CSSF reported to examine lending by UCITS funds, and other business-critical industry news

Luxembourg Funds Intelligence Briefing
17th February 2020

The CSSF is reported to be examining potential liquidity risks arising from loans made by UCITS funds in the light of the suspension and subsequent closure last year of the Woodford Equity Income Fund in the UK. While the Woodford fund’s problems stemmed from unlisted and other hard-to-sell equity holdings, regulators across Europe and beyond are examining other assets held by funds offering daily liquidity that could be hard to sell quickly except at a steep discount. Other cases that have given rise to concern over the past year include bond holdings of Natixis’s H2O Asset Management range and the M&G Property Portfolio fund, which suspended trading in December for the second time in three years.

— Simon Gray, Editor in Chief


Asset Management
MiFID II transparency has spurred EU investor interest in ETFs: Lipper

Improved transparency on fund fees imposed by MiFID II has contributed to strong inflows into exchange-traded funds by European investors, according to Detlef Glow, a research director at Lipper. Morningstar, which predicted in 2017 that European ETFs would have €1trn assets under management by 2020, now says the threshold will be reached this month and ETF assets will amount to €2trn by 2024. BlackRock’s iShares dominate the market with a share of 44.3%, according to Todd Rosenbluth, head of ETF research at independent research provider CFRA.

Best source:

Wall Street Journal

(subscription required)

Fund Services
IQ-EQ recruits head of real estate in Luxembourg from rival Intertrust

Investor services group IQ-EQ has appointed Tamás Márk to the newly-created post head of real estate. Márk has more than 15 years’ experience in the corporate services and tax industry, including work with the European real estate market. He was previously head of real estate for Intertrust in Luxembourg, and was earlier a senior manager for corporate services and private wealth at law firm Rutsaert Legal, having been a senior tax advisor in the grand duchy with KPMG and then Ernst & Young.

Best source:

InFinance
Depositary services among added value leaders in Luxembourg banking sector: Statec

Luxembourg’s depositary banks serving the asset management sector enjoyed 28% growth in banking added value between 2015 and 2018, the best performance of any segment of the industry apart from retail banking with 49%, according to a review by Statec. The statistics office says depositary banks’ business was boosted by the ongoing growth of the country’s fund industry. Corporate finance saw banking added growth of 6%, but universal banks suffered a decline of 15% and private banks of 59%. Statec says that in 2018, banking accounted directly for 13% of the country’s added value, compared with an average of 4% in the eurozone as a whole.

Best source:

Wort

(subscription required)
See also:

Statec

(in French)

Regulation
CSSF reported to scrutinise loans by UCITS funds over liquidity risk

The liquidity risk of loan investments made by EU retail funds are reported to be under scrutiny by the CSSF, which is believed to have asked some funds’ managers  privately to prepare to sell their holdings. While most UCITS funds offer investors daily redemptions, selling loans in the secondary market typically takes significantly longer. Liquidity risks of UCITS funds have become a focus of regulatory concern since the suspension and subsequent closure of the UK’s Woodford Equity Income Fund, which was unable to sell illiquid stocks fast enough or in sufficient volume to meet redemption requests.

Best source:

Risk

(subscription required)
CSSF issues warnings over fraudulent entities and fines business for admin failings

The CSSF has warned about two websites that it says are not authorised to offer services in or from Luxembourg: www.clbrm-private.com, which claims to be an asset management and investment consulting firm under the name GW Investments, and www.conceptone-invest.com, which claims to offer investment services as Concept One. The regulatory agency says GW Investments and Concept I Sicav are legitimate entities with no connection to the fraudulent websites. The CSSF has also announced it has fined a support financial sector professional entity around €15,000 for non-compliance with administration and accounting rules in 2017 and 2018.

Best source:

Paperjam

(in French)
See also:

Luxembourg Times

(subscription required)

Technology
LuxTrust partnership offers cross-border digital identity services in Luxembourg and Belgium

Through a partnership between LuxTrust and Belgian counterpart Itsme, digital identity services can now be provided on a cross-border basis for the first time in Europe via LuxTrust’s Cosi platform, which will allow LuxTrust users to identify themselves digitally in Belgium and those of Itsme in the grand duchy. The service is being rolled out gradually, with only users of Luxtrust Scan, 4% of the firm’s 600,000 client base, initially able to use the service, but it should be fully available in the two countries by year-end. LuxTrust and Itsme have been working on the project over the past 18 months, with Banque de Luxembourg the first institution from the grand duchy to express interest.

Best source:

Paperjam

(in French)
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Three Reasons Why We Believe Lies (and the Fake News They Pollute)

I lied to my wife last night.

After movies with a friend, I told her I had stayed true to our no-sugar pact rather than admit to the M&Ms I had guiltily enjoyed.

Guilt and enjoyment, bedfellows in the act of lying.

A little lie. A white lie. That’s what people do, all the time, for all sorts of reasons. To make ourselves look good. To protect others from being hurt.

Or for bigger, more selfish reasons like making money, gaining an advantage or masking our own less-than-noble behavior.

In this case, my wife believed me because a) she wanted to, b) it fit her view of me and c) she’s accustomed to believing me.

We’ll return shortly to those three factors in a larger context.

