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Andrea Frazzini, David Kabiller, and Lasse Heje Win CFA’s Graham and Dodd Award

CFA Institute, the global association of investment management professionals, has named the winners of the 2018 Graham and Dodd Awards of Excellence. Every year, a research article published in the CFA Institute Financial Analysts Journal receives the prestigious Graham and Dodd (G&D) Award to recognize the contribution of the research to the practice of investment management. The article “Buffett’s Alpha” by Andrea Frazzini, David Kabiller, CFA, and Lasse Heje Pedersen of AQR Capital Management has won the Top Award for 2018.

Published in the Fourth Quarter 2018 issue of the Financial Analysts Journal, the article suggests that Warren Buffett’s returns are neither luck nor magic but instead a reward for leveraging cheap, safe, high-quality stocks. The piece attempts to explain the remarkable performance of Buffett’s Berkshire Hathaway portfolio by analyzing and compiling stock returns, mutual fund data, holdings data, SEC reports, and even hand-collected comments from Berkshire Hathaway’s annual reports.

“It is fitting that an article about Buffett, Benjamin Graham’s most famous student and a strong advocate of his value investing approach, is this year’s Top Award winner, bringing the award back full circle to the well-respected principles of Graham and David Dodd,” said Heidi Raubenheimer, CFA, managing editor of the Financial Analysts Journal at CFA Institute. “Andrea Frazzini, David Kabiller, and Lasse Heje Pedersen did an outstanding job of thoroughly dissecting Buffett’s approach and analyzing what is truly at the heart of Berkshire Hathaway’s long-term success. Their findings confirm the ‘practical implementability of academic factor returns’: Berkshire Hathaway’s systematic exposure to value and quality factors can be mimicked and realized by others. Their analysis demonstrates the further improvement of the fund’s performance by its successful use of its unique access to high-quality, cheap leverage.”

In addition to the Top Award, the G&D Awards Committee honored “Hedge Funds and Stock Price Formation” by Charles Cao, Yong Chen, William N. Goetzmann, and Bing Liang with a Scroll Award. The article was originally published in the Third Quarter 2018 issue of the Financial Analysts Journal and concerns stock mispricing implied by both hedge fund ownership and trading.

The annual G&D Awards of Excellence include the Top Award to recognize the best research article and up to two Scroll Awards to acknowledge the runners-up. Winners are chosen through a two-stage selection process. First, all members of the Financial Analysts Journal Advisory Council and Editorial Board are invited to vote, producing a shortlist of practitioner-relevant research articles published in the Financial Analysts Journal throughout the year. Second, the G&D Awards Committee (six members selected from the CFA Institute Board of Governors, the CFA Institute Leadership Team, CFA Society leadership, and the Financial Analysts Journal editorial team) collectively decide the award winners from the shortlist.

Adaptation to the Client and Social Commitment: BNP Paribas Wealth Management Tools to Ace the New Post-MiFID II Course

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Although she recognizes that MiFID II will promote the discretionary management of portfolios, Silvia García-Castaño, CIO and Head of Discretionary Portfolio Management at BNP Paribas Wealth Management Spain lets us know in this interview the importance of this service that will coexist with financial advisory services in order to have best tailor offering solutions for wealth management clients. In fact, adaptation to the client and social commitment are some of the milestones for the success in the private banking business.

The asset management and advisory industry in Spain started the second half of the year with much anticipated developments: the application of MiFID II to the Spanish legal system, whose objective is to provide greater protection to investors by establishing a legal framework of professionalism and transparency for its relationship with financial entities. For Silvia García-Castaño, Head of Discretionary Portfolio Management at BNP Paribas Wealth Management Spain, the application of the directive “is good news that allows us to finally adapt ourselves in the new rules”, although she emphasizes that the publication of the last Royal Decree Law does not represent major developments, as most of the relevant issues for the industry are still pending from regulatory development and are not detailed enough to solve the doubts amongst investors that have arisen in the recent months.

But, despite the questions that still remain on the table, she believes that her entity has already done its homework strengthening their processes: “Entities have already developed numerous projects for a long time to adapt to the new demands of MiFID II. In our case, many of these measures have already been implemented in recent years, nonetheless our procedures have been reviewed. Our entity is in a continuous evolution, we have already progressed adequately in the past but we continue to dedicate our best resources in order to continue to lead in this area”, she said and highlights:” Risk control has always been one of our strengths. We want to build durable relationships with our clients, this is the reason why we have been investing in being objective and transparent for years. “

The value of discretionary portfolio management

Mrs. García-Castaño is responsible for Discretionary Portfolio Management at BNP Paribas Wealth Management, and she believes that MiFID II will strengthen the value of this service in combination with advisory services: “I firmly believe that MiFID II help provide a better service for the client. Discretionary management and advisory are two services that can coexist and complement each other very well. There are clients who feel very comfortable delegating the management to professionals for an important part of their wealth but keep a separate part to take their own decisions. The more we integrate these two services, the more added value we will provide to our customers”, she explains.

All in all, she recognizes that MiFID II will promote discretional portfolio management, as it is a service that makes life easier to clients as teams of experts are the ones who take the decisions on their behalf. “MiFID II strengthens the value of a service that already existed and which is expensive for financial institutions as it integrates big capabilities in analysis, investment strategy, selection and monitoring of financial instruments services, portfolio construction, monitoring, risk control, and IT”, she adds.

