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He believes that the idea of a ‘tax haven’, in the traditional sense of the phrase, is now somewhat outdated.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:
Photo: Proclos . Bill Gross: "Investors Cannot Make Money When Money Yields Nothing"
In his latest monthly outlook, Bill Gross mentions that negative interest rates are real but investors seem to think that they have a Zeno like quality that will allow them to make money, otherwise why would a private investor buy a security at minus basis points and lock in a guaranteed loss? The bond guru states that “zero and negative interest rates break down capitalistic business models related to banking, insurance, pension funds, and ultimately small savers. And although under current conditions “they can’t earn anything! … many of them are using a bit of Zeno’s paradox to convince themselves that they will never reach the loss-certain finish line at maturity.” But as Gross mentions, some investor has to cross the finish/maturity line even if yields are suppressed perpetually, which means that the “market” will actually lose money.
And this applies to high yield bonds and even stocks. “All financial assets are ultimately priced based upon the short term interest rate, which means that if an OBL investor loses money, then a stock investor will earn much, much less than historically assumed or perhaps might even lose money herself.” The reality, according to Gross, is that Central banks are running out of time. Their polices consisting of QE’s and negative/artificially low interest rates must successfully reflate global economies or else markets, and the capitalistic business models based upon them and priced for them, will begin to go south.
According to him, during 2017, the U.S. needs to grow 4-5%, the Euroland 2-3%, Japan 1-2%, and China 5-6% so that central banks can normalize rates or “capital gains and the expectations for future gains will become Giant Pandas – very rare and sort of inefficient at reproduction… Investors cannot make money when money yields nothing.” He concludes.
You can read the full letter in the following link.
Robert Hackney, Senior MD, First Eagle Investment Management, which advises the First Eagle Amundi International Fund - Courtesy photo. Making More, by Losing Less: Amundi First Eagle’s Pure Value Strategy
Robert Hackney is Senior Managing Director for First Eagle Investment Management, which advises the First Eagle Amundi International Fund, a fund that has been in operation for the past 20 years, and boasts a volume of assets under management of 6,45 billion dollars. We have had the opportunity to talk to him about the fund and its investment philosophy.
This fund is presented with the slogan “Making more, by losing less”, but what is really the philosophy of your strategy?
The manager explains that at First Eagle they follow Ben Graham’s – the father of Value Investing- investment philosophy, as set out in his book “The Intelligent Investor”. He believes that “Investors should look for opportunities to grow their wealth, but above all to preserve it. If an investor is comfortable investing in a company whose intrinsic value is higher than its stock market listing, you can be sure he is minimizing the risk of capital loss. “
Quoting Ben Graham, Hackney refers to the “margin of safety” concept: “there must be a difference between the intrinsic value of a stock and its market price, and when there is a significant discount in relation to the intrinsic value, it’s the time to buy.” Hackney believes that “investment should be approached by analyzing the fundamental value of a company, its ability to generate cash flow, so we can get to identify companies that are overvalued in order to move away from them,” this is when the motto “making more, by losing less” acquires its full meaning: “When the bubbles of overvalued stock burst is when our fund earns more“, because it loses less than the indices, in which the items with more weight tend to belong to overvalued popular companies.
“The only way to buy at a cheap price is by investing in companies which are not very popular.” Graham believes we can find value in undesired and unwanted companies, as could currently be the case with the energy industry, unattractive to most managers, “but which are, nevertheless, the ones we have added to our portfolio during the last six months”.
In short, the philosophy of the fund is to select companies for their intrinsic value and fundamentals, thus avoiding large unrecoverable losses.
What is the current level of cash in the strategy? And six months ago? What has changed? And gold?
“We use liquidity as a residual item while waiting to find good opportunities, preserving purchasing power, in order to have the opportunity to buy when we really think we should do it. When the market is cheap, we have little liquidity in the portfolios, and vice versa. We currently have 15% in cash, this item has historically been 10%, and the time it has been at its highest, during the second quarter in 2014, it reached 27%”
“With respect to gold, we have been buying for a year and a half, and the idea is to always maintain a 10% weight in our portfolio, which is what we have now, and we use it as a potential hedge against market decline and possible financial hardship and policies. During the period 2008-2011 the value of gold increased much faster than the value of shares, and as a result had to sell gold so as not to exceed 10%. In 2012 the value of gold began to fall and that of shares began to rise, therefore, we had to start buying to maintain that percentage.”
As Hackney points out, gold plays no role in the global economy. It has no industrial use and is either intrinsically worthless or intrinsically priceless, depending upon the state of affairs in the world. Humans have used it as currency and throughout history it has been the mirror of the world of finance and the barometer of investor confidence. In 1999, with an almost perfect global economic situation, gold traded at $ 300 an ounce, in 2016 it trades at $ 1,200, reaching $ 1,800 an ounce during the most tumultuous time globally.
The portfolio is constructed searching for balance and protection among the various items in the portfolios, thus minimizing risk exposure.
Are there good buying opportunities during a market correction? Where? Which sectors?
