If big is still beautiful, asks David Cowell from Myddleton Croft Investment Managers,  why are senior execs leaving to start their own operations? The latest in the long line is the London boss of Brooks Macdonald.


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German five-bankingyear government debt sold at a negative yield for the first time in history on Wednesday as borrowing costs and inflation in the eurozone continue to fall. The German Finance Agency sold €3.3bn worth of government bonds maturing in April 2020 at an average negative yield of 0.08%. In January eurozone inflation was -0.6%, down from -0.2% the previous month, so even bonds with zero or slightly negative yields are offering a small positive real return in this environment. Gilbert & Sullivan would have loved this.

RBS’s private banking division, which includes Coutts and Adam & Co, saw litigation and conduct costs of £90 million eat into profitability during the course of 2014. During the fourth quarter the division posted an operating loss of £59 million compared with a profit of £64 million in the prior quarter. This was a decrease on the previous year, however, when costs were as high as £206 million. The figure was revealed in a market update on the status of its suitability review, a German investigation into whether the bank’s Swiss arm aided clients in tax evasion and a US probe.



Lloyds Banking Group is paying its first dividend for six years after reporting a rise in profit and improvements in its capital. I find it interesting that some banks are paying dividends when their cost of capital is in excess of the return thereon. But then I’m not a CFO.

An excerpt from an e-mail from EDHEC-Risk inviting me to a master class in London. Despite the Gallic charm of the following, please persevere:


“….goal-based investing is a novel investment solution framework dedicated to allowing investors to secure their essential goals, while maximizing the probabilities of reaching their otherwise meaningful goals that cannot be secured with full probability given their dollar and risk budgets. Through an efficient use of dedicated performance and hedging building blocks, as well as a suitably designed allocation to these building blocks, goal-based investing generates 50% greater probability of achieving investors’ important or aspirational goals compared to traditional approaches.”

EDHEC (Ecole des Hautes Etudes Commerciales du Nord) is a French “grande école” specialising in business and management, founded in 1906, and based in Lille with a presence in London. I do hope that a policymaker from FCA attends a presentation in London on 23 March at which this will be discussed. At €900 a pop, it could be worth two regulators attending just in case one gets carried away and has an original thought.

The blurb goes on: “The aim of this masterclass is to provide participants with an introduction to the modern financial engineering and risk management techniques which will allow a new breed of investment managers to design and implement innovative forms of welfare-improving investment solutions for individual investors.” Who knows? It may water down this unnecessary preoccupation with risk-based solutions. I can dream, can’t I?


St James’ Place reveals its advice business made a £10.9m loss last year, compared to a £6.1m loss in 2013. Er…. Luke Ch4 v23?

The ONS confirmed last month’s estimates that the economy grew 0.5% in the last quarter of 2014, leaving the year’s figure at 2.5%. Pretty healthy by comparison.

Labour’s dear leader has now proposed that his cut in student charges to £6,000 pa be paid for by knocking off higher-rate tax relief on pensions. Another ‘buy now while stocks last’?


Have a good weekend.

David Cowell



For and on behalf of Myddleton Croft Investment Managers

1 Woodside Mews

Clayton Wood Close


LS16 6QE

Tel:        0113 274 7700

Fax:       0113 274 7711


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