. Santander México Hires Jorge Arturo Arce for its Global Corporate Banking Division
Grupo Financiero Santander México, (BMV: SANMEX; NYSE: BSMX) (“Santander México”), one of the leading financial groups in Mexico, announced that Jorge Arturo Arce Gama has been hired as Deputy General Director of Global Corporate Banking.
Executive President and CEO of Santander México, Héctor Grisi Checa, said, “Santander México is bolstering its leadership in corporate banking, and securing an executive of Jorge’s caliber underscores our commitment to this goal. We are attracting the best talent and forming the most powerful unit in this segment of banking in Mexico, a clear differentiator from our competitors.”
Jorge Arturo Arce Gama is an industry veteran, with more than 25 years of experience in investment and corporate banking. He most recently served as CEO and Chairman of the Board of Deutsche Bank México. He has worked at institutions including Citibank México and Deutsche Bank in New York with responsibility for Latin America. He has also been Vice President of the Mexican Banking Association (ABM for its initials in Spanish) and a member of the Business Coordinating Council.
Adam Butler, Michael Philbrick and Rodrigo Gordilloare the executive team behind ReSolve Asset Management and the authors of the new book, Adaptive Asset Allocation: Dynamic Global Portfolios to Profit in Good Timesand Bad.
In their new book, Butler, Philbrick and Rodrigo, argue that picking stocks can only get you so far…true portfolio diversification cannot be achieved by picking a set of securities within a single asset class.
Given the current difficult market conditions, the traditional means of portfolio management simply won’t help investors achieve their financial objective. Static stock and bond portfolios, strategic asset allocation, and buy-and-hold might work during certain market regimes, but if they didn’t get the job done over the last 15 years. ReSolve Asset management is expecting 20 more years of the same, investors have to make some real changes.
Adaptive Asset Allocation presents a framework that addresses these major challenges, emphasizing the importance of an agile, globally-diversified portfolio:
Scrutinizes the relationship between portfolio volatility and retirement income.
Details the historic divergence between economic reality and investor behavior.
Demonstrates a model for predicting long-term returns on the basis of current valuations.
Examines the difference between Strategic Asset Allocation, Tactical Asset Allocation, and Dynamic Asset Allocation.
Adopts an investment framework for stability, growth, and maximum income.
An optimized portfolio must be structured in a way that allows a quick response to changes in asset class risks and relationships, and the flexibility to continually adapt to market changes. To execute such an ambitious strategy, it is essential to have a strong grasp of foundational wealth management concepts, a reliable system of forecasting, and a clear understanding of the merits of individual investment methods.
“The portfolio management industry is undergoing a revolution analogous to the shift that occurred after Markowitz introduced his modern portfolio theory in 1967. Managers who embrace the new methods will increasingly dominate traditional managers, and those who fail to adapt will, inevitably, face extinction,” assert the authors.
Photo: David Leo Veksler. RBS Sells ETF Business To Chinese Asset Manager
Hong Kong based asset manager China Post has acquired the ETF offering of Royal Bank of Scotland, which consists of ten funds with combined assets of €360m.
China Post is the international asset management arm of China Post & Capital Fund Management. As a result of the acquisition, China Post will become the promoter and global distributor of the ETFs, formerly RBS’s ETFs listed in Frankfurt and Zurich.
Morover, the ETF’s will be seeded with additional capital to make them more attractive to institutional investors, they will also be cross-listed in Hong Kong.
The current fund range offers investors access to commodities, emerging market and frontier market equities, China Post aims to expand the offering with a new smart beta strategy offering investors access to Chinese equities.
Danny Dolan, managing director of China Post Global (UK), comments: “This acquisition demonstrates China Post Global’s long term commitment to the European region. Our aim is to differentiate ourselves through innovation. For example, while ETFs giving exposure to China and smart beta strategies already exist, no-one in Europe has yet combined the two.”