This process is also facilitated by asset managers, who had to launch new clean share classes for their range of funds: “The situation over a year ago in relation to clean share classes was unsatisfactory. Although the progress of the asset managers has not been as quick as we may have wished, it has been sufficient to adapt to MiFID II in time, ” said the expert.

Funds of funds, funds and mandates

As vehicles to materialize this discretionary portfolio management, Mrs. García-Castaño highlights the beauty of the fund of funds as an investment product, but she also highlights the importance of the direct lines funds and mandates. “The investment fund is an optimal instrument for the Spanish investor. At BNP Paribas we have always opted for funds of funds, under an open architecture scheme. Among our range are our multi-management funds that already have a 20 year track record. These have been a very suitable instrument for the construction of global and diversified portfolios”, she said.

“Our mission, discretionary portfolio management, must adapt to all phases of a client’s life. For this reason, at BNP Paribas we have designed a range of investment solutions, fiscally efficient and adapted to the different needs of our customers. Within this range, there are funds with direct investments, but also discretionary portfolio management mandates through other types of investment vehicles, to adapt to the specific needs of each client. New fund solutions must also be adapted to the new requirements of MiFID II”, says García-Castaño about his offering.

In addition to this, she stresses that discretionary portfolio management must incorporate both active and passive management: “Knowing when to use active or passive management is part of our portfolio decision-making process. Asset managers must be modest and concentrate efforts on what we do best and actively manage, our portfolios to generate alpha and differentiate ourselves from the rest. For the rest of assets, styles or geographical areas, it is important to find the best of every type of asset in the industry”, she says.

On the impulse of the ETFs under potential new fiscal efficient transferability (which could finally reverse), she foresees a wider use of ETFs over time: “Currently, we use the ETFs in our investment solutions or for those customers who don’t mind the further tax penalties ETFs suffer In these cases, we have implemented an analysis and selection process similar to the one we use with investment funds, with an external partner, Trackinsights. The day these products are available for the “traspasos” process, ETFs products will be also used with the rest of clients”.

Different collection options

According to a varied offer of services and products, the entity also offers different collection options, the CIO said: explicit in discretionary portfolio management and diverse in advice services: “In the advisory service, the client can choose between the payment of an explicit commission, eliminating retrocessions, or continue as before, without an explicit payment where the bank is remunerated through retrocessions. The customer has the last word, according to their needs and preferences “, explains Mrs. García-Castaño.

All in all, to give best service to a client that has been changing over time: “Since we started our private banking activity, we have been observing changes in the financial behavior of our clients. Currently, our client of private banking and discretionary management, in particular, has a greater financial knowledge and is generally accustomed to having lot of information. Our client has always been demanding, the difference is that now they have all the information at their disposal. Therefore, it is very important to provide our client with a consistent portfolio management service adapting portfolios to our market vision. Working with risk scenarios and quantitative tools always helps, but the key is to know how to adapt to each of our clients, with great dedication and communication. The financial crisis has reinforced the relationship with our clients allowing us to get much closer to them and their needs.”, explains the expert.

Social commitment and responsible investment

Adapting to the client is on its DNA, together with its commitment to society. “As an international bank, we have the strong commitment and we dedicate human, technological and financial resources to be part of change. Our aim is to transform our operational system to be more digital and be the preferred partner of our customers”, explains Mrs. García-Castaño.

According to the CIO, “it is a main objective for BNP Paribas to bring all capabilities we have as financiers, buyers and employers at the service of four fundamental pillars: energy transition, entrepreneurship, support for future generations and local ecosystems”. To this purpose, the Company Engagement department has been created at the center of the organization and with the presence of the steering committee, to intensify its positive impact on the society: “Being a bank for a changing world means continuing to be the partner of our clients to contribute to a more sustainable and egalitarian world”, she adds.

In fact, beyond his social commitment, Mrs. García-Castaño highlights that BNP Paribas Asset Management, is one of the pioneers in responsible investments. “We have been using ESG criteria in its portfolio management for more than 15 years, with assets under management in excess of 230,000 million euros with ESG philosophy. BNP Paribas is currently a member of international organizations advisory committees such as PRI, the IIGCC and FAO / OECD, and the group is rated by PRI as A +, for their responsible investment approach”. And she explains that in BNP Paribas Wealth Management they take advantage of these capabilities of BNP Paribas AM. “In addition, we have an offer of socially responsible investments in continuous development, which will have a fundamental role in our future growth”.

BNP Paribas social responsible investment criteria include the adoption of the 10 Principles of the Global Compact regarding the selection of issuers and strict sectorial policies to monitor sensitive sectors investments.

To grow in a market with big potential…

With these principles, the entity seeks to grow in a potentially large market, although with a strategic business reorientation towards high net worth segment (see appendix): “Economic Spanish growth in recent years has been very resilient. Low interest rates for our superior domestic growth profile in recent years led to higher growth than our European counterparts”, she says, also mentioning the importance of the real estate and tourism sector development.

“Expansionary monetary policy has been supportive for asset valuations and contributing to a positive wealth effect. Our growth forecasts are positive for coming years both in Europe and in Spain”, predicts Mrs. García-Castaño. “The still accommodative monetary policy will continue supporting business and real estate dynamism so we forecast a positive private banking trend.”

