Foto cedidaGuy Wagner, director general de BLI.. Banque de Luxembourg unifica sus unidades de gestión de activos
Banque de Luxembourg Investments (BLI), Banque de Luxembourg’s asset management company, has strengthened its multi-management team by recruiting Amélie Morel and Jean-Baptiste Fargeau as fund analysts. The team has now 5 people in charge of analyzing, selecting and monitoring an external fund list, as well as the management of the funds of funds multi-asset classes.
Amélie will be in charge of the follow-up of the asset classes European, SRI, sectorial and theme equities. Jean-Baptiste takes of the responsibility of the asset classes emerging equities and bonds and of high yield and corporate bonds.
“Following new recruitments in the past few years, mainly in the equities and fund distribution teams, we have also decided to strengthen our fund selection team”, says Fanny Nosetti, Head of BLI’s multi-management. “Amélie and Jean-Baptiste have gained first professional experience in other companies before joining us and they are an excellent addition to our asset management company. We are delighted to welcome them to the team!”
Amélie Morel (29) replaces Inès Buttet who left BLI. Following nearly three years auditing investment funds atDeloitte, Amélie worked as an investment analyst with a Luxembourg wealth structurer. Amelie holds a Master’s degree in Finance from Grenoble Ecole de Management and is a level 3 CFA candidate.
Jean-Baptiste Fargeau (36) has an engineering degree from Ecole Centrale de Nantes as well as a master degree in business administration from the IAE Paris. He started his career in Luxembourg in 2005 as a quantitative analyst within the management company J.Chahine Capital, and then became portfolio manager in 2007 in the same company.
CC-BY-SA-2.0, FlickrPhoto: Thomson Reuters. Seilern Investment Management Won Four New Awards
Seilern Investment Management have recently been acknowledged throughout Europe in the Lipper Awards, for the long-term performance of our funds. On 19th April in London, they announced the final round of UK and Pan-European awards, bringing the total to 14 awards in 2016.
Over the past weeks Seilern Investment Management have won awards for Best Equity Group (Small Company) in Switzerland, Germany, Austria, UK, and Europe and Stryx World Growth has won for Best 5 Year Performance in Switzerland, Germany, Austria, France, UK, and Europe.
“These awards are a testament to the commitment the team has in seeking out companies that demonstrate only the very highest prospects for long-term growth and reflect our consistency in generating returns for our investors. While we are gratified to be recognised, above all, we are pleased that we continue to deliver for our clients”, said Raphael Pitoun, Chief Investment Officer.
Capital Strategies Partners has an strategic agreement to cover Spain, Italy, Switzerland and LatAm market for Seilern Investment Management.
Foto: Ben
. Preqin reconocido en los 2016 Queen’s Award for Enterprise
Preqin has been awarded a Queen’s Award for Enterprise in the category of International Trade. The award recognizes Preqin as an outstanding UK business, citing excellence in its field and sustained growth in its overseas business. This year the awards, which are announced annually on Her Majesty the Queen’s birthday, praise 243 UK companies for leading the way in business achievement.
The Queen’s Awards for Enterprise are the UK’s highest official accolades for business success. Operating in various forms since 1966, they recognize UK businesses for outstanding achievement in one of three categories:International Trade, Innovation and Sustainable Development. Entrants come from all parts of the UK, from city-located centers of commerce to the remotest of locations, and include organizations involved in a wide range of industries and sectors.
CEO Mark O’Hare said of the award:
“It is a huge honor to be included in this year’s list of Queen’s Award winners, especially so on the occasion of Her Majesty’s 90th birthday. Over the past 13 years, Preqin has strived to deliver excellent products to our customers, becoming the leading source of data and intelligence for the global alternative assets industry. We are extremely proud and grateful to have this hard work recognized by the Queen’s Award panel. I would like to add my deepest gratitude to all of our directors, staff and partners for creating the culture of excellence, integrity, and dedication which characterizes Preqin, and without which this achievement would not be possible. Most of all, we are grateful to our many customers around the world for their longstanding support.”