“Other differentiators for us include our access quotas to mainland Chinese securities, the strength of our parent companies and their distribution networks, and the strong financial engineering background of our team, which will help with product construction” he adds.
Photo: Steven Oh, Global Head of Credit and Fixed Income at PineBridge Investments. Does the Loan Market Continue to Offer Attractive Opportunities?
The leveraged loan market has more than doubled in the past decade to US$872 billion, with over 1,000 issuers. Steven Oh, Global Head of Credit and Fixed Income at PineBridge Investments, provides his views on the current state of the loan market, and whether this opportunity is attractive and sustainable.
Why are loans an attractive asset class in the current environment?
The outlook for US GDP growth for 2016, while weakening somewhat recently, is still in the 2%-2.5% range, providing a stable backdrop for leveraged-loan issuers.
The unemployment rate should trend even lower and wage growth is expected to accelerate modestly. Coverage ratios (EBITDA-capital expenditures/interest) are near all-time highs. The current default rate of 1.33% is still significantly below its historical average and is forecast to increase at a gradual rate.
What are the characteristics provided by loans that appeal to investors?
Leveraged loans can perform well in all market cycles. Loans rank at the top of the capital structure, so recoveries are generally higher than for high yield bonds. They provide a hedge against rising interest rates since spreads are typically based off of three month LIBOR.
Leveraged loans provide a high level of current income, with the loans market offering transparency and some liquidity.
Furthermore, leveraged loans are a stable asset class: There have been only two years of negative returns since 1997.
Do you believe that the opportunity to invest in loans will be sustainable? If so, why?
The leveraged loan market has more than doubled in the past decade to US$872 billion, with over 1,000 issuers. It is now a mature market that offers several benefits to issuers and investors alike.
What will be the impact of stricter rules and regulations on the banking sector?
While most loan issuers have multiple market makers, stricter regulations have adversely impacted liquidity. In general, commercial and investment banks that trade loans now hold less inventory. Additionally, regulators are scrutinizing leverage loans much more thoroughly than prior to the financial crisis. This is having the effect of keeping leveraged levels at more moderate levels. The amount of leveraged buyouts with debt multiples of seven times or higher is currently less than 4% as compared with 30% in 2007.
How do you think this market differs across Europe and the US?
The European loan market had been holding up better than the US market in 2015. Spreads are generally tighter despite intrinsic European challenges of lower liquidity and diverse jurisdictions.
But Europe has also weakened in 2016 due to reduced demand from one of the largest participants in the European loan market: CLO’s. At current levels, we believe investors are adequately compensated for expected defaults, although we could see further volatility.
Will that affect your portfolio positioning?
Given that the US market is considerably larger, the vast majority of our holdings are US domiciled; however, we are constantly evaluating relative value between the US and European markets. In our Global Secured Credit Fund, we shift allocations between the US and Europe based on our determination of relative value.
How do you analyze companies?
We conduct a detailed bottom-up credit analysis combined with top-down economic views. It is highly credit intensive and involves a globally coordinated team approach.
What are you typically looking for when deciding whether to invest?
We seek companies with sustainable business models, and consistent, positive cash flows. We also focus on fixed charge coverage, liquidity, and operating cash flow to ensure the amount of leverage is appropriate given the industry sector. Companies in cyclical industries should have less leverage and more liquidity to ride out commodity cycles.
How much more significant will company analysis be in this asset class compared with traditional assets?
In our view, fundamental credit analysis is the key to success in the leveraged loan asset class. Issuers are generally rated BB or B, and therefore have higher levels of risk compared with investment-grade issuers.
What risks are associated with loans, and how can you ensure you are compensated sufficiently for them?
The primary risk associated with leveraged loans is default risk. The key to avoiding credit loss is extensive analysis and monitoring of credits. We evaluate current spread levels to ensure we are being compensated for the expected level of default risk.
In the current environment, we believe spread levels are very attractive given our default expectations.
