offer attractive yields when adjusted for inflation. According to JPMorgan analysts, emerging market stocks fell to about 5% of their managed assets in the global equity fund, compared to over 10% before 2013.
Even this year, investors have withdrawn nets of over $28 billion from emerging market equities and bond funds, according to JPMorgan data. This primarily reflects the $22 billion withdrawn in April at the peak of concerns over the impact of US tariffs, despite a return of $5 billion of $5 billion in May and June.
“We’re looking forward to seeing you in the future,” said Kevin Daly, co-head of CEEMEA Economics at Goldman Sachs. “Even small influxes have definitely had a disproportionate impact.”
This week’s 5 unacceptable stories
Howard Marks, co-founder of Oaktree Capital Management, a $20 billion alternative manager, is urging China to open more “asset classes” to foreign investors while setting a brighter view of the world’s second-largest economy.
Redinel Korfuzi, a former Janus Henderson analyst who used working from home as the cover of an insider trading and earned nearly £1 million, has been found guilty in one of the most famous UK insider trading cases in recent years.
German prosecutors have chosen not to close criminal investigations against Asoka Wöhrmann, former DWS CEO, and charges greenwashing allegations with fines to the asset management division of the US and German Deutsche Bank.
When the UK’s assets manager Aberdeen Group renamed Abrdn four years ago, the new Monica stood out – for undoubtedly the wrong reasons. Here are Abrdn’s miserable brand lessons:
Legal & General is doubling its asset management business as it seeks to expand internationally and sell more private market products to its customers, from pension plans to wealth managers.
And finally
‘Hyphen’ (1999) by Jenny Saville©GagosianPrivate Collection. ©Jenny Saville
Jenny Saville: The anatomy of the painting, currently on display at the National Portrait Gallery in London, exemplifies “horror rendered with the kindness of feather light.” “The best work on this career-spanning show is proof of an artist with incredible and bold talent,” she says.
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