We learn over the course of our lives the signals to watch for, the questions to ask, the scepticism to bring to the situation to judge for ourselves what’s true and what isn’t, to decide where on the lying scale, if you will, a certain person or situation belongs (from 0 – “never lie” – to 10 – “always lie”), and then to respond accordingly.

We expect to get smarter and wiser as we grow older and amass experience of dealing particularly with liars who register on the upper end of that scale.

What happens, though, when lies grow into something more insidious?

When they evolve into the currency for public policy and decision-making?

When they become the foundation on which politicians run for office or exercise power when they win?

That can happen when people stop caring that they’re being lied to. And that’s where we are now, one reason why this moment is so anxiety-inducing to so many people whatever their political affiliation and country of origin or residence.

I conceived VitalBriefing in 2011 because businesspeople I respected were complaining of two problems: a) They couldn’t swim through the information tsunami to find what mattered and b) they lacked the tools to separate fact from fiction.









Fact versus Fiction in a World of Fake News

These days, I’m thinking a lot about that second issue. Separating fact from fiction, real from unreal masquerading as real, genuine from the disingenuous is not only core to the success of my company. It’s also at the center of our global future.

In short, facts matter. Lies damage.

One of the principal drivers of my work and that of my colleagues over many decades of my career as a journalist covering the world at all levels — local, national, foreign and global — has been to ferret out the facts in any given situation and to assemble them into stories that could be counted on as much as humanly possible to present an objective version of the truth.

In one way or another, facts lie at the heart of every story in every legitimate newspaper, magazine and news operation. It’s what we strive for as journalists – that a particular story will have a particular impact because of the facts beating at its center.

And therein lies the question I’m grappling with: What does it mean when “alternative facts” – a euphemism for lies first posed by Donald Trump spokesperson Kellyanne Conway – become legitimate currency, and vast numbers of people are willing to make important decisions based on lies they know are lies?

In speeches, I’ve often used a clip of President Obama declaring his faith that “the American people, they’ve got good judgement. They’ve got good instincts. As long as they get good information.”

I wanted to believe him. I no longer do. Good information is no longer enough.









Minding the Facts





Despite the ongoing collapse of traditional, mainstream news media due to changing economics and the continuing loss of outlets and jobs for trained, professional journalists, editors, fact-checkers and photographers, there still are many legitimate sources of fact-based reporting and responsible journalism.

Yet, think about what we saw with the appalling outcome of the impeachment trial of President Trump in the US Senate: All but one Republican senator backing the multiple, documented lies of the president and those closest to him.

Ultimately, facts don’t carry weight these days.





“Think about what is now required for a Republican politician to be considered a party member in good standing. He or she must pledge allegiance to policy doctrines that are demonstrably false; he or she must, in effect, reject the very idea of paying attention to evidence.”

Paul Krugman, The New York Times




That quote from Nobel prizewinning economist Paul Krugman truly worries me.

Recent research on this subject focus on three explanations, which can be linked, as to why people are willing to ignore facts in their process of making judgements.

#1: Motivated Reasoning

The first is “motivated reasoning,” identified by social scientists as selectively choosing evidence to fit into the preferred conclusion.

In an article for Fast Company, Adrian Bardon, author of The Truth about Denial, says “this very human tendency applies to all kinds of facts about the physical world, economic history and current events.”

Bardon says motivated reasoning explains why a person’s “political, religious, or ethnic identity quite effectively predicts one’s willingness to accept expertise on any given politicised issue.”





#2: Confirmation Bias

That characteristic leads to the second factor: “confirmation bias,” by which people disregard information that doesn’t conform to their beliefs while latching on to that which reinforces what they already believe.

In their book Denying to the Grave: Why We Ignore the Facts That Will Save Us, psychiatrist Jack Gorman and his daughter, public health expert Sara Gorman, identify a physiological aspect to this tendency which seems, on the surface, to be self-destructive.





“It feels good to ‘stick’ to our guns’ even if we are wrong,”

Jack and Sara Gorman




They point to research indicating there’s a burst of dopamine that triggers genuine pleasure when people absorb information that buttresses their existing views.

Elizabeth Kolbert, a Pulitzer prizewinning staff writer for The New Yorker, calls confirmation bias “among the best catalogued…of the many forms of faulty thinking that have been identified.”

She cites researchers who argue that this tendency actually works against our interests; that it’s a human “design flaw” that could harm us by leading people to disregard danger or proof of threats.

Cognitive scientists Hugo Mercier and Dan Sperber liken confirmation bias to a mouse setting out to prove its conviction there are no cats around…and ending up as dinner. As such, humans logically should have evolved to reject this bias.

They attack the issue in The Enigma of Reason, further honing confirmation bias to “myside bias.” They argue that humans don’t believe ‘just anything.’ We’re good at identifying flaws in others’ arguments, but not our own.

They say humans evolved to win arguments rather than to show logical consistency in their reasoning which, they say, is why reason seems to lose out in the world of fake news, Twitter, Facebook and fabricated research.

“This is one of the many cases in which the environment changed too quickly for natural selection to catch up,” they write.