Are you being compensated enough for the associated illiquidity risk?
Although there has been a slight reduction in liquidity levels due to increased regulation, liquidity in the leveraged loan market is much less of a concern today than a decade ago.
Given current spreads, we believe investors are being well compensated for both illiquidity risk and default risk.
This information is for educational purposes only and is not intended to serve as investment advice. This is not an offer to sell or solicitation of an offer to purchase any investment product or security. Any opinions provided should not be relied upon for investment decisions. Any opinions, projections, forecasts and forward-looking statements are speculative in nature; valid only as of the date hereof and are subject to change. PineBridge Investments is not soliciting or recommending any action based on this information.
Nigel Green. El escándalo de los #panamapapers no representa a la industria offshore
The Panama Papers is a global investigation into the sprawling industry of offshore companies. According to the International Consortium of Investigative Journalists (ICIJ), which conducted the investigation of more than 11 million leaked files, “the investigation exposes a cast of characters who use offshore companies to facilitate bribery, arms deals, tax evasion, financial fraud and drug trafficking.” However the allegations made in the Panama Papers case are not representative of the international financial services industry, affirms the boss of one of the world’s largest independent financial advisory organizations.
According to Nigel Green, founder and chief executive of deVere Group, the leaked documents from Panamanian law firm, Mossack Fonseca suggest there might have been tax evasion on a grand scale, but in is opinion, those allegations are not representative of today’s wider international financial services industry. “The overwhelming majority of the offshore sector only provides services that are fully compliant and legal and they are used by law-abiding clients, who are simply looking for typically better returns, more investment options and greater flexibility.”
He believes that the idea of a ‘tax haven’, in the traditional sense of the phrase, is now somewhat outdated. “In today’s world, in which financial information is being automatically exchanged with tax authorities globally, it is almost impossible to hide money. No longer can people stash assets on ‘treasure islands’ and not expect to be caught.” Green mentions that in his experience working with expatriates and international investors, who have generally more transient lifestyles, “offshore accounts are preferable simply for convenience. They offer centralised, safe, flexible and international access to their funds no matter where they live and no matter to which country the individual moves to in the future. In addition, they offer a wide choice of multicurrency savings and investment solutions.”
Amongst the benefits of offshore financial centres, Green highlights that they allow those who qualify to do so, to use legal, bona fide international investment products to form part of a robust and sensible financial planning strategy. As well as that they allow companies to avoid getting taxed twice on the same income and that they offer legitimate financial refuge for those in countries where there is economic and political turmoil, such as extremely volatile currency and confiscation of assets.
Green claims that the current scandal is an opportunity “to further enhance the effectiveness and credibility of these international financial centres and the sector. This is especially important as the industry is set to grow exponentially in the coming years as individuals and companies become ever more globalized.”
CC-BY-SA-2.0, FlickrPhoto: Pablo Blázquez Photo. Claudiana Ramirez and Carlos Hernandez-Artigas join the Relationship Managers’ Team at BigSur Partners
BigSur Partners, a multi-family office based in Miami, has expanded its team of Relationship Managers, with the addition of two experienced professionals: Claudiana Ramirez and Carlos Hernandez-Artigas.
Carlos Hernandez-Artigas joins the team after 13 years at Forrestal Capital, a firm of which he was a founding partner. Hernandez-Artigas was the general counsel for Panamerican Beverages (Panamco) for over a decade, until its sale to Coca-Cola FEMSA in 2003. His legal training, operational experience, extensive experience in both mergers and acquisitions, and advice to multi-jurisdictional families strengthen the Big Sur team. He is a member of the Board of Directors for Arcos Dorados and for Iinside, a Californian technology company.
Meanwhile, Claudiana Ramirez, a Colombian lawyer with a master’s degree in law from the American University, has over 18 years experience as a financial advisor to UHNW Latin American clients. Prior to joining BigSur Partners, she worked at Merrill Lynch, Credit Suisse and RBC Wealth Management.
