CC-BY-SA-2.0, FlickrPhoto: Juan Antonio F. Segal
. JP Morgan Creates a New Wealth Management and Investment Solutions Unit
JP Morgan Chase has created a new unit that combines the firm’s wealth management business across Asset Management and Consumer & Community Banking. The Wealth Management & Investment Solutions unit will be lead by Barry Sommers and Brian Carlin, who will report to Asset Management CEO Mary Callahan Erdoes.
According to a memo by Erdoes, that Funds Society had access to, Sommers will become CEO of Wealth Management, responsible for JP Morgan’s client business: Chase Wealth Management, the Private Bank and J.P. Morgan Securities. While Carlin will become CEO of Investment and Banking Solutions, responsible for all wealth management products, services and platforms, including investments, lending, banking, technology and operations. In addition, he will oversee the Digital Wealth Management and Institutional Wealth Management Business.
“Barry and Brian bring a tremendous amount of experience and horsepower to our business and are ideal leaders to partner. They’ve worked together for years, and bring complementary experiences and backgrounds.” Erdoes wrote of the appointment.
Of Sommers she said: “Barry has worked in both Consumer & Community banking and Asset Management, and knows our investment business and branch network as well as any leader in the firm. As Consumer Bank CEO, Barry delivered record investments and outpaced the industry in deposit growth for four straight years.”
While for Carlin, she stated: “Brian has worked in Asset Management for 15 years, including the past three years as our Chief Financial Officer. Prior to that, he ran Products and Investments in the Private Bank, where he led the development of Private Bank and Chase Wealth Management investment solutions. He also built the Private Bank’s mortages, deposits & custody, and trusts & estates offerings.”
“Beyond their capabilities, Barry and Brian represent the best of our values and leadership. They think client first, are culture carriers and excel at running business end-to-end. We have complete confidence that they will continue our track record of success.” Erdoes concluded.
CC-BY-SA-2.0, FlickrPhoto: Michael Gil
. Luxembourg Launches First Green Exchange in the World
The Luxembourg Stock Exchange (LuxSE) becomes the first stock exchange globally to introduce a platform for green financial instruments: Branded Luxembourg Green Exchange (LGX). Access is limited to issuers who comply with stringent eligibility criteria. The platform aims to set a new benchmark for the rapidly evolving green securities market.
Commenting on the launch of LGX, Robert Scharfe, CEO of LuxSE, said: “New issuance of green securities has taken off since COP21. There is a real desire for change. The green market has enormous potential but this needs to be matched by interest from investors. By setting strict standards for green securities, LGX aims to create an environment where the market can prosper. The upcoming COP22 event will focus on preparations for the Paris Agreement to enter into force. With LGX, a dedicated platform for both issuers and investors, we are granting the solution for financing green projects.”
Only 100% green
LGX gathers issuers that dedicate 100% of the raised funding to green investments. It is home to the majority of the 114 green bonds listed on LuxSE, worth over $45 billion. LGX marks the first time that a stock exchange requires green securities to adhere to strict eligibility criteria, including:
Self-labelling as green or equivalent (e.g. climate-aligned). The issuer has to clearly state, during the application process, the intended green nature of the security.
Use of proceeds. Need of a clear disclosure that the proceeds are exclusively used for financing or refinancing projects that are 100% green, according to the GBP or CBI eligibility taxonomy.
Ex-ante review and ex-post reporting. Issuer’s commitment to provide both independent external review and ex-post reporting – a requirement unprecedented on the market.
“Ex-post reporting is far from being the market standard. The bold decision to introduce it as an entry requirement stems from our ambition to be able to guarantee that securities on LGX are genuinely green. Such reassurance is what investors seek as they increasingly expect issuers to be crystal clear about the use of proceeds,” the CEO added. Access to LGX is banned for securities on the excluded categories list comprising of, but not limited to: nuclear power production; trade in CITES; animal testing for cosmetics and other non-medical products; medical testing on endangered species; fossil fuels. The LGX concept has been developed in line with best practices set out by Climate Bonds Initiative, International Capital Market Association (ICMA) and World Wildlife Fund (WWF). LGX has its own logo – a colour variation of the standard LuxSE trademark. “An issuer who does not meet LGX eligibility criteria can still list on our markets, but the ‘bar is higher’ for entry to LGX. Having said that, we encourage issuers to go further than the minimum requirements and really leverage this platform to create new standards on the quality of communication with investors,” Robert Scharfe added.
