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Jupiter Opens its First Office in the United States for its New Subsidiary

denver-767050_1920 — Pixabay CC0 Public Domain. Jupiter AM ubica en Denver su primera sede en Estados Unidos

Jupiter Asset Management announced the opening of its first office in the United States, for its recently created US subsidiary – Jupiter Asset Management US LLC (“JAM US”). Three Jupiter employees, including two newly appointed team members, will be based in the office in Denver (Colorado) as the firm initiates its expansion within the onshore US institutional market.

In a press release, the asset manager pointed out that Taylor Carrington has joined the firm as head of US distribution and managing director for JAM US. Reporting to Warren Tonkinson, managing director, distribution, he will lead the firm’s sales efforts in the onshore US institutional market. With 19 years’ experience in asset management, Carrington joins from Allianz Global Investors, where his most recent position was head of North America, institutional client team. “His appointment marks Jupiter’s first step into this client segment, and an important expansion of its international distribution profile”, said the firm.

Initially, he will spearhead the US onshore distribution of NZS Capital’s global growth strategies, following the agreement of the strategic partnership in late 2019, under which Jupiter is the exclusive global distributor of its products. Teh asset manager revealed that Carrington has known the NZS investment team and its client base for many years, having previously worked with NZS co-founders Brad Slingerlend and Brinton Johns at Janus Capital Group.

Following receipt of the appropriate regulatory approvals, he will also lead the distribution of Jupiter’s investment strategies to the onshore US institutional market.

As part of the initiative to build out the US infrastructure, the firm has also hired Tracy Pike as head of investment oversight at JAM US. As stated in the press release, subject to regulatory approval, her primary responsibility is to oversee the delegation of investment activities to NZS Capital in relation to the NZS strategies, or Jupiter Asset Management Limited in the UK.

Pike brings over 24 years’ industry experience and was previously head of sub-advisor oversight at Charles Schwab Investment Management. Prior to this, she was a senior product manager at Janus Capital Group, where she worked closely with Carrington and the NZS investment team. Pike will report to Katharine Dryer, Jupiter’s deputy CIO.

A credit research hub

Joining them in the Denver office will be Joel Ojdana, a US credit research analyst on the fixed income strategy. He has worked at Jupiter since July 2018 and has over twelve years’ experience in investments. Previously based in London, he has made “a meaningful contribution to the firm’s US credit research – an important pillar of Jupiter’s £12.7 billion unconstrained bond offering”, pointed out the asset manager. Ojdana will be Jupiter’s first research analyst based in the US and he will continue to report to Luca Evangelisti, head of credit research, remaining an integral member of Jupiter’s fixed income team.

Jupiter revealed that during 2021, they will be actively exploring the opportunity to establish a local US credit research hub and potentially expanding the team based there, with Ojdana leading this initiative.

A “vital” local presence

“The US institutional market is incredibly significant, and I’m thrilled that we’ve been able to open our office in Denver. Under Taylor and Tracy’s experienced leadership, there is a brilliant opportunity to expand meaningfully, offering both NZS and in time, Jupiter strategies to US institutional investors”, said Tonkinson.

In his view, establishing a local presence is vital to achieving success in this market and ensures their new US clients will receive the highest level of customer service. “The office opening also represents a key milestone in Jupiter’s international growth”, he added.

Meanwhile, Carrington commented that, having worked in the US institutional market for many years, he is confident that Jupiter’s “broad, high-conviction and genuinely active” fund range will appeal to a wide number of sophisticated investors looking to navigate global markets. “The opportunity to initiate Jupiter’s expansion in the region, as well as to work with the NZS team again, is incredibly exciting and I look forward to helping Jupiter becoming a significant participant in this market”, he said.

PIMCO and GE Capital Aviation Services Create an Aviation Leasing Investment Platform

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model-planes-1566822_1920 — Pixabay CC0 Public Domain. PIMCO y GE Capital Aviation Services crean una plataforma de inversión en el sector de arrendamiento de aeronaves

PIMCO and GE Capital Aviation Services (GECAS), a business unit of GE, have reached a preliminary agreement to develop an aviation leasing platform to support up to $3 billion in aircraft asset financings. The firms announced in a press release that the transaction is subject to customary closing conditions and receipt of required regulatory approvals.