Mercer Advisors and Kanaly Trust last week announced that they have reached a definitive agreement to merge. Upon the merger completion, the combined company will manage assets exceeding $8 billion making it one of the largest independent wealth managers in the United States. Terms of the private transaction were not disclosed.
The combined company will be led by David H. Barton, Chief Executive Officer of Mercer Advisors. Mercer Advisors was acquired by Genstar Capital, a private equity firm, last year. Kanaly Trust is owned by Lovell Minnick Partners, a private equity firm that invests in the financial and related business services sectors, which will retain a stake in the combined company.
Mercer Advisors is a total wealth management firm that provides fee-only comprehensive investment management, financial planning, family office services, retirement benefits and distribution planning, estate planning, and tax management services. Based in Santa Barbara, Mercer has over $6 billion in assets under management and more than 5,000 clients.
Kanaly Trust provides comprehensive wealth management and financial planning and trust/estate services to families, individuals, and estates. The Houston-based company manages and advises on assets totaling over $2 billion on behalf of more than 500 families, and serves as the trustee or executor for estates totaling more than $2.5 billion.
“This transaction brings together two great companies and creates a strong partnership of people who have the benefit of a stronger platform from which to offer expanded services with the personal and customized service clients demand,” said Barton. “Genstar has been instrumental in helping us rapidly grow our company, and we are well-positioned to build on our momentum. Paramount in Kanaly Trust’s decision to join Mercer Advisors was our shared commitment to the highest level of service, which makes this combination such a great fit.”
“The merger with Kanaly Trust is a significant step forward towards scaling a national wealth management firm to a broader base of sophisticated clients,” said Anthony J. Salewski, a Managing Director at Genstar. “This transaction combines the complementary resources of two important players, and we are excited about this transformative partnership. We are pleased with Mercer Advisors’ progress, led by Dave, and we plan to continue to invest in and support the company as it continues to build its presence in the wealth management sector.”
“This merger brings together two world-class wealth management firms, which will allow us to expand client resources beyond the high-levels we have today,” noted Drew Kanaly, Chairman of Kanaly Trust. “Our extensive experience working with high-net-worth entrepreneurs and executives, and family offices is highly complementary to Mercer Advisors, and this partnership will allow us to provide those services on a national level.”
“The talented Kanaly Trust team remains focused on providing high touch, highly personalized financial advice and customized solutions, which we believe will continue to be in high demand among clients,” said James E. Minnick, Co-Chairman of Lovell Minnick Partners. “We look forward to our continued involvement and support in working with Mercer and Kanaly in growing the combined company.”
The merger is subject to customary regulatory approval.
Investors domiciled in Europe and Asia are shifting their attention in regards to sector allocation says trendscout, a service offered by fundinfo that measures fund interest based on online views of their 16+ million fund documents database.
According the their latest insight, Technology and HealthCare had attracted a lot of interest for quite some time, but the tide has recently turned. HealthCare has been losing steam since last fall, and Technology has corrected from its year-end rally. Investor’s focus is now shifting towards depressed cyclical sectors like Gold Mining and even towards Physical Gold ETFs:
Other trendscout highlights include that amongst the categories losing attention are Equity Europe, Equity Japan and Fixed Income Relative Value, while Equity World, Flexible Allocation and Equity Gold Mining are gaining attention with the iShares Core and Comstage driving interest for Equity World.
Other funds gaining attention according to trendscout are:
Foto: Mike Beales
. Julius Baer aumenta su participación en Kairos en un 60,1%, hasta alcanzar el 80%
Julius Baer yesterday announced that the transaction to acquire an additional stake of 60.1% inKairos Investment Management for EUR 276 million (US$ 314,51 million) was completed on 1 April 2016, bringing the Group’s total ownership of Kairos to 80%.
