NCMA is the regulated capital markets advisory subsidiary within Navigant. We are staffed with industry professionals with years of experience in cash and derivative trading, structuring and risk management.
NCMA serves banking institutions, insurance companies, pension funds, sovereign wealth funds, corporates and investment managers in four principal areas:
NCMA’s business operates against the significant structural changes to financial markets which have arisen from developments such as the financial crises of 2007/8.
Increased prudential regulatory capital requirements, such as Basel III, and other restrictions may push risk taking away from banks towards the asset management industry, where significant pools of capital are being accumulated. Parts of the banking sector still, however, have significant work to do to reduce balance sheets leverage. Many institutions have illiquid structured products, such as commercial mortgage backed securities which need to be restructured, extended or even “reprofiled”. Banking exposures to Portugese, Irish and Greek government debt are still a concern.
For asset managers, regulatory restrictions on offshore hedge funds, such as the Alternative Investment Fund Management Directive, are not yet at the same stage of development as the Basel framework for banks and attempts by legislators to restrict leverage in hedge funds have been dropped. Instead higher standards on risk management, valuation and custody have been imposed.
For both asset managers and banks, the regulators have focused on remuneration for traders and those with significant influence functions. Independent valuation has now become important where the fees of asset managers depend on the performance of the fund which is valued by them.
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NCMA Brochure
An overview of NCMA's services
The onshore asset management industry in Europe is benefiting from the success of the UCITS structure. Although concerns have been expressed about the techniques used to squeeze strategies into the liquidity constraints required under UCITS, the structure should flourish if it can compete on costs with its offshore cousin. The latest version of the directive, UCITS IV, is in force in the UK from 1 July 2011.
Traded markets in Europe have been fragmented by MiFID, whilst giving high-frequency traders opportunities to benefit from pricing opportunities from institutional order flow albeit under the suspicious gaze of the regulators. Market abuse becomes harder to monitor in this environment whilst it has become a regulatory priority.
Exchange traded funds (ETFs) provide investors with low cost asset allocations and traders with arbitrage opportunities. The very success of ETFs raises the question of another bubble, with regulators worrying about increased asset correlations and the creation of synthetic ETFs by banks. All of these factors require participants in the financial markets to abide by unprecedented standards of corporate governance, risk management and prudent valuation. This is the case for complex issues, such as a coherent approach to credit valuation adjustments, through to basic procedures which properly implement industry standard valuation for illiquid and unlisted securities. All of this provides fertile soil for litigation to take root.
NCMA works with all participants in the financial markets to adapt and thrive in this new environment.
Navigant Capital Markets Advisers Ltd. Authorised and regulated by the Financial Services Authority. FRN: 511521
NAVIGANT CAPITAL MARKETS ADVISERS LTD
Registered Office: 100 New Bridge Street, London, EC4V 6JA
Company No. 05604810