Zurich-headquartered private bank EFG International has agreed to acquire the Luxembourg based private banking activities of UBI Banca International from Unione di Banche Italiane.
UBI Banca International (Luxembourg) has around EUR 3.6 billion in assets under management.
EFG International specified that the transaction is structured as a cash acquisition of UBI Banca International (Luxembourg) S.A. and will have no material impacts on EFG International’s regulatory capital position.
The deal is expected to close during the first half of 2017, and the company will merge into EFG Bank (Luxembourg) S.A..
UBI’s branches in Madrid and Munich are not part of the transaction, as well as its fiduciary and corporate banking activities.
It forms the second move of EFG International in the M&A activity since the start of 2016 as the company is to soon acquire the Lugano based private bank BSI, after an agreement has been signed on 21 February 2016 with BSI’s sole shareholder BTG Pactual.
The EFG International annual general meeting, scheduled on 29 April 2016, shall result in a shareholder approval for the transaction. The deal is to be closed in Q4 2016 and BSI is expected to entirely merge into EFG International at end 2017.
CC-BY-SA-2.0, FlickrPhoto: Balint Földesi. Serial Inverters, the US Treasury 's New Target
The US Treasury Department has taken new steps to further curtail a popular type of corporate transaction in which a US company merges with a foreign counterpart, then moves abroad to lower its tax bill. The strategy known as corporate inversions technically involves having the foreign company, based in a country with lower tax rates, buy the US company’s assets. Ireland, with its highly competitive 12.5% corporate tax rate, has been a popular place to incorporate, Eric McLaughlin, Investment Specialist at BNPP IP.
The new rules, announced in conjunction with the Internal Revenue Service, take particular aim at foreign companies that have completed multiple deals with US companies in a short period, what the regulator calls “serial inverters.”
The two main points Eric McLaughlin, Investment Specialist at BNPP IP, presents are the implementation of a three-year look-back period for US-based mergers and acquisitions (M&A) and earnings stripping:
Three-year look-back period. This relates to how the Treasury is going to enforce ownership fractions for inversions. If the shareholders of a foreign acquirer own more than 20%, but less than 40% of the combined entity, and the foreign acquirer conducts substantial business activities in the foreign jurisdiction, the inversion technically works. If the shareholders of the foreign acquirer own more than 40% of the combined entity, the inversion works and most of the negative consequences are avoided. The new rules go further, effectively counting domestic acquisitions by an inverted acquirer in the last three years as impermissible. If the value of those previous acquisitions is disregarded, the foreign acquirer becomes smaller and subject to more stringent inversion rules.
A tactic known as ‘earnings stripping’ involves the US subsidiary borrowing from the parent company and using the interest payments on the loans to offset earnings — a cost that is not reflected on financial statements, but which lowers the tax bill. The new rules classify this intra-company transaction as if it were stock-based instead of debt, eliminating the interest deduction for the US subsidiary. This change applies not just to inversions, but to any foreign company that has acquired a US entity and used this technique to lower taxes.
Implications of the new steps to curb corporate inversions
“We thought the Treasury had deployed the full extent of its regulatory power in two previous inversion updates. The rules recently announced by the Treasury, however, were seen as much more aggressive and expansive and sent shock waves up and down Wall Street,” says McLaughlin. The most immediate reaction was the news that Pfizer plans to abandon its USD 152 billion merger with Allergan – the largest deal yet aimed at helping a US company shed its US corporate citizenship for a lower tax bill. Pfizer executives have made no secret of their belief that renouncing its corporate citizenship and lowering its overall tax bill was their duty as stewards to shareholders.
Yet even by the Treasury’s own admission, the latest rules will not be enough to completely halt the flow of companies seeking to renounce their US citizenship. There is even a question as to whether the Treasury has overstepped its authority. Such a move would be possible only with an overhaul of the tax rules by Congress, which few believe will happen soon. The current political climate also complicates the matter. Corporate tax policy may be a key issue in the fall presidential elections as Democrats have moved to toughen legislation, while Republicans look to lower corporate tax rates.
