• Deutsche AM reduces holdings in multi-asset portfolios
• Yields are no longer compensating for risks: JPMorgan

Some of Europe’s biggest money managers are getting ready for a turnaround in the two-year bull run of the continent’s riskiest corporate debt.

Deutsche Asset Management has reduced holdings of European junk bonds in its 100 billion euro ($106 billion) multi-asset portfolios, BlackRock Inc. says risks for European credit are tilted to the downside, and JPMorgan Asset Management says investors should brace for a tough second half…

Big Investors Losing Faith in Europe’s ECB-Fuelled Junk Rally

• Interest in Indian economy will continue to be strong: ANZ
• Barclays, ANZ, Credit Suisse raised rupee forecasts recently

There’s no stopping the rupee. Strategists say Asia’s best-performing currency of the past six months could climb further as the Reserve Bank of India’s interest-rate cut lures more inflows into local shares.

Benchmark borrowing costs in Asia’s third-largest economy stand at the lowest since 2010, which could spur growth, boost corporate earnings and encourage foreign funds to add to $8.8 billion of Indian stock purchases this year. That optimism sent the rupee to a two-year high after the RBI’s decision on Wednesday…

• Hedge fund manager says index products harm growth creation
• Singer’s main hedge fund gained 3.5% in the first half

Billionaire Paul Singer is warning of a growing and menacing threat: passive investing.

“Passive investing is in danger of devouring capitalism,” Singer wrote in his firm’s second-quarter letter dated July 27. “What may have been a clever idea in its infancy has grown into a blob which is destructive to the growth-creating and consensus-building prospects of free market capitalism.”

• Big caps rule Hang Seng’s Asia-beating gains on mainland bids
• Bocom, Fidelity see small equities continuing to underperform

Hong Kong stocks may be Asia’s star performers this year, but it hasn’t done much to revive the fortunes of the market’s perennial underdogs: small-cap shares.

A peek under the hood of the Hang Seng Index’s 25 percent surge shows it’s being dominated by larger equities, with smaller companies trading at their biggest price discount to the big caps since 2009. That’s despite expectations a trading link between Hong Kong and Shenzhen set up in December would lure mainland money into the former British colony’s smaller shares…

• City will pay $1.18 billion to pensions in 2018, report says
• Projected budget gap is the smallest since 2007, city says

Chicago will contribute $1.18 billion to pensions in 2018 as the junk-rated city steps up payments to put its retirement funds on a path to solvency, even as the unfunded liabilities keep growing…

Chicago Pension Bills Soar as City Pays Up to Keep Funds Solvent

• Oliver Wyman says lenders will need capital for European units
• Need to exist outside U.K. will only grow, consultant says

Banks may need to find $30 billion to $50 billion of additional capital to support new European units in the aftermath of a hard Brexit, according to Oliver Wyman Inc.

The extra money is equivalent to 15 percent to 30 percent of the capital that wholesale banks currently commit to the region, the management consultant said in a report published Tuesday. In addition, operating costs could rise by $1 billion as functions previously handled in London are duplicated on the continent, the company said…

• PRA Chief Woods asked to share assessment of banks’ readiness
• Getting transition right is crucial for London, Morgan says

Nicky Morgan, chair of the U.K. Parliament’s Treasury Committee, asked Bank of England Deputy Governor Sam Woods to weigh in on the sort of transition plan that will be needed as the U.K. withdraws from the European Union.

Morgan asked Woods, head of the BOE’s Prudential Regulation Authority, about the desirability and design of a transition period, including a “bridging period” to cover the time between the end of exit negotiations and the start of the U.K.’s new economic relationship with the bloc…

LONDON — Barclays said on Friday that it fell to a large loss in the second quarter, but said that it had reached a major milestone in its turnaround, finally completing a wide-ranging restructuring.

The bank has moved aggressively to get rid of businesses that it does not consider to be core future operations and to resolve misconduct issues that have dragged on its results, and costs from these efforts pushed it into a loss in the second quarter. Barclays said on Friday that it had taken charges associated with selling much of its African business and with a controversial insurance product that has weighed on the results of British banks…

• Data shows an influx of funds into onshore corporate debt
• Foreigners might warm to market; ‘just a matter of time’

Turns out that China’s new Bond Connect with Hong Kong isn’t just good for foreigners. Offshore Chinese money is using the channel to bring money back home, taking advantage of opportunities in domestic credit products.

With the Chinese yuan’s exchange rate rising in recent months against the dollar — and likely to stay stable with a critical Communist Party leadership conference looming later this year — that’s made it more attractive to invest in higher-yielding domestic bonds…

• New leaders chase global growth as CEO McNabb steps down
• Funds will undercut rivals on price without passive strategy

Walking through Vanguard Group’s headquarters in Malvern, Pennsylvania is a lesson in naval history.

