CC-BY-SA-2.0, FlickrPhoto: Juan FernandezG. Ignacio Pedrosa Joins BTG Pactual in Chile
BTG Pactual Chile hired Ignacio Pedrosa, as Executive Director of its Internatonal Funds division.
Pedrosa has had a successful career in Asset Management and Private Banking with over 20 years experience. Prior to joining BTG Pactual he was in charge of the Spanish operations of French Tikehau Investment Management. Before that he served in Spain’s most renowned independent asset managers, Bestinver and EDM and was a member of the Board of the United Investors Sicav Luxembourg. Between 1999 and 2005 he held various positions at Banco Urquijo (Sabadell) including Regional Private Banking Director.
He holds and Economics and Business BA from the San Pablo CEU University in Madrid.
CC-BY-SA-2.0, FlickrRoger Ibbotson set up Zebra Capital in 2001.. Kepler Launches New UCITS Platform with A Global Equity Beta Neutral Fund Advised by Zebra Capital
Kepler Partners LLP has raised $81m via its new UCITS platform, Kepler Liquid Strategies (KLS), for a global equity beta neutral fund. This is the first sub-fund of the KLS ICAV, which is a Dublin domiciled UCITS structure designed to give investors access to high quality managers selected by the team at Kepler Partners.
The fund, KLS Zebra Global Equity Beta Neutral, began trading on June 30th and saw significant interest from investors across Europe, despite the chaos in financial markets around the Brexit referendum.
Kepler has appointed Connecticut based Zebra Capital Management LLC as investment advisor on the fund, who will manage the portfolio based on their established investment process and philosophy. The KLS Zebra Global Equity Beta Neutral fund mirrors a strategy run by Zebra Capital in an existing offshore hedge fund. As a beta neutral strategy, it is designed to avoid the kind of volatility which markets have been experiencing in recent weeks. The new fund targets a net return of 7-8% per annum over a market cycle with a volatility of 5-6% per annum.
The underlying strategy is typically made up of 650 long and 450 short equity positions and uses a unique ‘popularity factor’ developed by the Zebra team which includes former Yale Professor Roger Ibbotson, who set up Zebra Capital in 2001. The core theory revolves around the idea that fundamentally strong but unpopular stocks tend to outperform fundamentally weak but popular companies. Ibbotson was described by the FT this year as the ‘pioneering analyst of the equity risk premium’ and the ‘godfather of smart beta’.
Georg Reutter, head of research at Kepler Partners, said: “Given the current uncertainty in global markets, we feel it is a good moment to be bringing a beta neutral strategy to the market. We are very pleased that our research based approach has led us to partnering with Zebra Capital as the first fund on the KLS platform.”
Laurie Robathan, head of sales, added: “Kepler has raised $1.3bn for UCITS fund clients since 2010 and, after biding our time for some years, it is exciting to have now made the logical step into this space by launching our own dedicated UCITS platform”. “We are very pleased to be working with a group of Zebra’s calibre and their total commitment as a firm to this project has been clear from the outset. Given the turmoil of recent weeks, the success of this launch is a clear signal from the market that this is the right fund at the right time.”
KLS Zebra Global Equity Beta Neutral Fund has an annual fee of 1% and a performance fee of 10%.
CC-BY-SA-2.0, FlickrPhoto: Intv Gene. GAM announces acquisition of Cantab Capital Partners and launches GAM Systematic investment platform
GAM announced the acquisition of Cantab Capital Partners (Cantab), an industry-leading, multi-strategy systematic manager based in Cambridge, UK. Cantab manages USD 4.0 billion in assets for institutional clients worldwide.
Purchase price consists of an upfront cash payment of USD 217 million, funded from GAM’s existing cash resources, and deferred consideration based on future management fee revenues. GAM is the industry’s third-biggest provider of liquid alternative UCITS funds.
At the same time, GAM launches GAM Systematic, a new investment platform dedicated to systematic products and solutions across liquid alternatives and long-only traditional asset classes including equities, debt and multi asset. Cantab will form the cornerstone of GAM Systematic.
