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.
CC-BY-SA-2.0, FlickrMatteo Renzi, after the referendum. Italy Starts a Period of Uncertainty After Matteo Renzi's Defeat
On Sunday, the populist wave spreading across Europe saw a defeat in Austria after the Green Party’s Alexander Van der Bellen won 53.3% of the votes versus Hofer’s 46.4%. However, in Italy, with around 60% of voters opting for a “no”, and nearly 70% turnout, Italians firmly rejected an important Constitutional reform that would have removed power from the Senate and left the Lower House as the key legislative Chamber in Italy. The reform was one of the flagship measures of PM Renzi, who has already confirmed he will tender his resignation.
Patrice Gautry – Chief economist, Union Bancaire Privée (UBP) believes that “a period of political uncertainty is coming back on Italy, with rising difficulties to form a government coalition or to find a clear majority. No time for the government to engage new economic reforms in front of political uncertainties.”
According to Nicola Mai, Head of European Sovereign Credit Research at PIMCO the result is negative at the margin for Italian and European risk assets, for a couple of reasons:
First, the reform’s failure means that Italy has lost an opportunity to make its political system leaner and more conducive to reforms.
Second, Renzi’s resignation is likely to lead to a period of higher political uncertainty which comes in the midst of ongoing recapitalization efforts in the Italian banking sector.
However, he believes that negative market sentiment on the vote is likely to be mitigated by the fact that the market has been expecting a “no” (based on polls) and that the ECB, which will meet next Thursday remains in play in European sovereign markets. Although originally they experienced losses, shares in Italian banks have rallied this morning. “Tail risk is sentiment deteriorating significantly on Italian banks and infecting other Italian and European risk markets.” Mai points out stating that the referendum outcome makes the recapitalization of Monte dei Paschi harder to achieve, with potential negative knock-on effects on the rest of the system and in particular on Unicredit’s equity raising plans, which today announced is in exclusive talks with Amundi for the sale of Pioneer Investments.
The Amundi team considers the Italian referendum is particularly important for portfolio construction for several reasons:
The markets doubt in Italy’s ability to make the reforms needed to revitalise its economy, which is a problem in a country where the debt-to-GDP ratio is well over 100%. The referendum is merely adding uncertainty to an already complex situation;
It comes at the end of a year of political surprises that caught out some investors;
It is being held just days before two much-awaited central bank meetings (ECB and Fed), which will only add to market jitters;
The markets’ capacity to absorb heavy trading flows at the end of the year is, at best, reduced, and this is stoking fears that volatility will rise. This is particularly true as the Italian market’s interest rate futures are also used to hedge positions on other premium-based markets (the credit market, for example) when liquidity is tight.
In terms of next steps, President Mattarella will seek to facilitate the formation of a transition government, headed by a political or technocratic figure, tasked with leading through ongoing bank recapitalizations and reforming the current electoral law (which is currently inconsistent between the two Chambers). This will take some time, and elections are unlikely to be called until this is done (until mid-2017 at the earliest). The new electoral system is likely to be proportional in nature, and facilitate the formation of grand coalition governments in future.
The people “have spoken in a clear and unequivocal way… we leave with no regrets,” said Italy’s Matteo Renzi, before tendering his resignation. According to Allianz GI, Italy’s rejection of reforms and Renzi’s resignation may lead to early elections or other scenarios that could spook investors already facing a tumultuous political year in Europe. Then again, markets may have already discounted future bad news, and the ECB stands ready to step in.
CC-BY-SA-2.0, Flickr. Pioneer Investments Could Become French
UniCredit and Amundi have entered into exclusive negotiations in relation to the possible sale of the Pioneer Investments business to Amundi. In a brief joint press release, they confirmed the negotiations are ongoing without disclosing price or further details.
The french asset management group confirmed its interest in acquiring Pioneer Investments last October saying the acquisition was consistent with the growth strategy, and that if it was to be closed it would have to offer a return on investment greater than 10% over a three-year horizon. However they denied a €4bn valuation for Pioneer Investments.
Other groups that were interested in acquiring Pioneer include British Aberdeen Asset Management which decided a €3.5bn valuation was too expensive, Australian Macquarie and Spanish Banco Santander which decided last July not to merge its Asset Management Business with Pioneer.
Pioneer had over 225 billion euros in Assets Under Management as of end of September.
UBS has combined most of its Wealth Management businesses in Europe into one legal entity, UBS Europe SE. The new European subsidiary is headquartered in Frankfurt, Germany and will operate in European markets through a network of branches.
According to a press release, the choice of a societas Europaea as the corporate structure for the entity provides UBS with strategic flexibility.
