Photo: Naroh, Flickr, Creative Commons. New Equities Fund Invests in Listed European Family Businesses
The current economic and financial situation is changing investment habits. Persistently low interest rates, the resulting quest for yield and control of risks are the main concerns for investors seeking to invest in equities. Against this backdrop, BLI – Banque de Luxembourg Investments will launch the BL-European Family Businesses fund, a new equities fund that invests in around 60 listed European family businesses, rigorously selected according to strict criteria: a clear competitive advantage, strong profitability, a value-creating business strategy and attractive valuation.
“One distinguishing characteristic of family businesses is that they are not driven by short-term financial objectives. Because of the family’s commitment to the next generation, the company naturally develops a long-term strategy with an underlying desire for continuity and resilience over time. Of course, growth and performance are also important, but these goals are balanced by socio-economic values that can strengthen the organisation and its position in the market,” says fund manager Ivan Bouillot, who is also fund manager for the BL-Equities Europe fund since 2004.
“Family business leaders are also able to steer the company’s strategy and shape the corporate culture through the values they advocate, their passion for their profession and their social commitment. It was during meetings with family business owners that we began to appreciate the added value of businesses managed by families, and the idea of developing this family business fund project grew from there.”
The BL-European Family Businesses fund invests in European equities, regardless of market capitalisation. They define a company as a family business if at least 25% of its equity is owned by the person or family that founded the company or acquired the company’s capital, if the family has an active role in the company as a manager or a board member, and if there is a desire to preserve the company as part of the family’s wealth.
“With this new fund, we continue to apply our proven investment strategy, which involves selecting quality companies and taking an interest in their long-term development”, explains Head of Sales, Lutz Overlack. “Our strategy focuses mainly on manufacturers of personal and household goods, food and beverages and companies in the industrial, healthcare, chemistry and technology sectors.” Banking and insurance, capital-intensive industries, commodities and telecommunication companies are excluded from all the funds in the BL funds range.
Unigestion, the boutique asset manager with scale, appointed Emanuele Ravano as Chairman of UNI-GLOBAL, the SICAV comprising 13 Unigestion subfunds.
According to a press release, Ravano will work closely with Unigestion’s senior management team and will be influential in mentoring and supporting Unigestion’s distribution initiatives. He is particularly well placed, given his previous experience, to support Unigestion’s accelerated distribution plans in intermediary markets.
Ravano has over 30 years of experience building long-term client relationships by providing prudent investment advice and consistent portfolio management. His track record of active portfolio management at world renowned institutions include 13 years as Managing Director and Head of Global Wealth & Portfolio Management at PIMCO and 16 years as Managing Director and Head of European Fixed Income at Credit Suisse.
Bernard Sabrier, Group Chairman of Unigestion said of the appointment: “Emanuele’s vast sector knowledge and dedication to delivering measurable results will help us build on our existing strong client relationships and form new ones in the future. We are very pleased he is joining the team.”
Emanuele Ravano commented: “I am excited to be joining such a well renowned organisation, which creates such compelling and unique propositions for investors on a global scale. My passion for quality investment ideas and innovation is shared throughout the whole staff at Unigestion and I look forward to what we can achieve over the coming years.”
Foto: AedoPulltrone, Flickr, Creative Commons. Aviva to Lift UK Property Fund Suspension On December 15th
Aviva Investors has announced it will resume trading of its £1.5bn Property Trust on 15 December, having suspended the fund on 4 July to implement a “sustainable sales programme” in order to raise liquidity.
In a note sent to investors seen by InvestmentEurope, the asset manager said the trust has sold 11 properties totalling £212m between the EU referendum vote and 17 November 2016. The temporary suspension has allowed the company to be selective with its orderly sales programme, and ensure the retained portfolio remains “robust and well diversified.”
“There have been no forced sales, and we have focused on taking the right time to obtain the best value on sales, whilst retaining core assets and maintaining a balanced UK commercial property portfolio. Prices achieved have been broadly in line with market valuation changes since the EU referendum vote,” the note reads.
“The sales have been selected in line with our wider real estate strategy to focus on fewer centres, and values achieved have been broadly in line with market valuation changes since the EU referendum vote. We are confident that the trust holds a robust and diverse portfolio of properties; providing significant potential for growth, a strong income stream and the opportunity for further income growth,” Ed Casal, CEO of Aviva Investors Real Estate, said.
“Despite the recent uncertainty in the market, yields on property remain relatively attractive in a low interest rate environment. We believe there is a convincing place for the asset class within a balanced portfolio for long-term investors,” he added.
