Foto cedidaAris Prepoudis, courtesy photo. Aris Prepoudis, New CEO of RobecoSAM
RobecoSAM, the investment specialist focused exclusively on Sustainability Investing (SI), has appointed Aris Prepoudis as CEO from January 1, 2017, subject to FINMA approval. He will take over from Reto Schwager, who has led the company as interim CEO since August 2016. Schwager will continue to perform as Global Head of Private Equity and a member of the Executive Committee.
Albert Gnägi, PhD, Chairman of the Board of Directors, RobecoSAM: “The Board of Directors is delighted to appoint Aris Prepoudis as the new CEO for RobecoSAM. Prepoudis brings to the company the ideal set of skills, an entrepreneurial mindset and a passion for Sustainability Investing. These qualities will be instrumental for continuing innovation and fostering profitable growth opportunities at RobecoSAM. The Board of Directors would also like to thank Reto Schwager for his commitment as RobecoSAM’s CEO ad interim, and for providing consistent leadership during the transition.”
Aris Prepoudis, appointed CEO, RobecoSAM: “I am proud and honored to be named as CEO of RobecoSAM, the pioneer and global leader in Sustainability Investing for over two decades. I am looking forward to shaping the SI landscape by delivering cutting-edge asset management solutions to our clients. As the CEO, I will focus on profitable growth, further develop our expertise and leverage on the burgeoning interest in Sustainability Investing around the world.”
Aris Prepoudis, a Swiss national, served until recently as CEO of Vescore (formerly Notenstein Asset Management), an asset manager specializing in sustainable and quantitative investments. Previously, he was Head of the Institutional Client Business Unit at Notenstein Privatbank, where he led the consolidation of all the asset management activities of Raiffeisen Switzerland into Notenstein Asset Management. From 2000 to 2013, Prepoudis worked at Bank Sarasin & Cie AG in various senior positions, culminating in the role of Global Head of Institutional Clients. He began his career at STG Cooper & Lybrand (now PwC) and subsequently worked at ATAG Ernst & Young as an audit manager for Swiss Mutual Funds and Banks. Prepoudis holds a Bachelor of Business Administration from the University of Applied Sciences in Basel.
Foto cedidaPhoto: Mark Mobius, Executive Chairman at Templeton Emerging Markets Group / Courtesy photo. Mobius: “A Period of Bilateral Agreements between the U.S. and Emerging Markets is Opening Up, offering Great Opportunities, even for Mexico”
“Mexico is not going to disappear because Trump has arrived at the White House. Its oil will still be there, and so will its manufacturing capacity, and if the U.S. market closes up to it, there will be other markets that want to buy products Made in Mexico, especially with such a cheap Peso.” This quote sums up the opinion which Mark Mobius, Executive Chairman at Templeton Emerging Markets Group, and a Portfolio Manager of Franklin Templeton’s emerging equity strategies since 1987, holds on emerging markets following Trump’s victory: we must not fear a debacle.
In an interview with Funds Society, Mobius talks about one of the main concerns of investors in emerging markets looking forward to 2017: what will happen to these markets once Trump is president? Returning to Mexico’s case, which is probably the most vulnerable country due to its hefty trade balance with the United States: “Given that Trump is primarily a businessman, I think he will reach a bilateral agreement with Mexico that will ultimately be beneficial to the country. Problems related to drug cartels and organized crime are common for Mexico and the United States, so it makes sense for both countries to work together to solve them.” The solution, Mobius says, may involve negotiations to help normalize the movement of people, “but I think they will eventually come to an understanding.” In fact, for Mobius, Mexico now offers tremendous opportunities: “The Mexican peso cannot drop much more from current levels, at least on a sustained basis. We estimate that it is already slightly undervalued.”
On comparing Mexico to Brazil, one of the markets that Mobius has favored in its emerging equity strategies for a longer period of time, he points out that the Brazilian economy has suffered a much greater punishment than Mexico, with two consecutive years of GDP contraction, and is now in full recovery phase with ongoing structural reforms that Mexico has yet to undertake. “Mexico’s dialogue with the Trump administration could be a catalyst for the adoption of these reforms, which in the end would be very beneficial to the country,” says Mobius.
As for the Asian continent, Mobius does not see a negative effect for China due to Trump’s victory. “The countries receiving the most aid from the United States are Japan, South Korea, and to some extent also the Philippines. With Trump, these countries may have to redefine the terms of their relationship with the United States by increasing their contributions, so they may face additional pressure in their budget that should be monitored.”