By moving into the growing segment of scalable systematic investing, GAM takes an important step to deliver on its long-term objective to expand and diversify its active asset management business. Leading systematic strategies are attracting substantial allocations from investors globally due to their compelling returns and their rigorous, disciplined investment processes.
GAM Systematic will complement GAM’s successful active discretionary investment offering. It will also serve as the Group’s innovation hub for the development of new technologies, investment ideas and approaches for systematic strategies and products.
Alexander S. Friedman, Group Chief Executive Officer of GAM, said: “We have been evaluating how best to enter the systematic space for the past 18 months because we believe it represents an important capability for an active investment firm in the current environment and in the decades to come. GAM Systematic will offer our clients a compelling range of unique products complementary to our strong discretionary product range at a time when the investment industry is challenged to provide cost-efficient, liquid and diversified sources of returns.”
CC-BY-SA-2.0, FlickrPhoto: Michael Baldinger. Michael Baldinger To Leave RobecoSAM, Reto Schwager To Be Appointed CEO Ad Interim
RobecoSAM, the investment specialist focused exclusively on Sustainability Investing (SI), today announced that Michael Baldinger, RobecoSAM CEO since 2011 and Member of the Executive Committee (ExCo) since 2009, has decided to leave the firm. He will join the asset management division of an international bank as Global Head of Sustainable & Impact Investing, and will be based in New York.
Reto Schwager, Head of Private Equity at RobecoSAM and Member of the Company’s ExCo since January 2015, will be appointed CEO ad interim per August 15, 2016, subject to FINMA approval. Michael Baldinger will leave the Company once a smooth handover to the CEO ad interim has been completed. A search process for a permanent replacement of Michael Baldinger has already begun. Both internal and external candidates will be considered.
Michael Baldinger joined RobecoSAM in July 2009 as Global Head of Distribution & Marketing and ExCo Member. In January 2011, he was appointed CEO.
Albert Gnägi, PhD, Chairman of the RobecoSAM Board of Directors: “The Board of Directors regrets Michael Baldinger’s decision and thanks him for his contributions over the last years. Michael Baldinger, his ExCo colleagues, and all the dedicated specialists at RobecoSAM have built the world’s foremost platform for SI, upon which the firm will continue to build and grow. We wish Michael all the best for his personal and professional future.”
Michael Baldinger, departing CEO of RobecoSAM: “I am proud of having built, together with my colleagues, the world’s leading platform for SI. After more than seven years with the firm, it is the right time for me to take the next step in my career. I want to thank everyone at RobecoSAM for their dedication and passion to SI and for having given me the opportunity to lead such a wonderful firm.”
CC-BY-SA-2.0, FlickrFoto: Magnus Hagdorn. Anne Robinson deja Citi para liderar el departamento legal de Vanguard
Vanguard has announced that Anne E. Robinson will join the $3.5 trillion investment management firm next month as General Counsel and Managing Director of its Legal and Compliance Division. She most recently served as a Managing Director and General Counsel Global Cards and Consumer Services at Citi.
“Anne Robinson is an ideal addition to Vanguard’s senior leadership team. Her expansive and varied legal experience in the financial services and consulting fields will be of great value to Vanguard and our clients,” said Vanguard CEO Bill McNabb.
Ms. Robinson will assume leadership of Vanguard’s Legal and Compliance Division from Managing Director Heidi Stam, who announced her intentions to retire in October 2015.
As a member of the firm’s 12-person senior leadership team, Ms. Robinson will be responsible for all legal and compliance activities, including regulatory, corporate, and litigation matters.
After spending the early part of her career in private law practice and with Deloitte Consulting, Ms. Robinson joined American Express in 2003 and served in various legal positions of increasing responsibility. She joined Citi in 2014 as the General Counsel for Global Cards. She received a B.A. degree in political science with honors from Hampton University in 1991 and graduated from the Columbia Law School in 1994.
Foto: Remko van Dokkum
. Legg Mason adquiere Financial Guard
Legg Mason announced that it has agreed to acquire an 82% majority equity interest in Financial Guard, an onlineRegistered Investment Advisor and innovative technology-enabled wealth managementand investment advice platform. Financial terms of the transaction were not disclosed.
