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Former blockbuster investment funds fall from grace – Financial Times



Blockbuster funds that previously ranked as the largest in Europe have undergone a spectacular downfall over the past decade.

Former star funds managed by investment groups including Standard Life Aberdeen, BlackRock and Franklin Templeton have shrunk to a fraction of their former size after losing favour with investors as quickly as they earned it.

SLA’s well-known Gars fund, a multi-asset strategy that ranked as Europe’s largest fund as recently as 2017, when it managed a combined €38.6bn, now has just €4.5bn in assets, according to Morningstar, the data provider.

Franklin Templeton’s Global Bond fund, run by veteran fixed income investor Michael Hasenstab, has had a similarly pronounced fall. After dominating the investment industry in 2014, when it had €30.2bn in assets, the fund now stands at just €7.7bn.

BlackRock’s Global Allocation fund has shrunk from €35.8bn to €12bn in just three years, and Carmignac Patrimoine, run by veteran French investor Edouard Carmignac, stands at just €10.8bn, down from €30bn at its peak.

The trend underscores how popular funds’ sharp growth can also lead to their undoing. Investors pile in when managers perform well, but when funds grow to a large size, their returns tend to drop off, resulting in outflows.

“Large funds are vulnerable to boom and bust dynamics,” said Morningstar’s Ali Masarwah, who carried out the research. Not only do giant funds drive up the valuations of the securities they buy, which makes future outperformance more unlikely, they are also less flexible than smaller funds due to liquidity risk considerations, he added.

Just one out of eight former blockbusters analysed by Morningstar beat its benchmark in the period immediately after ranking as Europe’s biggest fund. The data excluded money market funds.

Separate research from data company Broadridge found that only a quarter of the 100 best-selling active funds in Europe continued to attract positive investor flows three years after peaking in size. “Today’s flow winner is tomorrow’s loser,” said Chris Chancellor, senior director at Broadridge.

The findings come after Pimco’s €57bn Income fund lost its place as Europe’s largest fund last month after taking a hit during the market sell-off sparked by the coronavirus pandemic.

The fixed income product run by Dan Ivascyn, the “bond prince” who replaced Bill Gross at Pimco, lost €22bn in March because of a mixture of negative market movements and investor outflows.

Pimco Income now ranks behind Swedish equity fund AP7, which took the top spot after being boosted by the rally in global stock markets during the second quarter.

The Pimco fund’s performance has improved in recent months but investors have not piled back in at the same rate as before the March rout, said Mr Masarwah. He suggested that some investors were diversifying away from the fund because of concerns over its large size.

“Big is not always beautiful,” said Mr Masarwah. “Letting funds grow too large may be in the interests of fund companies but it is not in investors’ interests.”

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G2S2 Capital Inc. Announces Investment in Cominar Real Estate Investment Trust – Canada NewsWire



MONTRÉAL, Oct. 28, 2020 /CNW/ – G2S2 Capital Inc. (“G2S2”) announces today that it has increased its ownership of trust units (“Units”) of Cominar Real Estate Investment Trust (“Cominar”) to over 10% of Cominar’s outstanding Units.  

On October 28, 2020, G2S2 acquired 600,000 Units of Cominar through the facilities of the Chi-X alternative trading system at a price of CDN$7.30 per Unit (the “Acquisition”), representing approximately 0.34% of the outstanding Units.  Prior to the Acquisition, G2S2 owned and exercised control over an aggregate of 18,245,100 Units of Cominar, representing approximately 9.99% of the outstanding Units. Immediately after the Acquisition, G2S2 owns and exercises control over an aggregate of 18,845,100 Units of Cominar, representing 10.33% of the outstanding Units.

G2S2 acquired the Units for investment purposes. G2S2 may, from time to time, depending on market and other conditions, increase or decrease its beneficial ownership, control or direction over Units of Cominar through market transactions, private agreements, or otherwise.

In accordance with National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, G2S2 has filed an early warning report regarding these transactions on the System for Electronic Document Analysis and Review (SEDAR) at under Cominar’s issuer profile. Cominar’s head office is located at 2820 Laurier Blvd., suite 850 Quebec City, Québec G1V 0C1.

About G2S2

G2S2 Capital Inc. is a privately held investment holding company focused on creating value across a variety of businesses with a long term horizon. G2S2 is incorporated under the laws of Canada. G2S2 is controlled
by George & Simé Armoyan.

SOURCE G2S2 Capital Inc.

For further information: or to obtain a copy of the early warning report, please contact George Armoyan, Executive Chairman of G2S2 at 514-333-8800, extension 1925.

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Inovalis Real Estate Investment Trust initiates strategic review process to enhance unitholder value – Canada NewsWire




TORONTO, Oct. 28, 2020 /CNW/ –  Inovalis Real Estate Investment Trust (the “REIT”) (TSX: INO.UN) today announced the formation of a special committee of independent members of the Board of Trustees (the “Special Committee”) to consider strategic alternatives available to the REIT. The Special Committee expects to review and evaluate a wide range of strategic alternatives to enhance unitholder value.  