Green market is our duty
With over $42 billion in new issuances globally, 2015 was another record year for labelled green bonds. As estimated by the Climate Bonds Initiative, in 2016, the green bonds issuance will reach $100 billion. The already thriving green bonds sector received an additional boost after the COP21 conference in Paris last year during which 195 countries agreed on keeping the rise of global temperature below 2 degrees Celsius. The International Energy Agency estimates that the world needs $1 trillion a year until 2050 to finance a low-emissions transition. The market for green finance is growing fast, and yet it represents an almost invisible fraction of overall capital market funding.
CC-BY-SA-2.0, FlickrPhoto: Jaime Silva. Amundi Creates Dedicated Platform for Real and Alternative Assets
Amundi is launching a single platform bringing together its capabilities in real and alternative assets (AI) in order to become one of the leading alternative asset managers in Europe.
Real estate, private debt, private equity, infrastructure and alternative multi-management are now all part of an integrated business, bringing together 200 investment professionals in origination, structuring and management, responsible for EUR 34bn in assets (as at 30th June 2016). Amundi aims to double its funds under management in real and alternative assets by 2020.
Amundi’s track record in alternative assets includes 40 years’ experience in real estate, a leading position in credit management and a pioneering approach in infrastructure, where it has partnered with EDF. The new business grouping will help Amundi develop these areas of expertise to serve investors’ needs for performance and diversification.
According to a press release, Amundi believes that with low correlation to traditional assets, AI strategies have an illiquidity premium which is attractive as we face long- term low interest rates and sustained equity volatility. 38% of institutional investors envisage reallocating part of their portfolio to private debt, 44% to infrastructure, and 51% to private equity.
Pedro Antonio Arias, Amundi’s Global Head of Real and Alternative Assets, said: “We have been meticulously building our capabilities over recent years by attracting skilled teams from diverse backgrounds. Our aim is to further develop our capabilities based on the EUR 34bn we already manage in this area, and to be a leading European player in real and alternative assets.”
Through this new platform, Amundi will offer institutional and individual investors the opportunity to invest directly in real assets with dedicated solutions or via collective solutions with co- investment or multi-management funds.
Eric Wohleber, Amundi’s Head of Real & Alternative Assets Sales, added: “Amundi’s power, infrastructure and financial strength are all major advantages allowing us to give European and Asian investors transparent, institutional-quality investment solutions in real and alternative assets.”
The Alternative Investment Management Association (AIMA), the global representative for alternative asset managers, has announced a new Chairman and the formation of a new AIMA Council, the Association’s global board of directors.
Taking over as AIMA Chair is Simon Lorne, Vice Chairman and Chief Legal Officer, Millennium Management LLC. He replaces the former SEC Commissioner Kathleen Casey, who served as Chair of AIMA from September 2012 to September 2016.
There are four new additions to the AIMA Council – Robyn Grew, Chief Administrative Officer and GC, Man Group Plc; Han Ming Ho, Partner, Sidley Austin; Ryan Taylor, Partner and Global Head of Compliance, Brevan Howard Asset Management LLP; and Michael Weinberg, Senior Managing Director, Chief Investment Strategist, Protégé Partners.
The Council, who will serve from September 2016 to September 2018, is as follows:
Simon Lorne, Millennium Management LLC (Chair)
Jack Inglis, AIMA
Olwyn Alexander, PwC
Andrew Bastow, AQR Capital Managements (Europe) LLP
Fiona Carpenter, EY
Stuart Fiertz, Cheyne Capital Management (UK) LLP
Robyn Grew, Man Group Plc
Han Ming Ho, Sidley Austin
Tim O’Brien, Pine River Capital Management LP
Martin Pabari, CQS (UK) LLP
Christopher Pearce, Marshall Wace Asia Ltd
Henry Smith, Maples and Calder
Ryan Taylor, Brevan Howard Asset Management LLP
Philip Tye, HFL Advisors Limited
Karl Wachter, Magnetar Capital LLC
Michael Weinberg, Chief Investment Strategist, Protégé Partners
As well as Casey, Eva Sanchez of Citadel Europe and Choo San Yeoh of Albourne Partners are also stepping down from the Council.