In fact, confirmation bias is also part of the explanation of the power of fake news, smack in the middle of a “clickbait culture” where the most provocative headline draws audience into stories that will reinforce their existing views based on any material that supports them, actual facts be damned.





#3: Illusory Truth Effect

The third explanation is called the “illusory truth effect,” the notion first raised in 1977 that we all hold multiple beliefs that simply aren’t true, a conclusion that has been confirmed in many experiments since then — including a 2012 study concluding that “repeating false claims will not only increase their believability but may also result in source monitoring errors.”

In a 2018 paper published in the Journal of Experimental Psychology, Gordan Pennycook of the University of Regina, Tyrone Cannon of Yale and David G. Rand of MIT find that “fluency via prior exposure” makes a significant difference:





“Using actual fake news headlines presented as they were seen on Facebook, we show that even a single exposure increases subsequent perceptions of accuracy, both within the same session and after a week.”

Journal of Experimental Psychology




But here’s the real bottom line on that one: “Although extreme implausibility is a boundary condition of the illusory truth effect, only a small degree of potential plausibility is sufficient for repetition to increase perceived accuracy.”

In other words, the more times you read, hear or watch a story, the more you believe it’s true. 









What it all means





Combine these three factors and you land at a single conclusion:

If it could be true and it fits your existing belief, the more you hear it, the more you’ll believe it (and you’ll feel good spreading it to others who think like you).

And it offers one explanation for how lies and false information can be recast as “news” – real fake news – by humans who then can use all the tools at their fingertips, from Facebook to Twitter to Instagram to bots to any social media platform in these days of everyone’s-a-publisher to broadcast these targeted “stories” to hundreds of millions of people who are likely to believe them.

As we well know by now, the single technological factor that bears the most blame for the “weaponization of content” is indeed social media and the platforms that enable global transmission of any content, including unverified, unchecked and unreliable.

Donald Trump himself has mused that without social media – specifically Twitter – he likely would not be occupying the Oval Office.

Just ask those Russian disinformation specialists who during the 2016 presidential campaign, according to a report by the US Senate Select Committee on Intelligence, made:

  • 61,500 phony Facebook posts that reached some 126 million Americans (half the number of eligible voters)
  • 116,000 Instagram posts
  • 10.4 million tweets

All appeared as if they were posted by genuine users. (And that’s just a percentage of the false social media related to the election).

So, start adding up the damage since the election and what was a minor brushfire a few years ago is now a major conflagration of post-fact-based stories that propel badly-founded decisions.

Disregarding overwhelming evidence to the contrary, substantial numbers of people believe that crime in America has worsened since 2008, childhood vaccinations are dangerous and that owning a handgun makes one safer.





“The information we consume is like the food we eat. If it’s junk, our thinking will reflect that.”

Farnam Street




In fact, a group of MIT researchers documented in a 2018 study published in Science, that false news spread further and faster on social media.

Indeed, they found that the truth took six times as long to get to 1,500 people as a falsehood – and that fake news stories were 70% more likely than actual, true stories to be retweeted.

“Falsehood diffused significantly farther, faster, deeper and more broadly than the truth in all categories of information,” they concluded.

But Jack and Sara Gorman, bent on trying to correct the way we misinform ourselves, run up against this brick wall: Even when people are given accurate information, they won’t necessarily change their minds. Instead, they discard information that doesn’t fit their belief system.





“The major new challenge in reporting news is the new shape of truth. Truth is no longer dictated by authorities but is networked by peers. For every fact there is a counterfact and all these counterfacts and facts look identical online, which is confusing to most people.”

Kevin Kelly, Wired Magazine




In 2017, BBC Future Now assembled 50 experts for a discussion of the 21st century’s greatest challenges. Many of the experts identified the breakdown of trusted information sources among them.

“The major new challenge in reporting news is the new shape of truth,” said Kevin Kelly, co-founder of Wired magazine. “Truth is no longer dictated by authorities but is networked by peers. For every fact there is a counterfact and all these counterfacts and facts look identical online, which is confusing to most people.”

In this world of information pollution, it becomes a tremendous challenge to tease out the real from the fake. The more we take in, the harder it is to evaluate its value.

As Greg Swanson, CEO of digital media consultancy ITZ Media puts it, “the sorting of reliable versus fake news requires a trusted referee.”









What you can do





Slammed by news from all directions, there are steps you can take to reduce and maybe even eliminate the fake news that pollutes your personal environment:

  • Consume less.
  • Be very selective in the news you consume.
  • Check out the sources you choose. Do they adhere to genuine journalistic practices? If they have biases, are they clearly stated and presented? Do they present multiple sides to the story, but not necessarily giving them all equal weight? Are their conclusions based on responsible reporting?
  • Be wary of sites that don’t clearly present the sources of their revenue.
  • Avoid sources displayed in your social media feeds that you can’t verify and/or lack legitimate expertise in the subject matter.
  • Don’t rely solely on breaking news. Seek out more in-depth stories and analyses to inform your opinions and decisions.

As for me, I’ve learned my lesson about lying. I promised my wife that next time, I’ll tell her the truth about those M&Ms.

Europe uses sustainable finance initiative to curb climate change

Europe is using its Sustainable Finance Initiative to fight climate change. But will it work? VitalBriefing Editor-in-Chief Simon Gray shares his expert insights on the matter.

