Photo: eric chan. Los inversores se decantan por el efectivo, mientras continúan los miedos de que las políticas monetarias no funcionen
According to the latest BofA Merrill Lynch Global Research report, conducted from April 1-7, 2016, average cash balances jumped up to 5.4% from 5% in March, approaching the 15 year-high of 5.6% recorded in February While the three top most crowded trades are Shorting Emerging Markets, Long US dollar, and Long Quality Stocks.
“With valuations for bonds and equities at their seventh highest reading in 13 years, investors may be turning to cash to protect against the downside while shunning risk assets where valuations constrain the upside. Range-based trading is likely to continue,” said Michael Hartnett, chief investment strategist at BofA Merrill Lynch.
Regarding the US Monetary Policy, the vast majority of fund managers still expect no more than two Fed hikes in the next 12 months, while “Quantitative Failure” remains one of the biggest tail risks. Meanwhile in Europe, a record percentage of fund managers see EU monetary policy as “too stimulative” while confidence in this policy as an economic growth driver drops sharply to 15% from 24% in March
The survey also noted that investors have rotated into staples and cash, from Japan, discretionary, commodities and Eurozone. Allocation to Japanese equities marked its first underweight positioning since December 2012.
According to Manish Kabra, European equity and quantitative strategist, “Global investors highlight Quantitative Failure as the biggest tail-risk, followed closely by Brexit. However, despite significant convergence in previously extreme regional preferences, Europe remains the most attractive region globally.”
CC-BY-SA-2.0, FlickrPhoto: Moyan Brenn. PineBridge Investments Completes Fundraising for Structured Capital Partners III, L.P.
PineBridge Investments, the global multi-asset class investment manager, has announced the final close for PineBridge Structured Capital Partners III, L.P. (together with parallel partnerships, the “Fund”).
PineBridge completed the fundraising in March with US $600 million of aggregate capital commitments, surpassing its planned target amount of US $500 million. The Fund will invest in junior capital securities including mezzanine debt and structured equity issued by privately-owned middle- market companies across all sectors in North America.
F.T. Chong, Managing Director and Head of PineBridge Structured Capital, stated, “We are committed to being reliable and flexible providers of junior capital to middle market companies. We are pleased with the positive reception for our Fund. Most of the Limited Partners from our prior fund have signed up for this Fund and new investors include major institutions in the US as well as Europe, the Middle-East and Asia.”
Generali Investments Europe appointed Jörg Asmussen as an independent director to the company’s Board of Directors, since April 1st.
Santo Borsellino, Chief Executive Officer of Generali Investments, says: “On behalf of everyone here at Generali Investments, I am delighted to welcome Jörg to our Board of Directors. His outstanding expertise, and the wealth of experience in international financial markets he brings to the Board, will be instrumental in reinforcing our international footprint and further driving our expansion in the European markets”.
Jörg Asmussen (49) has been State Secretary at the German Federal Ministry of Labour and Social Affairs between 2013 and 2015. Prior to that, he had been a Member of the Executive Board of the European Central Bank (ECB) from 2012 to 2013, and State Secretary at the German Federal Ministry of Finance (2008-2011), where he held a succession of positions before.
Asmussen replaces Antonella Baldino, who resigned as independent member of Generali Investments Board of Directors in March.
Daniel Pierce, foto cedida. Daniel Pierce, nuevo socio en accelerando associates
accelerando associates, a European fund distribution consultant, strengthens its capacities with the hire of Daniel Pierce from Wells Fargo in London. Pierce joins as a partner and will work with Philip Kalus in accelerando’s offices in Valencia.
Daniel Pierce has more than 16 years experience in the asset management industry, on both sides of the Atlantic. Pierce joins accelerando from Wells Fargo, where he worked as Investment Management Specialist EMEA. Prior to Wells Fargo, Pierce has held various positions at Citi, including Cross Asset Group Fund Sales EMEA in London, and Smith Barney in Dallas. Pierce has relocated with his wife and his two daughters from London to Valencia. “accelerando associates has built a stellar reputation and has an impressive client book. However, there is still a lot of room to develop the firm and client solutions further, which is an exciting opportunity“ says Pierce. “I trust I can make a meaningful contribution to accelerando’s further development“.
