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Stress Eater? Emotional Eater? Whatever kind of ‘eater’ you are, there’s probably a physiological reason

26 Jan

This is a feature I drafted while on work placement at Frank PR last January, to promote a new dietary aid from XLS Medical.

What kind of eater are you?

Copycat Eater

We tend to adopt the eating habits of those around us. If your boyfriend habitually snarfs a bacon sarnie or pays a 2am visit to Chicken Cottage on his way home after a night out, this legitimises your kebab pit-stop after a girls’ night out.

If you feel more comfortable eating pizza with those girlfriends who are more of a comfy size than going bar-hopping with the size-zero girlfriend – maybe just because you look and feel better about yourself in their company, -bear in mind that you become who you eat with.

A 2007 study from Harvard University took 32 years’ of data from an inter-linked social network of 12,000 adults and found a person’s chance of becoming obese rose by 37% if their spouse had become obese; 40% if a sibling had; and 57% if a friend had.

Emotional Eater

Perhaps instead of confronting your difficult or negative emotions, you reach for something to plug the void. You don’t want to have to analyse the reasons for your friendship problems, or admit to yourself that the love of your life hardly acknowledges your existence. So you allow yourself a chocolate biscuit. Or one, or two, or three.

Studies have found high levels of obesity in those who have difficulty forming close relationships, perhaps because of childhood issues or some history of relationship abuse. Interestingly, this link between obesity and abuse has only been found in women. Men have other coping mechanisms. It is time you stopped and fought against this ‘coping’ behaviour that has evolved from a societal perception and objectification of women.

Learn to love yourself, and accept that other people can and will love you too. Then you can make a conscious decision to develop healthier habits.

Careless Eater

Studies have found that people whose lives are marked by a lack of self-control typically show higher levels of obesity. Maintaining a healthy diet takes planning and, extreme caution around high-fat foods. If you get home at night without the energy to cook and make yourself a pile of baked beans and toast loaded with cheese, you have only yourself to blame for lack of foresight. Don’t settle for the easy option.

Moreover, there are hidden calories in everything. Dollop of ketchup is another thirty or forty. And careful with the butter – a large serving, melting and dripping off the bread just the way you like it – that’s another sixty calories. Per slice.

Eating Out of Boredom

Maybe you lack something to do with your hands. Perhaps you’ve just given up biting your nails. Is this the reason you find yourself compelled to keep reaching for the popcorn at the cinema; to keep digging your fist into the tin of Quality Streets someone left on the coffee table.

Chronic boredom is actually a condition known as “anhedonia”, defined as a neurobiologically-reduced sensitivity to pleasurable experiences. By constantly seeking easy gratification in the form of very sweet or salty foods, long-term you impair your ability to feel pleasure. Brain scans have shown similarly reduced density of dopamine receptors (dopamine being the pleasure chemical) in obese people as cocaine users.

So try to minimise the presence of sweet, fatty and salty foods in your diet, and also the way you use them to ‘treat yourself’. This is a dangerous association to build; instead get recreational enjoyment from a wide range of (brain) activities.

Stress Eater

Do you hit the biscuit tin in times of stress? There may be a biological reason, though it depends on the type of stress you are suffering from. If the stress is one your brain interprets as a ‘challenge’ it is capable of dealing with, it takes a neurological shortcut and activates the sympathetic-adrenomedullar (SAM) system directly, bypassing to some extent the first site of response; the SAM is the pathway responsible for the production of adrenaline. Adrenaline diverts blood to the brain and muscles, and away from non-essential activities like digestion. People suffering this type of stress often end up eating less.

HOWEVER if the stressor is perceieved as a ‘threat’, another hormonal pathway, the hypothalamus-pituitary-adrenal (HPA) gland is activated. The HPA is principally responsible for the release of cortisol or corticosterone. Cortisol stimulates hunger and feeding, so an excess of cortisol can trigger resort to highly palatable – i.e. tasty and high-calorie – foods.

With humans, if “threat stress” includes a threat to one’s social self concept, like having an aspect of public embarrassment or failure, it is an even more potent trigger of cortisol release.[1]


[1] Dickerson SS, Gruenewald TL, Kemeny ME. When the social self is

threatened: shame, physiology, and health. J Pers 2004;72:1191–216.

[21] Goeders NE. The impact of stress on addiction. Eur Neuropsychopharmacol



It’s Official: Report Finds you Have to Stalk Your Website Visitors to Grow Your Business

27 Oct

‘Are You a Modern Marketer?’ ask Oracle and Forrester

A global study, instigated by a partnership of Oracle and Forrester Consulting, found “a strong correlation between modern marketing best practices and business success.” Modern marketing is that involving real-time and predictive analytics, and tailoring offers to customers adaptively depending on their preferences, spending behaviour and reactions to marketing campaigns.