AIMA Chairman Simon Lorne said: “I’m honored to be named as AIMA’s Chair at this important time in our industry’s evolution. I look forward to working with the outstanding firms and individuals who are the global face of our industry as we work together to best serve the interests of our individual and institutional investors around the world.”
AIMA CEO Jack Inglis said: “I am excited to have such a strong board to guide our work at AIMA, and I am very much looking forward to working closely with Simon Lorne, our new Chair, as we address the big issues facing alternative investment fund managers around the world. We are fortunate to welcome to the Council individuals with the skills and experience of Robyn Grew of Man, Ryan Taylor of Brevan Howard, Michael Weinberg of Protégé Partners and Han Ming Ho of Sidley Austin. On behalf of AIMA and all the membership, I also would like to pay tribute to our out-going Chair Kathleen Casey, who served the Association with such distinction these last four years, and Eva Sanchez and Choo San Yeoh, who have made such an important contribution to AIMA and the global industry over a number of years.”
Citi Private Bank Continues to Build out Latin American Team - courtesy photo. Citi Private Bank Continues to Build out Latin American Team
Citi Private Bank announced that Nicolas Schmidt-Urzua has joined as a Managing Director and Head of the Multi-Asset Trading & Advisory team for Latin America. Mr. Schmidt-Urzua will be based in New York and report to Lisandro Chanlatte, Head of Investment Counselors for Latin America; and Adam Gross, Head of Multi-Asset Trading & Advisory for the Americas. In this capacity Mr. Schmidt-Urzua will be responsible providing complex trading solutions to the firm’s most sophisticated Capital Markets clients, including Active Traders and continuing to segment the bank’s client coverage model. “Nicolas has over 15 years of trading expertise, working with clients in Latin America and Europe. Acquiring the best talent to provide top tier coverage, content and execution underscores our commitment to our clients in the Latin American region,” said Mr. Chanlatte.
Mr. Schmidt-Urzua previously served as Head of the Global Investment Opportunities (GIO) for Latin America (excluding Brazil) at J.P. Morgan Private Bank. Prior to his GIO role in Latin America, Mr. Schmidt-Urzua held a similar position as the GIO Head in Geneva where he was responsible for building a $40 million revenue business for clients. Prior to J.P. Morgan he worked as an Investment Advisor with Credit Suisse in New York and Miami. Mr. Schmidt-Urzua holds an MBA from the Thunderbird School of Global Management, a B.S. in Business Engineering from the Universidad de Chile, as well as a Diploma in International Trade & Commerce from the University of California, Berkeley.
“Citi Private Bank is strongly committed to Latin America. This coupled with Citi’s institutional capabilities and open architecture investment platform, enables Citi to remain at the forefront as the key partner of choice for the most sophisticated families in the region,” said Mr. Schmidt-Urzua.
With $374 billion in global assets under management, Citi Private Bank includes 49 offices in 15 countries, serving clients across 139 countries.
CC-BY-SA-2.0, FlickrHelmer Arizmendy, foto cedida. Lombard International abre oficina en Miami
Lombard International, a global leader in wealth structuring solutions for the high net worth market, recently announced the opening of its office in Miami, FL, located at 801 Brickell Avenue. The new office will be a hub for Lombard International’s sales team to reach high net worth individuals, families and institutions in Latin America.
“The Miami office serves as a gateway for us to engage with and educate advisors of the Latin American high net worth community,” said Helmer Arizmendy, Senior Managing Director and Latin America Region Head for Lombard International. “With this new expansion, we look forward to raising awareness of our solutions available to help protect and preserve wealth.”