This strategic investment platform will enable GECAS and PIMCO-advised accounts to acquire “new and young fuel-efficient aircraft to meet the needs of a diverse set of global airlines over many years”, they explained. The platform looks to provide “much-needed financing” for airlines which are looking to upgrade their fleets.

The portfolio will initially focus on narrowbody aircraft while allowing flexibility to invest in attractive opportunities in the widebody market. PIMCO and GECAS will consider a range of investment criteria including an airline’s assets and credit quality and also geographic factors.

PIMCO is already one of the world’s largest investors in aviation-backed debt. Both firms think that its presence in aviation financing markets combined with GECAS’ leadership role in the aircraft-leasing segment will provide “enormous flexibility” to fund the global airline industry. GECAS will source transactions, act as servicer and provide asset management services for the platform.

Essential liquidity for a critical industry

“As the airline industry struggles with the effects of the COVID-19 pandemic, the PIMCO-GECAS platform will inject essential liquidity into this critical industry by providing financing solutions at a time when there are fewer traditional financing options for airlines,” said Dan Ivascyn, PIMCO’s Group Chief Investment Officer.

In his view, aircraft remain an attractive asset class in a critical infrastructure sector supported by solid long-term growth drivers. He also pointed out that GECAS’ expertise as a world class aircraft lessor aligns with PIMCO’s “longstanding investment strategy” in aviation finance.

Meanwhile, Greg Conlon, president and CEO of GECAS, claimed to be “delighted” to team up with a premier institutional investor such as PIMCO in this strategic relationship which he thinks will enable “opportunistic plays” to support airline customers around the globe.

“While GECAS maintains an industry-leading position, this platform will ensure we can continue providing our airline customers with the aircraft needed to sustain their franchises”, he added.

The AMCS Group Launches US Offshore Effort for Jupiter Asset Management

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rocket-1245696_1920 — Pixabay CC0 Public Domain. Credit Suisse AM lanza un fondo para invertir en bonos corporativos de corta duración de mercados emergentes

The AMCS Group, a third-party distribution agency, announced in a press release that “effective immediately” it will represent the Jupiter Group, as introducer for its combined UCITS offering across both Jupiter and Merian branded funds. This follows Jupiter’s acquisition of Merian Global Investors on July 1st.

Central to the strategy will be several of Jupiter’s flagship products, including Jupiter Dynamic Bond ($16.9 billion assets under management), managed by Ariel Bezalel and Harry Richards; Jupiter European Growth ($9.2 billion AUM), managed by Mark Nichols and Mark Heslop; and the Merian Gold and Silver Fund ($945 million AUM), managed by Ned Naylor-Leyland.

“AMCS will be focusing its efforts for Jupiter exclusively in the US Offshore market, targeting global private banks, US wirehouses, regional broker dealers and independent advisory firms”, said the firm. It will be partnering closely with William Lopez, Jupiter’s Head of Latin America and US Offshore, in its effort to expand the reach of Jupiter Group funds across its targeted segments and clients.

AMCS pointed out that they were closely involved with Merian Global Investors prior to its acquisition by Jupiter. Its partners developed Merian’s footprint in the Americas region from 2013 to 2018 as employees of the Old Mutual Group. When Merian, formerly Old Mutual Global Investors’ Single Strategy business, was spun out of its UK parent in a 2018 management buyout, Andres Munho and Chris Stapleton formed the AMCS Group to serve as introducer for its UCITS funds in the Americas.

Chris Stapleton, co-founder and managing partner at the AMCS Group said that they are “delighted” to have the opportunity to partner with Lopez and the wider Jupiter team to further solidify the firm’s position in the US Offshore market. “We believe there is an opportunity to leverage some of the existing relationships and framework we have developed with Merian to fast track Jupiter’s growth in this important market segment”, he added.

