Lyxor merges ETF and indexing activities as part of ETF push

May 15th, 2012 | By | Category: ETF and Index News

Lyxor Asset Management, part of Societe Generale, has reorganised its ETF and indexing asset management activities, creating a new unit dedicated to “ETF & Indexing” investment solutions. This unit is to be led directly by Alain Dubois, Chairman of Lyxor Asset Management.

Lyxor merges ETF and Indexing activities as part of ETF push

Alain Dubois, Chairman of Lyxor Asset Management.

Simon Klein, in addition to his role as Head of ETF Europe, has been promoted to Global Head of Business Development, ETF & Indexing, and has become a member of Lyxor’s Executive Committee. He will report to Alain Dubois and Christophe Baurand, Global Head of Business Development for Lyxor AM.

Prior to joining Lyxor, Klein was Head of ETF and ETC Sales for Continental Europe at Deutsche Bank in Frankfurt since 2007.

According to a statement released, the aim of bringing together these two activities is to enhance Lyxor’s development in the ETF market, while merging its ETF business with its non-listed indexing business. This will also allow Lyxor to propose a comprehensive Index Asset Management offering.

Supporting Klein in his new role, two Product Line Managers will be in charge of product development and strategy: Nizam Hamid, as Product Line Manager – ETF, and François Millet, as Product Line Manager – Indexing.

Commenting on this announcement, Simon Klein said: “We see a very deep trend with our international clients willing to invest in a global and wide range of ETFs and indexing products. Consequently, we actively pooled and strengthened our expertise and set up to fulfil our clients’ needs. This new organisation will allow us to meet the clients’ request to optimise their asset management strategies in a very cost efficient way.”

Lyxor was an early pioneer in the development of the European ETF industry and was responsible for the launch of the first ETF on the Paris Euronext stock exchange in 2001. Today, Lyxor holds a 15% market share in Europe with more than EUR 29 billion of assets under management. Though, over the past year or so, Lyxor has suffered outflows following concerns relating to swap-based (so-called synthetic) ETFs.

Back in October 2011, in an effort to dispel investor concerns, Lyxor launched an ETF ‘Quality Charter’, committing the company to a set of ETF standards designed to ensure greater transparency, efficiency and liquidity.

These charter commitments covered issues relating to asset management quality, index tracking, transparency, counterparty risk and the primary and secondary markets. A number of the commitments went well beyond UCITS’ minimum requirements. Of note, Lyxor vowed to target daily counterparty risk of zero, below the 10% required by UCITS, and to publish the details of all its holdings and counterparties daily on its website. It also ruled-out securities lending.

Currently, Lyxor is the third largest ETF provider in Europe and ranks sixth worldwide, offering a range of 227 ETFs with access to over 165 individual indices across all asset classes (equities, bonds, money markets, and commodities), themes, sectors and regions.

Recent product launches include four new commodity ETFs on the London Stock Exchange, including two smart or enhanced beta funds and a pair of long/short broad-based exposure funds, and a suite of US S&P 500 sector ETFs on the Deutsche Börse and Euronext Paris.

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