The move will allow JPMAM to expand operations into China as it takes full ownership of CIFM, in which it currently holds a 49% stake.

The approval comes over two years after JPMAM’s original application to buy out CIFM in 2020 and follows the recent lifting of restrictive Covid-19 policies in China to boost the confidence of overseas investors.

Following the completion of the acquisition, CIFM will operate under the JPMAM brand in China as it integrates into the firm’s global operating model.

“We believe integrating the strengths of CIFM’s local operating expertise with the resources and global scale of JP Morgan creates powerful momentum,” said Dan Watkins, APAC chief executive of JPMAM.

“Our strategic goal is to significantly grow JPMAM China to become the leading foreign asset manager in China and contribute to JPMAM becoming the leading manager of China assets to global investors.”

Eddy Wong, chief executive of CIFM, will become chief executive of JP Asset Management China, reporting to Watkins. 

“We are delighted to formally become part of the JP Morgan family,” added Wong.

“As we build on CIFM’s well-established presence and onshore expertise, we are committed to providing both Chinese and international clients with a comprehensive suite of investment solutions, underpinned by outstanding investment performance, industry-leading investment products, and excellent client service.”

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The Morgan Money corporate investing and trading solution will be hosted by Trovata as the first third-party app on its platform.

The partnership will allow mutual clients to determine their liquidity needs using Trovata to then utilise Morgan Money’s services to take investment actions.

Users will be able to transact across their global portfolio in real time, with the ability to compare funds across multiple managers, currencies, durations or settlement options.

Morgan Money will also provide investment balances and transaction which will flow into Trovata in real time, allowing operating and investing activities to be monitored and managed in one place.

“Now more than ever, corporate treasury investors need a fully integrated trading solution for their liquidity needs,” said Paul Przybylski, head of product strategy and Morgan Money at JP Morgan Asset Management.

“Bringing two of the newest and fastest growing experiences in corporate finance and treasury together makes for a powerful combination for our customers.”

Trovata’s platform provides users with the ability to organise bank transactions into their various cash flow types, allowing customers to build cash forecasting models essential for determining liquidity thresholds. Using this information, finance and treasury professional can invest excess cash using Morgan Money.

With the rapid rise in interest rates, businesses could potentially generate as much as 3-4% of low-risk interest income or “yield” on its idle cash from operations, claimed the two firms in a statement.

“Finance and treasury clients are seeking to automate and streamline how their work gets done each day,” said Brett Turner, founder & chief executive of Trovata.

“The tools of the job have to be newer, smarter, faster, easy to use, and easy to set up. We expect that Trovata and Morgan Money will be the go-to modern toolbox to manage cash and investments.”

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Kenneth McLeish confirmed in a post on social media that he has joined Barclays Wealth Management as chief information officer after six years with JP Morgan’s asset management division.

McLeish is re-joining Barclays after previously working at the investment bank for 13 years between 1997 and 2011 in various trading technology roles, including EMEA head of algo trading technology and global head of arbitrage technology.

He has also previously worked in technology roles at Royal Bank of Scotland as head of trading services technology, head of fixed income, currencies and commodities algo trading technology. Following his initial departure from Barclays in 2011, McLeish was global head of eFX IT at Standard Chartered Bank for just under a year.

The high-profile departure at JP Morgan Asset Management follows news that head of equity trading for Asia Pacific, Lee Bray, has taken on an expanded role with the firm that will see him build out a new data science team.

JP Morgan Asset Management confirmed that Bray, a 20-year veteran at the company, has been appointed head of data science in the region based in Hong Kong. The new data science team that he will lead will look to bolster the firm’s investment platform with new technologies such as machine learning and artificial intelligence.

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Lee Bray, a 20-year JP Morgan veteran, has been appointed APAC head of data science in a newly created position effective 13 July in addition to his current role as equity trading head based in Hong Kong.

JP Morgan Asset Management said in a statement that Bray will establish the new data science team as the firm looks to enhance its investment platform with machine learning, artificial intelligence and natural language processing technologies.

The new team will collaborate with global business units within JP Morgan Asset Management to develop new tools for clients and analyse key data sets, including its proprietary ESG scoring framework, which is in development.

Bray has been head of trading for Asia Pacific at JP Morgan’s asset management business for over eight years, having started his career as a European cash equity trader in 1999. He has held several senior trading positions at the business throughout his career, including head of program trading.