By merging its subsidiaries in Germany, Italy, Luxembourg (which already includes the branches in Austria, Denmark and Sweden), the Netherlands and Spain into one legal entity, UBS has taken an important step to simplify its governance structure and increase operational efficiency across its European operations. This move allows UBS to more effectively invest in its European wealth management business and enhance the offerings and services it provides to clients in these important markets.
UBS Europe SE will be led by a management board whose members are: Birgit Dietl-Benzin, Chief Risk Officer, Fabio Innocenzi, Market Representative (Wealth Management), René Mottas, Market Representative (Wealth Management), Andreas Przewloka, Chief Operating Officer, Thomas Rodermann, Market Representative (Wealth Management), Stefan Winter, Market Representative (Investment Bank). Thomas Rodermann, who has headed UBS’s German business for the past two years, will assume the role of spokesman of the UBS Europe SE Management Board. The UBS Europe SE Supervisory Board will be chaired by Roland Koch, who has been Chairman of UBS Deutschland AG since 2011. The Market Representatives will lead the branches in their respective country.
Pixabay CC0 Public DomainPhoto: Unsplash. Monaco Passes Law on Multi-Family Offices
The National Council of Monaco – the Monegasque Parliament – has passed a law on 29 November 2016, aiming to regulate the activity of multi-family offices in the Principality.
Amendments to the draft law put forward by the Monegasque government, allowing banks and asset managers to establish MFOs in the Principality and the ability given to MFOs to manage portfolios, were finally removed to avoid possible conflicts of interest.
Monegasque MFOs will be categorised in one of two ways: some will only focus on administration but will not be allowed to process financial transactions, while those in the second category will be able to transmit financial orders and provide financial advice to their clients.
The second type of MFOs will need both authorisation from Monegasque regulator the Commission de Contrôle des Activités Financières (CCAF) and the Monegasque government, as well as starting capital of €300,000.
Speaking to InvestmentEurope, Thierry Crovetto, the rapporteur of the law on MFOs and CEO/independent fund analyst at TC Stratégie Financière, says : “The law will spur foreign residents of Monaco to favour local MFOs rather than those of their countries of origin.
“It is estimated only 10% of the assets of Monaco’s foreign residents are currently deposited in banks established in the Principality. There is a huge potential to explore here. A few legal safeguards have been enshrined in the text. The remuneration will be that pertaining to clients only. In addition, banks and asset managers cannot be major shareholders of MFOs that will establish themselves in the Principality. We do not want to see asset managers selling their products through the setup of MFOs in Monaco,” Crovetto adds.
More to read about Monaco’s law on multi-family offices in the forthcoming December 2016/January 2017 issue of InvestmentEurope.
CC-BY-SA-2.0, FlickrPhoto: rachaelvoorhees
. AllianzGI to Acquire Sound Harbor Partners
Allianz Global Investors will acquire Sound Harbor Partners, a US private credit manager led by Michael Zupon and Dean Criares, for an undisclosed sum.
As a result of the acquisition, the Sound Harbor team will join AllianzGI. Sound Harbor is a New York-based private credit manager focused on alternative investments in corporate loans, direct lending, distressed debt and opportunistic credit. The firm manages these investments on behalf of its clients in private limited partnerships, collateralized loan obligations and separately managed accounts. Zupon is a former Partner at The Carlyle Group where he founded and led the leveraged finance business. Criares is a former Partner of The Blackstone Group where he founded and led the loan management business. The transaction is expected to close in the first quarter of 2017.
Andreas Utermann, CEO and Global CIO of AllianzGI, said: “Over the last five years, AllianzGI has invested steadily in the quality and breadth of its active investment offering. Within our fast-growing Alternatives segment, private debt stands out as a particularly exciting area, where we’ve clearly signalled our intent to expand our capabilities to address our clients’ evolving investment needs. The addition of the team from Sound Harbor is a significant step in that process, strengthening and complementing our existing capabilities in this important space.”
Deborah Zurkow, Head of Alternatives at AllianzGI, added: “We are very excited the Sound Harbor team are joining our expanding private debt platform. We continue to see strong demand from our clients for access to a diverse range of illiquid alternatives solutions. Sound Harbor’s expertise enhances AllianzGI’s existing global Alternatives capability, which includes infrastructure debt and a fast-growing corporate loans capability in Paris, underlining our desire to establish ourselves as one of the most prominent private debt managers globally.”
Commenting on behalf of Sound Harbor, Michael Zupon said: “Dean and I, along with the entire team, are looking forward to joining a leading and respected investment manager that shares Sound Harbor’s commitment to outstanding investment performance and dedication to its clients’ needs. Joining AllianzGI will enhance our ability to capitalize on trends favoring growth in alternative investment managers with scale, brand recognition and long-term capital.”
