Northstar Financial Services has added index-linked investment plans to its growing product range.
According to a press release, the Bermuda company believes that the Global Index Protect combines the benefits of 100% principal protection coupled with participation in the S&P 500 Index.
Clients have the choice of 5, 7 and 10 year durations and also the option of an annual lock-in feature, that ensures any annual gains in the index are captured and so the guaranteed payment at maturity is increased through the life of the contract.
The Global Index Protect is therefore designed for investors to whom preservation of capital is a priority, but who also wish to benefit from the positive performance of equity markets. As is the case with all Northstar investment solutions, clients also enjoy the benefits of a Bermuda trust structure, which include financial security and enhanced wealth transfer flexibility.
Northstar’s Global Head of Distribution, Alejandro Moreno, commented: “I am very excited at the prospect of introducing these new solutions to our distribution partners. The combination of guaranteed 100% principal protection and in some cases more than 100% of the upside potential of equity markets should prove to be an attractive proposition to our advisors and their clients and perfectly complement Northstar’s existing suite of variable and fixed-rate investment plans.”
Northstar’s Vice Chairman, Mark Rogers, commented: “The addition of Global Index Protect further demonstrates Northstar’s commitment to delivering innovative products to help serve the needs of our international clients more closely. I look forward to working with advisors on our enhanced range of solutions as we introduce Global Index Protect globally.”
. Liquidity Management Top Priority for Fund Managers and Institutional Investors in New Market Environment
State Street Corporation in partnership with the Alternative Investment Management Association (AIMA), the global representative of alternative investment managers, released a new research report that found that nearly half (48 percent) of survey respondents say that decreased market liquidity is a secular shift that is here to stay. Regulations stemming from the 2008 financial crisis, coupled with historically low interest rates and slow rates of growth in the global economy, have constrained the ability of many banks to perform their traditional roles as market makers, which in turn has impacted broader market liquidity conditions.
More than three-fifths of the survey respondents say current market liquidity conditions have impacted their investment management strategy, with nearly a third rating this impact as significant, and are reassessing how they manage risk in their investment portfolios. More broadly, they are adjusting to an environment of less liquidity in which trading roles have been transformed, new market entrants are emerging, and electronic platforms and peer-to-peer lending are changing the way firms transact their business.
“Increased regulation and the pressure to manage costs have significantly changed market liquidity conditions,” says Lou Maiuri, executive vice president and head of State Street’s Global Exchange and Global Markets businesses. “The new liquidity paradigm is causing many players in the investment industry to think again about the fundamentals: what roles they play, where they invest, and how they transact their business.”
While there is no one-size-fits all strategy for balancing risk and return in the current market environment, investors and managers are adapting to the new environment by focusing their efforts in three areas:
Rationalizing the risk
Optimizing the portfolio
New rules, new tools
49% say the role of non-bank institutions as liquidity providers will grow and 42% say that this growth will come from hedge funds Nearly half (47%) say hedge funds may play an important role in providing liquidity in more volatile markets. “With liquidity likely to remain top of mind for years to come, now is the time to find the strategies, tools, and solutions that will make a sustainable difference in the new investment climate,” continued Maiuri.
“Hedge funds and other asset managers are responding to more challenging market liquidity conditions by increasingly seeking out new opportunities, including taking on a more prominent role as market-makers, providing new sources of finance to the real economy, and lending their support and expertise to improving liquidity risk management,” added AIMA CEO Jack Inglis.
Gustavo Lozano, courtesy photo. Pioneer Investments Wins a Mandate for Mexican Afore XXI-Banorte
Global Asset Manager, Pioneer Investments, announced on Monday the appointment of an Asian Equity Mandate with Mexican pension fund manager, Afore XXI Banorte. The mandate, totaling close to USD 150 million, will be actively managed by the specialist Asian Equities investment team at Pioneer Investments’ London hub. Pioneer Investments, which currently has USD 246 billion of Assets Under Management globally, has been managing Asian Equity assets since April 2008 based on a consistently applied philosophy and process. This approach has provided a strong track record over the medium to long term through all market cycles.
Afore XXI Banorte, the pension fund manager in Mexico, awarded Pioneer Investments the mandate as it diversifies its investment strategy and seeks to provide its customers with access to investment opportunities across the international markets. To date, Afore XXI Banorte has funded one previous mandate on European Equity Markets with Schroders and BlackRock and this is the second project that they are awarding. The funding period is expected to be quicker than previous industry experiences on the back of regulation flexibility and experience acquired.
The Asian Equity mandate, a segregated account close to USD 150 million, follows an original pan Asiatic approach that includes Japan. This allows the investor to benefit from emerging Asia potential while investing in developed market companies based in Japan and Australia.
Gustavo Lozano, Country Head of Pioneer Investments Mexico, commented: ‘’We are delighted to be able to partner with Afore XXI Banorte. We have been working with them and other pension funds to develop of long-term institutional relationships in an integral relationship where knowledge transfer and investment capabilities are key. We believe that our fundamental, proprietary research-driven approach to investment in Asian Equities stood out through the selection process, and we look forward to building a rewarding relationship with the Afore going forward.’’
Jose Castellano, Head of Iberia, North America Offshore & Latin American Markets at Pioneer Investments, noted: ‘’ Pioneer Investments opened a Mexico Office in 2012 and being able to work with Afore XXI Banorte is the culmination of efforts from a variety of areas of our business. Afore XXI-Banorte is the largest pension fund in Mexico and key for our consolidation as a top international active manager in the country and the region. We believe that our best-in-class service proposition together with our investment expertise is key to developing long-term relationships. We are honored to be awarded this mandate by Afore XXI Banorte, and we will continue to work closely with them to secure both a high quality of service and strong long-term performance.’’
Sergio Mendez, CIO for Afore XXI Banorte noted: “We selected Pioneer Investments for the strength of their process, their performance record, original investment proposition and the stability of the investment team. We are excited to be moving forward with Pioneer Investments, giving the Mexican pension fund market access to international expertise. Afore XXI-Banorte continues its diversification in international markets building strong and beneficial partnerships with the global Asset management community that will benefit Mexican pensioners in the long run.”
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.
