Morgan Stanley a global bank has launched FX Gateway, a new multi-manager platform aimed at providing institutional investors access to select currency managers. In turn, the platform seeks to provide currency managers with a more diversified investor base. With Morgan Stanley acting as FX Prime Broker and distributor for the platform, FX Gateway is able to leverage the Firm’s expertise in the FX business and its deep distribution channels.
“Our institutional clients are increasingly attracted to the FX Markets as an asset class and are therefore looking for ways to access managers with demonstrated currency investment expertise,” said Martine Bond, Managing Director & COO of FX and Emerging Markets at Morgan Stanley. “We are excited with FX Gateway as an investment vehicle which can help make the investment process more efficient for investors. This is another example of Morgan Stanley’s commitment to the FX business,” she added.
FX Gateway employs strict selection criteria, a standardized due diligence process and ongoing monitoring for currency managers, each of which is conducted by Mercer Investment Consulting in its role as the program advisor and fiduciary for the platform. This independent selection of currency managers by Mercer based on strict criteria and ongoing due diligence process is designed so that all currency managers on the platform meet and maintain the required standards.
“Mercer is pleased to be associated with Morgan Stanley in the development of the FX Gateway Platform,” said Jeff Schutes, Mercer’s U.S. investment consulting leader. “This provides an efficient and robust means to leverage both Mercer’s deep knowledge of currency managers and Morgan Stanley’s prime brokerage and distribution capabilities in FX.”
Investors in FX Gateway will be able to choose from a range of products that can be tailored to their foreign exchange strategic requirements. Investors will also be able to benefit from daily transparency on manager performance and daily liquidity. The platform has appointed SS&C Technologies, Inc. as the administrator to ensure independence of net asset value calculations and to leverage their technology expertise to maximise operational efficiency.
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For this initial phase, FX Gateway is expected to have between ten to fifteen managers on the platform. C-View and The Cambridge Strategy are the first two managers and a further seven are expected to be included by mid-October.
Commenting on the launch, Paul Chappell, Managing Director and Portfolio Manager at C-View said: “We are delighted to be amongst the initial group of managers selected at launch of the FX Gateway product. For us Gateway provides wider access to the C-View Currency Managed Account Program. We are impressed with both the product offering and the resources Morgan Stanley is making available for its distribution. In the current environment which is replete with opportunity in currency as an asset class, it allows a much wider range of investors access to a number of carefully selected managers.”
Derek Doupe, Director of Marketing at The Cambridge Strategy noted: “We are very happy to be one of the initial managers selected for this Programme and believe that the use of Mercer to select the managers for the FX Gateway product will provide investors with a high level of comfort as they move to incorporate a direct currency allocation into their portfolios.”
AllianceBernstein is another currency manager which is expected to be live in the coming weeks. “AllianceBernstein has been managing currency in client portfolios since 1992,” said Chung Ma, Senior Quantitative Analyst at AllianceBernstein. “Working with Morgan Stanley over the past five years, we’ve been impressed with the enormous investment they’ve made into their FX services. This has set the stage for Gateway, a unique synergistic opportunity between the two firms. We are excited to launch onto the platform and explore new avenues of distribution in this flourishing relationship.”
Morgan Stanley is pushing its FX Prime Brokerage service post Credit Crisis as hedge funds have started diversifying their clearing partners. Morgan Stanley offers the Matrix platform, a single deal platform which was built using Flex technology an open source framework. It has the ability to sit on a users desktop and leverage web connectivity.