With much fanfare, the new European Commission president, Ursula von der Leyen, has unveiled the continent’s “man on the Moon moment”: Europe’s Green Deal plan to to achieve carbon neutrality by 2050.

True, details of just how the EU plans to meet this challenging target will be revealed only in June. And Poland, where 80% of the electricity comes from coal, is holding back on committing to carbon neutrality until the EU earmarks more financial assistance to ease its transition.

Crucially, though, as the Trump administration sneers publicly at climate science, the EU is now formally on board for taking a global lead.

The Commission declared that to become the world’s first climate-neutral continent is “the greatest challenge and opportunity of our times”.

Its plan, announced in mid-December, includes investment in green technology, sustainable solutions and the creation of new businesses, acting as a catalyst for economic growth through a transition that’s “just and socially fair …[and] designed … to leave no individual or region behind”.

Immediate impact

Arguably, though, a less high-profile decision earlier that month may have a more immediate impact on carbon emissions and the environment.

On December 5, EU finance ministers and representatives of the European Parliament reached agreement in principle on the “taxonomy” of the Commission’s sustainable finance initiative: a common set of rules governing how to determine which activities can and cannot be counted as green investments.

The finance ministers’ accord still must be formally endorsed by EU leaders. But the road now appears clear for the full sustainable finance package to become EU law – and it could start influencing corporate behaviour in Europe and beyond well before the European Green Deal takes effect.

The Commission’s initiative features three elements, two of which were endorsed last year by the European Parliament and member states.

The first would require institutional investors and asset managers to reveal how they integrate — or fail to integrate — environmental, social and governance criteria into their risk management processes.

Green benchmarks

A second measure would amend the EU Benchmark Regulation by creating  a new category of standards comprising low-carbon and positive carbon impact measures to provide investors with better information on the carbon footprint of their investments.

The Commission also has proposed changes to subsidiary legislation to MiFID II and the Insurance Distribution Directive that would incorporate ESG criteria into the advice that investment firms and insurance distributors must offer individual clients.

But taxonomy has always been the most critical element. The biggest issue in sustainable or green finance is how exactly it’s defined. Critics argue credibly that the lack of standard definitions has led to an epidemic of ‘greenwashing’ – investment firms and other businesses spouting green principles without adopting meaningful changes to their energy use, carbon emission or waste practices.

Universal classification

The proposed taxonomy regulation would set the conditions and framework for a unified classification system that defines an environmentally-sustainable economic activity.

But it hasn’t been without dispute and controversy — which explains the delay in approval from EU member states.

Most notably, France sought to have nuclear power deemed a low-carbon source of energy. But Paris appears to have admitted defeat in the face of vehement opposition from Austria, Germany, Luxembourg and the European Parliament.

However, the finance ministers agreed to a “do no harm” provision expected to exclude nuclear power when detailed rules are drafted.

The deal would create three categories for sustainable investments: “green”, “enabling” and “transition”, obliging companies with more than 500 employees to reveal the extent to which their activities fit these categories.

Cost of capital

How will all this affect businesses? By intensifying pressure on fund managers and institutional investors such as insurance companies and pension funds to focus their investments on companies that meet the Commission’s criteria — and to withhold their money from businesses that can’t or won’t do so.

So, expect the cost of capital for fossil fuel-oriented companies to rise, affecting their profitably and undermining their ability to compete with rivals that embrace renewable energy.

Yes, there’s already plenty of activity in the green investment sphere. But the lack of common standards has proved a major drawback. With the possibility that EU standards become widely adopted around the world, the Commission’s taxonomy could become the gold standard that, at last, vaults the green economy to global acceptance.

Competitive intelligence should supercharge, not drown, your sales team

In an era of information-overload, competitive intelligence and competitor/press monitoring can be your differentiator

Our world is driven increasingly by data: what we read, what we buy and what we think.

Businesses that fail to harness the data flow will cripple their sales staff’s efforts to attract new business and retain existing customers.

Why we all need business intelligence

No business can operate in a bubble, particularly in the modern, globalised and internet-driven economy. You must stay current on your competition, the innovations about to rock your world and the data that will cut costs and boost productivity.

Corralling all that information is expensive.

Often, data is unstructured. That means monitoring competitors or absorbing a tsunami of information from news articles, blogs and press departments doesn’t squeeze easily into corporate KPIs and reports, or on a single intelligible spreadsheet.

Hence, competitive/competitor intelligence, and monitoring software and services that draw on data analytics and industry news/trends will spot strengths, weaknesses, opportunities and threats.

Just as important, they present the information in a format that executives and staff can use to drive decisions.

The aim is to collate, structure, present and update relevant data so that various staffers, including your sales team and finance department, can make better strategy, react faster and ultimately sell more.

Why humans for competitive intelligence and media monitoring?

Harnessing all that data is a massive and exponentially-growing challenge. Internal business functions create many thousands of data points each day.

But information held by the finance team may not be accessible to customer service or passed in a useful format to sales teams that could, in turn, offer alternative products to customers struggling to pay invoices, or offer an upgrade to those who consistently pay on time.

Meanwhile, automated competitive intelligence and media/competitor/press monitoring software and tools paradoxically can contribute to an organisation’s information-overload, flooding your business with irrelevance.