The United States spends about USD 5 billion a year on maintaining its military bases in Japan, and another USD 2 billion on bases in South Korea. Donald Trump has questioned this expenditure throughout his campaign, as well as the usefulness of these military bases to maintain stability in the Asia-Pacific region. Political experts in this region point out that China has been hoping for the United States to withdraw its troops from Japan and South Korea for a long time, which now seems more plausible.
Mobius believes that China has favored Trump over Clinton from the very beginning, because it believes that he is willing to negotiate. “We will not see so much cold-war-like rhetoric in China-US relations, so negotiations will be easier.” Something similar, but even more pronounced, happens with Russia, a country with which the United States has reestablished dialogue. “If Trump is not going to allocate so many resources to the Middle East, dialogue with Russia becomes essential.”
Overall, Mobius believes that the multilateral treaties in which the United States participates will be weakened, but many opportunities are opening up in US bilateral agreements with individual countries, which will be positive. He does not anticipate a steep crises in emerging market equities and forecasts a return of inflows once specific measures by the president-elect, or the absence of them, become public.
Faced with the FED’s rate hikes – which seem much more likely after Trump’s victory- it is foreseeable that in future US Treasuries will return to a much more attractive yield than currently, which will be beneficial for emerging markets equities,” says Mobius. “There is a perception that equities fall when the FED raises rates, but if we look at history we see that there is no correlation.”
Pixabay CC0 Public DomainFoto: LinkedIn
. OppenheimerFunds lanza una plataforma UCITS para hacerse global
OppenheimerFunds has announced the appointment of Doug Stewart as Head of European, Middle East and Africa Distribution, based in London. The appointment represents a further expansion of OppenheimerFunds’ International Distribution platform, which also includes the launch of a UCITS-Fund platform. Stewart will be responsible for marketing and distribution efforts throughout Europe, the Middle East and Africa. He will report to Steve Paddon, Head of Institutional & International at OFI Global Asset Management, Inc., a subsidiary of OppenheimerFunds serving institutional investors and consultants throughout the world.
Paul Eisenhardt, Head of International Distribution (ex EMEA), is responsible for the distribution of international solutions and developing client relationships in Canada, Latin America and the Asia-Pacific region. Eisenhardt also reports to Paddon.
The launch of OppenheimerFunds ICAV, an Ireland-domiciled UCITS platform and its sub-funds will focus on investment opportunities in global and developing markets equities, providing new choices to clients and deepening relationships with consultants and investment platform providers. The first of these strategies to become available is the company´s flagship global value, global equity and developing markets equity funds which launched last week.
“We are pleased to bring some of our most compelling investment strategies to an international audience, to help meet the needs of our evolving client base,” said Art Steinmetz, Chairman and CEO of OppenheimerFunds.
“Expansion to non-U.S. markets is a core element of our long term engagement with institutional investors,” said John McDonough, the firm´s Head of Distribution. “We’re delighted to welcome Doug to the team as we build our reach globally, and continue our focus on developing long-term client-centric solutions that differentiate us in the marketplace.”
Paddon added, “Doug and Paul’s appointments deepen the talent base of our dedicated institutional team, with their proven track records working across a variety of client segments. We look forward to increasing our engagement with institutional clients internationally by building access to our investment capabilities.”
According to Andrew Bosomworth, PIMCO’s head of portfolio management in Germany, the European Central Bank (ECB) faces a tricky challenge at its Governing Council meeting. On December 8th, it must decide on the minimum amount of quantitative easing (QE) needed to return inflation to target – and in what size doses it should be administered.
So far, the ECB has conducted two rounds of QE and committed to buy €1.74 trillion in assets, mostly government bonds. Phase one began in March 2015, spanned 13 months and saw €60 billion in asset purchases per month; phase two began in April of this year and is scheduled to run for 12 months at a rate of €80 billion per month.
The PIMCO specialist believes striking the right balance between the stock (of assets to purchase) and flow (the rate of purchases) will be key. “Both current inflation and projections for next year remain far below the ECB’s just-under-2% target, supporting the argument for more QE at a high monthly purchase rate. But monetary policy works with a lag, and because the ECB has already administered a lot of easing, further purchases risk creating asset bubbles and hurting savers – an argument for phasing out QE as soon as possible.”
In his opinion, there may appear to be little difference between purchasing €80 billion in assets per month for six months and purchasing €60 billion in assets for nine months (two options likely to be on the table). But while the ECB might be tempted to reduce the monthly purchase rate now, he thinks maintaining higher monthly purchases for a shorter period is more likely to square the stock-versus-flow circle, for three reasons.