At JP Morgan Asset Management, Bray has worked on evolving the firm’s trading strategies with quantitative approaches, including the deployment of artificial intelligence, machine learning and data processing for more systematic trading.

 “Continual investment in industry leading technology and data is one of our key strategic priorities,” Dan Watkins, CEO for APAC at JP Morgan Asset Management, commented on Bray’s appointment.

“As we continue to become a more data-driven business, Lee and his team will help us to ensure we are fully capitalising on these opportunities for our clients, bringing together global resources with a tailored approach to both leveraging local expertise and helping our clients on the ground here in Asia.”

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At TradeTech this year, you are scheduled to speak on an all-star panel about systematic trading. Why do you think automating trading workflows is such a hot topic now?

Broadly speaking, automation can be categorised as either execution or workflow automation, and both types of automation can help to drive trading cost reduction, risk reduction and minimise manual effort. Hence, it’s paramount in delivering for clients. Automation also helps to free up traders’ time so they can implement tailored trading styles in volatile market conditions, thus the heightened industry focus and conversation on automation over the past year.

What role has automated trading workflows played during the pandemic and recent market volatility?

Thanks to the automation of workflows and talented traders, we successfully navigated a material increase in last year’s volume of orders, which increased 40% compared to 2019 in EMEA. This was achieved with the same level of resourcing, whilst minimising trading costs and without any errors.

What are the inherent benefits and risks of systematic and automated trading?

Consistency of outcome, reduced trading costs, reduced manual effort, and reduced risk are all end goals when automating execution and other workflows. A consistent approach should also result in more comparable data and improved analytics. From here, quantitative and machine learning generated recommendations can be leveraged by both traders and automation systems. But it’s important to note that whilst automation is a powerful tool, it’s not an end in itself. To reduce the likelihood of any automation-related pitfalls, it’s good practice to keep your end goal(s) front of mind.

What role will automation play in the future for trading desks?

The industry is evolving as fast as ever and there will be periods of elevated volatility due to market cycles and exogenous events. Trading desks need to utilise agile methodologies and have a strong foundation of talent and platform, including automation, to be nimble and flexible enough to pivot in this environment. Automation will remain a key part of this story, offering flexibility and continuous improvement of trading performance.

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JP Morgan Asset Management has signed up to become a member of the ICE ETF Hub advisory committee, which focuses on improving and developing the open architecture platform for issuers, authorised participants, market makers and custodians.

“As an issuer serving fast-growing ETF markets, we’re aware of the critical need for a robust infrastructure for the primary market that can support our customers’ needs for both investment returns and innovation,” said Joanna Gallegos, global head of ETF strategy at JP Morgan Asset Management. “The ICE ETF Hub advisory committee is squarely focused on improving that infrastructure and we look forward to helping pursue greater efficiencies to the ETF market.”

ICE has onboarded several major institutions recently to the ETF Hub as authorised participants, and has rolled out new basket negotiation technology to the platform. Credit Suisse and Wells Fargo were among the banks that have signed up recently, following in the footsteps of Goldman Sachs, JP Morgan, Citadel Securities and others.

Earlier this month, ICE also said the ETF Hub traded a record notional volume of $148 billion in the second quarter this year. The new volume record was up 9% on the previous quarter, which recorded $137 billion in notional volume.

The ETF Hub supports US-listed domestic equity and fixed income ETFs, but ICE plans to expand this to also support US-listed international equity ETFs. The exchange will also add connectivity to its bond execution platforms through the recently formed ICE Select division during the third quarter this year to provide secondary market cash bond trading.

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Through the asset manager’s ‘Morgan Money’ trading platform, it will initially use Calastone to enhance its entire settlements process, becoming the first in the market to offer automated settlement to its users. 

The partnership enables JP Morgan Asset Management’s users to settle trades in real-time, while the Calastone platform digitalises the investment and reporting process.  

“We are excited to partner with Calastone to bring automated settlements to the platform, allowing our users to settle trades in real-time, with automated trade workflow, initiated from one Morgan Money platform,” said Paul Przybylski, head of product strategy and development at JP Morgan Asset Management.  

The partnership strengthens the existing relationship between the two firms with Calastone already providing trade automation services for JP Morgan funds globally. The current coronavirus pandemic has also highlighted the benefits of end-to-end automation and the digitalisation for post-trade processes between fund providers and investors.  

