Pierpoint Perspective$

This week’s guest is Manooj Mistry who has been at the heart of the growth of the ETF market in Europe. Manooj shares his personal journey with Roy Zimmerhansl - the tremendous growth of ETFs in Europe over the past 20 plus years.

Manooj was formerly the head of ETFs and Index Investing at DWS (the asset management division of Deutsche Bank), where he was part of the team that established the Xtrackers ETF business in 2007, Europe's number two provider by assets under management. He also served as Chief Executive of DWS Investments UK Limited with responsibility for traditional investments and UK distribution. Prior to DWS, Manooj worked at Merrill Lynch International where he launched the first ETFs (LDRS ETFs) in Europe in April 2000.

Manooj on LinkedIn: https://www.linkedin.com/in/manooj-mistry-9b0b39122

Whitepaper referenced by Roy: ETF Liquidity, Securities Finance and Collateral Management

Show timeline

02:15 Manooj at the beginning of ETFs in Europe

07:30 Why multiple stock exchange listings for ETFs?

13:05 Merrill exits business, early days of institutional ETF use

16:38 DWS enters ETF market but with a different focus on synthetics

20:10 Comparison between physically backed and swap backed ETFs

25:13 and then … the Global Financial Crisis

28:55 The battleground between synthetic and physical ETFs

35:30 Whatever happened to synthetic ETFs?

37:42 Where do ETFs go from here?

41:00 Manooj's experience as an investor doing securities lending

48:40 ESG and ETFs

53:00 Closing thoughts

56:39 Roy's wrap up

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Lynden Howie, European Head of Equity Finance speaks in-depth with host Roy Zimmerhansl about Synthetic Prime Brokerage.

You can follow Lynden and Cantor Fitzgerald as follows:

Cantor Fitzgerald Europe (including a section on Prime Services): https://www.cantor.com/global/europe/

Lynden on LinkedIn: https://www.linkedin.com/in/lynden-howie-70948031

Show timeline

02:12 Lynden's background in Synthetic PB

05:24 What is Synthetic Prime Brokerage?

07:48 Why do investors use it?

10:56 Why do Prime Brokers offer a synthetic alternative to cash markets?

14:21 Trading with competitors

22:45 Long and Short synthetic positions

23:30 Access products and does Synthetic PB take business away from securities lending?

29:00 Synthetic PB as a 'thing' - the structures

31:35 Trade execution and trading platforms

41:25 Key changes in the market over past 20 years

43:10 Closing thoughts from Lynden

44:25 Lynden as an educator and those who inspire us

48:15 Roy's wrap up

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Roger Cohen, founder of Portable Beta is an investor, derivatives specialist and academic, and joins host Roy Zimmerhansl to discuss ETFs; geared, leveraged and bear funds; ESG and quantum theory.

You can follow Roger's work as follows:

Roger Cohen on LinkedIn: https://www.linkedin.com/in/portablebeta

Portable Beta: https://portablebeta.com.au/

Betashares (where Roger is an advisor): https://www.betashares.com.au/

Quantum Theory of Toilet Paper

https://www.linkedin.com/posts/portablebeta_the-quantum-theory-of-toilet-paper-activity-6657050516067061760-r2UJ

Show timeline

03:10 ETFs

06:45 Synthetic vs Physical ETFs

13:28 Involvement with BetaShares

16:00 ETF themes - adding value or chasing trends?

18:51 Geared, leveraged, short, bear funds

22:48 ESG including short selling

27:45 Bear Funds

30:00 Shorting in futures and cash markets

32:40 A securities lending analogy

36:54 A 'tweak' to retirement finances

43:30 Australia, Academia and big things from our childhood

45:47 Quantum Theory of Toilet Paper and 2020

48:35 Resilience and adaptation in 2020

52:10 Roy's wrap up

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Show Notes

Andy Dyson, CEO, International Securities Lending Association addresses a huge range of topical and challenging issues in a sweeping and fast paced one-hour interview with host Roy Zimmerhansl, Practice Lead, Pierpoint Financial Consulting.

Timeline:

2:27       Reflections on ISLA/ISF Virtual Conference series

7:01       SFTR Report Card

16:22    Comments on market resilience during the 2020 market turmoil

22:20    Capital Markets Union/CSDR

32:13    Digital Transformation/Common Domain Model

39:17    ISLA CDM Showcase (free to attend invitation link http://bit.ly/ISLACDM)

39:26    New ISLA Working Groups

45:05    ISLA Governance

52:17    The changing role of Trade Associations

55:38    Kudos to the ISLA team

57:07    Lessons from 2020

Key items of note:

·        The ISLA CDM Showcase webinar 1 December 2020 http://bit.ly/ISLACDM

·        Regarding the ISLA governance discussion (45:05), our podcast researchers uncovered that part of the ISLA Council for Sustainable Finance governance policy provides for the ICSF Chair - Radek Stech, to attend ISLA Board Meetings as and when ICSF activities or interests form part of the agenda. Well done to ISLA and ICSF for having this enshrined. Also, we understand anecdotally that this has been the practice since ICSF launch and Radek has attended accordingly. You can see the ICSF Governance document at https://www.isla.co.uk/wp-content/uploads/2020/09/ICSF_Governance.pdf

·        Andy Dyson’s blog: Reflections of the CEO, latest edition: https://www.isla.co.uk/blog/reflections-of-the-ceo-2/

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This episode features renowned short seller Fraser Perring of Viceroy Research. Perring called out Wirecard publicly and suffered the consequences of challenging a darling stock. Other major frauds followed including Steinhoff, which was a $7.4 billion fiasco.

Roy Zimmerhansl asks Perring to discuss a range of matters from the psychology of short selling through to what's next for Viceroy.