Given the persistent discount between the REIT’s trading price, the implied IFRS Value, and the Board and management’s view of the REIT’s intrinsic value, the trustees concluded that it would be in the best interest of the REIT and the unitholders to conduct a complete strategic review of its business and organization.

The decision was made after weighing the consequences of the pandemic in the REITs core markets. The REIT will continue to evaluate the possible acquisition or disposition of certain portfolio assets throughout this process.

The Special Committee is comprised of Dan Argiros (Chair), Jean-Daniel Cohen, Michael Lagopoulos, Jo-Ann Lempert, Marc Manasterski, Michael Missaghie and Robert Picard.

There can be no assurance that this process will result in a transaction or other new agreement. The REIT does not intend to disclose further developments with respect to this process, unless and until the Board of Trustees approves a specific transaction, alternative new agreement or otherwise concludes the review of strategic alternatives.

About Inovalis Real Estate Investment Trust
Inovalis Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT has been created for the purpose of acquiring and owning office properties primarily located in France and Germany but also opportunistically in other European countries where assets meet the REIT’s investment criteria. The REIT currently owns interests in office properties in both France and Germany.

Forward-Looking information

This news release contains forward-looking information within the meaning of applicable securities legislation. Forward-looking information generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans”, or “continue”, or similar expressions suggesting future outcomes or events. Forward looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Inovalis REIT’s control that could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, global and local economic and business conditions; the financial condition of tenants; our ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; the impact the COVID-19 virus will have on the REIT’s operations and interest and currency rate functions. The REIT’s objectives and forward-looking statements are based on certain assumptions, including that the Canadian and European economies remain stable, interest rates remain stable, conditions within the real estate market remain consistent, competition for acquisitions remains consistent with the current climate and that the capital markets continue to provide ready access to equity and/or debt. All forward-looking information in this news release speaks as of the date of this news release. Inovalis REIT does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise except as required by law. Additional information about these assumptions and risks and uncertainties is contained in the REIT’s filings with securities regulators, including its latest annual information form and MD&A.

SOURCE Inovalis Real Estate Investment Trust

For further information: David Giraud, Chief Executive Officer, Inovalis Real Estate Investment Trust, Tel: +33 1 5643 3323, [email protected]; Robert J. Picard, Trustee, Inovalis Real Estate Investment Trust, Tel: +1 416 865 6645, [email protected]

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BoC holds rate, forecasts recovery by 2022 – Investment Executive



The bank’s updated outlook in its monetary policy report said the rebound over the summer was stronger than expected as the country reversed about two-thirds of the decline seen in the first half of the year.

Officials estimate the economy will shrink by 5.7% this year, but grow by 4.2% next year, and 3.7% in 2022, meaning gross domestic product won’t rebound to pre-pandemic levels for another two years.

In his opening remarks at a late-morning press conference, governor Tiff Macklem said it will take quite some time for the economy to fully recover from the Covid-19 pandemic, and the path will be “uneven across sectors and choppy over time.”

“We know the pandemic is reducing investment and is likely to cause long-lasting damage to some people’s job prospects. These forces will reduce Canada’s economic potential,” Macklem said.

The report forecasts annual inflation at 0.6% this year, 1.0% next year, and 1.7% in 2022.

The bank held its overnight rate target at 0.25% on Wednesday, which is where it will stay until the economy has recovered and inflation is back on target.

The bank also announced Wednesday that it intended to buy more longer-term bonds because those have a “more direct influence on the borrowing rates that are most important for households and businesses.”

James Laird, co-founder of said the outlook suggests low interest rates until at least 2023, which is the earliest the bank anticipates the economy would be able to handle higher rates.

The projections for growth and inflation mark a return to the bank’s usual practice of giving a longer view for the economy in its quarterly monetary policy report.

The report said the six months of experience with containment measures and support programs, as well as more information on medical developments like vaccines, has given the bank a better foundation to make a base-case forecast.

Underpinning the bank’s outlook are two major assumptions: That widespread lockdowns won’t be utilized again and that a vaccine or effective treatment will be widely available by mid-2022.

The country has recouped about two-thirds of the three million jobs lost in March and April. Emergency federal aid has replaced lost wages for millions of workers, and provided loans and wage subsidies to struggling businesses.

The recuperation from the drop earlier this year has been uneven, the report notes. The hardest hit sectors, such as restaurants, travel and accommodations, continue to lag.

Workers in those sectors, as well and youth and low-wage workers, continue to face high levels of unemployment, the report says.

All may be hit hard again by any new rounds of restrictions, the report notes. Some areas of the country have already imposed such public health restrictions in the face of rising Covid-19 case counts.

“The breadth and intensity of re-imposed containment measures, including impacts on schools and the availability of child care, could lead to setbacks,” the report says.

“Long breaks in employment have the potential for longer-term impacts on the income prospects of vulnerable groups.”

The report said government aid has played a key role in providing a financial lifeline to individuals and businesses.

Changes to employment insurance and new benefit programs will increase households’ disposable income, officials write, adding that the bank expects government aid to “provide important support to the economy throughout the recovery.”

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