First, maintaining €80 billion in monthly purchases minimizes the risk of tightening financial conditions, even if it involves purchasing a smaller total stock of assets. Financial markets are sensitive and might interpret a smaller purchase rate as a signal that QE will stop soon.
Second, committing to a shorter-term policy gives the ECB more flexibility to change course. If it turns out that nominal economic growth recovers strongly and durably – say, above 3.5% – the ECB could slow purchases during the final quarter next year and stop altogether by mid-2018. If growth remains weak, it could opt to extend QE into 2018. We see little cost to postponing the decision.
Third, interest rates and the euro are likely to rise for fundamental reasons independent of QE once growth recovers. Winding down QE under those circumstances would reduce the risk of tighter financial conditions that could push the economy back into recession. From a risk management perspective, we think it’s better to delay reducing monthly purchases until there is a high degree of confidence in economic forecasts.
Owing to the scarcity of eligible Bunds, Bosomworth believes any extension of QE will likely require relaxing some of the ECB’s rules for purchasing government bonds, and so the ECB may change its rules so that it can buy bonds at yields below the deposit facility rate and in quantities that deviate from its capital key. “With so much government debt on its balance sheet and peripheral banking systems (especially Italy’s) dependent on ECB liquidity as never before (see chart), a sovereign debt restructuring would be a crisis for the ECB. We therefore think relaxing the 33% cap on purchases for any one bond or issuer is less likely, and may be left in the toolkit for the next recession. Let’s hope that’s a long way away.” He concludes.
Pixabay CC0 Public Domain. Active European Equity Funds Set to Continue Outperforming U.S. Counterparts
European equity funds with conviction and strong performance could lead the way in reversing outflows in the sector caused by a combination of Brexit, stretched valuations, and weak earnings that has sent investors elsewhere, according to the latest issue of The Cerulli Edge – European Monthly Product Trends Edition.
Cerulli Associates, a global research and consulting firm, notes that active equity funds in Europe have fared considerably better than their counterparts in the United States. A study by S&P Global shows that 90% of active U.S. equity funds tracking the S&P 500 underperformed the index in the three, five, and 10 years to the end of June 2016. In contrast, 63.8% of active equity funds in Europe underperformed the S&P Europe 350 over three years.
“To put it in a more positive way, over 36% of active funds matched or beat the index. Whether it is the result of the more disparate nature of the European markets or other factors, Europe clearly has more active funds outperforming than the United States,” says Barbara Wall, Europe managing director at Cerulli.
She points to companies such as Allianz Global Investors with its sizable funds that have outperformed over one, three, five, and 10 years. “The funds’ clear sector stances, such as overweighting industrials, seem to have paid off. Some funds can achieve outperformance just by underweighting one major sector.”
The performance of the finance sector over the past couple of years serves as an example, according to Wall. “Amundi’s Europe Conservative fund has underweighted this sector, which makes up just 4.45% of the portfolio. In the three years to September 2016 the fund gained 29.5%, compared with 18.4% for the MSCI Europe, in which financials are 19.5%.”
Pixabay CC0 Public DomainPhoto: Mampu. Local Partners Purchase Raymond James’ Argentinean Equity Interests
The Argentinean shareholders of Raymond James Argentina and RJ Delta Asset Management announced today that they have reached an agreement with Raymond James South American Holdings Inc.’s (Raymond James) to acquire all of the shares of both companies.
Raymond James Argentina S.A. has been rebranded as AR Partners S.A,. while RJ Delta Asset Management S.A. has been renamed Delta Asset Management S.A.
Eduardo Tapia, former President of Raymond James Argentina acquired control of AR Partners and will continue as President of the company.
Gabriel Ruiz, former President of RJ Delta Asset Management and current President of Delta Asset Management and Christian Cavanagh, former Chief Investment Officer at RJ Delta Asset Management and present Director of Delta Asset Management, collectively acquired controlling interest in Delta Asset Management.
For his part, Eduardo Tapia has increased his shareholding a pro-rata and continues to be a board member of Delta Asset Management. The changes detailed above do not imply alterations in the current management structures and do not affect the operations of the companies, which will continue to operate freely and independently from each other.
Raymond James came to Argentina in 1998, partnering with Tapia, to be the company that would take over for Caspian Securities, a pioneer in emerging markets, recognized for its quality research and proven track record in corporate finance.
Raymond James Argentina had as purpose to provide securities services, corporate finance, financial advising and research in Argentina. The joint venture, in which Raymond James held a controlling interest while placing the strategic management in the hands of the Argentine partner, has maintained a strong track record over the past 18 years. Raymond James Argentina – headed by Eduardo Tapia – has been a leader in the Argentine equity market, participating in 65 percent of the IPOs & Follow-on Offerings of Argentine companies, participating in financial transactions in exceed of USD 8 billion dollars. Its Research team has been recognized by institutional foreign investors as the best in Argentina on numerous occasions.