The firm will operate as part of Legg Mason’s alternative distribution strategies business, which focuses on combining technology with the firm´s investment affiliates’ capabilities to better serve clients. The investment is part of its overall long-term strategy focused on creating choice for investors across investment capability, product and vehicle, and distribution.
Financial Guard’s aggregation technology provides advisors the ability to create a comprehensive picture of clients’ financial positions and recommend potential solutions to meet their clients’ investment objectives. It offers portfolio analysis and recommendations for a large universe of both passive and active funds. By making the technology available to advisors and their clients, both brands intend to help financial institutions grow their advisory business and be well-positioned to conform to the new Department of Labor fiduciary standard, set to be implemented in April 2017. Legg Mason will offer the Financial Guard platform to firms who are looking for technology solutions to assist them in meeting expanded compliance requirements in a holistic, cost efficient way.
More broadly, as demand continues to grow for technology-enabled advice, it becomes increasingly important for firms to offer to all of their clients technology solutions that are intuitive and easy to implement across a client’s entire portfolio. The technology offered by the firms can be implemented seamlessly at distribution partner firms to help them provide comprehensive advice.
Legg Mason plans to complement the Financial Guard platform’s existing capabilities with investment products from its nine independent investment managers, including multi-asset class solutions from QS Investors.
Pavilion Financial Corporation, a North American based employee-owned, investment services firm, is planning to acquire Altius Holdings, the parent company of Altius Associates, a global private markets advisory and separate account management firm with offices in the UK, U.S. and Singapore. The transaction is expected to close in the third quarter of this year subject to regulatory approval.
Pavilion will combine the operations of Altius Associates with LP Capital Advisors, the alternative asset advisory subsidiary of Pavilion headquartered in Sacramento, California. The combination will create a larger global alternative asset class advisory platform with expanded depth and breadth of services and geographic footprint. At closing, the combined organisation will be rebranded as Pavilion Alternatives Group and represent Pavilion’s global advisory platform specialising in alternative asset classes with total alternative assets under advisement of over US$60 billion, out of a total US$570 billion.
Pavilion Alternatives Group will be comprised of approximately 70 dedicated professionals located in London, UK; Singapore; and across offices in North America (Sacramento, Richmond, Boston, Salt Lake City and Montreal). All senior management from Altius Associates and LPCA will remain in leadership positions in Pavilion Alternatives Group.
“This acquisition, our fifth since 2010, is consistent with our strategy of assembling various expert and specialized teams to bring top quality investment advisory services and solutions to our clients,” said Daniel Friedman, President of Pavilion. “Altius has an excellent reputation in providing alternative asset consulting to a global clientele over a span of nearly 20 years. Altius and LPCA already share common values and a proven client service approach and they complement each other geographically. Together, we will form a stronger alternative asset class advisory platform for Pavilion offering consulting services and solutions across private equity, private credit, real assets, and hedge funds.”
John Hess, London-based Executive Chairman and founder of Altius Associates added, “Since our founding in 1998, we have been globally focussed. Our professionals have over 150 years of experience working with clients across Europe, North America, Australia and Asia with global research coverage. We are delighted to join Pavilion’s team and excited by their enthusiasm to work together to grow our business.”
“We firmly believe that our partnership with Pavilion will provide our clients with access to greater resources that will enhance our already strong advisory and research capabilities, while maintaining our entrepreneurial culture and client-service standards,” said Brad Young, co-CEO with Altius Associates in Richmond. “As part of Pavilion Alternatives Group, we will have additional resources to recruit top talent and invest in the development of our service offering and expansion of our global footprint.”
Donn Cox, President and Managing Director of LPCA said, “Combining forces with Altius will provide our clients with additional resources in North America, significant global reach into Europe, Australia and Asia, and enhanced service offerings and solutions without compromising our focus of providing objective and thoughtful advice with a fiduciary mindset. In addition to advising highly sophisticated institutional investors around the globe in private markets, Altius has a proven track record in providing customized solutions to its clients. Its deep and global research capabilities, dedicated private debt platform and significant real asset resources will also complement our core service offerings.”