This office opening comes shortly after Lombard International’s expansion into Bermuda with the appointment of Phil Trussell as Senior Managing Director to lead the growth of its life insurance operations in the region. In addition, earlier this year Lombard International opened a representative office in Paris and two brokerage offices in Asia, expanding the firm’s global footprint into other key financial markets.
“As the number of ultra-high net worth individuals and families continues to grow, Latin America is a key market for Lombard International,” said Ken Kilbane, Executive Vice President and Head of Global Distribution at Lombard International. “The opening of this new office further cements our position as a global leader in wealth structuring solutions for the high net worth market.”
Yesterday night Hillary Clinton and Donald Trump faced each other in their first Presidential Debate at Hofstra University in Hempstead, New York. The apparent winner was Hillary Clinton. While she calmly and eloquently touched many policy areas in detail, Trump’s lack of preparation had him ranting in a sloppy pattern of interruption after the first half hour, and the markets noticed. For example the Mexican peso – dollar parity went from 19.89 pesos per dollar at the beginning of the debate, to 19.54 towards the end.
Amongst the more memorable quotes are:
From Hillary:
“I think Donald just criticized me for preparing for this debate. And, yes, I did. You know what else I prepared for? I prepared to be president. And I think that’s a good thing.”
“Well, Donald, I know you live in your own reality,” Clinton responding to Trump’s trade attack.
From Donald:
That makes me smart,” Trump said in response to Clinton saying he might not pay federal income taxes.
“I was going to say something extremely rough to Hillary, to her family, and I said to myself, ‘I can’t do it. I just can’t do it.’ It’s inappropriate. It’s not nice,’ ” Trump told CNN after the debate.
During the debate they engaged in an occasionally raw series of clashes on topics from trade policy to the Iran deal to Trump’s taxes. It is clear the presidential candidates don’t often see eye to eye, but they both agree that the US needs to fix its crumbling infrastructure. Allianz Global Investors created an infographic that shows how infrastructure spending could pay off for the economy – and how investors could take advantage.
According to Kristina Hooper, US Investment Strategist at Allianz Global Investors “The US presidential election has the potential to negatively affect markets in the short term. Depending on the outcome of the Congressional races, the new president may not be able to see much of his or her platform come to fruition. However, both candidates are likely to increase fiscal spending, which should be positive for the US economy – particularly since it’s unclear how effective monetary policy still is. Investors may want to take a ‘wait-and-see‘ approach to making sector bets – except for infrastructure, which is likely to benefit regardless of who wins in November. Either way, investors should also expect greater volatility as we get closer to the election.”
Photo: MIth, Flickr, Creative Commons. In Spain, A Third Election Could Result in a Fiscal Cliff
Spain has been without a government for almost a year. Moreover, given the current political impasse, there is a rising risk that it might not have one before the end of the year. So far, the economic performance has not been obviously affected, but, according to Fabio Balboni, european economist at HSBC, the fiscal performance has been.
Despite strong growth, the deficit has been broadly in line with the previous year, which at 5.1% of GDP was worryingly high.
“Low inflation and temporary job creation are all behind the disappointing revenue growth and difficulties cutting spending in real terms, but there have also been some tax giveaways. In total, we estimate the fiscal stimulus is adding about 1% to GDP growth this year.”
But the lack of a government might have more serious economic consequences from here. If the 2017 budget cannot be approved by the end of the year, all of the main spending items will be frozen at current levels, including wages and pensions. That would be equal to spending cuts of about 1% of GDP. This might help to reduce the deficit, but it would also have negative consequences for growth. This risk should also provide a strong incentive for the political parties to avoid a third election.
In October, Spain also faces a new round of negotiations with Brussels. The biggest risk is the suspension of the EU’s structural funds, worth about 1% of GDP. But given the anti-austerity mood prevailing in Europe at the moment, and the political situation, we don’t think the European Commission will be too tough. However, once a government is in place, Brussels will want to see more progress made on the deficit reduction.