Meanwhile, Andres Munho, co-founder and managing partner at the AMCS Group, commented: “We are very pleased with the breadth of high-quality investment capability our partnership with Jupiter will enable us to deliver to our clients. Jupiter’s excellence in a number of fixed income sectors, including its flagship Dynamic Bond, provide an excellent addition to what we have historically offered through Merian.”

The AMCS Group’s Miami based team focused on the Jupiter effort

Stapleton will be overseeing global key account relationships across the region, as well as advisory and private banking relationships in the Northeast; and Munho will be overseeing all advisory and private banking relationships in Florida. Meanwhile, Francisco Rubio, regional vice president at AMCS, will be responsible for the Southwest and West Coast regions of the US, as well as private banks and independent advisory firms in Miami.

The team will be supported by Alvaro Palenga, sales associate and Virginia Gabilondo, client services manager.

Alantra AM Acquires 49% of Indigo Capital, a Pan-European Private Debt Asset Manager

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parisdeMorton1905 — Foto: Morgon1905, Flickr, Creative Commons. paris

Alantra AM has announced in a press release the acquisition of a 49% stake in Indigo Capital SAS, a pan-European private debt asset manager.

Based in Paris, Indigo is an independent, established player in the alternative finance market specializing in the financing of small and medium-sized European businesses worth between €20-300 million through a combination of private bonds and preferred equity. Since inception, the firm’s 7 investment professionals have completed over 50 investments for a total value of more than €800 million across France, Italy, the Netherlands, Switzerland, and the UK.

“The investment in Indigo Capital represents yet another step in the growth plan of Alantra AM, and follows the incorporation of Grupo Mutua as its strategic partner to support the firm’s ambition of building a diversified pan-European asset management business”, said the firm in the press release.

Through its existing teams and the strategic stake in Indigo Capital, Alantra and its affiliates will have over €1 billion of assets under management covering different private debt strategies, including senior debt, unitranche and private bond solutions to corporates and long-term flexible financing for real estate companies.

The different teams actively cover 7 European markets.

The State of Inflation-Linked Bonds in a Post-COVID-19 Environment

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Jana Vukomanovic Water Unsplash — Pixabay CC0 Public DomainJana Vukomanovic. Jana Vukomanovic

As global markets attempt to recover their poise in the relentless shadow of COVID-19, one hot topic has perhaps challenged economists more than any other: What will be the pandemic’s effect on inflation? We believe the inflation rate will be between zero and 1%, and this is already priced in the market. But the picture for 2021 is only now starting to clear, presenting a new landscape of opportunities for investors in the inflation-linked bond market.

Many experts predicted the global coronavirus lockdown would be disinflationary – and they were right. The fall in activity did have a clear effect on prices for a variety of reasons. At AXA IM, we now forecast 2020 inflation to average 0.4% in the Eurozone, 1.0% in the US and 0.7% (1) in the UK – rising to 0.7%, 1.4% and 1.5% respectively for 2021. The impact, however, has not been a one-way street – we are already starting to see signs of higher pricing in some sectors which could suggest market expectations are too low.

One factor that has served to depress core inflation has been the inclusion of more online pricing into the data, an understandable measure given the impact of the lockdown on consumer behavior. However, we believe several other factors are having the opposite effect. Food prices, for example, have tended to climb during this period, as have telecoms prices after a long period of decline.

Hidden effects

In some areas we are still assessing the longer-term trend, although there does appear to be some evidence that education and health prices could continue to rise, alongside some localized trends in leisure and tourism services where consumers are no longer travelling to cheaper destinations. Inflation surveys could have a difficult job adapting to new realities in consumption patterns.

More fundamentally, there is evidence that the post-lockdown response from consumers has pushed some economies towards a more aggressive rebound than had been feared, accompanied by a parallel rise in prices. Figure 1 below shows that recent inflation numbers in the US have been the most solid seen in years, and that the rebound has been broad-based. In addition, as we move into 2021, inflation numbers worldwide will reflect a negative base effect from oil prices, which slumped as the pandemic spread.