In 2005, Raymond James and Eduardo Tapia partnered with Gabriel Ruiz, senior executive of the Asset Management unit of the Santander Group, to create RJ Delta Asset Management, a company that would provide Asset Management services. In 2008, Cavanagh, senior executive of the Asset Management unit of the BBVA Group, was invited to join as a Partner and Chief Investment Officer.
Delta Asset Management, headed by Gabriel Ruiz and Christian Cavanagh, is one of the leading independent asset managers in Argentina, with 13.5 billion pesos in assets under management and more than 10.000 customer accounts, held by corporations, institutions and individuals. The company has received many accolades since inception and continues to be one of the top asset management firms in Argentina. Recently the international rating agency Standard & Poor’s named RJ Delta Asset Management among the “Top Managers” in the local market.
This acquisition reflects both the positive expectations of the buyers in the Argentine capital market and their trust in the quality of the operations that local management has successfully led since its inception. This transaction is part of the long-term strategies of the local companies. The acquiring partners view this as a reaffirmation of their commitment to the Argentine capital markets. As they continue to lead the companies, they are very optimistic of its long term prospects.
“We are beginning this journey with plenty of optimism, as this acquisition will allow us to take full advantage of the opportunities we believe the new Argentine marketplace will offer. We expect strong development in the financial services sector, where there are high expectations for the repatriation of the capital market which has moved abroad over the last two decades. We thank Raymond James for these years of successful partnership” said Eduardo Tapia.
“We believe the asset management industry and particularly the mutual fund sector has great growth potential, which we think will be sustained by a strong increase in savings among Argentine and foreign investors in the domestic market. We will continue to be leaders and innovators in the industry, thanks to the professionalism of our team, our outstanding performance and the quality of our products. We thank Raymond James for being a great partner that accompanied our growth, since we launched RJ Delta Asset Management 11 years ago”, Gabriel Ruiz explained. In a statement from Raymond James, they express their gratitude to the acquiring partners and to all associates for their outstanding work and accomplishments as well as the strong relationship that was built over the last 18 years.
To the date, the transaction has been communicated to argentine regulatory agencies.
In line with the strategic update as announced on 16 November 2016, ABN AMRO has decided to sell its private banking operations in Asia and the Middle East to LGT, a leading international private banking and asset management group.
Jeroen Rijpkema, CEO of ABN AMRO Private Banking International said: ‘Private banking is a core activity of ABN AMRO. After a strategic review, we have decided to focus on further strengthening and growing our private banking activities in Northwest Europe. The transfer of our private banking business in Asia and the Middle East is the logical next step in implementing this strategy. We are happy to have found in LGT a strong and solid partner to ensure continuity of service in the best interest of our clients and staff involved’.
ABN AMRO Private Banking manages around USD 20 billion (EUR 18.5 billion) of client assets in Singapore, Hong Kong and Dubai, representing about 10% of ABN AMRO Private Banking client assets worldwide. The transaction is subject to approvals from the relevant authorities and closing is expected in Q2 2017. ABN AMRO expects to realise a substantial book gain.
In the region, ABN AMRO will continue to offer financial services to its Corporate Banking clients active in amongst others Energy, Commodities & Transportation, the Diamond & Jewellery sector and Clearing.
Despite having much stronger capital bases than before the financial crisis, banks around the world remain exposed to capital-related confidence shocks, according to S&P Global Ratings‘ Most Banks Don’t Need More Capital, But The Flexibility To Use It In Times Of Stress.
“This apparent paradox reflects the effectiveness of the significant increase in minimum regulatory capital requirements in ensuring that systemically important financial institutions (SIFIs) have enough bail-in-able resources to absorb stress losses in a resolution,” said S&P Global Ratings credit analyst Bernard De Longevialle. “However, at the same time, the higher requirements have also lead to a parallel shift in what the market believes are the minimum capital levels banks should permanently respect to keep its confidence.”
As a result, in period of stress, banks might react with many of the same procyclical behaviors that we’ve seen in the past. Current considerations by Europe’s Single Supervisory Mechanism to split Tier 1 Pillar II requirements into a hard “requirement” and a softer “guidance” component may give welcome additional flexibility to Europe’s large banks to absorb unexpected shocks without triggering confidence-sensitive coupon suspension.
Regulators have been successful in forcing the banking system to build a much stronger capital base than before the crisis.