Paintings of the 18th-century ship that inspired the company’s name jostle with seascapes and a framed letter from legendary British Admiral Horatio Nelson. Even the campus itself conjures tales of derring-do, with buildings swooping along a shallow curve, as if tracing a galleon from stern to bow…

Vanguard Builds a Fleet of Active Funds to Dominate Overseas

• Industry’s clubby culture leaves some misbehavior unpunished
• Investors seek ways to avoid backing the next serial harasser

Reference checks in Silicon Valley these days are likely to start with a new question: “Are you under NDA?”

Venture capitalists and their backers are trying to find new ways to talk to each other and gather information after accounts of mistreatment from several women have shaken the industry. Not wanting to fund the next serial sexual harasser, investors in VC funds are more closely scrutinizing the character of investing partners and asking pointed questions to try to unearth what exactly they’re not being told…

• Pool surpasses Blackstone’s $21.7B benchmark for LBOs
• Private equity fundraising tops $100B for three quarters

Apollo Global Management LLC amassed $24.6 billion for the largest fund ever raised by a leveraged-buyout firm, crowning a string of record-setting war chests as investors hunt for better returns.

Apollo’s ninth private equity fund hit its $23.5 billion hard cap and added additional money from the firm, employees and affiliated people, according to a regulatory filing Wednesday. It intends to have $24.7 billion in total, the filing shows…

Apollo Raises Record $24.6 Billion for New Global Buyout Fund

• Buoyant equity markets have retail investors playing catch-up
• Fixed-income inflows can’t keep pace with stock appreciation

When it comes to flows into stocks and bonds, forget the great rotation: It’s all about the relentless rebalancing.

“The equity rally is feeding the bond rally, preventing bond markets from selling off in a risk-on environment,” JPMorgan Chase & Co. strategists led by Nikolaos Panigirtzoglou wrote in a note distributed to media on Monday…

JPMorgan Tells Clients the Surge in Stocks Is Prolonging the Bull Market in Bonds

• Chicago banker says Vector Group gave seven-figure infusion
• Trump described Vector CEO Howard Lorber as one of best pals

He is, by Wall Street standards, a small-time banker.

But in 2014, with Donald Trump eyeing a run at the White House, Stephen Calk stepped into the big-money world of New York real estate — and a network of Trump associates.

Doors opened for Calk, who was named to Trump’s economic advisory panel and whose bank loaned millions to entities tied to Trump’s one-time campaign manager, Paul Manafort. The Federal Savings Bank, where Calk is founder, chairman and chief executive officer, also got a “seven-figure” investment from a firm run by one of Trump’s closest friends, Howard Lorber, according to court testimony not previously reported…

• Dealmakers and financiers find second wind in cryptocurrency
• ‘There’s so much to imagine,’ ex-China Renaissance exec says

Richard Liu gave up a seven-figure salary this month to get into one of the hottest financial instruments around right now: initial coin offerings. The former China Renaissance deal-maker has since backed a clutch of cryptocoin sales that’ve raised millions — sometimes in seconds — often without a single product.

From Hong Kong and Beijing to London, accomplished financiers are abandoning lucrative careers to plunge into the murky world of ICOs, a way to amass quick money by selling digital tokens to investors sans banks or regulators. Cut out of the action, a growing cohort of banking professionals are instead applying their talents toward buying or hawking cryptocurrency…

• Central bank policy cited as main risk over coming year or two
• Bloomberg poll captures views of 30 investors across globe

America’s second-longest bull run in stocks on record will end by late 2018, when U.S. credit also will enter its first bear market since the global crisis, according to a Bloomberg survey of fund managers and strategists.

The poll of 30 finance professionals on four continents showed a lack of consensus on the asset judged as most vulnerable now, with answers ranging from European high yield to local-currency emerging-market debt — though they were mostly in the bond world. Among 25 responding to a question on the next U.S. recession, the median answer was the first half of 2019.

• Three-month bill auction attracts lowest demand in eight years
• Bills mature when U.S. projected to reach borrowing capacity

The Treasury Department got a clear message from investors that they’re starting to get concerned another showdown over the U.S. debt ceiling may get ugly.

The government’s auction Monday of $39 billion of three-month bills attracted the lowest demand of any other sale of the securities since June 2009. The bills, which mature around when the Treasury is estimated to run out of money unless lawmakers agree to extend the statutory limit on the nation’s borrowing, were sold at a rate of 1.18 percent, the highest since October 2008…

• Lack of specialist means that restructurings drag out: PwC
• Bond defaults at unprecedented S$1.35 billion since Nov. 2015

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Keith Kueh was expecting Pacific Andes Resources Development Ltd. to pay back the company’s bonds last year so he could finance his son’s college bill and his own retirement. Now it’s 18 months after the Singapore-listed fishing company didn’t honor some obligations and he hasn’t gotten his money yet.