“I am, as all of my colleagues truly excited about Daniel joining us. He brings in a lot of additional experience, thorough technical knowledge and most importantly the right mindset to think beyond and to challenge widespread beliefs and practices in asset management as well as in fund distribution,“ states Philip Kalus, founder and managing partner of accelerando associates. “Our team of five combines now 70 years experience in the asset management industry, with 48 years experience in fund distribution, which provides a major competitive advantage versus our peers,“ continues Kalus. “In addition we have four different nationalities in the team and we speak five European languages fluently, which helps enormously to dive deep into different European fund markets and to get the nuances in fund buyer trends and requirements right.“
accelerando associates, founded in 2004, is a leading European fund distribution consultancy with offices in Frankfurt, London and Valencia and provides European fund distribution research and bespoke strategic advice to asset management firms worldwide.
Foto: Simon Cunningham
. El mercado de financiación alternativa online en Estados Unidos supera los 36.000 millones en 2015
The online alternative finance market, including crowdfunding and peer-to-peer lending, is exploding in the U.S., generating more than $36 billion in funding in 2015, up from $11 billion in 2014, according to a new report published by KPMG, the Cambridge Centre for Alternative Finance and the Polsky Center at the Chicago Booth School of Business.
“The emergence of new FinTech companies will continue to transform the financial services sector,” said Fiona Grandi, National Leader for FinTech, KPMG. “The pace of disruption is sure to accelerate, forging the need and appetite for collaboration among incumbents and non-bank innovators.”
Breaking New Ground: The Americas Alternative Finance Benchmarking Report analyzed online alternative finance activity across the Americas. Among its key findings is that financial, financial innovations and the technologies that enable them have exploded by 9x in just two years, from a total market size of $4.5 billion in 2013 to $36.5 billion in 2015 – the U.S. makes up 99 percent of that.
When analyzing the various funding models, the report found that marketplace/P2P consumer lending is the largest market segment in the U.S., responsible for more than $25 billion in 2015 and a total of $36 billion from 2013-2015. U.S. Businesses are also increasingly tapping into alternative finance to the tune of $6.8 billion in 2015 alone, which is significant when comparing the total for 2013 and 2014 of $10 billion.
Between 2013 and 2015, U.S. online alternative finance platforms have provided $52 billion in funding to individuals and businesses, according to the report. During that same time, these platforms facilitated roughly $11 billion of capital into 270,000 small and medium sized enterprises. In addition to consumer and business funding, the report also found that real estate models are scaling rapidly, generating nearly $1.3 billion in 2015.
The report points to several game-changing drivers of transformation that are impacting the banking industry, including the following:
Speed:Using algorithmic technology, credit decisions and underwriting takes minutes, not days.
Transparency:Investors and borrowers alike gain visibility into the loan portfolios, including risks and rewards.
Customer-centric:Platforms bring the “brick and mortar” branch into the on-demand and mobile application generation.
Data:Platforms have re-engineered the definition of credit worthiness. FICO may still be a factor, but it’s no longer the only factor.
Grandi added: “These changes are permanent benchmarks that banks must now rise up to meet. You may argue whether today’s unicorns will be here tomorrow; however, the shift towards the digital bank is indisputable.”
Foto: Davide D'Amico
. Londres se mantiene como mayor centro financiero mundial, por delante de Nueva York
Both cities gained four points in the ratings and London remains eight points ahead of New York. The GFCI, published recently by Z/Yen, is on a scale of 1,000 points and a lead of eight is fairly insignificant. The author continues to believe that the two centers are complimentary rather than purely competitive. A number of respondents commented that the uncertainty surrounding the possible exit of the UK from the EU is having a negative impact on London’s competitiveness at present.
London, New York, Singapore and Hong Kong remain the four leading global financial centers. Singapore has overtaken Hong Kong to become the third ranked center by just two points. Tokyo, in fifth place, is 72 points behind London. The top financial centers of the world are all well developed, sophisticated and cosmopolitan cities in their own right. Successful people are attracted to successful cities and it is perhaps no surprise that financial services professionals rank these centers so high.
North American centers fortunes in GFCI 19 are mixed. Of the financial centers in the USA, New York, Washington DC and Los Angeles rose in the ratings. The three leading Canadian centers fell in the ratings after strong rises in the past year. Toronto remains the leading Canadian center with Montreal in second and Vancouver in third.