Julius Baer first announced the transaction to increase its stake in Kairos by acquiring an additional 60.1% of the Milan-based companyin November 2015, following its initial purchase of 19.9% in 2013, and has since then received the relevant regulatory approvals.
The executive management of Kairos will remain unchanged and the transaction will significantly reinforce Julius Baer’s and Kairos’ long-term position in Italy and further fuel Kairos’ ambitious growth trajectory.
Kairos was established as a partnership in 1999 and today employs a total staff of over 150. The company is specialized in wealth and asset management, including independent best-in-class investment solutions and advice. As at 31 December 2015, Kairos’ assets under management had reached over EUR 8 billion (US$ 9,12 billion), up from approximately EUR 4 billion (US$ 4,56) billion when Julius Baer and Kairos started their strategic partnership in 2013.
Photo: Jürgen Mossack, co-founder of Mossack Fonseca/The International Consortium of Investigative Journalists. The Panama Papers, Another Reason Why The Offshore Industry Should be More Transparent
Yesterday’s leak from the International Consortium of Investigative Journalists (ICIJ) lays bare the extent to which corruption, tax evasion, and other criminality is made possible by the global offshore industry. Over 60 media outlets collaborating with the ICIJ are publishing a series of stories based on documents leaked from the prominent Panama-based law firm Mossack Fonseca.
This firm is one of the world’s top creators of shell companies, corporate structures that can be used to hide ownership of assets. The law firm’s leaked internal files contain information on 214,000 offshore companies connected to people in 200 countries and territories. The data include emails, financial spreadsheets, passports and corporate records revealing the secret owners of bank accounts and companies in 21 offshore jurisdictions, from Nevada to Hong Kong to the British Virgin Islands.
While the creation of these companies does not constitute any crime, using them to evade taxes or launder money, does. That is why organizations like Global Witness are calling for tax havens to end the secrecy that enables this abuse. “This investigation shows how secretly owned companies, many of them based in the UK’s tax havens, can act as getaway cars for terrorists, dictators, money launderers and tax evaders all over the world. The time has clearly come to take away the keys, by requiring the collection and publication of information on who really owns and controls these companies. This would make it much harder to launder dirty money and leave the rest of us safer as a result,” said Robert Palmer, campaign leader at Global Witness.
Meanwhile, Verdict Financial says that the Offshore Wealth Management will endure this latest crisis. Andrew Haslip, Verdict Financial’s Head of Content in Asia-Pacific for Private Wealth Management, comments that “The data leak from offshore law firm Mossack Fonseca has made headlines around the world. But it will have little direct impact on the amount of wealth offshored as High Net Worth (HNW) clients no longer book assets abroad to shelter wealth from tax or prying eyes.” Indeed the Panama Papers leak is, by all accounts, the largest to date and appears to have snagged a number of high-profile clients, including celebrities, politicians and businessmen. No doubt another round of investigations by tax authorities will be forthcoming, followed by hefty fines and, in a few rare instances, criminal charges. “However, the leak is not likely to significantly impact the offshore wealth management sector. Offshore wealth managers have been dealing with the decline in client anonymity for quite some time, and the Panama Papers are simply the biggest leak to date. Ever since automatic disclosure became the standard in the wake of the financial crisis, the industry has been transitioning away from client anonymity as an impetus for investing offshore.”
According to the most recent Global Wealth Managers Survey from Verdict Financial, in 2015 the top two reasons for investing offshore globally were HNW clients expecting both better returns offshore and access to a better range of investment options. Client anonymity barely registered, way down in eighth place.
“As long as HNW clients remain focused on the search for yield and superior investments, they will be attracted to the more freewheeling offshore sector. Offshore financial centres such as Singapore, Hong Kong, the UK, and the US (and even perennial whipping boy Switzerland) that can offer the sophisticated investments prohibited in more tightly regulated onshore retail investment markets will continue to see strong inflows.” Haslip concludes.
Amongst the leak the ICIJ includes a list of the Banks involved:
