CC-BY-SA-2.0, FlickrDavid Knutson, Eric Skelton and Chris Eger . Schroders US Strengthens Credit Team with Three Key Hires
Schroders has announced three senior appointments in the US to underpin the strong growth of its US fixed income business.
David Knutson has joined the US Credit team as Head of Credit Research – Americas. He will be based in New York and report into Wes Sparks, Head of US Credit. David will be covering large US banks. David brings almost 25 years of research experience to Schroders; he joins from Legal and General Investment Management America, where he had been a Senior Analyst in Fixed Income Research for ten years. Prior to this, David spent three years as Director of Fixed Income Research at Mason Street Advisors and seven years working in Credit Research and Debt Capital Markets at UBS. David replaces Jack Davis who transitions internally into a Senior Analyst role.
Eric Skelton joined the Global Fixed Income and FX trading team as US Credit trader for US investment grade credit, based in New York. He will report into Gregg Moore, Head of Trading, Americas and will work closely with US Credit Portfolio Managers, Rick Rezek and Ryan Mostafa and the rest of the US Fixed Income trading desk. Eric Skelton joins Schroders from Achievement Asset Management (formerly Peak6 Advisors), where he was a Credit Trader. Prior to joining Achievement Asset Management in 2014, Eric spent three years at Nuveen Investments.
Chris Eger joins the US Credit team in a newly created role as Portfolio Manager, reporting to Wes Sparks. Chris is based in the New York office. He joins Schroders with 14 years of experience in Investment Grade – in both Trading and Portfolio Management capacities. He joins from J.P. Morgan Chase, where he held the role of Executive Director – Credit Trader, Investment Grade Domestic and Yankee Banks. Prior to joining J.P. Morgan in 2007, Chris spent five years at AIG Global Investment Group where he held two Vice President positions, firstly as a Credit Trader and then as a Total Return Portfolio Manager.
Karl Dasher, CEO North America & Co-Head of Fixed Income at Schroders, said: “Investors globally are increasingly attracted to US credit markets in the search for yield and we have been beneficiaries of that trend. To support continued client demand and process evolution, we have made three strategic hires. These additions will further strengthen our in-house research and execution capabilities in the USD credit domain.”
CC-BY-SA-2.0, Flickr. US Engine of Dividend Growth Slows Markedly, While Europe Picks up the Pace
Global dividend growth slowed in the second quarter, according to the latest Henderson Global Dividend Index. Underlying dividend growth, which strips out exchange rate movements and other lesser factors, was 1.2%. This is slower than the 3.1% underlying growth seen in the first quarter, partly reflecting Q2 seasonal patterns that give greater weight to slower growing parts of the world, and partly owing to a more muted performance from the US.
US payouts rose 3.1% on a headline basis to $101.7bn, equivalent to an underlying increase of 4.6%. This was the slowest rate of growth since 2013, reflecting subdued profit growth in the US, partly due to the impact of a strong dollar. The slowdown in the US began late last year but should be considered a normalisation to more sustainable levels of dividend growth after several quarters of double digit increases.
Income investors turn their attention to Europe in the second quarter. Two-thirds of the region’s dividends are paid in Q2, making it comfortably the largest contributor to the global total. European dividends (excluding the UK) rose 1.1% year on year in headline terms*, but on an underlying basis were an encouraging 4.1% higher. European dividends of $140.2bn made up two-fifths of the global second-quarter total. They were 1.1% higher than Q2 2015 on a headline basis. Underlying growth was an impressive 4.1%, once lower special dividends, particularly in France and Denmark, as well as other lesser factors were taken into account.
The Netherlands and France enjoyed the second and third fastest growth rate in the world, while German growth was hit by big cuts from Volkswagen and Deutsche Bank; Austria, Spain and Belgium also lagged behind.
In Japan, headline growth was 28.8%, with payouts totalling $30.8bn. Two thirds of this increase was down to the currency, with positive index changes accounting for the rest. In underlying terms, therefore, dividends were 0.8% lower, as company earnings were depressed by the strong yen, and as economic confidence in Japan weakened.
It was a challenging quarter for emerging markets. Dividends fell over a quarter on a headline basis to $22.9bn, as weaker currencies and index changes took their toll. Adjusting for these factors, payouts fell 18.8% in underlying terms, with a large number of countries, including the big four BRICs, seeing underlying declines.