Western European centers remain mired in uncertainty. The leading centers in Europe are London, Zurich, Geneva, Luxembourg and Frankfurt. Of the 29 centers in this region, 12 centers rose in the ratings and 17 centers fell. Rome, Madrid and Brussels, three centers closely associated with the Eurozone crisis have shown signs of recovery.
Latin America and the Caribbean suffer. All centers in this region, with the single exception of Mexico City fall sharply in GFCI 19. The offshore centers in the Caribbean (in common with the British Crown Dependencies listed under Western Europe) all suffered declines along with the Brazilian centers Sao Paulo and Rio de Janeiro.
Seven of the top ten Asia/Pacific centers see a fall in their ratings. Singapore, Tokyo and Beijing rose slightly in GFCI 19. Of the top ten centers in this region, Seoul and Sydney showed the largest falls.
Centers in the Middle East and Africa also fell in GFCI 19. Having made gains in GFCI 18 all centers in this region, except Casablanca, fell in the ratings. Dubai remains the leading center in the region, followed by Tel Aviv and Abu Dhabi. Casablanca rose 11 places and is now fourth in the region.
CC-BY-SA-2.0, FlickrPhoto: Walter-Wilhelm
. Momentum Building in U.S. Impact Investing Market
Private investments are a growing area of opportunity for asset managers looking to get into the impact investing space, according to the last issue of The Cerulli Edge – U.S. Monthly Product Trends Edition. Thus far, only a small portion of managers has penetrated the impact investing market. In Cerulli’s 2016 alternative investments survey, just 14% of institutional asset managers polled indicate that they manage alternative asset impact funds (or thematic investing funds).
The survey, conducted in partnership with US SIF, shows that over the next two to three years, more than half of asset managers offering responsible investment products expect high demand from foundations (56%) and high-net-worth (52%) investors. Moreover, the research reveals that more than half (52%) of consultants surveyed are evaluating and, in some cases, recommending impact investments to their private wealth and institutional clients.
Mutual fund assets dropped for the fourth straight month, losing 0.7% in February to end the month at $11.3 trillion. The continued decline is now entirely attributable to performance. Despite underlying market fluctuations, February brought little change to ETF assets, as they held steady at just about $2 trillion. Flows reversed course during the month and totaled nearly $3 billion for the vehicle.
Foto: SalFalko. Los colegios deberían enseñar educación financiera
Is financial literacy an important-enough skill that it should be taught alongside reading, writing and arithmetic? Most Americans seem to think so, according to a recent survey from RBC Wealth Management-U.S. and City National Bank.
The survey, conducted in mid-March, found that 87 percent of Americans believe that financial literacy should be taught in schools. Of those in favor of incorporating financial literacy into the classroom, 15 percent said instruction should begin as early as elementary. The rest (72 percent) said it should be taught in middle and high school.
“Having a basic understanding of how money, investing and our broader financial system works is critical in our society today. Yet there is a growing realization, particularly in the wake of the last financial crisis, that many people don’t understand budgeting, investing or how simple financial products like loans work,” said Tom Sagissor, president of RBC Wealth Management-U.S. “That puts them at a disadvantage not only during their working years, but as they begin to contemplate retirement.”
The same survey found that more than one-third of American adults (35 percent) received no instruction on investing — whether from their parents, school or someone else. Another 39 percent said they simply taught themselves.
“Money has long been considered a taboo topic, even among family,” said Malia Haskins, vice president, wealth strategist at RBC Wealth Management-U.S. “We’ve seen many of our clients struggle with how to talk to their kids about money. In fact, many ask their financial advisor to have the conversation with their kids because they aren’t comfortable doing so themselves.”
But data suggests this trend may be changing. While 38 percent and 37 percent, respectively, of Baby Boomers (ages 55 and older) and GenXers (ages 35 to 54) said no one taught them about investing, only 29 percent of Millennials (ages 18 to 34) claim to have had the same experience. In fact, 29 percent of Millennials said they learned about investing from their parents and 22 percent said they learned in school. That’s a vastly different experience than that of Baby Boomers, only 10 percent of whom said they received such instruction at home and 9 percent of whom said they did in the classroom.