Show Timeline:

3:20 A background in life skills

5:25 Foreshadowing Grenke

6:44 Dealing with long term shorts - P&L and psychology

10:05 Finding Short Candidates

12:40 Regulator's reactions to Zatarra/Viceroy reports, allegations and short positions

19:35 Financial Terrorism

22:30 ESG & the value of short sellers

25:35 Surviving bad corporate news

30:09 Perring's fight back against personal attacks

32:00 Accessing securities for short sellers

34:30 The personal impact of exposing frauds

38:09 Where next for Viceroy?

Items mentioned in the podcast:

Wirecard blog post

Dividend Arbitrage blog post

Follow Viceroy Research:

Website: https://viceroyresearch.org/

LinkedIn: Viceroy Research

Twitter: follow Fraser - @AIMhonesty and @viceroyresearch

Under development https://www.criminalespionage.com/

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Today's episode covers the topic of Managing Service Provider Relationships and includes a discussion on ServiceMatrix, a ground-breaking alternative to traditional vendor benchmarking. Host Roy Zimmerhansl is joined by Lawrence Inman, Senior Supplier Oversight and Relationship Manager, FundRock Partners Ltd and Andy Stephenson, Founder ServiceMatrix

Show timeline:

06:02 The role of Vendor Oversight

10:00 Outsourcing services

12:35 Monitoring Performance and KPIs

16:58 Where do surveys fit in?

25:00 The managed survey response flaw

27:40 Service providers DO want feedback!

30:12 Is ServiceMatrix a survey wrapped in an App?

31:37 Why is Pierpoint involved?

32:30 Timely feedback, but at what price?

43:57 So many surveys, so little time

45:42 Questions vetted by Investors

47:38 Closing thoughts from Lawrence

52:10 Closing thoughts from Andy

52:42 Show review from Roy

Follow FundRock Management

https://www.fundrock.com/

Twitter: @FundrockMC

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The Pierpoint team, Jeroen Bakker, John Arnesen and Roy Zimmerhansl discuss and debate the value of Exclusive lending arrangements.  

Show timeline:

03:06 What is an Exclusive?

06:50 Exclusives - just another securities lending transaction?

10:00 What value does an Agent Lender add?

13:19 Direct to a Beneficial Owner or via an Agent?

20:02 The value proposition for a Beneficial Owner

26:16 Exclusives and Cash Collateral

34:50 The future for Exclusives

41:35 Closing thoughts on Exclusives

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Jeroen Bakker, Pierpoint Benelux Consulting Lead, delves further into the issues that are important for borrowers when they are determining where to source assets from.

Check out Jeroen's latest blog post on the short squeeze that drove Volkswagen into briefly reaching the position of the largest company in the world as measured by stock market capitalisation. Read the blog here

Show Timeline:

Time Comment

02:40 Flexibility - Ease of trading, automation and onboarding

11:57 Breadth of automated trading - General Collateral only?

15:22 Collateral flexibility

24:22 Equity collateral considerations in volatile markets

27:10 Triparty collateral

28:22 ETFs as collateral

30:45 Term transactions

39:24 Supply - What is the single biggest issue?

40:25 How do mid-sized or smaller lenders compete?

44:25 Where do domestic lenders fit in?

46:45 Problem of portfolios using the same benchmarks

49:33 Exclusives

54:33 Synthetics

01:05:29 Closing thoughts from Jeroen

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Gary Klahr, Associate Director, EquiLend is interviewed by Roy Zimmerhansl and talks about standardisation, operational efficiency, EquiLend’s mission and their support for the Pierpoint white paper series “A Journey Through Time: Paper 1 – Building on the Past”

White paper available here: A Journey Through Time: Paper 1 – Building on the Past

Check out Roy’s MUST READ articles at the EquiLend Insight page: https://www.equilend.com/news/insight/

Follow EquiLend:

https://www.equilend.com/

Twitter: https://twitter.com/EquiLend

LinkedIn: https://www.linkedin.com/company/equilend/

Show Timeline:

2:05 Why should people listen to this episode?

3:05 Problem resolution – the way we were

5:38 Twenty First Century Twins – Standardisation and Automation

8:25 The shift to exception management

10:25 SFTR forces change

12:00 Real Time in the trade lifecycle

14:45 SFTR sets new levels for standardisation, but more work is required

19:20 It takes two to tango

20:57 Where do we go from here? Real Time

22:33 Investing in Operations

25:08 Gary’s closing thoughts

26:57 Episode wrap-up

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Mark Faulkner Co-Founder Credit Benchmark addresses Basel IV issues for Securities Finance with podcast host Roy Zimmerhansl, Practice Lead at Pierpoint Financial Consulting Ltd. 

Stories mentioned in the podcast/other relevant material:

Basel IV Rules

CCP Network Creditworthiness

Sub Custodian White Paper

CCP Monitor

Mid-July 2020 Financial Counterpart Monitor

Securities Finance Use Case Menu

Follow Credit Benchmark:

https://www.creditbenchmark.com/

Twitter: https://twitter.com/CreditBenchmark

LinkedIn: https://www.linkedin.com/company/credit-benchmark/

Show Timeline:

4:13

Why should people listen to this episode?

6:32

Why don’t so many entities already have credit ratings?

9:30

What do Credit Ratings really represent?

12:50

Bank of England/HM Treasury and Credit Benchmark

19:17

‘The challenges of aggregation’ and ‘Group decisions are more effective’

24:13

How is Credit Benchmark different / complementary to Credit Rating Agencies

26:46

Piping securities lending transactions from hedge funds through to beneficial owners

29:27

Basel IV challenges for securities finance

35:13

Economics drives behaviour

39:25

Closing thoughts from Mark

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