EFG Asset Management (EFGAM) – an international provider of actively-managed investment solutions – announced it has brought the management of its top-performing, award-winning New Capital US Growth Fund in-house.
The strategy underpinning the New Capital US Growth Fund was launched for EFGAM in July 2010; based on the firm’s convictions of multi-year growth across the Atlantic, and has since successfully delivered long-term outperformance for clients.
Core members of the existing investment team have officially joined EFGAM as part of the transition. Citywire A rated, Joel Rubenstein, who has been co-lead on the fund since inception will continue as lead manager, working alongside senior portfolio managers Tim Butler and Mike Clulow, as well as research analyst Chelsea Wilson and client portfolio manager Don Klotter, all of whom have been running the fund since inception. There will be no change to the investment process. The US team will continue to be based in Portland, Oregon, and will remain focused on managing the fund. In addition, they will now have the benefit of working alongside other New Capital portfolio managers and analysts with access to the broader global team of investment professionals.
The New Capital US Growth Fund has proven to be a successful component of the wider New Capital fund range, which comprises seven equity funds, three fixed income funds and one multi-asset fund. The Fund has a 5-star rating by Morningstar and a 5 crown rating from FE Trustnet. Compared to the universe of US large cap growth equity funds (approximately 330 funds), it has consistently performed in the top quartile over 1, 3, 5 year periods and since inception. – Moz Afzal, CIO, EFG Asset Management: “This move reflects the successful growth of our New Capital funds franchise. At the time of the fund’s launch we wanted to ensure we had the best managers to implement our strategic views. The strategy has been very fruitful for us, and we are now in the position to provide clients with the best service possible by incorporating all aspects of the fund’s management under the New Capital umbrella.” – Joel Rubenstein, lead portfolio manager: “We have always worked extremely closely with the EFGAM team. Given the success of the fund we are looking forward to taking the relationship to the next stage. We are confident that by joining a much bigger organization with a larger analyst platform, cross-collaboration will enhance the investment process and ultimately performance for clients.”
Foto: Abel Pardo López
. Bill Gross: En renta fija, hay que buscar vencimientos cortos y apalancarse para ganar en un entorno de tasas negativas
In his latest monthly outlook, Bill Gross compares the sun’s lifespan and that of capitalism and inmediate needs, “our finance based economic system which like the Sun has provided life and productive growth for a long, long time – is running out of fuel and that its remaining time span is something less than 5 billion years,” he writes on his letter, adding that “our global, credit based economic system appears to be in the process of devolving from a production oriented model to one which recycles finance for the benefit of financiers. Making money on money seems to be the system’s flickering objective. Our global financed-based economy is becoming increasingly dormant, not because people don’t want to work or technology isn’t producing better things, but because finance itself is burning out like our future Sun.”
He mentions that what people should know is that the global economy has been powered by credit. And that with negative interest rates dominating 40% of the Euroland bond market and now migrating to Japan, it is less likely that someone will loan money knowing they will receive less in the future. “Negative investment rates and the expansion of central bank balance sheets via quantitative easing are creating negative effects that I have warned about for several years now.” He adds that governments, pension funds and corporations are suffering because they cannot earn enough on their investment portfolios to cover the promises, and that “the damage extends to all savers; households worldwide that saved/invested money for college, retirement or for medical bills. They have been damaged, and only now are becoming aware of it. Negative interest rates do that”.
In his opinion, “the secret in a negative interest rate world that poses extraordinary duration risk for AAA sovereign bonds is to keep bond maturities short and borrow at those attractive yields in a mildly levered form that provides a yield (and expected return) of 5-6%.”
Standish Mellon Asset Management Company LLC, the fixed income specialist for BNY Mellon Investment Management, announced that Vincent Reinhart will join the firm as Chief Economist.
Reinhart, who will report to David Leduc, Standish’s Chief Executive Officer and Chief Investment Officer, is a recognized leader in economics and the investment management industry. He will serve as a key resource for Standish’s investment team and support developing the firm’s macro framework which is a key part of Standish’s investment process across all strategies.
“We are delighted to have someone of Vincent’s caliber and expertise to further strengthen our global macroeconomic research platform. He will provide additional scope to our team based investment process and will support our focus on developing innovative fixed income solutions,” said David Leduc.
Reinhart succeeds Tom Higgins who passed away late last year. “2015 was difficult as we said goodbye to a dear friend and remarkable colleague, but we find ourselves fortunate to add Vincent to the team,” continued Leduc.
Prior to joining Standish, Mr. Reinhart held the roles of Chief U.S. Economist and Managing Director at Morgan Stanley and is a visiting scholar at the American Enterprise Institute (AEI). In addition, Reinhart worked at the Federal Reserve for twenty-four years where he was responsible for directing research and analysis of monetary policy strategies and the conduct of policy through open market operations, discount window lending, and reserve requirements. Reinhart received his undergraduate training at Fordham University and has graduate degrees in economics at Columbia University.
“I am excited to be able to join Standish, a firm with an impressive history, strong team and excellent investment capabilities,” stated Reinhart. “I look forward to working with my new colleagues to meet the needs of our clients and to help them navigate ever changing market conditions.”
CC-BY-SA-2.0, FlickrFoto: EvelynGiggles, Flickr, Creative Commons. La consolidación de la industria europea de fondos no parará aunque el mercado acompañe
The Thomson Reuters Lipper ‘Launches, Liquidations & Mergers in the European Mutual Fund Industry: Q4 2015’ report, available here, highlights the following trends int he industry:
Over the course of the year 2015 the European fund industry launched 2,162 new products, while 1,573 funds were liquidated and 1,127 products were merged into other funds. This meant the number of products available to European investors decreased by 538 funds during the year 2015.