Foto cedida. Telecommunications, Healthcare, Consumer Products or Services: Sectors in which Muzinich sees Value in High Yield
The high yield debt market is worth $ 1.3 trillion in the US alone, that of European high yield is about 500 billion, and the corporate debt market of emerging countries is growing. Erick Muller – Head of Markets and Products Strategy at Muzinich, who recently visited Miami- thus explained the scope of the huge , corporate credit industry, in which his company has focused since its foundation in 1988. The strategies managed by the management company are neither limited to high yield, since it also invests in investment grade securities, nor to a fixed term.
Time to invest in energy…
Muller believes that the price of the oil barrel will remain low and volatile, and avoids investing in the US energy sector, except in those companies not sensitive to the price of crude oil. “Now is not the time to invest: with the barrel price remaining at around US$ 40, 30% of companies could fail in the next 12 months. There are sectors that represent better opportunities, such as telecommunications, cable television, healthcare, and consumer products or services, to name a few,” he said in an interview with Funds Society.
Equities or corporate debt ?
According to Muller, there is starting to be some competition between equities and high yield corporate debt, and there seems to be a greater flow towards the latter. “Now is the time to enter the corporate debt market, but staying within securities rated BB or B, and away from emission with a C rating,” says Muller, explaining that the crisis will continue, and lower quality debt can suffer.
Now is also the time to be tactical, because the correlations are very large; and flexible, in order to afford seizing opportunities and exiting at the appropriate time, without being tied down. Another one of this strategist’s keys for investment in the current market environment is diversification, more sophisticated diversification which dilutes risks within each asset class, while allowing him to remain loyal to his convictions.
The US high yield market, which is very domestic economy oriented, is attractive for its fundamentals (except for some activities such as oil or mining), The European is attractive for its lower volatility, while the emerging markets could be attractive for their valuation.
“We are very cautious about global growth. The Fed raised rates for reasons of financial stability and not to relax overheating in the US economy,” said the strategist, who does not believe that the conditions for more than one rate hike in 2016 are given, but also warns that we will have to wait until June to be clearer as to how the year will end.
In his opinion, the most appropriate strategies for this environmentare the short-term US high yield debt strategy, absolute return (global, tactical, and long-short), and those focused on long-term US high yield debt.
Sovereign wealth funds and central banks are emerging as large scale providers of collateral, providing a much needed boost in liquidity to the global financial system, according to a new study by BNY Mellon and the Official Monetary and Financial Institutions Forum (OMFIF).
The report, Crossing the Collateral Rubicon: A new territory of challenge and opportunity for sovereign institutions, notes the liquidity boost is coming at a welcome time when financial institutions face challenges from new regulations on risk mitigation and balance sheet management. Two dozen sovereign institutions with more than $2 trillion in assets under management took part in the study. Thirty-seven percent said they are in advanced stages of considering collateral trades or already implementing them. Sixty-six percent reported that enquiries from potential counterparties in the trades were increasing.
“Collateral is becoming the sole determinant of institutions’ ability to engage in financial transactions in the cash or derivatives markets,” said Hani Kablawi, chief executive officer of BNY Mellon’s Asset Servicing business in EMEA. “Since the financial crisis, new regulations have placed a premium on counterparties gaining access to high-quality collateral. Yet, central bank macroeconomic policies have reduced the supply of collateral. This has produced a great challenge for markets and a large-scale opportunity for official holders of these securities such as sovereign wealth funds.”
Quantitative easing programmes have resulted in central banks acquiring significant amounts of government securities, moving them away from traditional suppliers of liquidity such as banks and brokerage companies. These securities are among the most sought after for collateral trading. Governments that issue the highest-rated debt have had lower debt issuance in recent years, further constricting the supply, the report said.
“We now have a situation in which the lower-rated securities that cannot be used for collateral trading are circulating more freely than the higher-rated securities, which have been taken out of the markets,” Kablawi adds. “While the mismatch between demand and supply for credit is evident in the US and the UK, it has become particularly acute in continental Europe and has been a major factor behind the sluggish recovery. Sovereign institutions that provide collateral are playing an important part in overcoming these liquidity shortages and limiting market volatility.”
In turn, the falling oil price has helped to drive up demand for collateral from energy supplying nations. One chief risk officer for a Middle East sovereign fund who took part in the study said: “In the current environment of low oil prices, the liquidity framework becomes more important so investment activity can continue. We must make sure the liquidity profile is appropriate, prioritising liquidity over returns. In the future, maintaining the liquidity management framework is the key.”
You can read the full report in the following link.