According to a report from China Industrial Bank (CIB) and The Boston Consulting Group (BCG) on Chinese private banking development in 2016, despite the slowing Chinese economic growth, the wealth of high net worth individuals (HNWIs) is rising steadily. It is estimated that China’s high net worth families will reach 3.88 million by 2020 and their investable financial assets will then account for 51％ of China’s individual wealth, offering great opportunities for the development of private banking business.
The report, called 2016 China Wealth Report: Growing Against the Trend with Global Asset Allocation notes that as the Chinese economy continues to open, the demand of HNWIs for global asset allocation will increase significantly. It is estimated that the proportion of Chinese individual assets to be allocated overseas will increase from the current 4.8％ to about 9.4％ in the next 5 years. And that from 2015 to 2020, HNWIs’ investable financial assets will increase at an average annual rate of 15％, significantly higher than the projected GDP growth rate of 6.5％ over the same period.
Chen Jinguang, CIB Vice President, is optimistic about the prospect of China’s private banking, saying, “It is estimated that China’s high net worth families will reach 3.88 million by 2020 and their investable financial assets will then account for 51％ of China’s individual wealth, offering great opportunities for the development of private banking business. However, at the same time, we should recognize the undersupply of private banking services. At present, China’s private banking institutions manage less than 20％ of the wealth of high net worth families, which implies huge opportunities for development. Moreover, in recent years, the banking industry has been accelerated its transformation, focusing on developing capital-light businesses. During this process, private banking business will face unprecedented development opportunities by taking advantage of connecting investment asset and private wealth.
According to their survey, about 30％ of HNWIs have invested overseas, and 56％ have not yet but say they will consider overseas investment in the next three years. “As the most dynamic participants in China’s economy, HNWIs are leaders in bringing China in line with the international norms. China’s continuous economic globalization will drive the HNWIs to shift from domestic wealth allocation to global wealth allocation.”
The survey points out that, against the background of Chinese economic globalization, RMB exchange rate volatility and declining domestic return on assets, the drivers for overseas investment of HNWIs will be more diversified. The change of drivers will create more business opportunities for Chinese Private Banks: the number of customers seeking overseas investments will expand, including not just ultra-high net worth individuals (UHNWIs) but also HNWIs; the shift from real estate to financial assets will increase demand for wealth management services; and the shift from overseas-oriented one-way flow to domestic-overseas two-way flow will help expand Chinese institutions’ operations into foreign markets.
CC-BY-SA-2.0, FlickrPhoto: Dave Humphreys. Assessing Brexit And The Impact On The Recovery In Europe
Over a week has passed since the UK electorate narrowly voted to leave the European Union (EU). The MSCI Europe Index fell 10% in the subsequent two days and then bounced back to recover most of that drawdown. On the currency front, sterling fell 10% when compared to pre-referendum levels.
Interestingly, Investec notes that changes in credit spreads and sovereign bond yields in Europe have remained muted indicating stability in that part of the financial market. But for Ken Hsia, portfolio manager European Equity Fund at the firm, this is quite different from the reaction to concerns of a slowdown in 2011/12.
According to the Investec expert, the UK’s decision to leave the EU has resulted in more short-term uncertainty, there is arguably now an opportunity for dialogue and a re-casting of policy to refresh relationships across Europe on a footing that is more aligned with current thinking about the role and purpose of the EU.
How these discussions evolve should interest those outside the region as some themes have global resonance. With government bond yields largely underpinned, Investec believes the relative attractiveness of equities remains intact, especially when corporate balance sheets are the healthiest they have been for many years. Naturally, the pace of recovery in corporate earnings once again comes into question. However, the firm continues to see good bottom-up investment opportunities within the region as identified by our 4Factor process.
What are the opportunities and risks posed by Brexit for European equities?
It is clear that the prevailing uncertainty will be a drag on economic growth, however, we are seeing some new steers from our 4Factor process. We believe, capital projects with long payback periods will be shelved until there is more certainty. However, we believe, projects with shorter paybacks should not be affected, especially those projects which boost productivity.
In the Investec European Equity Fund, we have reduced exposure to companies that are affected by weakening domestic consumption, but we are happy with our holdings in exporters, as they should see some tailwinds from the weaker sterling.