AXA IM

From a more macro perspective, we see a medium-term risk that the COVID-19 outbreak could exacerbate tensions in the current model of globalization. Pre-pandemic – alongside US President Donald Trump’s ‘America First’ approach to trade – there had already been a shift towards a more protectionist tone in global markets. Now the virus has forced countries and businesses to re-assess the flow of goods, services and people across borders.

Hedging into view

These observations mean we believe there is a general risk to the upside for inflation as we move into 2021. And it is a risk that we believe has not been adequately reflected in market expectations.

One way to gauge how markets expect inflation trends to evolve is to look at inflation swaps. The chart below (Figure 2) shows that realized inflation since June is consistent with the top-end outlooks for inflation. The inflation swap market, however, is still pricing in the lower end, particularly in Europe but also to some extent in the US. Our expectation is for a potential aggressive rebound of inflation at the beginning of 2021, and we believe investors should consider preparing for that eventuality.

AXA IM

Naturally, these factors to the upside are encouraging more investors to explore ways they can hedge inflation risk and is having a tangible impact on the inflation bonds market, already underpinned by active monetary policy and supportive fiscal policy. Consumer behavior, the rise of protectionism and the possibility of regulatory price effects (for example through green policies) will be central to the potential uptick in prices – but central banks will also do what they can to push inflation higher from this point.

Column written by Jonathan Baltora, Head of Sovereign, Inflation and FX – Core at AXA IM.

To learn more about this topic, please contact Rafael Tovar, Director of Wholesale/US Offshore Distribution, AXA IM at Rafael.Tovar@axa-im.com.

Notes:

[1] AXA IM estimates as of September 2020

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Family Businesses: Insights on an Attractive Investment Prospect

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Pictet Asset Management has developed a new investment strategy that invests in publicly listed family businesses, companies that count founding families as major shareholders. Pictet-Family was repositioned on the 29^th May 2020 and has seen its investment universe change. It is managed by Alain Caffort and Cyril Benier. In this interview, they discuss the strategy’s guiding philosophy.

What exactly is a family business?

How you define a family business is a matter of interpretation. Sometimes it’s obvious, say when founders hold very large stakes in their own names. But the boundaries can sometimes be blurred. We take a systematic and rigorous approach to our definition. Family businesses that make up our investment universe are publicly listed companies in which an individual or family holds a minimum of 30 per cent of voting rights. The family can be by blood or marriage, the stake can be held through a foundation or some other vehicle. Such information is rarely freely available; unearthing it often requires painstaking research.

Why 30 per cent?

Research shows that active participation in the general assemblies of publicly listed companies averages around 60 per cent of share ownership. At 30 per cent, a shareholder (or group of closely tied shareholders) effectively has the casting vote and, thus, control.

Why focus on family businesses?

Family businesses are the lifeblood of our society and the backbone of the global economy. They contribute between 50 per cent and 70 per cent of countries’ gross domestic product and employ the majority of their workforces.

There’s a large body of research showing family businesses tend to outperform their peers – financially and in terms of shareholder returns.

Of course, as anyone with experience of families and family disputes knows, this type of ownership can also lead to a number of problems – which is why it is also crucial to take an active approach to investing in these companies. And that’s where we can make a difference – ensuring we avoid the pitfalls in this otherwise attractive investment landscape. Please read our related article on the universe for more about why it makes sense to invest in family businesses with an active approach.

This suggests corporate governance is a big focus for you, is that right?

Environmental, social and governance (ESG) factors are all important sources of investment performance. But when it comes to investing in family businesses, governance is key. That’s because governance is intrinsic to a company’s overall values and culture.

We use several bespoke indicators in order to draw out what’s acceptable and what isn’t. For example, we tolerate a lower degree of board independence from family companies – after all, the close alignment between the family’s and business’ fortunes is one of the reasons these companies do so well – but we’re much more stringent on the composition and approach of the company’s audit, remuneration and nomination committees.

What sorts of family businesses do you invest in?

We have no geographic or size preference – with the caveat that the shares have to have a fairly substantial minimum daily liquidity of USD5 million. We accept that this liquidity requirement keeps us from investing in some potentially interesting companies, but it also protects our clients from the worst effects of market dislocations such as we’ve recently seen.

