June 12, 2013 2:27 pm

Lyxor hit by chairman’s departure

Lyxor, the third-largest exchange traded funds provider in Europe, has been rocked by the departure of another two senior executives.

Alain Dubois is leaving after a decade as chairman of the asset management group to join MSCI, the index provider, while Claus Hein is on gardening leave after stepping down last week from his role as head of Lyxor ETFs for the UK, the Nordic region and Latin America.

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Inès de Dinechin, Lyxor’s chief executive, is to become chairman while retaining her current duties as ceo.

Mr Dubois is to take up the role of managing director and head of new business and product development for MSCI’s index business in August.

His exit follows that of Simon Klein and Nizam Hamid, the head and deputy head of Lyxor’s ETF business in Europe, late last year. Mr Klein returned to Deutsche Bank while Mr Hamid moved to FTSE group.

Lyxor’s ETF business has struggled for momentum in recent years. Net outflows in the first five months of 2013 were almost $1.7bn, according to ETFGI, a consultancy that monitors industry trends.

Last year, Lyxor managed to attract inflows of just $328m, a tepid recovery that followed a weak performance in 2011, when it registered outflows of almost $9.9bn.

Assets under management at Lyxor’s ETF business stood at €31.2bn ($41.5bn) at the end of May.

Société Générale, the parent group, is rumoured to have been looking for a buyer for the Lyxor ETF business as the French bank refocuses on its core areas of expertise.

However, a spokesperson for SocGen dimissed the rumours.

“Lyxor is definitely not for sale” said SocGen.

Arnaud Llinas, who was appointed global head of Lyxor’s ETF and indexing business in December, has maintained that the company can regain its position as the number-two ETF player in Europe from Deutsche Bank.

“Confidence in Lyxor’s ETF business is fully intact,” said Mr Llinas.

“We are bringing out new products and actively recruiting. We have added three new European sales staff and expanded our marketing resources. We are aiming to grow our assets and are very committed to ETFs”.

Other changes suggest that the business remains under pressure, however.

Lyxor has announced two rounds of fees cuts, reducing management charges on two more ETFs earlier this year, following reductions in fees on seven of its largest ETFs last year.

It has also changed its business model by converting some of its derivative-linked “synthetic” ETFs to “physical” products that buy the constituents of the underlying index. Criticisms of synthetic ETFs by regulators have led to a marked decline in appetite for these vehicles among investors.

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