CC-BY-SA-2.0, FlickrPhoto: 2Tales
. SS&C Acquires Wells Fargo's Global Fund Services Business
Wells Fargo Securities, the investment banking and capital markets business of Wells Fargo & Company, announced that SS&C Technologies Holdings, a global provider of financial services software and software-enabled services, has agreed to acquire its fund administration business, Wells Fargo Global Fund Services (GFS). Pending regulatory approvals, the transaction is expected to close in the fourth quarter. The terms of the transaction were not disclosed.
GFS administers more than $42 billion in alternative assets, covering a wide range of complex strategies traded by global portfolio managers including fixed income, credit, distressed, structured credit, macro, equity, commodities, CDO, CLO, private equity, private debt, real estate and hybrid structures. Wells Fargo’s fund administration business services its clients through its global network of offices in, Hong Kong, London, New York, Minneapolis and Singapore.
“We believe GFS clients will benefit from SS&C’s industry-leading position, proprietary technology and depth of expertise in fund administration,” said Dan Thomas, head of Institutional Investor Services at Wells Fargo Securities. “Wells Fargo Securities will continue to provide financial solutions to our alternative asset manager clients in core areas such as Prime Services, Futures and OTC Clearing and Futures Execution.”
As part of the acquisition, SS&C will acquire GFS’ operations and team members in New York, Minneapolis, Singapore, Hong Kong and the United Kingdom. Wells Fargo will work closely with SS&C to provide GFS clients a seamless experience and continuity of services. Additionally, Wells Fargo will continue to provide access to its suite of financial products and services to GFS clients after closing.
“Wells Fargo’s Global Fund Services is well known for its expertise in administering real estate equity and credit strategies. The acquisition of GFS will create a compelling advantage for our customers as they access and manage sophisticated asset classes,” said Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies. “This transaction will expand our capabilities in the global fund market, reinforcing SS&C at the forefront among fund administration and extending our strong cloud-based platform for future growth.”
“Joining with SS&C will allow us to dramatically accelerate our global growth plans and pace of innovation,” said Chris Kundro, head of GFS. “SS&C’s innovations in cloud, mobility and fund technology are transforming investment management. This acquisition will create even more value for our customers and will benefit employees as they become part of one of the largest and most reputable fund administrators.”
CC-BY-SA-2.0, FlickrPhoto: Images Money
. Standard Life Investments to Reopen the Suspended UK Real Estate Fund
Standard Life Investments has announced its intention to reopen the suspended UK Real Estate Fund (and associated feeder funds) from 12.00 noon on Monday 17 October 2016.
The SLI UK Real Estate Fund was one of a number of funds to suspend trading on 4 July 2016. This decision was taken in order to protect the interests of all investors in the Fund following an unprecedented level of redemptions.
They subsequently implemented a controlled and structured asset disposal programme in order to raise sufficient liquidity to meet future redemptions and work is ongoing to ensure the Fund is well positioned for markets in the long-term. “We now believe the commercial real estate market has stabilised and that the adequate level of liquidity achieved will allow the suspension to be lifted.” Standard Life stated on a press release.
By lifting the suspension, dealing in the Fund and Feeder Funds, purchases and redemptions of shares, will return to normal on 17 October 2016, with the first valuation point being 12.00 noon on that date. Dealing instructions to purchase or redeem shares will be accepted from Wednesday 28 September 2016, in a written or faxed format only, ahead of the fund re-opening.
Providing advanced notice will enable investors in the fund to make any preparations required ahead of the re-opening.
David Paine, Head of Real Estate at Standard Life investments said: “In the immediate aftermath of the EU referendum result redemptions from retail investor property funds increased dramatically whilst property transactions reduced significantly. During the period of suspension the fund has been able to restore liquidity through an orderly disposal of assets. We are pleased with the progress made and the removal of the Market Value Adjustment, and able to announce the reopening of the fund next month. The Standard Life Investments UK Real Estate Fund invests in a diverse mix of prime commercial property. Its lower risk positioning should therefore be beneficial for performance at times of market stress and uncertainty and continues to offer a stable and secure income, with a distribution yield of 4.04%*. In our opinion, as the search for yield intensifies within a world of low interest rates and nominal growth, the outlook for UK commercial real estate returns and income remains attractive.”