So for example, if certain customers only bought Kellogs’ Special K in an online shop when it was signalled as being on offer, a sophisticated analytics package might recommend these customers be targeted with a bundle of offers including those on Special K. Customers who preferred Coco Pops as a breakfast cereal would not have this offer included in their email.

Theoretically it should be possible to tailor special deals to individual customers, making them offers they cannot refuse on products their browsing habits and customer records show they have a preference for. Readers will doubtless be familiar with ‘remarketing’ techniques, where webpage visitors are tagged when they click on a certain item or advert, and the associated advert follows them around the internet on a sidebar, for several days.

Perhaps advertisers will personalise the advert further, and reduce the price of the item to a level their purchase history on similar items suggests they are inclined to pay. There is some precedent in this area: Amazon used to target marked-up prices to buyers whose purchase history suggested they were willing to pay more, before word got around and public outcry forced it to stop the practice.

Marketing Analytics and Business Out-Performance

The report, whose stated findings are hinted at in the title, ‘Why You Need To Be A Modern Marketer: The Business Impact Of Marketing Maturity In The Age Of The Customer,’ found that, of a sample of 492 marketing decision-makers across a range of industries in the United States, United Kingdom, Germany and France, those which use marketing analytics packages like Oracles show relative out-performance.

Of those surveyed, 44 percent of modern marketers reported that their organization’s revenues had surpassed their plan by 10 percent or more over the last 12 months, versus just 23 percent of their non-modern marketing peers

archer cartoon

Targeted advertising means higher scoring hits


This being said, only 11 percent of respondents were classed as ‘Modern Marketers’, and “engage in a real dialogue with customers at each stage of the buyer’s journey”; most were categorised as ‘Experienced marketers’ (33 percent), ‘Discovery marketers’(41 percent) or ‘Novice marketers’ (15 percent).

The study defined “modern marketers” as marketers that use a combination of real-time predicative models and statistical techniques including intelligent targeting and cross-channel marketing attribution to ensure personalized customer engagement throughout each stage of the purchase journey.

And a little surprisingly, only 17 percent of marketers surveyed engage in nurturing leads and recycling them, the majority (52 percent) focusing instead on the perpetual search for new customers. Other activities this canny 17 percent performed were ‘behavioural triggers’ and ‘lead scoring’. Obviously in the interests of efficiency big spenders should be prioritised in outreach efforts. And having a thorough overview of a customer’s interaction with a website, and the precise factors that motivated them to click-through and/or place an order are vital to review the effectiveness of the process.

Of the 11 percent dubbed ‘Modern Marketers’, 87 percent said their messaging had become much more targeted toward specific segments, personas or client needs; and over half of them (55 percent) had progressed beyond basic demographic and firmographic information to segment based on personal criteria and interests. The final prescient statistic is that 31 percent now use ”intelligent tracking based on real-time feedback and behaviour tracking,” like remarketing techniques or analysis of email marketing campaigns.

This latter is something incorporated in Oracle’s own marketing analysis package, which tracks the campaign’s “number of emails delivered, open rate, bounce-backs, and offer effectiveness.” There is additional capability for marketers to “adapt their marketing approach in real time and swap out offers that do not elicit high response rates.”

Furthermore, its ‘Customer Profitabilty Analysis’ provides subscribers with suggestions for “effective bundles” of products customers are likely to buy, based on their previous purchases. Let us hope that the algorithm for optimising this approach does not make it as “effective” at maximising profitability as Amazon’s offer packages used to be…



Could New Lynx Aftershave Help Bring About World Peace?

21 Sep


Lynx sheds its chauvinistic image and celebration of all things machismo, to focus on creating peace in areas where violence and social exclusion is endemic.

The brand encouraged followers to put forward activities where they had embraced the ethos of ‘Peace Not War’ in their own lives, and post them on Instagram.

To launch the competition it sent war photographer Matthew Lloyd across the country to photograph local heroes teaching fractured communities to channel their frustrations into recreational pastimes, ranging from boxing to gardening.

In Tottenham, with a reputation for the enthusiasm of its inhabitants to break into impromptu fist-fights, usually outside nightclubs, many young people have found an oasis of calm in Harmony Gardens at Broadwater Farm. Head gardener Robbie Samuda was photographed with some of his charges. The Farm aims to give young people on probation and the long-term unemployed horticultural experience, and to bring peace to the local community.

On an estate in Ballymun, Dublin, another area no stranger to sectarianism, Dean Scurry is another local hero captured for posterity. He founded an independent hip hop label, Workin’ Class Records, providing young people with both a creative outlet and a means to financial self-improvement. Sometimes the only encouragement necessary is opportunity.