In this case, the old adage holds: Quality beats quantity.

Enter the personal touch.

As helpful as some automated services are for amassing data and information – for example, those from Oracle or Trakomatic – they can’t match analytics curated and organised by a human expert.

That’s why 80% of businesses now have at least one part-time employee (e.g. business intelligence analyst) dedicated to gathering BI.

Companies also must be able to react immediately to fake news spreading about them or their industry. Left to fester, opinion and falsehoods can quickly overwhelm the truth, complicating efforts to respond by PR, sales, marketing and customer-service colleagues.

The greater the data flow, however, the harder to filter right from wrong, true from false and useful from time-wasting – quickly overwhelming time-pressed staffers.

Multiple benefits

The need to recognise and respond to situations good and bad — and to respond quickly — often drives a company to invest in business and competitive intelligence that aims to assemble data fast and intelligibly.

MicroStrategy found that:

– 94% of businesses think data and analytics are important for growth and digital transformation.

– Almost two-thirds (64%) believe such software already has led to improvements in productivity and efficiency.

– Nearly half (46%) say they have improved customer acquisition and retention by deploying the technology.

Competitive intelligence, however, offers payoffs outstripping sales: 46% of respondents also say that related technologies led to the discovery and creation of new revenue streams.

ROI up to 1 000%

There are plenty of providers of competitive and business intelligence tools, software and services for marquee multinational clients such as SAP. Smaller specialists focus on specific sectors.

Be aware that these providers’ services are never cost-free.

While tricky, measuring the ROI on business intelligence is almost uniformly positive. A respected study by IDC found a median five-year ROI of 112% and an average payback time within 1.6 years.

One-fifth of the firms surveyed even found returns of 1 000% or more.

Other studies deliver a wide range of results. A more recent survey by Nucleus Research documented average returns of $13.01 on every dollar spent.

Companies as diverse as Amazon, cruise liners and even universities are keen on deploying competitive and business intelligence, respectively, to encourage more sales, more passengers and fewer dropouts by new students.

Ultimately, there’s a reason that the Dresner Advisory Associates’ popular Wisdom of Crowds® Business Intelligence Market Study notes that improving revenues using BI and CI is now the most popular objective enterprises pursue.

Sharing the sales benefit

These successes also depend on correctly implementing the software and the data produced.

Done well, CI also throws off intangible benefits, such as better employee engagement and a more pleasant, well-integrated working environment.

Poor implementation, without buy-in across all functions and levels, will reduce those intangible benefits — as well as the tangible, bottom-line ones.

More than 80% of management has access to the analytic data their systems deliver, according to the MicroStrategy study. Those on the front lines – in sales or customer support, for example – aren’t so lucky; just over half have access to the tools that could provide them more insight and help speed decisions.

That lack of access creates friction, adds to cost and leads to poorer outcomes, including the loss of once-loyal customers when the sales team can’t be proactive.

In those cases, the majority of employees must ask someone else in the organisation for help in making a data-driven decision.

A substantial number simply ‘wing’ it, relying on intuition rather than fact.

In short, restricting access to business insight is a false saving. Don’t be fooled.

Key takeaways

  • Business and competitive intelligence are widely considered as critical by companies in every sector.
  • There’s a significant difference between access to business intelligence and access to effective, high-value business intelligence. Simply gathering data won’t yield the potential 1 000% ROI.
  • Business intelligence — easy to share and absorb and tailored to your specific needs — must be easily accessible by your sales team.
  • The best business and competitive intelligence products are produced with some form of human curation that meets your specific needs.

Cure for Information Overload: Competitive Intelligence Quality (Not Quantity)

Conducting business would be unimaginable without access to the internet, particularly for news and critical information.

Remember the pain of researching a competitor’s latest products? Or waiting a week or more for a review in a flagship trade magazine?

Today, your favourite search engine delivers every catalogued article, review or social media posting in nanoseconds, rendering competitive intelligence and monitoring easier than ever before.

Which begs the question: Which links should you trust?

Not new, just bigger

Information overload is not a new concept.

According to the Harvard Business Review, it’s been an issue for at least 2,300 years. There’s even a reference in the Bible to the growing menace of the printed word.

In the digital era, research shows that information overload is bad for business — and for your employees. When unfiltered, business and competitive intelligence are at best ineffective, at worst harmful.

From sales data to media reports, the value of that information declines sharply when recipients aren’t guided to what matters most. Information overload – a.k.a “infobesity” and “infoxication” – quickly leads to infoxiety (information anxiety).

As business psychologist Tomas Chamorro-Premuzic argues, information and news filters may simply confirm our own biases based on what Big Tech knows about us already.

Too much information also inhibits our ability to digest and process information.

Gamechanger: Media monitoring

Even so, media and competitor monitoring can’t be overlooked as a crucial element in decision-making.

That information is a key component of any business and competitive intelligence and analytics architecture. A well-designed system will follow the latest news about your specific subjects, competitors, products, legal and regulatory developments.

Sounds like common sense. Yet designing an effective monitoring system is hard.

Even conducting your own internet search will quickly swamp you.