… thanks to internal talent

But to be able to grow in private banking, the talent of the team is key. Mrs. García-Castaño explains that “recruiting the best talent is an art. We are keen on attracting talent leveraging on the attractiveness of the BNP Paribas brand. Our employee rotation is very low. We are experts on building stable teams that fit and develop together. Our international approach and the commitment of our group to develop the Spanish unit is a motivation. Those who work at BNP Paribas know that we belong to a large group, highly solvent and with a long successful history”.

To retain and manage talent, the group invests a lot in internal culture, in creating an atmosphere in which the employee feels motivated. “Our private bank talks a lot about investments but also about our values, being easy to feel as a family and I think this is perceived by our clients. The big sense of belonging to this group is reinforced by working close to other multidisciplinary teams. Another motivating factor is BNP Paribas’ commitment to relevant issues such as climate change or diversity. As a result, our group has for many years developed a corporate social responsibility policy that includes environmental, social and good corporate governance criteria in the day-to-day of all our entity’s activities”, she adds.

Because of all this factors and because of the significant size of the bank, we also have to face challenges like increasing regulation, we don’t foresee our talent moving to independent firms: “Entities need an adequate size and many resources to best meet regulatory requirements on one hand and to provide with best experts and investment resources to our clients”.

And she also rules out that the roboadvisors can replace the private banker: “The roboadvisors will develop but it does not mean that they are going to replace the private banking. Quantitative models have always existed and new technology makes these models more powerful. We have always used this type of models and we continue developing them in order to help us in our decision-making process and to support portfolio management”.

BNP Paribas Wealth Management will focus on the segment of higher net worth clients after the recent sell of the Mass Affluent branch – with 550 million euros in assets – to Banca March. With this operation, that will be fully completed in the coming months once the pertinent authorizations are received, a part of BNP Paribas’ private banking business will be integrated into Banca March.

BNP Paribas Wealth Management continues with his specialization in the high net worth segment, being currently one of the most important international firms in the Spanish market with assets under management over 7,000 million euros

Going forward, BNP Paribas Group is refocusing its Wealth Management strategy in Spain and in other European countries towards a business model that specializes in high net worth clients, with a special focus on entrepreneurs, to which we can provide a greater added value in terms of personalized service and offering, taking advantage of the group’s capabilities (corporate and institutional banking, Global Markets, BNP Paribas Asset Management, Real Estate, etc.).

The entity specializes in the High Net worth and Ultra High Net worth customer segments, which so far accounted for 90% of the volume of total assets under management. This is a segment where you can add more value to your customers by providing a personalized service and a differentiated product offering.

For BNP Paribas, Spain continues to be a strategic country for the Wealth Management activity, with a 2021 plan that includes investments in technology to improve service to his customers.

BNP Paribas works on an open architecture scheme for years but they also have great experience in managing direct lines portfolios: “In 1998 we already managed one of the largest funds of the Spanish market under an open architecture process. On January 1st, 2003, we launched our range of fund mandates coinciding with new fiscally efficient transfers’ regulation. We could say that we are pioneers in this topic “, said García-Castaño. In her opinion, the benefits of open architecture remain as this investing style gives you access to the best expertise of each asset manager and increases diversification and she remembers that the combination of different managers reduces the portfolio volatility “. For me, open architecture is not taking 5 stars rated funds and neither to have an infinite palette of colours, but choosing those colours you really need and fit perfectly with others improving the beauty of the whole picture,” she says.

The expert argues that “funds are an interesting vehicle that allows you to postpone capital gains payment, so it will continue to be attractive for Spanish clients as long as our tax regime is not modified. But in addition, funds bring numerous advantages to customers in terms of diversification, economies of scale, liquidity, legal protection, etc.”

At BNP Paribas Wealth Management they work with a wide selection of more than 80 international managers that are interesting due to their management style, capabilities and resources: “The keys for selection analysis are: analysis of capabilities, consistency and sustainability. To do this, we conducted a quantitative and qualitative analysis, being especially restrictive with everything that has to do with the control and monitoring of risks “, explains Mrs. García-Castaño. In this work, they are not alone, FundQuest , acquired by BNP Paribas in 2005, a major worldwide player in the selection and analysis of investment funds, managing more than 50.000 million euros on a multi-management approach.

On the potential fiscal and legal changes of the sicavs, she recognizes that uncertainty is weighing on these vehicles, which have been losing assets in recent years. “The whole industry is waiting for the final decision on this issue, but it would be a pity to punish this vehicle since the impact would be very negative not only for the private banking industry but also for the whole Spanish economy”, she says.

In her opinion, there is much ignorance regarding this vehicle that is available to all savers and that does not have any privilege with respect to investment funds. And warns that unfavorable changes could international outflows from Spain: “In the countries around us there are other vehicles that work as an alternative to the SICAVs, so we could see a movement of capital to other jurisdictions.”

A cycle that is not at risk

On the market situation, she argues that the cycle is not yet over thanks to supporting factors such as profits and valuations, and she shows her preference for European, Japanese and Emerging equity. “In our baseline scenario, we maintain our conviction that the economic cycle is not at risk thanks to positive earnings per share trends and reasonable valuations, although volatility will accompany us for a while. We forecast 100 b.p US interest rates hikes for 2019 and no increases for 2020, so we assume that an “error” by the central bank is very unlikely. This is an important factor to clarify by markets. In our scenario, the dollar should depreciate to 1.22 bringing stability to emerging markets that have suffered an excessive correction … In the short term, uncertainty and geopolitics will drag performances “, explains the CIO.