Matthew Lloyd enthused about the potential for outlets like photography to help young people funnel their passions into something positive: “With apps like Instagram, everyone can explore a budding passion for photography and spread visual positivity to family and friends.”

The most overtly unifying measure is that of the Cross-Border Orchestra of Ireland, where young people, whether from Catholic or Protestant, Loyalist or Unionist backgrounds, come together to create musical harmony. They spread their socially cohesive ethos through concert tours in countries across the world.

Lloyd professed himself “delighted to be part of such a powerful campaign, not only are we raising awareness for Peace One Day but we are also championing heroes who are doing good for their community via this collection of images.”

The brand has also produced an exclusive track in collaboration with Naughty Boy, Professor Green, Wilkinson and Naughty Boy’s latest protégée, 21 year old Bristol singer-songwriter Ava Lily: the ‘Lynx Peace Edition’ of his recent track, ‘Pardon Me’.

This initiative is linked to its new Fragrance, ‘Lynx Peace’, which is vaunted under the tagline, “Imagine a world with no war – where love and attraction rule supreme. Where guys and girls down their arms, only to fall into each other’s…So don’t fight – find Lynx Peace.”

But this is more than just a publicity stunt. Lynx has truly put its money where its corporate mouthpiece is, and has made a major donation to the charity ‘Peace One Day’. The NGO works to promote a global ceasefire in conflict regions, for one day a year so that UN agencies can engage in vital humanitarian work. Lynx’s year-long peace process was timed to culminate this Sunday 21st September in 2014 ‘World Peace Day’.

World Peace Day events are taking place in regions across the globe, with the highlight being a performance by artist Akon in the DRC’s Goma International Airport. Lexxus Legal played the UK event at 12pm BST, and other performances were scheduled for New York, LA, Delhi and Sydney. The intention is to raise awareness of areas of conflict and bring unity to fragmented populations. This can be either a ceasefire on a national level, or something on a very intimate personal scale. The question its advocates – including actors Jude Law and Jeremy Gilley – are asking is “#Who will you make peace with?”

The focus for this year’s peace campaign, say the Peace One Day organisers, is the Democratic Republic of Congo (DRC) and the Great Lakes region of Africa, specifically Burundi, Rwanda, Uganda and Tanzania), with funding from the Howard G. Buffett Foundation. “The campaign seeks to engage with all sectors of society in the region, encouraging all parties and coalitions to stand together in the name of peace, so that a significant level of non-violence and ceasefire (in conflict-affected areas) can be achieved on Peace Day by 2016 at the latest.”

Marketing Manager of Lynx, David Titman, commented: “We are thrilled to be raising awareness for Peace One Day as part of the Lynx Peace campaign. We recognised that photography is a key passion point for our guys and we want to encourage them to explore it further by capturing their version of peace.”

The trendy aftershave brand, popularised among the young male demographic for its adverts featuring unlikely-looking heroes chased by hordes of ravishing women, has buffed up its image at the same time as celebrating regeneration in the lives of its youthful fans.

head gardener at Tottenham Broadwater Estate with his young helpers

head gardener at Tottenham Broadwater Estate with his young helpers

The founder of Ballymun Estate's Workin' Class Records, with his creative young potentials

The founder of Ballymun Estate’s Workin’ Class Records, with his creative young potentials


‘Network marketing’ is not a dirty word: story of a highly successful business model

20 Jun
white Mercedes Benz

some deal sweetener

Network marketing companies get a bad press. There seems to be some kind of stigma attached to performing the role. Admitting you are in network marketing is almost as much of a social taboo as letting slip at a cocktail party that you are a traffic warden, or an electricity salesman.

‘Can’t you get any other job?’ is the underlying assumption. But in fact, many people treat direct selling as a second, or even third, string to their bow. And these organisations reward their consultants generously for their time and capital input.

Many are not obliged to reward their shareholders, with dividends, because they are private limited companies. This also means there is no legal requirement to publish their annual financial accounts, which explains the aura of mystery which seems to cloud public perceptions.

Let us sweep away some of those cobwebs of half-truth and rumour with some hard stats. Network Marketing Central’s 2013 report on the ‘Top 50 MLM Companies by Global Revenue’ showed direct selling organisations across the globe are thriving. And not just the long-established ones like Avon.

Swiss-origin health, beauty and skincare brand Arbonne earned a respectable $353million. Though it has some way to go before it catches up with its nearest European competitor Oriflame, the skincare and cosmetics brand based in Luxembourg, which netted $2.1billion. For purposes of comparison we have sidelined the German Vorwerk & Co, because its main area of operations is household appliances (it started out selling carpets).**

Oriflame has an impressive gadget to ‘prove’ the effectiveness of its products. Its ‘biophotonic scanner’ purports to measure carotenoid antioxidant levels in skin, to “prove the effectiveness of your supplements in improving your overall antioxidant health.” This tool is doubtless necessary to justify the prohibitive price-tag on its anti-aging products: the ageLOC Future Serum comes with a whopping £170.99 price tag, while in the same range its Radiant Day SPF 22 is at £52.22 a premium-price product.