It remains to be seen what effect the new rules have on the broader equity market. While inversions have not played a dominating role in the mergers and acquisitions, (40 companies have struck inversion deals over the past five years, according to data from Dealogic), this does put additional pressure on investment banks. Meanwhile, in filing a lawsuit to block the Halliburton-Baker Hughes merger, the Obama administration has demonstrated its increasing willingness to challenge giant takeovers, reflecting a belief that the corporate world goes too far in its pursuit of megamergers.
Finally, the tax rate risk facing certain companies just got pulled forward. “The good news is that the anti-earnings stripping rules grandfather all instruments prior to April 4 and appear limited to foreign parents. The bad news is that we expect tax rate creep for US companies headquartered abroad and that these companies have lost their tax advantaged acquirer status. It also makes us wonder if this is the first step towards tighter tax regulatory frameworks globally.” He concludes.
The Bank of Japan’s regular policy meeting ended in Tokyo on Thursday with the policy committee deciding to take no action. In the event, this was a major surprise considering that in recent weeks the consensus expectation had formed solidly behind the view that the central bank would extend its negative interest rate policy which was introduced in January, and also extend the asset purchase programme. According to Nathan Gibbs, Fund Manager at Schroder Investment Management and renowned contrarian specialized on Japanese stocks, “today’s decision seems to imply that the policy committee feels more time is needed to judge the impact of the most recent changes before extending policy further.”
Japanese inflation, which was also released today, showed a marked slowdown in progress towards the central bank’s own inflation target of 2%. Indeed, in its statement the committee implicitly extended the deadline to reach that 2% target into the latter part of 2017. “This admission that the target has become harder, without any additional policy response, led to an immediate decline of around 4% in the stockmarket from the levels seen in the morning session. At the same time there was a sharp strengthening of the yen as currency markets priced-in the effective change in expected interest rate differentials. Some of the current deflationary impact is clearly due to external forces, including the weakness in the price of oil which forms a major part of Japan’s imports. Nevertheless, financial markets had already reflected the change in expectations with the implied inflation rate in index-linked bonds declining this year from around 0.8% to 0.3%. Most surveys of individual consumers in Japan also suggest that the gradual increase in inflationary expectations which has been generated in the last three years has begun to tail-off,” says Gibbs.
In his view, inconsistency introduces uncertainty and although Governor Kuroda has successfully surprised investors with the timing of previous decisions, the direction of his policy has always been absolutely clear. As a result, most investors have been prepared to accept his assertion that he would do “whatever it takes” to raise inflationary expectations. With those inflationary expectations now in decline, “the lack of response today introduces an element of uncertainty which the financial markets may view negatively. Of course, the central bank’s policy objective is to influence the real economy, not the stockmarket, and we must wait longer to see if the current policy is indeed sufficient to maintain the positive underlying trends we have seen so far,” he concludes.
Current Managing Director of Apex’s Maltese operation, Anthony O’Driscoll, has been promoted to Chief Operating Officer for the group. O’Driscoll, a member of the Certified Public Accountants of Ireland, has been with Apex for 10 years during which time he has worked at various Apex offices around the world; including Mauritius, Hong Kong, Ireland and Malta.
O’Driscoll has been instrumental in the rapid growth of the Malta office which he helped launch in 2008. Opening with just 5 employees, Apex Malta has grown exponentially now boasting a team of 70 employees servicing over 124 funds. Paulianne Nwoko current Operations Manager for Apex Malta replaces O’Driscoll as Managing Director for the office and David Butler becomes Chairman. Butler is the founder of Green Day Advisors LLP and Kinetic Partners, bringing over 20 years of industry experience with him to the role at Apex Malta.