Regarding asset classes they bet for risk on, “we favor European, Japan and emerging markets equity and we are less positive on US stock market. Regarding fixed income, we recommend to be cautious and short duration bonds before the normalization scenario of interest rates arrives. Within this category of assets we prefer corporate bonds to governments bonds and we find value on local current emerging markets debt”.

To find long-term trends, she argues that we must build on demographic, social and technological changes we will experience in the coming years, “in which there is no doubt that millennials will be the engine of growth, and we will address major trends such as revolution of mobility, investment in infrastructure, more sustainable production methods, or business investment “.

In support of gender equality and the greater role of women in the financial world

As well as being the CIO and head of DPM at BNP Paribas Wealth Management, Silvia Garcia-Castaño is a founding member and vice-president of the Spanish Executive Women association, EJECON in Spanish, which seeks to promote and support women in executive positions. “We founded the association in 2015 with the sole purpose of trying to promote more women into executive management positions and supporting the “talentoSINgenero” initiative”.

This is an association that has had an exponential growth and as of now has around 500 members with an average seniority of 15 years and that include women and men from more than 300 firms from all areas of the economy, who have the enough responsibility to promote a cultural change within their companies towards a more egalitarian workspace. “My daily task have always been related to strategic planning as well as company culture. In this sense I have been responsible for communication and I am currently leading the EJE&CON forums” she said, convinced that there is still a lot of work ahead”.

“Data such as salary differences or the fact that only one in ten CEOs are women, are the ones that have encouraged us to found EJE&CON. The important thing is to implement effective initiatives with the aim of making the gender balance a reality. The initiatives can be diverse, the important thing is that they obtain positive results, “she said. With this objective they have launched the EJE&CON Code of Good Corporate Practices in which they give ten clear recommendations in terms of diversity. We have also launched the Directors Program, the EJE&CON Awards or the EJE&CON Forums.

But, in spite of the challenges, she trusts that women will occupy a growing role in the financial world: “The financial sector and especially the management area have traditionally been run by men. Currently both clients and professionals are associated with a male role. But we are changing things, proof of this is this interview. It is important to change the image of certain roles to be is more attractive to the new women generations in order they join us in this exiting professional activity “, adds García-Castaño

With BNY Mellon IM, Unicorn Has All the Partners it Wants in US Offshore and LatAm Retail

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Con la entrada de BNY Mellon IM, Unicorn completa sus partners en US Offshore y LatAm retail — Foto cedidaUnicorn's US Offshore team. From left to right: Mike Kearns, David Ayastuy, Renata Parra and Luis Alvarez. With BNY Mellon IM, Unicorn Has All the Partners it Wants in US Offshore and LatAm Retail

Unicorn Strategic Partners continues to grow. The firm led by David Ayastuy will be responsible for promoting and distributing the UCITS funds of BNY Mellon Investment Management in the US Offshore market. In addition, they have signed Renata Parra, ex-HSBC, as responsible for client services.

Unicorn, with offices in Madrid, Miami, New York, Montevideo, Buenos Aires and Santiago de Chile, will initially focus on servicing BNY Mellon IM assets already on the market, seeking to intensify the company’s presence in the portfolios of family offices, institutional investors and fund platforms in the region.

BNY Mellon, with its multi-boutique model, in addition to the 40Act versions, has more than 50 UCITS funds with exposure to most asset classes. As Luis Álvarez told Funds Society, “there is a great demand from the market in the liquid alts part, it is something that with BNY Mellon we will be able to promote very actively with its Global Real Return Fund”.

Sasha Evers, managing director at BNY Mellon IM for Iberia, Latin America and US offshore mentioned: “We are very excited to be partnering with Unicorn to establish and develop our presence in the US offshore market where we see many opportunities to provide investors with access to leading global investment capabilities. We will provide Unicorn with a range of relevant products managed by our world-class investment specialists, as well as all of the necessary resources and support to enable them to provide the highest quality client service in the local market.”

In an interview, Ayastuy added that it is a great honor to include BNY Mellon IM among its partners and that they are extremely happy with the results they are having when promoting the Vontobel and Muzinich strategies. He also mentioned that, with the addition of BNY Mellon IM, Unicorn does not want to add any other partners in US Offshore and/or LatAm retail “because our way of working is a way of partnership and we want to be able to be an extension of the firms. With BNY and Vontobel we are covered for US Offshore and with Vontobel and Muzinich we are covered for LatAm retail,” he says adding that they would be open to increasing the number of partners in institutional LatAm.

Juan San Pío Joins Amundi as ETF, Indexing & Smart Beta Sales Director

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Juan San Pío se incorpora a Amundi como director comercial de Amundi ETF, Indexing & Smart Beta para Iberia y Latinoamérica — Wikimedia CommonsCourtesy photo. Juan San Pío Joins Amundi as ETF, Indexing & Smart Beta Sales Director

Amundi has appointed Juan San Pío as sales director of the firm’s ETF, Indexing & Smart Beta unit for Iberia and Latin America in an effort to strengthen the region.

San Pío will report to Marta Marín Romano, Amundi Iberia general director, and to Gaëtan Delculée, responsible for global sales of Amundi ETF, Indexing & Smart Beta.

Amundi’s latest appointment joins from Lyxor, where he was responsible for the ETFs and Indexed Funds unit in the same areas for which he has been now appointed. Previously, in 2008, he started working for Société Genérale responsible for Spain’s institutional sales. Prior to that, San Pío served at Santander Asset Management, where he was director of the firm’s external networks and institutional business.

