The hybrid registered investment adviser model - designed to allow investment pros to act as registered reps of a member firm while branding themselves as independent brokers - seems to be failing, according to an opinion piece in Investment News. As these models evolve, so too does regulation. Last year, 140 such operations tanked.
The piece's author, Todd Pack of Financial Advisers of America, writes: "What is becoming clear is that broker-dealers may now be expected to consider outside investment advisory business -where the investment adviser is charging an asset management or performance fee - as a private securities transaction.
This requirement could result in the untimely demise of the hybrid adviser model. In the event that broker-dealers incur the same level of liability for an outside investment adviser, it will be difficult to justify a 95% to 100% payout on that business."
ING is in talks to divest its car lease business for up to $5.7 billion. [DealBook]
The PNC Financial Services Group will buy the the Royal Bank of Canada's U.S. retail business and credit card assets for $3.62 billion. [Bloomberg]
JPMorgan Chase, Citigroup and Credit Suisse will be the lead underwriters for the Carlyle Group's impending IPO. [NY Times]
Nasdaq OMX wants to take a minority stake in LCH.Clearnet, the London swaps clearinghouse. [Reuters]
Regulators cracking down on broker-dealers over postage price gouging. [Investment News]
Some analysts are concerned that venture capitalists are blindly throwing money at start-ups that have not yet proved they can build something useful. [NY Times]
Alternative asset manager Oaktree Capital plans an IPO expected to fetch $8 billion to $9 billion. [Financial Times]