Deals & People February 13, 2013

BMO Adds Director, Relationship Manager

BMO added a director and relationship manager to its team.
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Bret Solnoki was appointed to director of national accounts, intermediary distribution; and Melody Rute was hired as relationship manager of BMO Retirement Services.

As head of BMO’s registered investment adviser (RIA) distribution efforts, a new position at BMO, Solnoki is responsible for raising awareness of BMO Global Asset Management’s mutual funds and separately managed account strategies among financial intermediaries. He reports directly to Mike Robinson, head of intermediary distribution for BMO Global Asset Management.

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Before joining BMO, Solnoki held similar positions at JP Morgan Asset Management, JHS Capital Advisors Inc. and Seligman Investment Advisors Inc. He earned a Bachelor of Science in finance from Fairfield University and holds the CIMC and CIMA designations.

With more than 25 years of industry experience, Rute joins BMO Retirement Services as a relationship manager, based out of the Madison, Wisconsin, office. Most recently she served as the manager of retirement plan services for SVA Plumb Financial. Rute earned a Bachelor of Business Administration from the University of Massachusetts, Amherst. She reports directly to Kurt Mueller, relationship manager at BMO Retirement Services.

The Markets February 13, 2013

Alternatives Continue to Attract Institutional Assets

Institutional investors continue to diversify their investment portfolios into alternative assets, according to Towers Watson.

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This is increasingly via direct funds rather than funds-of-funds. In 2012, Towers Watson’s clients—pension funds, sovereign wealth funds and insurance companies—allocated 70% more assets to hedge fund and private market strategies than in 2010, reaching $12 billion for the year.  

In 2012, the number of hedge fund mandates awarded to direct funds continued to increase, especially in the macroeconomic, fixed income and reinsurance areas. Similarly, in private markets, real estate, private equity and infrastructure, direct funds received the vast majority of assets. During the year, there was particular interest in infrastructure globally, with three times more assets being awarded to investment managers by Towers Watson’s clients than in 2011.  

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Zainul Ali, head of manager research, Americas, at Towers Watson, said, “Larger institutional funds are likely to continue to invest in funds directly for most alternative asset classes, rather than via funds-of-funds, as investors continue to focus on better fee structures and greater transparency.”

The Towers Watson data also shows Smart Beta strategies, which capture a premium over time or improve portfolio efficiency through diversification, continued to attract a significant amount of assets ($5 billion) in 2012. These new Smart Beta mandates were mainly allocated in the bonds, commodities and equities, and to a lesser extent in reinsurance, hedge fund and infrastructure. Towers Watson’s institutional investment clients have allocated over $20 billion to Smart Beta strategies to date.   

“These Smart Beta strategies range from relatively simple ideas—such as real estate securities and specialist infrastructure strategies to create liquid diversity—to doing existing betas better, such as nonmarket cap-weighted equities. They also include more specialist solutions with niche asset managers, such as reinsurance, currency carry and volatility premiums,” explained Ali.   

According to Towers Watson, institutional demand for global equity and bond mandates has remained high during the past five years, while demand for U.K.-focused equity and bond funds has fallen substantially during the same period. U.S. and emerging-market bond mandates continued to be popular in 2012, but global bonds were the most popular bond mandate among clients, almost doubling compared to the previous year. In total, bond mandate selections accounted for $24 billion in assets invested last year.  

In equities, global mandates continued to be the most popular with Towers Watson’s clients, closely followed in popularity by U.S. equity and global ex-U.S. equity mandates. In total, equity mandate selections accounted for $22 billion in assets invested last year.  

Manager selection activity globally at Towers Watson exceeded 900 selections in 2012, reflecting around $76 billion of assets moved.

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