Importantly, even after applying this stringent criteria, there are enough investable companies left – our universe is made up of 500 companies globally that operate across all sectors. It’s also worth noting that our liquidity limitation means that our strategy’s performance isn’t down to size effects. It’s not a case of trading performance for liquidity and thus volatility, as is the case with many small-cap funds. So we know that the outperformance of family businesses really is down to family effects.

So why do family businesses outperform?

We believe there are three primary reasons. First, the families tend to have most of their wealth and reputations invested in these companies, their interests are closely aligned. This, in turn, leads to the second reason, that family businesses often reinvest a larger proportion of their profits than their peers. Finally, stability of ownership also allows management to take a long-term view, rather than obsessing about the next quarter’s profits.

Are family firms weighted to certain countries and sectors?

Not in a way that narrows our investment options. Family companies operate across all sectors and industries. And we have a more balanced regional distribution than capitalisation-weighted global equity indices – for instance, 60 per cent of the MSCI All Country Index (ACWI) is based in North America, while our weighting is around 40 per cent.

But it is true we prefer some sectors to others. For example, Consumer Discretionary companies make up around 12 per cent of the MSCI ACWI but have nearly twice the weighting in our portfolio. And the majority of these companies are based in Europe, including some of the great luxury goods companies.

We’re also relatively heavily weighted towards Communication Services and Consumer Staples.

Why Pictet Asset Management?

Pictet-Family brings together the core capabilities of the Pictet group: Family businesses, Global funds, identification of winning market themes and a strong focus on ESG factors.

We know what the drivers of a successful family business are and what characteristics of a family business we are looking for. After all, we have a strong case study right at home: Pictet is a family business and a very successful one.

For more information on our Pictet-Family fund, please click here

Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to risks and uncertainties that could cause actual results to differ materially from those presented herein.

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This material is for distribution to professional investors only. However it is not intended for distribution to any person or entity who is a citizen or resident of any locality, state, country or other jurisdiction where such distribution, publication, or use would be contrary to law or regulation. Information used in the preparation of this document is based upon sources believed to be reliable, but no representation or warranty is given as to the accuracy or completeness of those sources. Any opinion, estimate or forecast may be changed at any time without prior warning. Investors should read the prospectus or offering memorandum before investing in any Pictet managed funds. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. Past performance is not a guide to future performance. The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested.

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For US investors, Shares sold in the United States or to US Persons will only be sold in private placements to accredited investors pursuant to exemptions from SEC registration under the Section 4(2) and Regulation D private placement exemptions under the 1933 Act and qualified clients as defined under the 1940 Act. The Shares of the Pictet funds have not been registered under the 1933 Act and may not, except in transactions which do not violate United States securities laws, be directly or indirectly offered or sold in the United States or to any US Person. The Management Fund Companies of the Pictet Group will not be registered under the 1940 Act.

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Lombard International Expands its Institutional Solutions Practice

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architecture-2256489_1920 — Pixabay CC0 Public Domain. El coste de riesgo de la banca casi triplica los niveles anteriores a la pandemia

Lombard International Group announced the expansion of its Institutional Solutions Practice (Practice) globally. This will provide institutional investors, based across the globe, with more effective ways to invest in U.S. private markets. Also, “it will assist U.S. and non-U.S. investment managers to raise capital through compliant investment structures that can more efficiently enhance net returns”, stated the firm in a press release.

The Practice focuses on improving global access to U.S. private markets for institutional investors such as pension funds, corporations, sovereign wealth funds, foundations, endowments and funds of funds, to enable their investment allocation to be “more efficient and effective”, says the wealth manager.

Operating across major global wealth hubs, the Practice is headed up by financial services veteran John Fischer, who leads a multi-disciplined team of senior executives. In the U.S., this includes Tom Wiese, Executive Managing Director; Sandy Geyelin, Executive Managing Director, and C. Penn Redpath, Senior Managing Director. Also, Jason Tsui, Managing Director, will lead the distribution strategy in Asia; Juan Job, Senior Managing Director, will be in charge of Latin American operations; and EMEA will be led by Peter Coates, who recently joined Lombard International as Global Director of Institutional Solutions.