Former roles include that of financial adviser at the private banking division of Morgan Stanley and head of the private banking unit at the Spanish Banco Guipuzcoano based in Madrid.

Edouard Carmignac Leaves his Company’s Day-to-Day Operations

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Carmignac’s President and Founder, Edouard Carmignac, has decided to leave its Patrimoine fund management team as well as his company’s day-to-day operations. In a press conference in Paris today, he mentioned that the transition will be gradual and that he will try to work more efficiently but leaving the day-to-day to a very competent team. He will remain on the firm he founded as CIO and member of the Board.

Earlier this week, he announced that after almost 30 years running it, he has decided to pass on the stewardship of the 16 billion dollar fund to Rose Ouahba, Head of Fixed Income, and David Older, Head of Equities.

Accourding to the company: “30 years after the creation of Carmignac, the investment philosophy of Carmignac Patrimoine remains the same. David and Rose, as sole Fund Managers, have fully embraced their partnership and are focused on reinforcing alpha generation with specific attention to risk management in this challenging global environment.”

Last month he gave David Older the leadership of his 3 billion dollar Investissement fund.

David Older joined Carmignac in 2015 as Fund Manager and was later appointed Head of Equities in 2017. “Expert on global technology, telecoms and media, his considerable experience in alpha generation and long-short management is key in a challenging environment.”

Before joining Carmignac, David Older spent 2003-2015 at SAC Capital/Point72 Advisors in New York, as co-Sector Head of the Communications, Media, Internet and Technology team. Prior to this, David was an Investment Banking Associate in the Communications and Media group at Morgan Stanley. David received a Bachelor of Arts at McGill University and holds a MBA from Columbia University.

Rose Ouahba joined Carmignac in 2007 as Fund Manager to take over the bond component of Carmignac Patrimoine. She was appointed as Head of Fixed Income in 2011. “Rose has been reinforcing and reorganizing the team to strengthen our unique “unconstrained” investment philosophy.”

She started her career as Bond Fund Manager at Ecureuil Gestion in 1996 and joined IXIS Asset Management 3 years later, as Head of the “Bond diversification” team and, subsequently, Head of Structured Credit Allocation. Rose holds a Postgraduate DESS in Financial Engineering from the University of Paris XII.

Carmignac Patrimoine is the original fund of the Patrimoine strategy. In 2013, they launched Carmignac Portfolio Patrimoine, a sub-fund of the Luxembourg Carmignac Portfolio SICAV. Carmignac Patrimoine and Carmignac Portfolio Patrimoine share the same investment strategy, portfolio construction and the same management process.

Indosuez Wealth Management names new Chief Executive Officer for CA Indosuez Wealth (Miami) and Global Head of Americas

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Frédéric Lamotte, nuevo director general para América en Indosuez WM — Wikimedia CommonsFrédéric Lamotte, Photo Linkedin. Indosuez Wealth Management names new Chief Executive Officer for CA Indosuez Wealth (Miami) and Global Head of Americas

Frédéric Lamotte has been appointed Chief Executive Officer of CA Indosuez Wealth (Miami) and Global Head of Americas at Indosuez Wealth Management, the global wealth management brand of Crédit Agricole group. He assumed these roles at the beginning of this year and is based in Miami.

This appointment demonstrates Indosuez Wealth Management’s continued commitment to the Americas and the intention to further develop its wealth management activities in this key market.

Frédéric Lamotte had been Chief Investment Officer at Indosuez Wealth Management group since 2012.

His international experience and his extensive banking expertise will benefit the bank in developing synergies between all of Crédit Agricole group’s businesses in the region.

Frédéric joined Banque Indosuez in 1988 as a member of the ALM department of Saudi French Bank. He then moved to Crédit Agricole Indosuez’s Singapore subsidiary in 1993 as Head of Derivatives before becoming Head of Capital Markets and Derivatives for the Tokyo subsidiary. In 1997, he was appointed Head of Advisory and Structured Products at Crédit Agricole Suisse and later took over as Head of Markets and Investment Solutions at Indosuez Wealth Management Switzerland in 2007.

He is a graduate of Ecole Centrale de Paris and holds a Master’s in International Finance from HEC.

Allfunds Hires Three Executives to Boost its International Expansion

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Allfunds nombra a tres altos ejecutivos  para impulsar su expansión internacional y acelerar su desarrollo — Foto cedidaCourtesy photo. Allfunds Hires Three Executives to Boost its International Expansion

European funds platform Allfunds has appointed three senior executives in a moved aimed at boosting its international expansion and further accelerate its development.

Luigi Lubelli, formerly Group Chief Financial Officer and member of the Group Management Committee of Assicurazioni Generali will become Allfunds’ new Chief Financial Officer. Having developed his management career at Mapfre, Morgan Stanley, Citibank and Banco Exterior de España (now BBVA), Lubelli will form part of the Allfunds Executive Committee and will focus on steering Allfunds towards its new value creation objectives, as well as on monitoring the achievement of its business goals.

George Yaryurais a strategic marketer with over 20 years’ experience in developing high impact product strategies, driving transformation and business growth for global tech brands. He joins as the new Chief Product Officer and will also serve on the Allfunds Executive Committee.