Arbonne, the company I represent, has a comprehensive programme of rewards and incentives for its consultants which I assume is similar for its rival network marketing companies. The standout showpiece of the scheme is the ‘White Mercedes Benz Cash Bonus Programme’, which allows anyone who becomes Regional Vice President with £500 cash towards the lease of said Mercedes. But only as long as they remain Regional Vice President. If the net sales volume they are oversee drops too low, their flashy set of wheels will be towed.

For the rest, the cash bonuses escalate in scale as you climb the pyramid of seniority and have an increasing number of consultants, district managers and then area managers beneath you. Just like in your standard office, you receive a pay rise when you get promoted, and bonuses when you reach and exceed sales targets.

Arbonne responded promptly to a request for its sales figures for 2013: “Our total sales for the year are up across all markets +10%, and your income is up on average +17% for the year — by all accounts you are in real momentum, and the best is yet to come in 2014!” The company spokesperson reported that consultant sponsorship increased much faster, by 54%.

It seems sometimes like the independent consultants comprise a larger part of the company’s revenue stream than they suspect, or than the companies let on. Many of the special offers are targeted at consultants themselves: make an order valued above £150, you get £65 worth of goods for £20. Not to mention the substantial discount that these half-enfranchised vendors receive on all inventory.

But Lord help you if you fail to make it to your annual quota by the end of the year, or you will be booted out of the sisterhood (or, for equality’s sake, gender-neutral fraternity). Bye bye discounted skincare.

One girl confided to me that a major portion of her annual quota was made up at Christmas, partly due to customer orders but also thanks to Christmas presents she bought with her discount. Admittedly there is a limit to the amount of consultant-discounted items comprise the required total, and a set portion must be through organic sales.


** For those who are devotees of Teutonic efficiency and quality standards is provided this, Vorwerk’s online self-description of its line of “innovative, high-quality Vorwerk products that are so practical and useful, and last for an exceptionally long time.” Everlasting lipstick, folks. Get in.

Know also that “Innovative ideas make for maximum quality. This is an officially acknowledged fact.” Presumably the EU Commission has published a statement to this effect.

New Business Ideas from America’s Newly-Listed Entrepreneurs

23 May

Initial Public Offering – floating atop a pile of cash

Brilliant Business Ideas from across the Atlantic/ the Pond

Americans, it has been established, have a penchant for patenting the slightest innovation which could give their business a competitive advantage. The authors of a report on ‘The Impact of the Patent System on SMEs,’ by Adam Hughes and Andrea Mina, of the Centre for Business Research, Cambridge collaborated with MIT to find that small firms in the USA were twice as likely as those in the UK to patent innovations – though were still less likely to do so than larger firms.

A 2008 US study, which must naturally be viewed in the context of the financial crash, showed that although small firms accounted for just 8% of patents granted, they comprised 24% of the patents in the top 100 ‘emerging clusters’ of innovation. The study’s authors wrote, “small firms are much more likely to develop emerging technologies than are large firms”. An analysis of the 58 companies registering an initial public offering (IPO) this week on US exchanges demonstrates their ability to turn a profit out of almost any activity.

Prominent sectors were pharmaceuticals, with 10 of the IPOs being for innovative drugs, drug delivery methods or ground-breaking science. Of course, the millions, even billions of dollars it takes to bring a new drug to market take this area out of the remit of SMES. Similarly with investment companies or special purpose vehicles, which predictably dominate the list, forming 12 of the firms now publicly tradable.

Digital marketing and technology is where much cutting-edge thinking is targeted. Digital broadcast graphics are always in demand, as are apps-writing companies. In a different mould is TelUPay, which is pioneering mobile banking and has patented what it claims is a ‘bank-grade’ payment system. The group is ambitiously targeting banks, retailers, large corporations and mobile officers as its main user-base. It promises that “TelUPay’s bank-grade mobile banking and payment service uses the most secure encryption technology available today for both the bank and the end-user.”

Let us hope its central control hub never gets hacked, or those encryption keys could become much less secure. We are unsure if Goldman Sachs or Morgan Stanley will consent to allowing million-dollar transfers using some stock-trader’s iPhone.

Everyone can star in their own commercial!

One digital marketing company, Kitara Media, has chosen to specialise in video production and distribution. It believes film is the best way for a brand to connect with its target demographic, and not only through adverts; its offerings also include video slideshows, video surveys, video quizzes and video Q&As. Yes, you heard right. Presumably respondents then film and upload their answers to Kitara’s 5000-strong video library.