This achievement should not, however, hide the fact that most of these capital resources would be available only as part of a resolution. Over the past six years, new forms of concurrent regulatory requirements have emerged in addition to going-concern risk-sensitive metrics. In assessing where large banks in Europe and the U.S. stand according to these metrics, we observe that their effective loss-absorbing margins above regulatory requirements have not improved on average since before the crisis.
International standard setters didn’t intend for these regulatory buffers to be viewed as establishing new minimum capital requirements. However, as seen earlier this year, the perceived risk of restrictions on distributions to shareholders or hybrid instrument holders can spread to the wider credit markets.
A further increase in regulatory minimum capital requirements could have unintended consequences, but flexibility to use capital buffers when needed would in our opinion benefit the resilience of the world’s banking system.
CC-BY-SA-2.0, FlickrPhoto: Ainhoa Sanchez Sierra. Millennials Put Greater Importance on ESG Factors
The Schroders Global Investor Study 2016, which surveyed 20,000 end investors in 28 countries, found that millennials (aged 18-35) are more likely to place greater importance on Environmental, Social and Governance (ESG) factors than older investors (aged 36+). The survey found that the millennial generation ranked ESG factors as equally important as investment outcomes when considering investments decisions. The study also highlighted that global investors would hold ESG investments for an average of 2.1 years longer than their usual investments.
Millennials demand for ESG
ESG factors such as corporate governance, social responsibility and environmental impact issues, such as world poverty and climate change, were all significantly more important to millennials than to the older generations in their investment decision. Opinions between these two age groups differed the most on world-based social outcomes, like poverty and climate change, with millennials rating these highly (7.2/10) compared to older investor groups (6.4/10), on average. The study also concluded that millennials were more likely to actively pull funds from companies with poor ESG records, companies associated with weapons manufacturing/dealing or linked to repressive regimes would be the primary causes of this.
Most groups of investors are looking for good corporate governance, with the issue topping their list of ESG concerns. However, millennials again appeared to show more concern rating it an average of 7.4/10 compared to older investors rating it 7.0/10.
ESG an alternative to short-termism
The study found that global investors would stay invested in ESG investments longer than usual, with 82% indicating they would do this. Over a third (38%) said they would stay invested in companies with positive ESG philosophies for at least two years longer than they would stay invested in their usual investments.
The value of ESG
On average, global investors rated ESG issues as less important when making an investment decision, than tangible, long-term growth, which they rated 7.8/10. However, global investors still rated positive ESG factors highly at 6.9/10 on average, indicating a high degree of importance placed on both issues. Many experts would argue the two considerations are inseparable.
Jessica Ground, Global Head of Responsible Investing at Schroders, said: “The interest in ESG and corporate governance issues for investors only looks set to grow given its prevalence amongst millennials. While returns are still the most important issue, ESG’s importance to end investors means that these factors are too big for any advisor to ignore… It is important to continue to educate investors on the value and added return ESG can provide. While many policymakers are concerned about the rise of short -termism in markets, encouragingly, those surveyed said they would stay invested in ESG philosophies longer than they would in other investments. It is important that investors recognise the value of being invested for the long term and this is especially relevant when considering ESG factors. ”
For more information on the study results follow this link.
Foto: Javi. Safra National Bank of New York adquiere el negocio de banca privada de Bank Hapoalim en Miami
Safra National Bankof New York announced that it has signed an agreement to acquire Bank Hapoalim’s private banking business in Miami. The agreement covers qualifying clients and their relationship management teams who are focused on high net worth clients across Latin America.
This acquisition is a logical extension of Safra National Bank of New York’s private banking business for Latin America, where it has been providing premier private banking and financial services to high net worth clients for more than 30 years. With this transaction, Safra National Bank of New York and its subsidiary, Safra Securities, LLC, further strengthen their private banking business and the global wealth management capabilities of the J. Safra Group.
Jacob J. Safra, Vice-Chairman of Safra National Bank, commented: “We are determined to play a leading role in the consolidation of the private banking market. Our capital strength, family ownership and 175 years of experience give us great flexibility to do such transactions.”
Simoni Morato, CEO of Safra National Bank of New York, said: “We look forward to welcoming the clients and employees of Bank Hapoalim in Miami to our organization. Bank Hapoalim’s private banking business in Miami fits perfectly with the strategic vision of the J. Safra Group and Safra National Bank of New York, and we are confident we will add immeasurable value to clients.”
The acquisition is expected to be completed during the course of the first quarter of 2017, subject to regulatory clearance. Financial terms are not disclosed.