Peter Hughes, Chairman and Chief Executive Officer said: “Anthony has been a driving force behind operational innovation for the Apex Malta office. His dedication and commitment to the success and growth of the office are evident in its rapid expansion since establishment 8 years ago. Through implementing progressive projects, such as successfully ensuring Apex Malta becomes the first paperless Apex office, Anthony has demonstrated an aptitude for operational excellence that we want the rest of the group to benefit from. I’m delighted that he can now support me in the role as COO for the group and ensure these progressive developments are implemented quickly and effectively across the rest of the Apex group.”
Anthony O’Driscoll, Chief Operating Officer said: “I am delighted to take on the role of COO for Apex. The group as a whole delivers a really distinctive service to its clients through continually evolving and adding to its product suite and delivering solutions spanning the full value chain of a fund. Understanding the day-to-day requirements of each unique asset manager, alongside the wider impact of market change on their businesses overall, is what fosters longevity in relationships and forms real trust in our ability to service and support our clients. I look forward to further developing our operating strategy on a global basis and implementing some of the procedures already successfully in place in Malta, to benefit both the other local Apex offices and in turn their clients.”
David Butler, commenting on his role as Chairman for Apex Malta, said: “I am thrilled to be joining the Apex Malta team in the position of Chairman. At this exciting time of growth for the company I will look to supporting its local development and helping reinforce Apex’s position as the leading administrator in Malta”.
Foto: José Carlos Cortizo Pérez
. BMO Global AM lanza el Global Equity Market Neutral Sicav Fund
BMO Global Asset Management has launched BMO Global Equity Market Neutral Sicav fund, in its popular ‘True Styles’ series, a strategy that combines value, momentum, low volatility, size and GARP (Growth at a Reasonable Price) styles.
The investments are all made on the large cap global developed markets universe as represented by MSCI World. The choice of this universe as well as the strict liquidity limits that are applied in portfolio construction ensure that investors in the fund have access to a truly liquid alternative strategy.
“Excess returns of portfolios can often be attributed to exposure to certain styles,” said fund manager, Erik Rubingh, Head of Systematic Equitiesat BMO Global Asset Management. “True Styles is used to focus our portfolios, only targeting the desired styles, without interference from other factors.”
Mandy Mannix, Head of Client Management, BMO Global Asset Management (EMEA), declares: “Our clients believe the BMO Global Equity Market Neutral (SICAV) will deliver an ideal building block for their multi-asset portfolios as it is liquid, highly diversified, with proven low correlation to major asset classes and the strategy has delivered considerably better returns than a passive index with lower volatility.”
The objective of the fund, co-managed by Erik Rubingh and Chris Child, is to generate an annual gross return of 4.5% in excess of cash with a target volatility level of 6%. Euro and US$ hedged share classes are available from launch.
CC-BY-SA-2.0, FlickrFoto: Luckycavey, Flickr, Creative Commons. BlackRock y Jyske Invest destacan entre los ganadores de los premios Lipper
The winners of the Thomson Reuters Lipper European Fund Awards 2016 have been announced. These highly-respected awards honour funds and fund management firms that have excelled in providing consistently strong risk-adjusted performance relative to their peers – the merit of the winners is based on entirely objective, quantitative criteria.
BlackRock and Jyske Invest collected the top Group Award. The full list of Group Award winners follows:
“We at Lipper would like to congratulate all of the 2016 award winners for successfully navigating the exceptionally stormy waters of the 2015 capital markets. Once again we are proud to recognize the outstanding skill and expertise put forth by these managers to deliver outperformance for their shareholders,” said Robert Jenkins, global head of Research at Thomson Reuters Lipper.
“All the winners of the Lipper Fund Awards deserve to be congratulated for delivering consistently good risk-adjusted performance, relative to their peers. The influential and prestigious Lipper awards are based on regularly superior performance by investment fund managers and groups. We are proud that our measurement of such an achievement enables us to grant these awards withcredible recognition and emphasis on consistency,” said Detlef Glow, head of EMEA Research at Thomson Reuters Lipper.