The second half of the year is likely to be weaker than the first, partly because seasonal patterns means the emphasis shifts slightly towards those parts of the world where dividends are growing more slowly, like emerging markets, Australia, and the UK. Owing to the changes in the latest quarter, the Henderson’s team has reduced their forecast for the full year to $1.16 trillion, down from $1.18 trillion. This is equivalent to a headline expansion of 1.1%, or 1.4% on an underlying basis.
“We can see how more muted profit expansion, partly owing to stronger currencies, has slowed dividend growth in Japan and the US. In emerging markets, payout cuts have been greater than we expected so far this year as well. Europe remains broadly positive, in line with our expectations. The weak spots we have seen have been company-driven, or owing to specific sector trends like the impact of lower commodity prices, rather than related to wider economic difficulties. The slowdown in the US began late last year but should be considered a normalisation to more sustainable levels of dividend growth after several quarters of double digit increases.” Said Alex Crooke, Head of Global Equity Income.
Since the UK’s decision to leave the EU at the end of June, the pound has fallen further on the foreign exchange markets, extending a descent that began in the months running up to the referendum. However, a number of large international UK companies pay their dividends in dollars, so, according to Crooke, the impact will be less severe than the pound’s devaluation might suggest. In addition, the UK only accounts for around only 10% of global dividends so the effect on the global total is likely to be relatively small.
CC-BY-SA-2.0, FlickrCamilo Lopez da entrada a Jorge Escobar como socio igualitario en la firma de real estate TSG - foto cedida. Camilo Lopez da entrada a Jorge Escobar como socio igualitario en la firma de real estate TSG
TSG -a leading, diversified real estate investment, development and sales company in South Florida formerly known as The Solution Group – has announced that Jorge Escobarhas joined as an equal partner alongside founding partner and CEO Camilo Lopez. Following more than 20 years in the international banking industry, most recently as Global Market Head of Chile for HSBC Private Bank, Escobar will serve as a managing partner in his new position.
TSG, which has successfully grown a portfolio of more than $400 million in assets since its inception in 2008, will utilize Escobar’s diverse financial expertise to enhance the firm’s boutique platform on a global level for investment in South Florida real estate. Capitalizing on Escobar’s institutional-minded discipline, the company’s new structure will focus on expanding its international network, while allowing for a more sophisticated and seamless approach to local market investment opportunities in a highly-personalized process.
“I am thrilled to welcome Jorge to the TSG family,” said Lopez. “Having developed strong relationships in Latin America, the U.S. and Europe for decades, Jorge possesses an ideal combination of global investment experience and an entrepreneurial drive that add tremendous value to our organization. Complimenting my expertise identifying real estate opportunities and in design ideation, our partnership will now deliver a robust strategy to expand TSG’s company value.”
Prior to joining TSG, Escobar was responsible for overseeing more than $1.5 billion in funds for high-net-worth clients throughout the world. During his nine-year tenure with HSBC, he led some of the largest investment transactions in offshore private bank business in Latin America and generated significant new business from the region’s most noteworthy families.
Prior to HSBC, Escobar was head of the private bank business for ABN AMRO Bank in Chile for four years. He began his career at Citi Group as an investment advisor, and later served as vice president of BankBoston Private Bank for more than three years.
“It is with great pride that I join this trusted organization built on the foundation of astute leadership and solid fundamentals,” adds Escobar. “This is a natural move for me to enter the real estate environment given South Florida’s prime position to set global benchmarks and TSG’s unique and innovative platform, which now places the company at the forefront through our partnership.”
The latest European ETF Market Review from Thomson Reuters Lipper shows that assets under management in the European exchange-traded fund (ETF) industry increased from 452.8 billion euros in June to a new all-time high of 473.6 billion euros at the end of July. Further insight and analysis for both assets under management and fund flows by asset type, classification, promoter and fund can be found here.
According to Detlef Glow, Head of EMEA research at Thomson Reuters Lipper, the increase of 20.8 billion euros for July was mainly driven by the performance of the underlying markets (+€12.8 bn), while net sales contributed €8.0 billion to the overall growth in assets under management in the ETF segment.
Bond ETFs (+€5.0 billion) enjoyed the highest net inflows for July. Equity US (+€1.5 bn), followed by Equity Emerging Markets Global (+€1.3 bn) and Equity Global (+€1.0 bn) were the best selling Lipper global classifications for July.
The best selling ETF promoters in Europe for July were iShares (+€7.2 bn), State Street SPDR (+€1.0 bn) and Vanguard (+€0.5 bn). The ten best selling funds gathered total net inflows of €4.6 bn for July. iShares Diversified Commodity Swap (+ €0.7 bn), was the best selling individual ETF for July.