We are considering further investment in the mining sector, where again the supply/demand dynamic after several years of oversupply is now showing some signs of better balance. We note that European companies in the global energy (Total, BP, Royal Dutch Shell) and mining (BHP Billiton, Rio Tinto) sectors are world-class companies.
How is the Investec European Equity Fund currently positioned to UK equities?
At present, the Investec European Equity Fund is approximately 3% underweight the UK, with a combination of domestic companies (Bovis, BT, National Grid, Just Eat) and some multi-nationals (Shire, BP, Imperial Brands, Paysafe Group). Of these, we believe, Bovis and Just Eat are the most exposed to changes in the UK economy. However, for multi-national companies the UK is typically less than 10% of revenue. The portfolio’s greatest overweights by country are France and the Netherlands.
As well as the direct impact from revenue exposure there may be further effects, but many of these will take some time to come to fruition. For issues such as regulatory change, tourism or trade negotiations, it is too early to assess the impact. In aggregate though, we expect performance to be driven by individual stock price moves rather than portfolio positioning. The beta of the portfolio is 0.98, with market risk therefore a minimal component of tracking error.
Brexit aside, where are we seeing signs of recovery in Europe?
To answer this question, we need to take a closer look at the current state of economic recovery in Europe. Speci cally, we will look at two cyclical (economically-sensitive) industries which have been leading indicators on our sector steers, the automotive industry and the cement industry, to re ect on current demand trends and reasons for the sluggish pace of recovery.
What are the risks to our investment case on European equities?
Though the near term may be dominated by mixed headlines, stock markets normally embed a longer-term perspective. We continue to see a recovery in European corporate earnings, albeit the pace can be frustrating. Also, we observe more companies adopting self-help strategies to enhance corporate returns which, if successful, could lead to enhanced shareholder returns. Corporate balance sheets are the healthiest they have been since before the global financial crisis. In this regard, the potential value created through any re-leveraging – for example; M&A activity and share buybacks – has yet to be realised for Europe, which is not necessarily the case for the US.
Dividends are growing due to improving cash flow and strengthening balance sheets, which have not seen the re-leveraging that often occurs at the end of stock-market cycles. To put things into perspective, the historical price chart for the Eurostoxx 50 Index below (covering 50 ‘blue chip’ stocks from 12 euro-zone countries) suggests the market is trading back in line with long-term trends. Analysis shows recent cycle troughs in 2009, 2011 and 2012, when headlines had a notable impact on market dynamics.
The European Fund and Asset Management Association (EFAMA) has published its latest Investment Funds Industry Fact Sheet, which provides net sales of UCITS and non-UCITS for April 2016 from 28 associations representing more than 99 percent of total UCITS and AIF assets’ net sales data.
The main developments in April 2016 can be summarized as follows:
Net inflows into UCITS and AIF increased to EUR 65 billion, up from EUR 26 billion in March.
Net inflows into UCITS amounted to EUR 44 billion, considerably higher than the EUR 8 billion recorded in March.
The increase in UCITS net sales was driven by stronger net sales of long-term UCITS and money market funds.
Long-term UCITS (UCITS excluding money market funds) recorded net inflows of EUR 33 billion, compared to EUR 18 billion in March.
Net inflows into bond funds increased to EUR 24 billion, from EUR 11 billion in March.
Multi-asset funds recorded net sales of EUR 6 billion, same as in March.
On the other hand, equity funds continued to experience net outflows, albeit lower than in March (EUR 2 billion).
Net sales of UCITS money market funds rebounded to EUR 11 billion, from net outflows of EUR 10 billion in March.
AIF recorded net inflows of EUR 21 billion, compared to EUR 19 billion in March.
Net assets of UCITS increased by 1.4% in April to EUR 8,104 billion, and AIF net assets increased by 0.7% to EUR 5,148 billion.
Overall, total net assets of European investment funds increased by 1.1% in April to stand at EUR 13,252 billion at the end of the month.
Bernard Delbecque, director of Economics and Research at EFAMA commented: “The accommodative monetary policy and the stimulus still in the pipeline supported the demand for bond and multi-assets funds in April, whereas weak economic growth and downside risks continued to weigh on equity funds.”
You can read the EFAMA Investment Funds Industry Fact Sheet in the following link.