Fund co-manager retires
Aviva has also announced that Mike Luscombe, co-manager of the fund, will retire at the end of January. Following his departure, Andrew Hook, co-manager of the fund since March 2015, will assume the role of lead manager.
Hook joined Aviva in 2007 and has over 15 years’ industry experience.
“He has played a key role in the repositioning of the trust’s portfolio over the past year, and will be supported by a dedicated and experienced asset management team along with the newly-established UK transaction team, who between them help source, develop and manage the properties in the portfolio,” the note reads.
Foto: freeimages9.com / Pexels. Los inversores globales han reducido sus exposiciones a efectivo
The BofA Merrill Lynch November Fund Manager Survey shows surging inflation expectations and slumping cash levels among global investors.
“There will likely be a trade in ‘bond proxies’ soon,” said Michael Hartnett, chief investment strategist at BofA Merrill Lynch. “But our cyclical view of peak liquidity, globalization and inequality means the ‘yield’ dam has been broken.”
Manish Kabra, European equity quantitative strategist, added that, “Global investors’ equity allocations towards the UK are at their second lowest level since 2008, with the sterling considered the most undervalued in the history of our long-running survey. Europe seems placed for contrarians, with Eurozone allocations at below-average levels.”
Other highlights include:
A record net 56% of investors think current fiscal policy is too restrictive and global inflation expectations soar to 85%, the highest in 12 years.
Cash levels slumped from 5.8% in October to 5.0% in November, as global growth and profit expectations rise to one-year highs and the US election result is seen an unambiguously positive for nominal GDP
However, stagflation expectations also close to 4-year highs as 22% of investors expect below-trend growth and above-trend inflation over the next 12 months.
Protectionism is seen as the biggest risk to financial market stability (84%).
Forty-four percent of investors think the rotation to cyclical styles and inflationary sectors will continue well into 2017.
The US election result accelerates rotation into Banks, out of high dividend yield and bond proxies and catalyzes buying of US equities, selling Tech and EM.
Allocation to Eurozone equities improves to 5-month highs of 8% overweight from net 5% last month.
Allocation to Japanese equities dips modestly to net 5% underweight from net 3% underweight last month.
Allocation to EM equities fall sharply to net 4% overweight from 31% overweight last month.
Photo: Keitikee, Flickr, Creative Commons.. Growth in Global Wealth Remains Limited in 2016
According to the Credit Suisse Research Institute’s (CSRI) seventh annual Global Wealth Report, the overall growth in global wealth remained limited in 2016, continuing the trend that emerged in 2013 and contrasting sharply with the double-digit growth rates witnessed before the global financial crisis of 2008.
In the mid-term, only moderate acceleration is expected. Switzerland once again ranked as the global leader in terms of average wealth per adult in 2016.
As the latest edition of the CSRI Global Wealth Report shows, total global wealth in 2016 edged upwards by USD 3.5 trillion to a total of USD 256 trillion (or 1.4%), a rise very much in line with the increase in the world’s adult population. Accordingly, average wealth per adult of USD 52,800 remains in line with last year’s figures.
Brexit vote hits wealth
The UK suffered a significant drop in wealth in 2016, with USD 1.5 trillion being wiped off household wealth in response to the Brexit vote, which triggered a sharp decline in exchange rates and the stock market.
Michael O’Sullivan, Chief Investment Officer of International Wealth Management at Credit Suisse, stated: “The impact of the Brexit vote is widely thought of in terms of GDP but the impact on household wealth bears watching. Since the Brexit vote, UK household wealth has fallen by USD 1.5 trillion. Wealth per adult has already dropped by USD 33,000 to USD 289,000 since the end of June. In fact, in US dollar terms, 406,000 people in the UK are no longer millionaires.”
Japan rises, distribution of Chinese wealth growth more unequal
The Global Wealth Report also highlights the impact of adverse currency movements, which caused wealth to fall in every region except Asia-Pacific. The highest rise in wealth amongst individual countries was achieved by Japan with a total increase of USD 3.9 trillion, followed by a USD 1.7 trillion rise in the US. Switzerland once again topped the rankings in terms of average wealth per adult. Despite a decline in average adult wealth, its leading position remains unchallenged.