CC-BY-SA-2.0, FlickrPhoto: d26b73. 80% of Institutional Investors to Increase or Maintain Exposure to Real Estate Over the Next Two Years
Approximately four in five (80%) institutional investors plan to increase or maintain their exposure to real estate over the next two years, according to a new study by Aquila Capital. With 38% of respondents feeling ‘positive’ or ‘very positive’ about the outlook for the asset class, the research suggests that institutional investor demand for European real estate shows few signs of abating.
Overall, 87% of institutional investors currently invest in real estate, with their average exposure equating to 11% of their portfolio. 58% of investors have exposure to a core real estate investment strategy with a third (33%) holding core-plus assets. 27% and 16% of respondents are invested in value-added and opportunistic strategies respectively.
Despite their enthusiasm, investors have a number of concerns about the outlook for European real estate: nearly half (47%) are worried by the impact of continued economic uncertainty while 43% think assets are at, or are close to, being fully priced. Around a third (31%) flagged falling yields in prime markets while 22% cited uncertain geopolitics and the threat of terrorism as being problematic.
The real estate investment vehicles most favoured by institutional investors include: collective funds (39%), specialist investment funds (35%) direct ownership (23%) and fund-of-funds (23%).
Rolf Zarnekow, Head of Real Estate at Aquila Capital, said: “Institutional investor demand for European real estate remains extremely strong and we are likely to see increasing amounts of new capital allocated to this asset class given the risk-adjusted returns it can offer.
“In our view, the Spanish residential sector currently offers a significant investment opportunity. We began investing in the Spanish property market two years ago and continue to see a significant increase in demand from international investors seeking to gain exposure to prime residential assets in key cities such as Madrid and Barcelona.”
The findings follow Aquila Capital’s recent launch of a new real estate strategy for institutional investors that invests in the reinvigoration of the Spanish residential property market. The strategy focuses on the construction of residential housing complexes and the conversion of existing properties to residential real estate in the metropolitan regions of Spain. Aquila Capital has already made a number of acquisitions and has a significant pipeline of further opportunities in this sector. The strategy targets a total return of 155% to 175% after local taxes and costs by the end of its investment term in 2019.
According to the research, almost 82% of investors are positive or neutral about the prospects for the Spanish real estate market and one in three respondents (31%) expects to see increasing numbers of institutional investors capitalising on the opportunities offered by the sector over the next two years.
Roman Rosslenbroich, CEO and Co-Founder of Aquila Capital, added: “We are delighted by the interest that our investment strategy has generated among investors and look forward to deploying newly raised-capital across a range of residential schemes that offer tremendous potential for capital appreciation.”
Amid a global economic slowdown and waning growth prospects for Latin America, presidential politics in four countries -Argentina, Brazil, Chile, and Peru- have also greatly impacted the prospects of recovery, according to the latest research from global analytics firm Cerulli Associates.
These findings and more are from “Latin American Distribution Dynamics 2016: Keys to Gaining a Foothold in Increasingly Globalized Market”, a report developed in partnership between Cerulli and Latin Asset Management.
“In broad terms, the movements signal a return to free-market and investor-friendly policies, reversing a troubling trend toward populism, nationalism, and expansion of the welfare state,” explains Thomas V. Ciampi, founder and director of Latin Asset Management. “In fact, as of mid-2016, only Venezuela and minor players Ecuador and Bolivia were still proudly carrying the leftist torch, while the rest of Latin America had seemed to grow restless with that approach.”
“The asset management industries in Argentina, Brazil, Chile, and Peru-including the AFP private-pension businesses in Chile and Peru, the local mutual fund industries of the four countries, and for offshore asset gathering through the wealth management channel-all face consequences from the shifts in leadership and the attitudes of the public,” Ciampi adds.
“In the case of Argentina especially, the recent election of pro-market president Mauricio Macri boded well for a normalization of the local capital markets, but created uncertainty for cross-border firms that have raised tremendous amounts of assets via the offshore wealth channel,” Ciampi said, noting that the government was eager to launch an amnesty plan aimed a repatriating a portion of the USD 500 billion of Argentine-investor assetsheld abroad.
CC-BY-SA-2.0, FlickrPhoto: AFTAB, Flickr, Creative Commons. Vanguard Looks to Diversify into Active ETFs
Vanguard, the king of passive investing with over 70 index-based ETFs, has asked for exemptive relief for offering actively managed ETFs via an Securities and Exchange Commission filing.