Jorge Calviño, appointed Chief People Officer, brings with him a wealth of experience in human resources having developed his career in different people roles with leading international businesses such as Gillette, Amadeus, L’Oréal, Microsoft, Beiersdorf and, most recently, Alain Afflelou. He will also be part of the Allfunds Executive Committee.

Allfunds’ CEO Juan Alcaraz said:”Allfunds is in the process of transformation, of constant change and expansion – enhancing our offering to both our distribution clients and the fund management industry. To maintain our focus and momentum, we must seek out the best people from around the world to ensure we continue on our path to become the leading wealth-tech company in the investment industry. I am therefore delighted to welcome Luigi, George and Jorge into these all-important roles.”

Thornburg Investment Management Launches Two UCITS Funds

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Thornburg Investment Management lanza dos nuevos fondos UCITS — Photo: Abi Barber. Thornburg Investment Management Launches Two UCITS Funds

Thornburg Investment Management has now a suite of eight fixed income and equity strategies on Thornburg’s UCITS platform. It has recently added both the Thornburg Long / Short Equity Fund and the Thornburg Strategic Income Fund.

The Thornburg Long/Short Equity Fund is co-managed by Connor Browne and Bimal Shah. The fund applies a bottom-up, fundamental security selection approach that is focused, diversified, and based on high conviction. Its portfolio is concentrated, with typically 30 to 40 stocks in both the long and short portions of the portfolio. The fund, domiciled in Dublin, Ireland, is based on an investment strategy launched in 2008, currently available to investors through separately managed accounts and a U.S. mutual fund structure.

Connor Browne, co-portfolio manager of the Fund, said: “Recent market volatility highlights the need for investors to have a permanent allocation to alternatives in their investment portfolios. Our Fund provides traditional long/short equity, hedge- fund-like exposure in a vehicle with daily liquidity. Notably, we have added value on both the long and short sides of our investment book since inception, and this sets us apart from many of our competitors.”

Carter Sims, managing director and head of global distribution at Thornburg mentioned: “The recent spike in volatility provides investors with new entry points to tap into a top-performing U.S. long/short equity strategy and the resources of highly respected and successful portfolio managers.”

The Thornburg Strategic Income Fund is managed by Jason Brady, Lon Erickson, Christian Hoffmann, and Jeff Klingelhofer and supported by Thornburg’s 40-person investment team. The Fund’s diversified portfolio is constructed with income-producing, relative-value investments that exhibit strong underlying credit fundamentals.

According to Jason Brady, president and CEO at Thornburg and co-portfolio manager of the Fund: “This Fund expands upon our legacy of providing investors with a stable source of competitive return, and a disciplined and balanced allocation in changing market environments.”

“Demand for diversified, relative value, fixed income portfolios continues to grow among global investors. The launch of Thornburg Strategic Income Fund signals our ommitment to providing our international partners access to Thornburg’s decades of fixed income experience,” added Sims.

Andrea Orcel Will Not Become Banco Santander ‘s CEO

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El consejo de Banco Santander acuerda no continuar con el nombramiento de Andrea Orcel como consejero delegado del Grupo — Foto cedida. Andrea Orcel Will Not Become Banco Santander 's CEO

Following a board meeting on January 15th, the Grupo Santander Board announced that Andrea Orcel’s appointment to the role of Group CEO will not proceed.

The Board of Santander made the decision to appoint Andrea Orcel in September 2018. In light of his seniority, along with regulatory, legal and contractual considerations, an early announcement of the appointment was necessary, subject to the usual conditions, including a six-month garden leave.

At that time, the Board of Santander had agreed the terms of his annual remuneration in his future role at Santander, which were in line with that of José Antonio Álvarez. It was not, however, possible, to determine in advance the final cost of the Group’s share of compensating Orcel for the remuneration awards, made to him by his previous employer, that would have been foregone. The Board therefore proceeded with the appointment on the basis of a considered estimate of the likely cost to Santander, based on advice, precedent and expectations of mitigation, due to the nature of the relationship between the two organizations and the different activities carried out by each institution.

In recent months, discussions have been taking place over the terms of Orcel’s departure from his previous employer. It has now become clear that the cost to Santander of compensating Orcel for the deferred awards he has earned over the past seven years, and other benefits previously awarded to him, would be a sum significantly above the Board’s original expectations at the time of the appointment.

The Board considers that for Santander to pay this amount to facilitate the hiring of one individual, even one of the calibre and background of Orcel, would be unacceptable for a retail and commercial bank such as Santander. This is particularly so in light of Santander’s values and its responsibilities to its wider stakeholders and the societies in which it operates. As such, it has been decided by the Board that it would not be right to proceed with the appointment.

José Antonio Álvarez, who has remained in the role since the announcement and his anticipated transition in March to Chairman of Santander Spain, will continue to serve in this role without change. He will also serve as Vice Chairman of the Board.

Rodrigo Echenique, who is due to retire from his current role as Chairman of Santander Spain in March, will remain until a successor is named.

Ana Botin, Executive Chairman of the Board said: “Santander is a retail and commercial bank with significant responsibilities to the societies in which it operates. In making this decision we have had to balance the respect we have for all of our stakeholders – the millions of people, customers and shareholders we serve – with the very significant cost of hiring one individual, even one as talented as Andrea, by compensating for the loss of a significant proportion of seven years of his past remuneration. The Board and I are certain that this decision, although difficult to take, is the right one. “On a personal note, my colleagues and I were looking forward to working with Andrea. We all wish him every success in the future. We, as a Group, are fortunate to have José Antonio who has agreed to continue as CEO. I know we will work together as well as we have over the past four years, delivering profitable growth as more and more customers trust us to help them prosper. We will present our strategic update to the market together later this year in what we both believe is an exciting opportunity ahead of Santander.”