Its ready-built video templates make it easy for clients to film-it-themselves, and super-impose text and other effects. It deploys the adverts’ messages to a ‘highly engaged’ subscriber audience. Kitara also draws on relationships with a suite of health, lifestyle and casual gaming websites (some of which it owns) where the ads are displayed. YouTube, watch out, there’s a new video player in town. And obviously it has an in-house analytics package which quantifies phenomena including psychographic audience metrics (lifestyle, interests and values), as well as ‘Viewability’ and ‘Engagement’

A Design that endures long after you’re dead

Another marketing company with a strong digital footprint is Matthews International, which focuses on encapsulating brand identity through in-depth client consultation; either through graphic design and printing of labels and packaging, or through retail communications i.e. company intranet, website and social media. It also has a physical presence through its Crack division, which does installations and visual merchandising in-store.

Perhaps its most intriguing aspect is the Matthews Memorabilia division, which exploits an oft-overlooked market niche: death. Matthews Memorabilia distributes bespoke bronze and granite memorials, upright granite memorials and monuments, flower vases, crypt plates and letters, cameo portraits and innumerable other cemetery decorations. In addition to offering a very stylish range of coffin options, the company is also the self-described “leading designer and manufacturer of cremation equipment and cremation-related products in North America.” In the UK, where funeralcare seems dominated by the Co-operative Bank and its add-on business divisions, there could be room for a designer coffin-maker.

If not better than the rest, we’re certainly cheaper

Of course, your business plan can eschew new ideas for the base price advantage. Discount package holiday company, ‘At Play Vacations’, offers a nigh unbeatable price cut of 75% off retail price, to several activity-packed US resorts. Its differentiating factor is the adventurous leisure pursuits it can organise, including dog-sledding, snowmobile tours, helicopter trips and desert hikes. We were however underwhelmed by its incomplete website, whose contact details were “12345 Something Street, New York New York,” and whose single blogpost ran ‘Your article title. Copy should fit here nicely!”

But the idea we were most impressed by was one of the simplest. Digimarc Corp has patented a ‘digital watermark’ barcode which scans 50% faster than products using the current UPC technology. Furthermore, the entire package is scannable rather than just the narrow strip containing the barcode. Digimarc’s promotional video was highly persuasive, featuring interviews and testimonials from industry insiders like the ‘professional cashier – 9 years experience’ who claimed the practice would free up checkout attendants to develop much deeper and fulfilling relations with their customers.

Group of investors request SEC to exempt them from regulations over new Investment Complex

15 Jan


A group of institutional investors has requested numerous exemptions from the SEC’s regulations over funds of funds to extend the remit of three feeder funds, enabling collective ownership by said investors in a complex of Affiliated Funds.

The investment group invoked the ‘public interest’ in support of most of their requested exemptions, arguing in depth that the violations Act 12(D)(1), 17(B) and 6 (C) were intended to prevent were either not relevant in this case, or that the group had taken sufficient precautions to prevent abuses of shareholder interests.

The funds established by the applicants comprise The Advisors’ Inner Circle Fund, The Advisors’ Inner Circle Fund II and Bishop Street Funds. From December 10, 2012, AIC offered shares of 45 series, AIC II offered shares of 36 series and BSF offered shares of 4 series;  “each pursue different investment objectives and principal investment strategies.” All three trusts are registered in Massachusetts, each as an open-end management investment company.

The investors making the application incorporate Citigroup First Investment Management Americas LLC, Cornerstone Advisors Inc., PNC Capital Advisors LLC, Frost Investment Advisors LLC, and GRT Capital Partners, LLC. All act in an advisory capacity over other specialist funds within their company group, with extensive oversight over their investment approaches. GRT currently serves as investment adviser for two series of AIC II: the GRT Value Fund and the GRT Absolute Return Fund.

The applicants first laid out how their proposal complied with existing SEC requirements. Their current arrangement was classified as an Affiliated Fund of Funds Arrangement (under Section 12(d)(1)(G), which allows a registered open-end fund or unit investment trust (UIT) to acquire an unlimited number of shares in other registered open-end funds and UITs that are part of the same “group of investment companies”. This collective is commonly known as a “fund complex”. The fund which capitalises on this exception, an “affiliated fund of funds” is limited in the forms of other securities it can possess as well as its shares of registered funds in the same group of investment companies.