VitalBriefing is hardly the world’s largest multinational (for the moment), but a quick Google search for us tosses out 5 370 results.

Try a bigger media outfit, like the BBC or New York Times, and the results run into the billions.

Online notification services such as Google Alerts are free and easy to create. Yet the results can prove frustrating: Complaints have been growing since 2013 that alerts are more about driving traffic to specific websites than about delivering relevant news.

Free filtering tools are fairly basic. For example, no matter how carefully you tailor them, alerts set for the ECB — European Central Bank — are just as likely to deliver match results and player news from the England and Wales Cricket Board (also the ECB).

At best, Google Alerts is a back-up when all else fails.

Quality matters

Bain & Company’s consultants call infobesity the enemy of good decisions.

They suggest taking a step back, reviewing exactly what you need from your data, focusing on the important elements and standardising the output – in an internal email, on an intranet or in a corporate knowledge management system, for example — making it easier to digest.

They also suggest that timing is everything. With big data ever more accessible, the tendency may be to deliver too much information, too often.

But perhaps the most significant insight from Bain & Company is on ‘quantity’ and ‘source’. Not every executive decision needs every single news article on a successful product launch or the impact of a new regulation.

If the views are fairly uniform, then one or at most two will do, especially if the second adds new information.

For ‘source’, read quality. Algorithms and artificial intelligence aren’t always best at discerning quality media. Their filters often are founded on momentum and traffic volumes.

In entertainment, ‘clickbait’ articles create tremendous amounts of traffic (and advertising revenue), so popularity could be said to equal success of sorts.

But in business, law and finance, the most insightful articles may be hosted on trade-news websites, government or agency sites or hidden behind subscription paywalls.

Then there’s fake news, particularly regarding politics and current affairs. In the 2016 US presidential election and the UK’s Brexit referendum, fake news often was published on new and virtually unknown websites, their reach amplified by social media retweets and “likes”.

The human touch

Fake news is no longer confined to politics.

It can strike businesses big and small, often with a real financial and reputational impact.

That’s why media and competitor monitoring, news curation, competitive intelligence, and high-value business intelligence continue to require a human element – and why at VitalBriefing we’ve recently updated our tagline to read “content you can trust”.

We’ve assembled a growing team of journalists around the world with expertise in their chosen fields, from financial services to logistics to sustainable development to the space industry and beyond. Their experience and knowledge of what’s important to your business — and what’s credible — is an invaluable resource.

Software and automation just can’t substitute for the human expertise and insight into what you specifically need to know to protect – and grow – your business.

We’re betting that will be the case for a long time to come.

Is Content Marketing the Key to Your Business Growth?

In just a few short decades, the internet has exploded into an expanding universe of content – and content marketing.

Run a web search and prepare to spiral into a black hole of possibly interesting but often false and distracting material that risks sending you spinning across a galaxy of irrelevance.

Information consumers — all of us — in this dense and fast-moving medium are challenged to know which sources to believe, especially when the term “fake news” is tossed around like confetti by our most powerful leaders.

“What’s gone from the internet isn’t ‘truth’, but trust: the sense that the people and things we encounter are what they represent themselves to be,” writes Max Read in New York Magazine.

It may sound counterintuitive – using more content to battle the content overload we are now experiencing – but high-value content marketing is critical for any business looking to separate itself from its competitors and effectively engage their target consumers.

In fact, a robust content strategy has fast become a key element of many business sales processes.

Standing out from the crowd

Amid this tide of dishonesty, it’s imperative for your business to open up an authentic channel of communication rich with real and valuable content.

But if it’s never been more important for businesses to generate quality content to stay competitive, how do you deliver high-quality, targeted information to current and future clients without getting lost yourself in the endless forests of information?

And more importantly, why do so many of us find it so hard to produce effective content marketing?

According to Doug Kessler, creative director at Velocity Partners, the answer to succeed with inbound marketing is to build a great content brand:

  1. Aim high and strike your target.
  2. Become known for producing top-notch content.
  3. Deliver on your promises.

Hit these three goals and you’ll attract quality producers who can power your upward spiral.

By providing reliable, engaging branded content and thought leadership that your customers opt in to read and share, you build trust – far more effectively than by throwing advertising at them – and can set your business apart from the competition, improve your brand recognition and reputation while highlighting your expertise in your industry.

According to DemandGen, 95% of B2B buyers consider content to be a trustworthy means of evaluating a company and its offerings, while Hubspot finds that prospective customers consume at least five pieces of content before buying – both points offering clear indications of content’s importance.

Anna Rosenman, an executive at customer relationship management software leader Salesforce – which just launched a content management system within its platform to enable businesses to harness customer data – says that without content, your commerce site is a mere webpage facilitating transactions.

Your own content also can serve as a forum to develop your brand’s voice, a place where you can present a more personal face of your business.

Marketing expert Michael Brenner notes that forcing the brand name on the customer’s attention can be counter-productive, so try to mention it as little as possible. This restraint could also help you to decide whether to host your content on your main branded website, or on a separate domain.

With trust and a relationship established, your content can educate your audience with the information they need to take the next steps in the conversion process, whether making an actual purchase, getting in touch for more information or engaging with you online.

