Fitch Ratings published its latest update on money fund portfolio holdings, "U.S. Money Fund Exposure and European Banks: Eurozone Rebounds," yesterday, along with a press release, entitled, "Fitch: U.S. Money Funds Return to Eurozone Banks." The release tells us, "U.S. prime money market funds (MMFs) increased their exposure to Eurozone banks in April, although asset allocations to these institutions remain well below 2011 levels, according to Fitch Ratings.As of end-April 2013, MMF allocations to eurozone banks represented 15.1% of assets under management within Fitch's sample of the 10 largest U.S. prime money funds, a 14% increase over the prior month. MMFs' eurozone allocations have almost doubled since end-June 2012, a sign of improving investor sentiment toward the region. This resumption in eurozone allocations also suggests that the March decline was a tentative retreat given the brief market uncertainty after the Cyprus banking system failure." (See also: Crane Data's May 13 News, "Repo Regains No. 1 Spot in April 30 Portfolio Holdings, CDs Again 2nd".)
Fitch comments, "Despite the increase, Fitch notes that MMF eurozone bank exposures remain less than half of their end-May 2011 levels. Fitch believes that eurozone banks likely have a diminished appetite for MMF funding, given the volatility that this form of funding experienced during 2H'11. Furthermore, reductions in some banks' overseas lending have likely curtailed the banks' need for U.S. dollar borrowing, including U.S. MMFs."
They add, "The largest country exposures in Fitch's sample were Canadian and Japanese banks, both at 12% of assets. Canadian bank holdings declined somewhat, but still remain well above May 2011 levels. The proportion of eurozone and European exposure in the form of repos, at less than 20% of these banks' collective exposure, remains well below the levels of roughly 40% of exposure seen during the height of the crisis last summer."
Finally, the Fitch report comments, "Australian, Canadian and Japanese banks collectively represent nine of the top 15 names.... Notably, the only European institutions within the top 15 are Credit Suisse, Societe Generale and Deutsche Bank. By comparison, 10 European banks (including seven from the eurozone) were in the top 15 at end-May 2011. The 15 largest exposures to individual banks, as a group, comprise approximately 41% of total MMF assets."
In other news, a press release entitled, "Horizon Cash Management Promotes Michael Markowitz to President tells us, "Horizon Cash Management LLC, the leading investment advisor specializing in active cash management solutions for the alternative investment industry, today announced that Michael Markowitz has been named president, effective April 24, and continues as chief investment officer. Mr. Markowitz replaces Pauline Modjeski, who served as president since 2008."
The boutique cash manager explains, "Mr. Markowitz joined Horizon in April 2012 as chief investment officer, executive vice president and partner. Over the past year, he has been responsible for the development and implementation of the overall strategies for the firm and management of all investment functions including trading, credit research and the operational aspects of the trading desk. As president, his main focus is on portfolio management and oversight of business operations."
Diane Mix Birnberg, Horizon Founder and Chairman, says, "Michael's 23-years of experience in managing fixed income portfolios has made significant contributions to Horizon's ongoing success. His level of expertise has helped improve our trading desk and operational efficiencies, adding value to our clients' portfolios and overall confidence in the fixed income markets in which we invest. Horizon is very pleased to name Michael the new president."
Finally, the release adds, "Prior to joining Horizon, Mr. Markowitz was managing director and head of short duration fixed income at Guggenheim Partners where he helped launch and manage a short duration, actively managed exchange-traded fund. Previously, he was a managing director and head of short duration fixed income at UBS Global Asset Management and its predecessor firm, where he was responsible for the investment and business side of the short duration division. Mr. Markowitz has been a frequent speaker at fixed income industry conferences."