John Clifton Bogle, Father of Indexing and Founder of The Vanguard Group, Has Died

| For Beatriz Zúñiga | 0 Comentarios

John Clifton Bogle, founder of The Vanguard Group, died on January 16, 2018 in Bryn Mawr, Pennsylvania. He was 89.

Mr. Bogle had legendary status in the American investment community, largely because of two towering achievements: He introduced the first index mutual fund for investors and, in the face of skeptics, stood behind the concept until it gained widespread acceptance; and he drove down costs across the mutual fund industry by ceaselessly campaigning in the interests of investors. Vanguard, the company he founded to embody his philosophy, is now one of the largest investment management firms in the world.

“Jack Bogle made an impact on not only the entire investment industry, but more importantly, on the lives of countless individuals saving for their futures or their children’s futures,” said Vanguard CEO Tim Buckley. “He was a tremendously intelligent, driven, and talented visionary whose ideas completely changed the way we invest. We are honored to continue his legacy of giving every investor ‘a fair shake.’”

Mr. Bogle, a resident of Bryn Mawr, PA, began his career in 1951 after graduating magna cum laude in economics from Princeton University. His senior thesis on mutual funds had caught the eye of fellow Princeton alumnus Walter L. Morgan, who had founded Wellington Fund, the nation’s oldest balanced fund, in 1929 and was one of the deans of the mutual fund industry. Mr. Morgan hired the ambitious 22-year-old for his Philadelphia-based investment management firm, Wellington Management Company.

Mr. Bogle worked in several departments before becoming assistant to the president in 1955, the first in a series of executive positions he would hold at Wellington: 1962, administrative vice president; 1965, executive vice president; and 1967, president. Mr. Bogle became the driving force behind Wellington’s growth into a mutual fund family after he persuaded Mr. Morgan, in the late 1950s, to start an equity fund that would complement Wellington Fund. Windsor Fund, a value-oriented equity fund, debuted in 1958.

In 1967, Mr. Bogle led the merger of Wellington Management Company with the Boston investment firm Thorndike, Doran, Paine & Lewis (TDPL). Seven years later, a management dispute with the principals of TDPL led Mr. Bogle to form Vanguard in September 1974 to handle the administrative functions of Wellington’s funds, while TDPL/Wellington Management would retain the investment management and distribution duties. The Vanguard Group of Investment Companies commenced operations on May 1, 1975.

To describe his new venture, Mr. Bogle coined the term “The Vanguard Experiment.” It was an experiment in which mutual funds would operate at cost and independently, with their own directors, officers, and staff—a radical change from the traditional mutual fund corporate structure, whereby an external management company ran a fund’s affairs on a for-profit basis.

“Our challenge at the time,” Mr. Bogle recalled a decade later, “was to build, out of the ashes of major corporate conflict, a new and better way of running a mutual fund complex. The Vanguard Experiment was designed to prove that mutual funds could operate independently, and do so in a manner that would directly benefit their shareholders.”

In 1976, Vanguard introduced the first index mutual fund—First Index Investment Trust—for individual investors. Ridiculed by others in the industry as “un-American” and “a sure path to mediocrity,” the fund collected a mere $11 million during its initial underwriting. Now known as Vanguard 500 Index Fund, it has grown to be one of the industry’s largest, with more than $441 billion in assets (the sister fund, Vanguard Institutional Index Fund, has $221.5 billion in assets). Today, index funds account for more than 70% of Vanguard’s $4.9 trillion in assets under management; they are offered by many other fund companies as well and they make up most exchange-traded funds (ETFs). For his pioneering of the index concept for individual investors, Mr. Bogle was often called the “father of indexing.”

Mr. Bogle and Vanguard again broke from industry tradition in 1977, when Vanguard ceased to market its funds through brokers and instead offered them directly to investors. The company eliminated sales charges and became a pure no-load mutual fund complex—a move that would save shareholders hundreds of millions of dollars in sales commissions. This was a theme for Mr. Bogle and his successors: Vanguard is known today for maintaining investment costs among the lowest in the industry.

A champion of the individual investor, Mr. Bogle is widely credited with helping to bring increased disclosure about mutual fund costs and performance to the public. His commitment to safeguarding investors’ interests often prompted him to speak out against practices that were common among his peers in other mutual fund organizations. “We are more than a mere industry,” he insisted in a 1987 speech before the National Investment Company Services Association. “We must hold ourselves to higher standards, standards of trust and fiduciary duty. Change we must—in our communications, our pricing structure, our product, and our promotional techniques.”

Mr. Bogle spoke frequently before industry professionals and the public. He liked to write his own speeches. He also responded personally to many of the letters written to him by Vanguard shareholders, and he wrote many reports, sometimes as long as 25 pages, to Vanguard employees—whom he called “crew members” in light of Vanguard’s nautical theme. (Mr. Bogle named the company after Admiral Horatio Nelson’s flagship at the Battle of the Nile in 1798; he thought the name “Vanguard” resonated with the themes of leadership and progress.)