The key is to provide highly readable content that enriches the reader with new insights and ideas. The Content Marketing Institute says that after reading recommendations on a blog, 61% of American online consumers made a purchase.

Case studies

Brenner offers examples.

A personal favorite: A few years ago, consulting company Capgemini suffered from poor brand awareness and was falling behind the competition. Vetoing a proposal to buy display advertising in golfing magazines — and even to sponsor a professional golfer — its brand manager opted in 2013 for a content marketing strategy based around Content Loop, a storytelling website integrated with LinkedIn featuring topics such as big data and the cloud, stories aimed at putting the company “at the heart of business and IT conversations”.

After one year, the brand site had drawn nearly one million new visitors, the firm had gained more than 100,000 new followers to its LinkedIn page and enjoyed 1.8 million shares of its content.

Crucially, the strategy generated nearly $1 million in sales the first year and has been growing since.

Other examples range from luggage company Away, which created Away Here, a high-end, magazine-style blog focusing on travel and lifestyle topics to enterprise chat provider Slack’s blog, “Several People Are Typing”, with tips on productivity and collaboration and Home Depot’s Garden Club portal, which is packed with how-to guides.

How to quantify your content marketing efforts

Quantifying the efforts you put into content marketing is difficult. Don’t fall into the mistake of identifying financial gain as the immediate goal. Rather, you’re in a marathon, not a sprint.

Nevertheless, return on investment can be maximized by creating a strategy that focuses on select topics for your target market rather than simply churning out content for its own sake.

Media and competitor monitoring for current trends are key. Same for harnessing data on the customer experience on your site that’s useful for future content planning, such as journey maps, user feedback and customer profiles.

Improved search engine optimization for your business provides consistent and relevant content, including a variety of topics and keywords. Indeed, Tech Client provides this heartening statistic: Websites that post consistent blog content boast on average 434% more pages indexed by search engines than those that don’t publish at all.

Believe this: Content costs about 62% less than traditional marketing techniques — and generates three times as many leads, according to DemandMetric. Obviously, that’s a highly efficient and effective way to maximise your budget.

While it’s cheaper than straight-up advertising, dedicating budgets to this effort is important. Data from the Content Marketing Institute/MarketingProfs shows that B2B marketers allocate 29% of their total marketing budget, on average, to content marketing (26% for B2C). The most effective allocate 42%, and the most sophisticated and mature allocate 46%.

Key takeaways

• Know your audience. Put yourself in your buyers’ shoes, be aware of their challenges, needs, interests, desires and concerns – and tailor your content accordingly.

• Choose the right tools and software to produce and show off your content.

• Unless you have an in-house team, outsource to content-creation professionals.

• Decide on, then develop your brand’s voice: serious, funny or whatever. Just have a voice.

• Post consistently and regularly across content types and platforms.

How the EU’s green finance ambitions could revolutionise fund management

The European Commission will soon launch ambitious plans that would position the EU as a global leader in the reduction of carbon emissions and the transition to a more sustainable economy that can contribute to curbing climate change. On behalf of our client, KNEIP, VitalBriefing looks at how Europe’s green finance goals could be a gamechanger for the fund management industry.

Click here to read How the EU’s green finance ambitions could revolutionise fund management.

 

How We Decided to Make our 2020 Holiday Donation

We’ve been discussing at VitalBriefing where to make a corporate donation for the holidays.

In part because I’m obsessed with a world that increasingly devalues the critical importance of fact-based information and in part because we’re a business based on journalistic principles, I set the parameters: Our contribution should be directed at an organisation dedicated to freedom of the press and/or safety of journalists and/or fighting censorship.

In my view, the issue of “information you can trust” and its impact on just and democratic governance, together with climate change, are two of the most urgent concerns for every person on the planet. And never in our lifetimes have the dangers been greater or the stakes higher.

According to the group we chose, nearly half the world’s population is denied access to free information, “knowledge that is essential for managing their lives…they are prevented from living in pluralist political systems in which factual truth serves as the basis for individual and collective choices.”

The candidate short-list was impressive:

The Committee to Protect Journalists: An invaluable, New York-based organisation with which I have many personal connections. It’s a wonderful group with a blue-chip board that has included David Schlesinger, the distinguished former editor-in-chief of Thomson Reuters and the current chairman of VitalBriefing’s International Advisory Board.

For more than three decades, CPJ has been defending and fighting for press freedom, shining the light on attacks on journalists and reporting on violations of press freedom around the world. It’s arguably the most influential voice defending the cause of essential journalism.

Index on Censorship: A young non-profit centred in London that “campaigns for and defends free expression worldwide,” publishing work by censored writers and artists and monitoring threats to free speech. Again, the personal connection was at work here: David Schlesinger is a trustee and the patrons include legendary figures such as Margaret Atwood, Michael Palin, Sir Tom Stoppard and Steve Coogan.

The group works in partnership with Amnesty International, the American Civil Liberties Union and Pen International, among others, and is a founding member of a global network that monitors censorship worldwide while defending writers and journalists and those persecuted for exercising their right to freedom of expression. As David told me: “We are one of the only voices fighting for pure freedom of expression in the face of severe encroachments including in our beloved EU.”