Loris Centola, Global Head of Research of International Wealth Management, said: “The consequences of the 2008-2009 recession will continue to have a material impact on growth, which is pointing more and more towards a long-term stagnation. The emergence of a multi-polar world, confirmed by the impact of the Brexit vote in the UK and by the US Presidential election, is likely to exacerbate such a trend, which could possibly lead to a new normal lower rate of wealth growth.”
Key themes addressed in the Global Wealth Report include:
Wealth outlook
Trends in the number of millionaires
The wealth pyramid
Bottom billion
Inequality
For a copy of the Global Wealth Report 2016, follow this link.
The hedge fund industry saw its lengthy run of positive performance taper off in October, as funds recorded ne returns of 0.01%. Most leading strategies recorded modest gains, with credit strategy funds returning 0.84%, and relative value funds returning 0.49%. However, equity and event driven strategy funds both saw losses, returning -0.27% and -0.26% respectively, contrasting with their position as the highest-performing leading strategies in September.
While most commingled hedge fund benchmarks were close to 0.00% in October, other fund types were underwater for the month. UCITS funds returned -0.15% for the month, while alternative mutual funds made more substantial losses of 1.40%. As result, both fund types have recorded losses for the past 12 months, returning -0.23% and -0.93% respectively. CTAs, meanwhile, recorded their third consecutive month of losses, as they returned -1.74% in October. This run of negative performance has resulted in YTD losses of 0.86%, and 12-month losses of 0.47%.
Other key hedge fund performance facts:
Longer Term Returns: Although October does not maintain the momentum of positive performance that the industry has recorded since March, hedge funds have still posted overall gains of 5.46% so far in 2016, and 4.99% over the past 12 months. As long as no further losses are posted, 2016 will mark the highest performance year for the industry since 2013.
Performance by Region: Hedge funds focused on North America and Europe both recorded losses in October, returning -0.76% and -0.39% respectively. Asia-Pacific-focused funds, however, made gains of 0.46%, while emerging markets hedge funds returned 2.35% for the month, far beyond any other region.
Discretionary Gains: Hedge funds using a discretionary trading methodology once again outperformed systematic funds, as they made gains of 0.13% compared to the latter’s -0.52% performance. In 2016 so far, discretionary funds have now returned 4.94%, compared to 3.34% for systematic funds.
Returns by Size: October performance shows little variance per fund size, but it is notable that emerging funds once again posted the highest returns, gaining 0.30%. Small and medium hedge fund both saw losses, returning -0.04% and -0.03% respectively for the month.
“Despite many hedge fund investors stating that they are dissatisfied with the returns of their hedge fund portfolios, the hedge fund industry over recent months has seen a period of positive performance unmatched since 2012-13. Unfortunately, in October this seems to have lost momentum, as the industry recorded near-flat performance.
However, many strategies and geographies have continued to make modest gains through the month, and the industry as a whole has not lost ground. Provided they can hold these gains in the last two months of the year, hedge funds are on course to mark their highest performance year since 2013. Among other fund structures, however, the overall picture is less positive. CTAs, alternative mutual funds and UCITS funds are all showing negative performance over the past 12 months, and recorded losses in October. CTAs in particular have experienced their third consecutive month of losses, and are currently on course to record lower performance in 2016 than they did in 2015”, said Amy Bensted, Head of Hedge Fund Products at Preqin.
CC-BY-SA-2.0, FlickrPhoto: Jeff Gunn
. The Old Mutual Global Investors’ Annual Conference in Boston Brought Together 55 Delegates
Last October, about 55 delegates from Miami, Bogota, Montevideo, Santiago, Lima, Houston, Dallas, San Antonio, San Francisco, and New York, gathered in Boston for the Old Mutual Global Investors’ annual conference.
With Chris Stapeton, Head of Distribution for the Americas, as Master of Ceremonies, attendees were able to listen to several of the company’s portfolio managers, such as Lee Freeman-Shor, portfolio manager of the European Best Ideas Fund, who spoke about his post-Brexit vision, and John Peta’s presentation on emerging market debt, as well as Josh Crabb, Head of Asian equities.
John Peta joined OMGI in 2015 from Threadneedle. In recent years, the company has been attracting professionals of a very high-level. An example is that of Mark Nash, who arrived at Old Mutual from Invesco (fixed income), or Rob Weatherston (Asian Equities), who came from BlackRock. “They have come to Old Mutual because our managers can develop their strategies, based on their vision, to generate alpha in their teams,” explained Warren Tonkinson, Managing Director of Old Mutual GI, in his opening speech.
