E*Trade Partners with E&Y, drops DirectAdvice.com
From San Francisco Chronicle
E*Trade is joining with Ernst & Young to allow its customers to receive financial planning by year-end 2000. Each company is putting $25 million into the new service. E*Trade clients will be able to access multiple levels of service ranging from electronic access to customized advice provided by an E&Y planner. E*Trade is severing an earlier alliance with DirectAdvice.com, which had been providing customers online advice. It made the decision because DirectAdvice.com lacks adequate advisors to step in when clients need a human touch. E&Y first entered the online advice business with an alliance with Financial Engines in June 1998.
Perpetual says its on the block
From CBS.MarketWatch.com
Perpetual PLC, a British-based fund manager with $17.7 billion in assets under management, reports that a number of potential bidders have approached it and that it has hired Merrill Lynch and Cazenove to review strategic options. Earlier reports were that Amvescap PLC had been interested in Perpetual but had withdrawn due to potential conflicts with its Canadian acquisition Trimark. The reported price tag was in excess of $1.65 billion. Perpetual’s founder Martyn Arbib is entertaining bids on his 48 percent stake. Potential suitors include: Credito Italiano and ABN-AMRO.
Reopened funds call Miss Lonelyhearts
From The Wall Street Journal
Closing a hot fund to new investors may be good for existing shareholders but it can present a marketing challenge. Today's
Journal reports that funds that reopen often struggle to gain new assets. What's the problem? The funds typically reopen when they are losing assets and new investors have no interest. One example used in the article is the H&Q IPO & Emerging Company Fund. Launched in October, it closed in December with $586 million in assets. Since then assets have fallen to $450 million and the fund reopened April 25.
Another is the Franklin Balance Sheet Investment Fund which closed in 1996 reopened February 1. Altogether, the paper looked at 21 funds that had closed and reopened.
Fund managers practice hedging
From USA Today
Not busy enough running the fund? If so, your company may let you run a hedge fund writes John Waggoner. Among the fund companies cited allowing this practice are: Alliance Capital, Wellington Management, American Express and Van Eck Global. Meanwhile, both The Putnam Group and MFS Investment Management may develop hedge funds, according to the article. Although the official reason for offering the funds may be to let high net worth clients graduate to a more sophisticated product for their needs, the real reason may be that if fund companies don't let their best portfolio managers play with hedge funds at home they will take their services elsewhere.
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