“Traditional models remain under immense pressure and have very quickly been seen to come up short. The key to managing this new post-COVID world, and to staying attractive in it, sits in embracing new, smart technologies – and making the switch from manual to automated,” added Ed Lopez, chief revenue officer, Calastone. 

“To see JP Morgan share in our vision and champion innovation is fantastic – and it gives us even greater confidence of the real potential for how far our Money Markets Services can go long-term.” 

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The Investment Association confirmed that Keith Skeoch, CEO of Standard Life Aberdeen, has been appointed chair of the board, while Michelle Scrimgeour, CEO of Legal & General Investment Management, and Patrick Thomson, CEO for EMEA at JP Morgan Asset Management, have been appointed deputy chairs. 

“Given the pace and scale of the changes faced by our industry, here in the UK and internationally, it has never been more important to have a strong voice speaking up for the investment management industry,” Chris Cummings, chief executive of the Investment Association, said. 

The senior appointments follow a board meeting and vote earlier this week, with all three buy-side bosses due to start their roles on 1 May this year. The Investment Association added the move aims to bolster the trade body’s long-term direction. 

“The asset management industry plays key roles in allocating capital to businesses and infrastructure projects, engaging with companies on ESG issues and importantly helping millions of people achieve their long-term financial objectives. I am honoured to be appointed chair of the board of the Investment Association,” Skeoch commented.

Skeoch replaces Peter Harrison, CEO of Schroders, who has been chair of the board for the past three years, and Scrimgeour and Thomson both replace Skeoch, who previously served as deputy chair of the board.

“I very much appreciate the confidence of my board colleagues and look forward to playing my part in ensuring that we have robust conversations around the future direction of our sector. As the industry’s trade body, we must continue to evolve and support the highest standards for all savers and investors,” Scrimgeour added.

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Speaking at the ‘Gaining the Edge Hedge Fund Leadership’ conference in New York, representatives from the hedge fund and allocator industry discussed the significant importance the technology will have on investment strategies and processes. 

“AI and machine learning is going to raise the bar across everything. Those that are not paying attention to it now will fall behind,” said one panelist from a $6 billion alternative investment manager, speaking under Chatham House Rules. 

Another panelist from a $4 billion hedge fund agreed, and argued that “every manager has to be looking at it”, while another explained it is beginning to analyse where it can use machine learning for its investment strategies. 

“We are looking at AI across all of our strategies – whether it is for execution, research, capital allocation etc. The technology is something that is very real, but at the same time, it is not a strategy by itself. It depends on how managers use it,” said one senior investment manager. 

The technology is becoming a necessity for hedge funds in order to analyse masses of data, predict corrections in supply and demand imbalances, as well as forecast market movements for tactical asset allocation. 

A recent poll conducted by BarclayHedge found that 56% of hedge fund respondents have used AI or machine learning to inform their investment decisions. Two-thirds also said they use machine learning to generate trading ideas and optimise portfolios. Just over quarter also said they use automation to execute trades. 

One speaker from a global asset manager highlighted that emerging hedge fund managers (sub-$1 billion in AUM), could become specialists in machine learning investing and develop viable systematic strategies. 

However, some of the largest hedge funds are developing machine learning tools or investing in it, including Bridgewater Associates and Man Group. In addition, Renaissance Technologies and Two Sigma have used the technology for investing for a number of years.

JPMorgan Asset Management arm is also planning to invest in emerging and established machine-learning statistical-arbitrage hedge funds. 

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Citi said that Curt Engler will relocate to Hong Kong to oversee the institution’s regional cash equities execution business, spanning 12 markets across the Asia Pacific region, including the high touch, program and electronic trading desks.

Engler has more than 20 years’ experience working in financial markets, most recently as head of equity trading for Americas in New York at JP Morgan Asset Management, after first joining the buy-side house in 2010.

In the role at JP Morgan, he was responsible for the firm’s trading desk and oversaw operations of more than $250 billion in assets under management. He also implemented new technologies across the trading desks to support increased automation and the use of analytics to improve execution performance.

Prior to JP Morgan Asset Management, Engler was a trader and an analyst at BlackRock in the quantitative equity group. Engler will be tasked with ensuring the bank’s franchise continues to embrace the latest technology to meet the changing needs of its clients.

“Curt’s market knowledge of operating in the world’s largest equity market and the market infrastructure changes he has worked through will be invaluable for Citi and our clients as Asian markets continue to evolve rapidly,” Richard Heyes, head of equities for Asia Pacific at Citi, commented on the appointment.

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