Reporters without Borders: Based in Paris, this NGO maintains correspondents in 130 countries able to take on governments over media and internet statutes and standards, defending freedom of information and publishing a World Press Freedom Index used as an evaluation and advocacy tool by the World Bank and the UN Refugee Agency in allocating aid.

From a marketing perspective, I also admire the shrewd and effective video they launched in November with a simple, straightforward and pointed message: “Without independent journalism, this would be the news.” Take a look, and you’ll have the answer to why I used Kim Jong Un’s photo for this piece.

All these groups – and many others such as ProPublica and PolitiFact do vital work and are worthy of all the support they can get. In the end, our decision was based on a laughably practical criterion: Which group had branded holiday cards at the ready that we could use to send to our clients and friends to solicit support for a cause we consider indispensable? Surprisingly, only Reporters met that need.

Next year, for sure we’ll move earlier and send our own cards and share our modest wealth with another of these worthy groups. I hope you’ll consider doing the same now and in future. Given the results of Brexit, the lies, distortions, real fake news and misinformation driving Trumpublicanism, and attacks on honest journalism and journalists around the world, the need will become only more urgent.

Luxembourg fund assets lifted by stock market boom, and other business-critical industry news

Every Monday, VitalBriefing is proud to publish its exclusive Luxembourg Funds Intelligence Briefing, featuring our editors’ selection of the most important stories of the week that impact the funds industry.

We invite you to check it out below, and if you like what you see, subscribe to receive the briefing FOR FREE to your inbox each week.

 

Luxembourg Funds Intelligence Briefing
13th January 2020

 

 

 

Luxembourg’s investment fund asset total, second in the world only to the US, continues to be lifted by the year-long stock market boom since the downturn at the end of 2018. From €1.5trn in 2009, in the aftermath of the global financial crisis, the industry’s net assets had risen to €4.67trn at the end of November. However, most of the increase in assets over the first 11 months of 2019 came from market growth rather than net inflows.

 

— Simon Gray, Editor in Chief

 

 

Asset Management
Fund assets set fresh record of €4.67trn in November

Net assets under management of Luxembourg-domiciled investment funds reached a record €4,669.7bn at the end of November, according to the CSSF. The sector has enjoyed almost a year of uninterrupted growth following the slump in global financial markets in the fourth quarter of 2018.

Best source:

Paperjam

(in French)

 

Fund Services
Thibaut Partsch joins Elvinger Hoss Prussen as partner

Alternative investment specialist Thibaut Partsch has joined Elvinger Hoss Prussen as a partner in the law firm’s asset management and investment funds practice. A member of the Luxembourg Private Equity and Venture Capital Association, Partsch was previously with international law firms in Brussels, New York and the grand duchy, including 12 years with Loyens & Loeff, and is a member of the bar in both New York and Luxembourg.

Best source:

Elvinger Hoss Prussen
Aztec Group supports close of Headway Capital Partners PE fund

Fund services provider Aztec Group says it has assisted UK-based private equity fund manager Headway Capital Partners on the final close of its HIP IV fund with total commitments of €372m. Aztec helped Headway with the fund’s formation and fundraising, and will provide ongoing administration services from its Luxembourg office.

Best source:

Luxembourg Chronicle

 

Regulation
Paris lobby group calls for more transparency from activist funds and short-selling restrictions

Paris Europlace, the lobby group for the French capital’s financial industry, has added its voice to calls for greater transparency on the part of activist funds targeting French companies, as well as seeking restrictions on short-selling. The group recommends that funds inform the targeted company of their plans and sources of finance, and share any non-public communications with the company’s shareholders. Paris Europlace has also proposed rules for proxy advisers and securities lending.

Best source:

Les Echos

(subscription required, in French)

 

Technology
Fintech firm Numbrs to relocate most of Luxembourg team to Switzerland

Martin Saidler, the founder of Swiss fintech firm Numbrs Personal Finance, says it will close its subsidiary Numbrs Luxembourg, with nine of the office’s 11 employees to be transferred to its Zug office. The firm’s main product is an app that aggregates bank account and credit card information and facilitates mobile banking and personal financial planning. Numbrs blames reported problems with the app on the implementation of the EU’s revised Payment Services Directive, but has threatened to take legal action against anyone publishing false speculation about the company.

Best source:

Inside Paradeplatz

(in German)
LuxTrust to open Paris office in European expansion drive

Digital certification firm LuxTrust is to open an office in Paris in the coming months as part of its strategy to target the wider European market, according to communications director Stéphanie Godar. The firm has recently developed products involving secure digital signatures alongside its existing digital identity services.

Best source:

Paperjam

(in French)

 

Customise This Briefing

This free weekly Intelligence Briefing critical for your Luxembourg fund interests, prepared by our top financial journalists, can be personalised just for you: Essential and accurate fund market news to deploy internally and for your customers. Contact us to explore how we can customise to boost your brand and your business.

 

The legal and tax complexities of real estate, your biggest asset

How much do you know about the legal and tax complexities of real estate in Luxembourg?

For many people, property is the biggest asset to their name, so it is important to be aware of how real estate is held and passed on to future generations in the grand duchy.

Read the informative and succinct guide VitalBriefing created for Banque Internationale à Luxembourg’s myLife information platform.

Read the full article here.