“Institutional Solutions has been one of the key drivers of our growth. We’re excited to launch this internationally expanded Practice across the major global wealth hubs in Asia, Europe, LatAm and the U.S. Our team’s many decades of experience in combining insurance solutions and investment for optimized outcomes, as well as their subject matter expertise in alternative investments, means they are perfectly positioned to assist strategic partners and clients focused on U.S. private markets, which present attractive investment opportunities”, said Stuart Parkinson, Group Chief Executive Officer.

Michael Gordon, US CEO & Global COO, commented that, as markets remain volatile and uncertain, the institutional appetite for U.S. private markets is increasing. “Despite recent events, financial markets remain globally connected, and non-U.S. institutional investors in particular continue to be a key driver of asset flows into U.S. private equity, private debt and real assets. I’m delighted to spearhead the growth of this practice globally, to help institutions better achieve their unique investment objectives”, he added.

Meanwhile, Fischer, Executive Vice President and Head of Distribution, pointed out that their aim with this internationally expanded Practice is to truly make every basis point count. “We have created an effective global offering, using time-tested insurance structures which help investors reduce the friction associated with U.S. private assets, improving investment yields and reducing administrative burdens. Importantly, our solutions are cost-efficient, transparent and highly customizable to the unique needs of institutional investors”, he said.

Morgan Stanley to Acquire Eaton Vance for $7 Billion

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Morgan Stanley has entered a definitive agreement to acquire Eaton Vance, a provider of advanced investment strategies and wealth management solutions with over $500 billion in assets under management (AUM), for an equity value of approximately $7 billion.

The acquisition will make Morgan Stanley Investment Management (MSIM) a leading asset manager with approximately $1.2 trillion of AUM and over $5 billion of combined revenues. The asset manager stated in a press release that it avances its “strategic transformation” with three world-class businesses of scale: Institutional Securities, Wealth Management and Investment Management.

MSIM and Eaton Vance consider themselves “highly complementary” with limited overlap in investment and distribution capabilities. Eaton Vance is a market leader in key secular growth areas, including in individual separate accounts, customized investment solutions through Parametric, and responsible ESG investing through Calvert. “Eaton Vance fills product gaps and delivers quality scale to the MSIM franchise. The combination will also enhance client opportunities, by bringing Eaton Vance’s leading U.S. retail distribution together with MSIM’s international distribution”, points out the press release.

“Eaton Vance is a perfect fit for Morgan Stanley. This transaction further advances our strategic transformation by continuing to add more fee-based revenues to complement our world-class investment banking and institutional securities franchise. With the addition of Eaton Vance, Morgan Stanley will oversee $4.4 trillion of client assets and AUM across its Wealth Management and Investment Management segments”, said James P. Gorman, Chairman and Chief Executive Officer of Morgan Stanley.

Meanwhile, Thomas E. Faust, Jr., Chief Executive Officer of Eaton Vance stated that by joining Morgan Stanley, they will be able to further accelerate their growth by building upon their common values and strengths, which are focused on investment excellence, innovation and client service. “Bringing Eaton Vance’s leading brands and capabilities under Morgan Stanley creates a uniquely powerful set of investment solutions to serve both institutional and retail clients in the U.S. and internationally”, he added.

The details of the transaction

The firms point out that this transaction is attractive for shareholders and will deliver long-term financial benefits. “Both companies have demonstrated industry-leading organic growth and have strong cultural alignment”.

The combination will better position Morgan Stanley to generate attractive financial returns through increased scale, improved distribution, cost savings of $150MM – or 4% of MSIM and Eaton Vance expenses – and revenue opportunities.

Under the terms of the merger agreement, Eaton Vance shareholders will receive $28.25 per share in cash and 0.5833x of Morgan Stanley common stock, representing a total consideration of approximately $56.50 per share. Based on the $56.50 per share, the aggregate consideration paid to holders of Eaton Vance’s common stock will consist of approximately 50% cash and 50% Morgan Stanley common stock.