Please click here to see the full list of winners. Individual classifications of three-, five-, and ten-year periods, as well as fund families with high average scores for the three-year period are also recognized. The awards are based on Lipper’s proven proprietary methodology, which can be viewed here.
Lipper data covers more than 306,000 share classes and over 128,000 funds in 63 markets. The free Lipper Leader ratings are available for mutual funds registered for sale in over 42 countries.
CC-BY-SA-2.0, FlickrPhoto: Brian Jeffery Beggerly. High Yield in the Crosshairs
Investing in high yield bonds is not for the faint of heart. That said, the risks associated with below-investment-grade bonds are frequently overstated and couched in hyperbole, believes David P. Cole, CFA, Fixed Income Portfolio Manager at MFS.
Late last year, investors beat a thunderous exit from high yield bonds, which in turn reverberated through financial markets as analysts pondered the implication of deteriorating credit markets on the US economy. More recently, investors have made a U-turn, and high yield has witnessed inflows again and spreads have tightened. Talk of a US recession has similarly subsided.
According to the expert, high yield bonds are subject to a cyclicality that mirrors the economic cycle — and default risk is an important factor in total investment returns. If one understands the cyclical backdrop of the high yield asset class and adopts an investment approach that involves prudent security selection, particularly in the lower-credit-quality segment of the market, high yield bonds can make a compelling addition to a well-diversified portfolio.
“The asset class has historically delivered a risk-return profile somewhere between higher-quality fixed income and equities, and has exhibited characteristics of both markets over full market cycles. In the period from 1988 to 2015, the Barclays U.S. High Yield Corporate Bond Index delivered a compounded annualized total return of 8.1% — more than the 6.6% return of the Barclays U.S. Aggregate Bond Index but less than the 10.3% return of the S&P 500 Index”, points out.
High yield bonds can offer diversification against interest rate and equity risk. With relatively low interest-rate sensitivity compared with other fixed income asset classes, the US high-yield market may offer a buffer against a rise in interest rates.
Prudent security selection in the lower-quality segment
Volatility in the lowest-rated high yield bonds can be significant. For this reason, it’s important to focus on differentiation in return and risk characteristics by credit quality, as the returns of the lower-quality segment of the market can vary quite meaningful from that of the overall high yield market.
Historically, highlights Cole, investors have not been adequately compensated for a strategic allocation to lower-quality segments of the high yield market, as the perceived carry advantage is often offset by capital losses due to defaults. Compared to the higher-quality portions of the high yield market, the lowest-rated high yield securities (CCCs) have produced lower compounded returns given the variance drain — losses incurred from heightened volatility because of the wealth erosion caused by downdrafts in security prices — associated with their significantly higher return volatility.
“While lower compounded returns argue against a strategic overweight to CCCs, this market segment also displays a greater dispersion of returns than those in the higher-rated BB or B portions of the market. This suggests potential opportunities to add value by selectively investing in CCC securities, especially on the heels of a significant selloff, when credit spreads have widened substantially”, explains the MFS portfolio manager.
Consequently, says Cole, a tactical allocation to the lower-quality segment of the high yield market can be appropriate when one is being sufficiently compensated for taking on the additional price risk. In the current environment, for instance, energy and mining companies may become attractive. However, investments in these lower-rated securities must be carefully weighed against the overall risk profile of the portfolio, as they can be both distressed and highly illiquid.
“December’s headline-driven selloff in high yield, prompted by a small handful of high yield strategies that ran into trouble with overweight positions in commodity sectors and CCC-rated securities, provided a stark reminder of just how important it is to manage credit risk in high yield”, concludes.
For MFS, the high yield market provides an opportunity for investors to gain exposure to the credit market with an asset class that provides diversification and an attractive return profile over time. Investing in this market also requires prudence, an eye for identifying inflection points, and favoring certain names — such as those on the higher-quality tier of the credit quality spectrum — to deliver attractive risk-adjusted returns.