These restrictions at times give birth to master-feeder arrangements, where an Affiliated, Underlying or ‘feeder’ fund is created solely for the purpose of investing in its ‘master’ fund, which orchestrates a diversified portfolio and strategy. Those investing in the ‘feeder’ fund must be part of the investment group constituting the ‘master’ fund, in order to be permitted to gain a sufficient, significant interest in the underlying fund’s common stock. To reduce transaction costs and to bypass the aforementioned controls on the type of security held, a distributor fund of funds is incorporated to periodically redistribute assets between complex members’ portfolios.

SEI Investments Distribution Co. was the designated ‘Distributor’. The distributor serves as principal underwriter and distributor for the shares of the trusts’ funds. Acting as co-advisers to the proposed fund of funds are Abbot Downing Investment Advisors, Bishop Street Capital Management; Abbot Downing is a distinct identifiable department of Wells Fargo Bank, N.A. and presently serves as investment adviser for AIC II series, the Clean River Fund series.

Previously, the Securities Act under the stipulations of Section 12(d)(1)(A) restricted investment by open-ended funds or unit investment trusts in other funds. The measures “were designed to prevent fund of funds arrangements that have been used in the past to enable investors in an acquiring fund to control the assets of an acquired fund and use those assets to enrich themselves at the expense of acquired fund shareholders,” explains the SEC (

Investment was capped at 3% in the acquired fund’s outstanding voting securities, and the buyer was prevented from investing 5% or more of its stock in any one fund; or investing more than 10% of its stock in total in other funds. Under Section 12(d)(1)(B), an investment adviser or dealer-broker of the company whose securities are being acquired cannot sell more than 10% of its outstanding stock to other funds.

Due to the subsequent difficulty for some funds in sourcing adequate finance, an amendment to the act enabled unlimited numbers of positions in ‘unaffiliated funds,’ with the same 3% cap on the size of the stake in the fund. The buyer was also prevented from influencing shareholder votes, and is restricted in its ability to exchange shares of the acquired fund. The only way of bypassing these rules is by claiming the interested parties are part of the same ‘investment group,’ and thus affiliated funds.

Many of these restrictions do not apply to affiliated funds, or groups of investment companies, under Section(d)(1)(G) of the act, provided the aggregate sales and distribution-related fees of the acquiring company and the acquired company are not excessive. And, the applicants explain in their own words, that:

“the acquired company has a policy that prohibits it from acquiring securities of registered open-end management investment companies or registered unit investment trusts in reliance with Section 12(D)(1)(F) or (G) of the Act.”

And additionally, if you are still following these gymnastic contortions in legal parlance, that “the acquiring company holds only securities of acquired companies that are part of the same ‘group of investment companies,’ government securities, and short-term paper.”

The Underlying Funds whose shares are being acquired by the investment trusts within the complex will have a severely restricted choice of investment policies, their major purpose the transfer of capital to unit and open-ended investment trusts and companies in the investment group. Investment Advisers acting for the funded funds will be licensed to accept capital transfers in their role as Affiliated Parties. Naturally there are constrictions too which limit the size of monetary transfers and exchanges, even between affiliated companies. The applicants detail how they intend to bypass these rules below:

Section 17(b) of the Act authorizes the Commission to grant an order permitting a transaction otherwise prohibited by Section 17(a) if it finds that (a) the terms of the proposed transaction are fair and reasonable and do not involve overreaching on the part of any person concerned; (b) the proposed transaction is consistent with the policies of each registered investment company involved; and (c) the proposed transaction is consistent with the general purposes of the Act.

Section 6(c) of the Act permits the Commission to exempt any person or transactions from any provision of the Act if such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Because multiple transactions could occur between a Fund of Funds and an Unaffiliated Fund, and because the Commission may interpret its authority under Section 17(b) as extending only to a single transaction and not a series of transactions, Applicants are also seeking relief pursuant to Section 6(c).

And the list of proposed exemptions from the Act goes on, evoking Section 12(D)(1)(J) as grounds for immunity from the requirements of Section 12(D)(1). The provisions of Section 12(D)(1) prevent a registered investment company from purchasing or acquiring a security or business interest from someone who is a broker, dealer, underwriter, investment company adviser or investment adviser.

The 12D-1 limit allows registered investment companies, on a case-by-case basis, to purchase securities from other firms engaged in the business activities prohibited under Section 12(d)(3) of the Investment Company Act: namely, small loan, factoring and finance companies. Securities can only be purchased from companies which derived no more than 15% of their total gross revenues over the previous three fiscal years from the businesses listed above. Furthermore, the registered investment company and all affiliated companies must not own more than 10% of the total outstanding voting stock of the portfolio company immediately after the securities acquisition. The proposed immunity from these universally applied limits is again justified on the basis of shareholders’ and the public’s interest.