The merger agreement also contains an election procedure allowing each Eaton Vance shareholder to seek all cash or all stock, subject to a proration and adjustment mechanism. In addition, Eaton Vance common shareholders will receive a one-time special cash dividend of $4.25 per share to be paid pre-closing by Eaton Vance to Eaton Vance common shareholders from existing balance sheet resources.

The transaction will not be taxable to Eaton Vance shareholders to the extent that they receive Morgan Stanley common stock as consideration. The transaction has been approved by the voting trust that holds all of the voting common stock of Eaton Vance, says the press release.

The acquisition is subject to customary closing conditions, and is expected to close in the second quarter of 2021.

iShares Launches the First Climate Risk-Adjusted Government Bond ETF

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ireland-1971997_1920 — Pixabay CC0 Public Domain. iShare amplía sus fondos sostenibles con el lanzamiento de un ETF UCITS de bonos climáticos

iShares has launched the first climate risk-adjusted government bond ETF in the market: the iShares € Govt Bond Climate UCITS ETF. The strategy tracks the FTSE Climate Risk-Adjusted European Monetary Union (EMU) Government Bond Index (Climate EGBI), launched by FTSE Russel last January.

The ETF offers access to Eurozone government bonds while seeking to provide a higher exposure to countries less exposed to climate change risks and a lower exposure to countries that are more exposed, explained FTSE Russel on a press release. As for the index, it is designed for investors with an increased focus on climate performance of their government bond portfolios and is the result of close collaboration with Blackrock’s team over recent months.

The Climate EGBI incorporates a tilting methodology that adjusts index weights according to each country’s relative exposure to climate risk, with respect to resilience and preparedness to the risks of climate change. This includes an assessment of the expected economic impact of transitioning to greenhouse gas emissions levels aligned with the Paris Accord target of less than 2°C by 2050, known as transition risk. An assessment of the physical risk of climate change such as sea level rises and the resiliency of countries to tackle these risks is also assessed.

“The decision by a leading investor and ETF provider such as Blackrock to license FTSE Russell’s Advanced Climate EGBI for an ETF listing marks an important juncture in climate themed investing in European fixed income markets. Both institutional and private asset owners are increasingly including climate objectives in their decision making and are adjusting fixed income portfolios based on climate concerns. We expect growing interest from investors in this area”, said Arne Staal, Global Head of Research and Product Management at FTSE Russell.

Meanwhile, Brett Olson, Head of iShares fixed income, EMEA, at BlackRock, pointed out that sovereign issuers are facing increasing pressure to meet sustainability criteria, as more investors consider the ESG profile of their fixed income portfolios. “Until today, investors have had very limited options for cost effective exposure to government bonds that incorporate climate risk. This launch is yet another example of our commitment to providing investors with more choice to build sustainable portfolios”, he added.

Stefano Caleffi Named New Head of ETF Sales for Southern Europe at HSBC Global AM

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HSBC Global Asset Management has expanded its ETF sales team with the appointment of Stefano Caleffi as Head of ETF Sales for Southern Europe, a newly created role.

Based in Milan, he will be responsible for driving HSBC Global AM’s ETF sales and business development efforts across Italy, Spain and Portugal. Caleffi will report to Olga de Tapia, Global Head of ETF Sales.

The asset manager announced in a press release that this appointment follows the ones of Phillip Knueppel as Head of ETF Sales for Austria, Germany and Switzerland and Marc Hall as Head of ETF Sales for Switzerland.

De Tapia commented that Caleffi’s appointment is another milestone in their plans to grow their ETF business in Europe. “His extensive client-facing and ETF industry experience make him the perfect candidate to drive our sales effort in Italy, Spain and Portugal”, she added.

Caleffi has over 15 years’ experience in the investment management industry. Most recently, he was Head of ETF Business Development Italy, Iberia and Israel at Invesco. Prior to that, he was responsible for Southern Europe distribution at Source. Before joining Source, he worked in the equities division of Credit Suisse First Boston.