“For investors like myself, we are not portfolio managers who are managing other people’s money,” said Kueh, a founder at a tech startup. “This is our hard-earned money.”…

• ‘Project Bowline’ details steps for moving trades to Frankfurt
• Balance-sheet relocation due to be completed by March 2019

Deutsche Bank AG may shift about 300 billion euros ($350 billion) from the balance sheet of its U.K. entity to Frankfurt as client trading and assets migrate to the continent following Britain’s decision to leave the European Union, according to a person familiar with the matter.

• About 65 million people live in slums in India’s urban areas
• Land prices, difficulty getting approvals hurt supply

India’s ambitious ‘Housing for All’ plan is bumping up against some harsh realities.

Prime Minister Narendra Modi set a target in 2015 of building 50 million homes in less than a decade, or about seven million a year. The nation has since added only 180,877 under the scheme, underscoring the challenge in achieving that target.

“It was a moon shot,” said Rajesh Krishnan, chief executive officer at Brick Eagle, a Mumbai-based private equity fund that provides project financing to affordable housing developers…

• Fundraising market better than ever, Rubenstein said in May
• Firm’s sixth U.S. fund valued at 1.3 times cost as of March

Carlyle Group LP is seeking $15 billion for its next U.S. fund, according to people familiar with the matter, for what could be the largest pool ever focused on buyouts in the region.

The fund, which would be the firm’s seventh for the U.S., is part of Washington-based Carlyle’s ambition to raise $100 billion from 2016 to 2019. Carlyle is replenishing its arsenals for buyouts in Asia and Europe, global infrastructure, North American energy, U.S. real estate, various credit strategies and more. The firm had gathered $17 billion toward the goal as of the first quarter, according to a June presentation by President Glenn Youngkin…

• Japan investment in Indian equities rises to highest on record
• South Asian economy seen as providing long-term growth

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The land of Abenomics is betting on Modinomics.

The demand is so strong that assets of Nomura Holdings Inc.’s India equity fund quadrupled to almost 400 billion yen ($3.6 billion) in just the past year. Japanese investors owned $13 billion of Indian stocks and bonds at the end of June, the most in data going back to 2012, according to India’s regulator…

• Noah’s Gopher China equity fund cuts exposure to ADRs
• Fund also adds tactical traders in preparation for volatility

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Noah Holdings Ltd., which manages the best-performing emerging markets fund of hedge funds, has cut China-related American depository receipts by about one-third this year after shares surged, while adding to yuan-denominated shares listed on the mainland.

• Canada gutted its science budget a decade ago under Harper
• The sky didn’t fall, but a slow-motion decline ensued

No modern American president has been more hostile to federal support for the sciences than Donald Trump. In the six months since he became president, he’s fired scientists, removed scientific data from federal websites, proposed a budget that deeply cuts research and appointed science skeptics to head the Environmental Protection Agency and the Department of Energy.

People who rely on their company pension plans to fund their retirement may be in for a shock: Of the 200 biggest defined-benefit plans in the S&P 500 based on assets, 186 aren’t fully funded. Simply put, they don’t have enough money to fund current and future retirees. The situation worsened for more than half of these funds from fiscal 2015 to 2016. A big part of the reason is the poor returns they got from their assets in the superlow interest-rate environment that followed the financial crisis. It’s left a hole of $382 billion for the top 200 plans.

• Fund will only dole out loans if it deems debt sustainable
• Government monitoring bond market conditions for possible sale

The International Monetary Fund agreed to a new conditional bailout for Greece, ending two years of speculation on whether it would join in another rescue and giving the seal of approval demanded by many of the country’s euro-area creditors.

The Washington-based fund said Thursday its executive board approved “in principle” a new loan worth as much as $1.8 billion. The disbursement of funds is contingent on euro-zone countries providing debt relief to Greece…

Greece Approved for $1.8 Billion Conditional Loan From IMF

• Sentry Small/Mid Cap Income Fund targets oligopolies
• Likes ‘nice and safe’ but doesn’t want to pay for it

With Canada’s small-cap market dominated by downtrodden energy and materials stocks, fund managers that specialize in the sector are looking further afield.

Sentry Small/Mid Cap Income Fund, the country’s top performing small-cap fund with assets of more than C$1 billion ($794 million), is finding some of its highest returns in a global concert promoter, a U.S. medical testing company, and a casino operator…

Casinos, Concerts Allow Top Fund to Avoid Dismal Canada Market