Vanguard, with over 2.5 trillion in AUM, is known for its index-based funds, both mutual funds and ETFs. However, the new filing suggests the firm is looking to branch further into active management. Although there is no mention of an initial fund and in practice there is a long period of time between been granted exemptive relief and launching a new product, with this filing Vanguard joins a growing number of fund companies filing for actively managed ETFs.
Companies such as Fidelity, Eaton Vance, Precidian, and Davis Selected Advisers have looked into joining the active ETF wagon, which accounts for roughly 26.4 billion dollars of the 2.3 trillion ETF market.
The Vanguard filing notes: “Applicants believe that the ability to execute a transaction in ETF Shares at an intra-day trading price has, and will continue to be, a highly attractive feature to many investors. As has been previously discussed, this feature would be fully disclosed to investors, and the investors would trade in ETF Shares in reliance on the efficiency of the market. Although the portfolio of each Fund will be managed actively, Applicants do not believe such portfolio could be managed or manipulated to produce benefits for one group of purchasers or sellers to the detriment of others.”
CC-BY-SA-2.0, FlickrPhoto: Niamalan Tharmalingam. UK Investors’ Outflows Drive 900% Rise in Property Funds Trade
UK retail investors’ activity around property funds has risen by 900% following Brexit compared with the same period a year earlier, according to data from Rplan.co.uk.
The increase in trade was driven by outflows outweighing inflows by more than 12 times, according to the online investment platform’s analysis.
The research mirrors latest data released by the Investment Property Databank that shows UK property values fell by 2.4% in July.
Investor outflows from property funds via rplan.co.uk peaked in the third week following Brexit (commencing 4 July) but dropped sharply thereafter.
In the first weekend after Brexit, UK retail investors ditched property and UK equity funds and switched into global and Japan equities.
“Self-directed investors pulled out of property funds in droves following Brexit, which would have played a role in driving down commercial property prices,” said Stuart Dyer, Rplan.co.uk’s Chief Investment Officer. “But our data suggests that gating was actually quite effective – or rather, than things could have been much worse without the gating/pricing adjustments,” Dyer said.
Anke Sahlén and Daniel Kalczynski are now in charge of Deutsche Bank Wealth Management (WM) in Germany. As Co-Heads the 48 year-olds will pursue the goals of developing WM into the leading trusted expert advisor to wealthy clients and advancing Deutsche Bank’s market leadership in its home market.
Sahlén and Kalczynski have both spent many years at Deutsche Bank and in its Wealth Management. “The appointment of Anke and Daniel demonstrates continuity and stability – values to which wealthy clients attach great importance,” said Fabrizio Campelli, Global Head of Wealth Management. “I am pleased to appoint two recognised wealth management experts whose expertise and abilities complement one another.”
Sahlén and Kalczynski will also be responsible for Sal. Oppenheim and Deutsche Oppenheim Family Office AG and intensify cooperation with their colleagues in Deutsche Bank’s Private, Wealth & Corporate Clients division to ensure that wealthy clients have access to the best products and services within the bank.
Kalczynski joined Deutsche Bank in 1990. He has been managing WM Germany on an interim basis since April, in addition to his responsibility as Chief Operating Officer (COO) of WM Germany and prior to that of Asset & Wealth Management (AWM) Germany. His previous roles included Head of Sales Management and the Southern Region for WM Germany.
Sahlén started her career with Deutsche Bank in 1993 and has focused on advising wealthy clients both nationally and internationally ever since. She currently leads the WM team in Germany’s Eastern Region and is a member of the Management Board for that region.
CC-BY-SA-2.0, FlickrPhoto: David Mello
. US Investor Optimism had Rebounded Prior to Brexit
Prior to the British vote to exit the European Union, U.S. investor optimism had rebounded in the second quarter, following a rocky first quarter for the markets, according to the second quarter Wells Fargo/Gallup Investor and Retirement Optimism Index survey, conducted May 13-22 with 1,019 U.S. investors, who have a total of $10,000 or more in savings and investments.
The Optimism Index rose 22 points in the second quarter to +62, returning the index to the level seen in the last half of 2015, before it dipped to +40 in the first quarter of 2016.
Non-retired investors scored highest on the optimism index, with the index increasing 27 points to +68. The index rose 10 points to +45 among retirees. Most of the gains in the overall index result from investors’ increased optimism about the 12-month outlook for the stock market as well as about reaching their 12-month investment targets. Additional gains were seen in investor optimism about economic growth as well as maintaining or expanding their household income. There was no change in investor perceptions about unemployment, inflation or reaching their five-year investment goals.