In January 1996, Mr. Bogle passed the reins of Vanguard to his hand-picked successor, John J. Brennan, who joined the company in 1982 as Mr. Bogle’s assistant. The following month, Mr. Bogle underwent heart transplant surgery. A few months later, he was back in the office, writing and speaking about issues of importance to mutual fund investors.

In December 1999, he stepped down from the Vanguard board of directors and created the Bogle Financial Markets Resource Center, a Vanguard-supported venture. Mr. Bogle worked as the center’s president—analyzing issues affecting the financial markets, mutual funds, and investors through books, articles, and public speeches—until his death. Mr. Bogle wrote 12 books, selling over 1.1 million copies worldwide.

Industry accomplishments

Mr. Bogle was active in the investment industry. Early on, he served as chairman of the board of governors of the Investment Company Institute from 1969 to 1970. He also served as chairman of the Investment Companies Committee of the National Association of Securities Dealers Inc. (now FINRA) from 1972 to 1974. In 1997, he was appointed by then-SEC Chairman Arthur Levitt to serve on the Independence Standards Board.

Awards

In 2004, Time magazine named Mr. Bogle one of “the world’s 100 most powerful and influential people” and Institutional Investor magazine presented him with its Lifetime Achievement Award. In 2010, Forbes magazine described him as the person who “has done more good for investors than any other financier of the past century.” Fortune magazine designated him one of the investment industry’s four “Giants of the 20th Century” in 1999. In January 2012, some of the nation’s most respected financial leaders celebrated his career at the John C. Bogle Legacy Forum. Among his numerous other awards and honors were:

Pennsylvania Society Gold Medal for Distinguished Achievement, 2016
EY Entrepreneur Of The Year Lifetime Achievement Award, 2016
FUSE Research Network Award for Lifetime Impact and Commitment to Investors and Investment Management Consultants Association Richard J. Davis Ethics Award, 2010.
National Council on Economic Education Visionary Award, 2007.
Center for Corporate Excellence Exemplary Leader Award, 2006.
Yale School of Management, Legends of Leadership, 2003.
Barron’s Investment Hall of Fame, 1999.
Woodrow Wilson Award from Princeton University for “distinguished achievement in the nation’s service,” 1999.
Fixed Income Analysts Society’ Hall of Fame, 1999.
Award for Professional Excellence from the Association for Investment Management and Research, 1998.
No-Load Mutual Fund Association’s first Outstanding Achievement Award, 1986.

Civic work

An avid booster of Philadelphia and the surrounding area, Mr. Bogle was active in civic affairs. “I loved Philadelphia, my adopted city that had been so good to me. I established my roots there, finding even more unimaginable diamonds,” he wrote in one of his books.

His civic work extended to organizations involved in education, leadership, and public affairs. He served as the first chairman of the board of trustees and chairman emeritus for the National Constitution Center. He was a member of the American Philosophical Society, American Academy of Arts and Sciences, The Conference Board’s Commission on Public Trust and Private Enterprise, and the investment committee of the Phi Beta Kappa Society. He served as a trustee of the American Indian College Fund, The American College, and Blair Academy.

Corporate board memberships

Mr. Bogle was sought after in the corporate community. He served as a director of Instinet Corporation, Chris-Craft Industries, Mead Corporation, The General Accident Group of Insurance Companies, Meritor Financial Group, Inc., and Bryn Mawr Hospital. He was a trustee for the American Indian College Fund and The American College.

Academic recognition

The academic community recognized Mr. Bogle’s for his accomplishments. He received honorary doctorate degrees from Villanova University, Trinity College, Georgetown University, Princeton University, the University of Delaware, University of Rochester, New School University, Susquehanna University, Eastern University, Widener University, Albright College, The Pennsylvania State University, Drexel University, and Immaculata University.

Author and speaker

Mr. Bogle was a best-selling author, beginning with Bogle on Mutual Funds: New Perspectives for the Intelligent Investor in 1993. He followed that with Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor (1999); John Bogle on Investing: The First 50 Years (2000); Character Counts: The Creation and Building of The Vanguard Group (2002); Battle for the Soul of Capitalism (2005); The Little Book of Common Sense Investing (2007); Enough. True Measures of Money, Business, and Life (2008); Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition (2009); Don’t Count on It! Reflections on Investment Illusions, Capitalism, “Mutual” Funds, Indexing, Entrepreneurship, Idealism, and Heroes (2011); The Clash of the Cultures: Investment vs. Speculation (2012); The Little Book of Common Sense Investing: 10th Anniversary Edition (2017), and, Stay the Course: The Story of Vanguard and the Index Revolution (2018).

Mr. Bogle also wrote numerous articles and commentaries for trade and business publications.

Personal information

Mr. Bogle was born May 8, 1929, in Montclair, New Jersey. He worked his way through Blair Academy and Princeton University as a waiter and also managed Princeton’s athletic ticket office.

A tall, athletic man who sported a crew cut for most of his life, Mr. Bogle played squash, tennis, and golf, and also enjoyed sailing. He was often described as a “fierce competitor” on the court and course, a demeanor he also maintained on the job. Reading was among his pleasures, as was The New York Times crossword puzzle, which he often completed in less than 20 minutes.

He married Eve Sherrerd in 1956. They had six children: daughters Barbara Bogle Renninger, Jean Bogle, Nancy Bogle St. John, and Sandra Bogle Marucci, and sons John C. Bogle Jr. and Andrew Armstrong Bogle. They had 12 grandchildren and six great-grandchildren.