They give due credence to the Commission’s autonomy of judgement, while implying that the rules may not apply in this particular case, stating that: “The Commission should consider… the extent to which a proposed arrangement is subject to conditions that are designed to address conflicts of interest and overreaching by a participant in the arrangement, so that the abuses that gave rise to the initial adoption of the Act’s restrictions against investment companies investing in other investment companies are not repeated.”

Finally, they detail the precautionary measures they have taken to prevent the potential abuse of the management fee structure; or of holding undue sway over one of the underlying companies’ management policy, purely by virtue of the fact it is directly answerable to the master companies’ investment advisors. The first condition will be forestalled by establishing a Board of the Fund of Funds, including a majority of the trustees who are not “interested persons”, as described in Section 2(a)(19) of the Act, who will rule that the advisory fees charged under advisory contracts for the principal investment funds are “in addition to, rather than duplicative of, services provided pursuant to any Underlying Fund’s advisory contract(s).” And moreover, that it is equal to the fee that would have been exacted by an Unaffiliated Investment Company for the same services.

The section condition will be met through a clause stipulating that if either an Advisory Group or Subadvisory Group becomes a holder of over 25% of the outstanding voting securities of the Unaffiliated Fund, the group nominally in charge of policy direction will vote its shares of the Unaffiliated Fund in the same proportion as the vote of all other holders of its shares. For reasons unknown, this contingency will only be triggered in the case of a 25% majority interest occurring “as a result of a decrease in the outstanding voting securities of an Unaffiliated Fund, an Advisory Group or a Subadvisory Group.”

One final exemption requested from the existing law is the proposal that the applicants be permitted to buy shares directly from ETFS of registered investment funds, rather than by the secondary market.

To sum up, an impressive intellectual case has been made by the applicant parties (Citigroup First Investment Management Americas LLC, Cornerstone Advisors Inc., PNC Capital Advisors LLC, Frost Investment Advisors LLC, and GRT Capital Partners, LLC., SEI Investments Distribution Co, Abbot Downing Investment Advisors and Bishop Street Capital Management). It is based on the assumption that they have enough safeguards in place to prevent the abuse of acquired investment funds’ shareholder interests that necessitated the Act’s relevant provisions in the first place. But considering that the acquired funds in question seem to have been created purely to serve the interests of the firms which will act, through the distributor, as both their investment advisers and managers, it seems their essential premise of the ‘public interest’ might be a shaky one. Will this consideration be outweighed by the possible benefits of such a large, balanced and diversified pool of investments?

The Syntax of Finance

28 Mar

Bull straddle, bear straddle, condor spread and strangle… to the unenlightened reader they sound like gymnastic moves, or sex positions. Yet they are just several of a catalogue of options-trading strategies, each with their own anthropomorphic title. The macho, almost militaristic metaphors assigned to mathematical calculations, on the probability of movements in the option’s underlying security, can heighten the drama of playing statistics. It also helps make the process nigh impenetrable to outsiders.

Understanding the various processes behind the calculation of the option’s delta, theta, assumed volatility and so on, are fiendishly complex when applied to unpredictable real-life underlying assets or indices. But I argue that the syntax that has evolved to describe them is partly a product of the male-dominated environment on the trading floor and in the standard corporate boardroom. Women have for some time been statistically thinner on the ground and worse paid. The female FTSE Report in 2010 found that just 12.5% of directors in the FTSE 100 companies were women. When in 2007 Bloomberg analysed US Government Accountability Office data, it found women managers in finance (e.g. bank tellers and executives) earned 58.8 cents for every dollar a man earned in 2007, down from 63.9 cents in 2000.

Post-structural Musings
To avoid shrilly bleating out feminist platitudes, I borrow some words from Foucault: “the exercise of power creates and causes to emerge bodies of information… The exercise of power perpetually creates knowledge and, conversely, knowledge constantly induces effects of power.” In essence, the language that evolves from an elite demographic serves to reinforce its elite status, and exclude those from lower or rival groupings.

This is despite the fact that a 2001 study by respected behavioural economists Terrence Odean and Brab Barber, ‘Boys will be Boys: Gender, Overconfidence and Commons Stock Investment,’ found that overactive trading reduced net returns for men by 2.65% a year, compared with 1.72% for women. By analysing data on commons stock investments, for more than 35 000 households at a major discount brokerage between 1991-1997, they found men also traded 45% more than women. So the bullish rhetoric of ‘straddling’ a choice option may at times reflect, and propagate, a misplaced level of confidence.

Too Many Words
The post-structuralist perspective on communication in the financial sector would take a similar view on the proliferation of acronyms. Most well-informed members of the public know that CDO stands for collateralised debt obligation, because the unprincipled selling of these toxic assets got such bad publicity. But how many of the uninitiated can define what a UCIT is? Generally Accepted Accounting Principles (GAAP) maybe, if they have been privy to annual reports. What about REITs, Real Estate Investment Trusts? The FTSE’s SEAQ, or non-electronically executable quotation service, is not even spelt out in logical order.