The presentation led by Ned Naylor-Leyland, Manager of the new Gold & Silver Fund strategy, entitled “Gold’s Perfect Storm,” attracted the attention of the audience and detailed, among other things, why “Gold ETFs do not make much sense,” or, that right now, the precious metal “is the only asset you can have that is not discounting another round of quantitative easing.”
Old Mutual Global Investors’ path to its current position as a benchmark company in the Asset Management industry and ranked in the top 5 in the United Kingdom, could be described as meteoric. Founded in 2012 from the merging of two smaller UK management companies, OMGI has gone from managing 17.9 billion dollars in assets to 35.7 billion. Its team, which started with 140 people, currently has 273 professionals. Tonkinson explained that in order to grow, they first invested in their investment, operational, and risk platforms, and later in their distribution platform by opening sales offices in several markets. They started with London, Hong Kong and Boston, and recently added Miami, Uruguay, Singapore, Zurich, and Milan.
The managing director pointed out that while at the beginning 95% of its assets were generated in the United Kingdom, currently only half of their flows come from there, due to its internationalization process. Old Mutual GI has also carried out a diversification process by type of client, just last year, they took their first steps in the institutional business, and thus far they have received 750 million dollars in assets from this type of client.
Andbank Spain, an entity specialized in private banking, has launched the Key Clients division, specialized in wealth management for high net worth individuals (HNWI). The objective of this business area is to attract €1bn over the next three years.
The new Key Clients division will offer a comprehensive wealth management service, with access to “exclusive” investment opportunities, Andbank said in a release. To this end, it will integrate a personalized private banking service, independent financial advice adapted to Mifid II, patrimonial planning and the “most advanced” technological tools of the market.
The head of the new Key Clients area will be Juan Carlos Solano, executive director at Andbank España since 2012, with more than 20 years of experience in the wealth management sector. Solano holds a degree in Business and Law from the University of Comillas – ICADE E3 and he is a member of the European Financial Planning Association (EFPA) in Spain.
Mirae Asset Global Investments, one of the world’s largest investors in emerging market equities, has announced that Peter Lee CFA, Ph.D. is stepping into the role of CEO and Chief Investment Officer. Previously, Lee had been the Executive Managing Director of the Global Investment Unit for Mirae Asset Global Investments in Seoul, South Korea, leading the equity investment team from the group’s global headquarters.
In his new role, Lee will be responsible for leading Mirae Asset USA through its next stage of expansion in the US market. In addition, Lee has set a number of ambitious objectives for Mirae Asset USA, focusing on increasing flows into existing products as well as new product development.
“Mirae Asset has established itself as a true competitor in the US market on the strength and heritage of our actively managed, emerging markets focused investment capabilities,” says Lee. “Our objective is to continue building on the global strength of the Mirae Asset brand by introducing attractive products and investment options.”
Mirae Asset USA is the US-based asset management entity that delivers the investment capability of Mirae Asset, a diversified financial services entity with over $100 billion in client assets under management. Mirae Asset USA brings to US investors the client focus and investment resources available to investors in other global markets for two decades.
A veteran of Mirae Asset, Lee has held senior investment strategy and executive management roles at several global entities within the group since 2014. Lee has a Doctoral degree in Economics from the University of Illinois at Urbana-Champaign. He also holds a Master of Arts degree in economics and a Bachelor degree in economics from the Seoul National University.
Lee steps into the CEO role that had been vacated by the departure of Peter Graham.
The Federal Reserve Board on Friday announced it is broadening the scope of post-employment restrictions applicable to Federal Reserve Bank senior examiners and officers.
By law, senior bank examiners are prohibited for one year from accepting paid work from a financial institution that they had primary responsibility for examining in their last year of Reserve Bank employment. This post-employment restriction has applied primarily to central points of contacts (CPCs) at firms with more than $10 billion in assets.
The revised policy expands the number of Reserve Bank examiners subject to this one-year post-employment restriction to include CPCs, deputy CPCs, senior supervisory officers (SSOs), deputy SSOs, enterprise risk officers, and supervisory team leaders. The new policy will more than double the number of senior examiners subject to this post-employment restriction from about 100 employees to about 250 employees.
In addition, a new policy prohibits former Federal Reserve Bank officers from representing financial institutions and other third parties before current Federal Reserve System employees for one year after leaving their Federal Reserve position. The new policy also imposes a one year ban on current Reserve Bank employees discussing official business with these former officers.
The restriction on former officers will be effective on December 5, 2016, and the revised senior examiner policy will be effective on January 2, 2017.