“Yes, there are good opportunities to be found within the energy sector and oil companies, some examples are Suncor Energy and Imperial Oil, Ltd., both Canadian companies, or Phillips 66. These are companies with healthy balance sheets that have little debt and which will survive. We need energy and oil, and if our investment horizon is long term, we can safely keep these companies in the portfolio,” says Hackney.
The expert finds other opportunities in markets such as Hong Kong, in which “real estate companies have great potential, as a result of fears and the collapse of the Chinese market are shifting activity and development to the Hong Kong market.” Finally, Hackney adds that the strategy is very interested in holding companies such as Jardine Matheson, Investor AB or Pargesa. “Generally they tend to be family-controlled companies that have a philosophy that fits perfectly with ours.”
One of the sectors which is not usual for this strategy is the banking sector. “We don’t have any European banks, since they are heavily indebted and it’s difficult to independently assess their assets. We do have a couple of U.S. banks in the portfolio, one is U.S. Bancorp and the other is BB&T. “
We have probably gone through a long period in which the “growth” stocks have behaved better than the “value” stocks. What has to happen for the market to be based on the fundamentals again?
“When the market is bullish and growing rapidly, we think it’s time to take positions in cash and gold, thus being below market. But we know that those periods are not eternal and that they often end up falling sharply, and that’s when we’ll return to buy,” said Hackney. “Humans react to fear and markets are a great school of the irrational, and can remain irrational for longer than we can remain solvent. For example, one may think Amazon is overvalued but you never know when, or if, the correction will come. For that reason we do not put ourselves short.”
How do you see current valuations?
“Currently in certain parts of the market there are companies with very attractive valuations such as in some parts of the global real estate sector; or companies with some exposure to the oil industry but which are not producers of the commodity, but have very attractive prices and they are what we are looking to buy,” says the manager. “The valuations we don’t like very much are in the social media or new tech sectors, because they are no longer adjusted in price and do not interest us.”
Do you think the proliferation of generic and factor based ETFs affect your investment style?
“In the short term, the proliferation of ETFs that replicate indices have dramatically increased market volatility, the spread is wider and the prices do not conform to reality, but the long-term effect is positive for selective managers who know what to buy, allowing them to acquire companies with artificially low values.” Hackney points out that they are really two completely opposite styles. “Our philosophy is that if you want to beat the market, it is impossible to achieve it by following the index, you must stop staring at the screen and look for the intrinsic value of the companies.”
CC-BY-SA-2.0, FlickrPoto: HelveticaFanatic
. CBRE Changes Leadership In Its Real Estate Investment Subsidiaries
CBRE Group has announced senior leadership changesin its real estate investment subsidiaries, CBRE Global Investors – a global real estate investment management firm – and Trammell Crow Company – a U.S. real estate development services business. The announcement was made by Bob Sulentic, CBRE’s President and Chief Executive Officer.
Matt Khourie, who has served as CEO of CBRE Global Investors for the past six years, has been named CEO of Trammell Crow Company. This move marks a return to the real estate development business for Mr. Khourie, who was a senior leader at Trammell Crow Company for 29 years before joining CBRE Global Investors in 2009
Ritson Fergusonhas been named CEO of CBRE Global Investors. Mr. Ferguson has served on Global Investors’ Global Investment Committee since 2011 and as Chief Investment Officer since 2015. He will also remain as CEO of CBRE Clarion Securities, the company’s real estate securities business.
Danny Queenan, who was named COO of CBRE Global Investors in August 2015 and also served as CEO of Trammell Crow Company since 2011, will now concentrate the vast majority of his time and energies on running CBRE Global Investors’ operations and strategic initiatives. Although he will not have a day-to-day role in Trammell Crow Company, he will remain active in this business at a strategic level, serving on its Board of Directors.
Courtesy Photo. FirstBank Florida Opens an Office on Brickell for Their Platinum Banking Division
FirstBank Florida, a leading boutique bank offering an extensive suite of services for personal and professional financial requirements, has opened its flagship location, the bank’s 11th South Florida location and first branch within Miami’s Financial District, at 848 Brickell Avenue. In line with South Florida’s tremendous influx of business and residential growth over the past several years – particularly Brickell – FirstBank Florida will also introduce a new service line tailored to meet the needs of individuals and organizations residing in its newest locale and beyond.
“We have been fortunate to effectively support our customers’ requirements personally and swiftly while contributing to the region’s economic recovery,” said Calixto Garcia-Velez, Regional Executive and Executive Vice President of FirstBank Florida. “Now is the perfect time to operate our flagship location in the epicenter of the Southeast financial gateway to the world.”
FirstBank Florida has chosen to open a branch in Brickell to serve as the main hub of its Platinum Banking Division, a growing concierge-style offering for businesses and individuals – including those in the international sector – seeking white-glove service from a team of proven, professional bankers.
Ramon Casanova, Vice President and Branch Manager and a leader within the FirstBank Florida’s Platinum Banking Division, is spearheading operations at the Brickell location. Casanova brings more than 23 years of banking experience, 18 of which have been on Brickell.
“Our organization is driven by a set of values that stem from being one with the community,” continued Garcia-Velez. “From this ingratiation with our customers, we are keenly aware of the growing dynamics and demands placed upon them, and as such, we are continuing to evolve and enhance our personalized services to extenuate our commitment and ensure their objectives are met.”