Only the secretive corridors of the Ministry of Defence flow with such an abundance of need-to-know-only acronyms. The FTSE glossary would almost fill a suitcase as comprehensively as a set of alphabetised Encyclopedias. And it wouldn’t matter if all financial reporters had a unified protocol towards use of acronyms, listing the object in full with its abbreviation in brackets afterwards, if they intended to use the abbreviation alone subsequently. Often, however, they put acronyms and abbreviations in the headlines, heightening the sensation of an industry that talks to itself in code., a Marxist reading
Marx once wrote, “The ruling ideas of each age have ever been the ideas of its ruling class,” a slightly more black-and-white view than the post-structuralist vision of an organic interaction between the ideas of different strata, relative to their weight and power. Does the ‘working-class’ not then have a distinct voice? Perhaps. Marx also wrote that “Men’s ideas are the most direct emanations of their material state,” but without the leisure afforded to the bourgoisie, who reaped the greatest portion of value added through the production process, the workers could do little more than mirror and absorb the cultural values imposed on them by the upper classes.

Gramsci was stronger on culture; Marx tended to overlook it as a side issue, a distraction from the socio-economic forces that were the central motors of the capitalist system. One wonders what they would have made of today’s money marketing campaigns. is patently a barely-concealed attempt by grasping capitalists to blanket their eye-watering loan interest rates with tableaus of cute felt puppets. The ‘Saving the Nation’ slogan of the GoCompare ads tries to appeal to patriotic sentiment, unifying it against a blubbering, moustachioed and intensely irritating foreigner.

Money Supermarket, which depicts Scotch-drinking aristocrats in a mahogany-panelled lair replete with moose’s head and open fire, is a self-referential portrayal of inbred upper-class gentlemen toasting their financial success. It is just too much of a stereotype to be true, right? Finally, is a calculated post-Freudian attack on consumer’s emotional sensibilities. ‘Oh look, it’s a talking meerkat. Awwww.’ By linking the audience’s empathetic connection to fictional site, where these furry Eastern European immigrants chase each other’s tails and… drink scotch, to the real site, advertisers are playing on viewers’ emotions in the most obvious way. And now they are giving away free meerkat toys. Classic behavioural reward psychology


New appointments; and a German airfield’s transformation into a solar power plant

18 Jan

Award-winning advertising executive to advise private advisory and merchant bank OmniView

OmniView Capital Advisers (OCVA), a privately held investment advisory and merchant bank which has overseen over $1bn in debt and equity transactions, has appointed Jeffrey Devlin, an advertising and entertainment veteran, to its Board of Directors.

He is being promoted from his current position as OCVA’s Chief Marketing Officer.

Devlin has worked as Senior Vice President at Lintas Worldwide Advertising. He won over $70 million in accounts  at Doner Advertising where he served as Senior Vice President of New Business Development. His clients included major companies and organizations including the National Football League (NFL), Atari, The Coca-Cola Company, Intel, and Sirius XM Satellite Radio, of which he is a senior adviser.

Over his time working in the advertising industry, Devlin was heaped with plaudits and awards. The list includes 17 CLIO Awards; 16 Andy Awards for advertising excellence; 21 Telly Awards for outstanding commercials; four Effie Media Awards; and a shiny Gold Camera from the U.S. International Film Festival. His award-winning piece for Visa, Olympics, has a permanent place at the Museum of Modern Art (MOMA) in New York.

Jeffrey Devlin said, “I look forward to bringing an advertising and marketing perspective to the Board to help leverage the company’s innovative philosophy and maximize business development opportunities.”

Green Tower Project In Brandenburg finished before deadline, thanks to Trina Solar

Smart energy company Trina Solar supplied 61MW of Solar PV Modules for an energy generating scheme in the German federal state of Brandenburg. The rows of modules now extend for more than a kilometre along the converted Preschen airfield in Jocksdorf, Brandenburg.

“Selecting Trina Solar as our main module provider was a very good choice,” said Alfred Behrens, CEO at AB Unternehmensberatung & Beteiligungsgesellschaft mbH, who initiated the project. “Because construction advanced well ahead of schedule, we ordered an additional 5.5MW of modules, which Trina Solar was able to provide and deliver to the site in just three days. Delivery capacity like that is hard to beat. And in terms of product quality, Trina Solar is top-class.”

More than 252,000 multi-crystalline Trina Solar modules, each with an average output of more than 240Wp, have been installed on the former airfield in Jocksdorf. The PV park that now covers the former military field has been fully commissioned and is considered to be among the most efficient plants in the world. It provides clean solar power covering the annual energy needs of around 17,000 households.