At of the end of December 2015 there were 31,931 mutual funds registered for sale in Europe.
Luxembourg continued to dominate the fund market in Europe, hosting 9,174 funds, followed by France, where 4,572 funds were domiciled.
For Q4 2015, a total of 704 funds (444 liquidations and 260 mergers) were withdrawn from the market, while only 563 new products were launched.
“Since the European fund industry enjoyed high net inflows for 2015, it is surprising the industry was still cautious with regard to fund launches. There were a number of mergers between asset managers over the last few years, which led to a number of duplications in the respective product ranges that need to be cleared to achieve economies of scale. In addition, there was still a lot of pressure on asset managers with regard to profitability, which also drove the cleanup of the product ranges. This pressure might even increase, once the new regulatory frameworks are fully applied, since not all the costs related to regulation can be passed on to investors and will therefore become a burden on the asset management industry”, explain Detlef Glow, Head of EMEA Research, Thomson Reuters Lipper, and Christoph Karg, Content Specialist Germany & Austria, the authors of the report.
“In this regard the consolidation of the European fund industry might continue over the foreseeable future, and even a supportive market environment —with rising equity and bond markets—might not stop the trend. But, the consolidation should at least slow, since increasing assets under management can lead to higher income for fund promoters”.
“We might also see an even higher pace of consolidation in the number of funds available to investors in Europe, if the volatility investors experienced in the markets during December 2015 and January 2016 continues over the course of 2016”.
Foto: theaucitron
. Cambian las necesidades tecnológicas del family office
New research “Technology in the Family Office: Navigating New Solutions,” from Family Office Exchange (FOX), has identified a shift in recommended best practices for family office technology. The report details the ways that technology’s rapid development and the emergence of the cloud have disrupted the traditional approach to family office technology, and why it should lead to a change in the way offices think about that technology in the first place.
In the past, family offices typically had to custom build their technology infrastructure in order to meet their specific needs. It was an expensive, cumbersome process—and one that could leave an office unable to agilely adapt to a family’s evolving needs.
In recent years, however, two significant developments in wealth management technology have proven to have a positive impact on family office technology product selection and investment: Internet/Cloud delivery of wealth management applications, and functionality. Thanks to the cloud, family offices can now maintain their own “holistic” platforms, taking advantage of the wide variety of existing wealth management and financial service applications to design a services model that fits their unique needs.
“The sheer speed of technology development,coupled with the dramatic increase in technology adoption rates for family clients in their day-to-day lives, has created a sense of urgency for today’s family office,” said Steven Draper, senior technology consultant at FOX and author of the whitepaper. “Cloud-based solutions have the potential to change the way family office staff interacts with its client base. This shift requires a new mindset when it comes to an office’s investment in technology—family offices must act to remove outdated systems and processes in order to keep pace with modern business practices in office efficiency, security, service levels and execution.”
To design and implement this new cloud-based infrastructure, family offices need to make sure they have access to an expert who understands the unique needs of their office and the services it provides, concludes the document.
Michael Dobson, Chief Executive since 2001, will step down from the role and be succeeded by Peter Harrison on 4 April 2016. Peter Harrison joined Schroders in 2013 as Head of Equities, becoming a Board member and Head of Investment in 2014.
He has had a long and successful career in asset management and has a deep knowledge of Schroders’ culture and values, having joined the firm as a graduate in 1988, re-joining Schroders in 2013. Andrew Beeson, who has been Chairman for the last four years and a member of the Board since 2004, will retire from the Board on 4 April 2016. The Board is pleased to announce that Michael Dobson will become non-executive Chairman, effective 4 April 2016. The Board is mindful of the UK Corporate Governance Code’s provisions and believes these appointments are in the best interests of the company and its shareholders. Succession planning has been a long-term priority for the Board and these appointments have been made after careful consideration and in consultation with major shareholders. The Chairman has written to all shareholders to explain the reasons behind these decisions and a copy of the letter is part of this release, together with a statement from Lord Howard, the Senior Independent Director, who led the selection process for the new Chairman. Massimo Tosato, Executive Vice Chairman and Global Head of Distribution, will retire as a Director of the Company and leave the firm on 31 December 2016. He joined Schroders in Milan in 1995 before relocating to London in 1999, was appointed to the Board in 2001 and has held a number of senior positions within the firm. Ashley Almanza, who joined the Board in 2011 as a non-executive Director and is currently Chairman of the Audit and Risk Committee, has informed the Board that due to his commitments as Chief Executive of G4S plc, he will not seek re-election and will leave the Board at the forthcoming Annual General Meeting (AGM) on 28 April. Rhian Davies will become Chairman of the Audit and Risk Committee at the conclusion of the AGM.
Lord Howard, the Senior Independent Director, said: “We are delighted that Peter Harrison will succeed Michael as Chief Executive. Peter has great experience of the investment industry and a deep knowledge of the firm, its culture and values. Michael Dobson is the outstanding candidate for the Chairman role and the Board’s unanimous choice. Michael has been an exceptional leader of the business for over 14 years. During that time, profits have reached a record level in excess of £600 million, assets under management have tripled and significant value has been created for shareholders. Schroders has built a highly diversified business with an exceptional pool of talent, and the firm is well placed for the future. Michael will be involved in supporting the firm’s relationships with its major clients, shareholders, strategic and commercial partners and regulators. On behalf of the Board, I would like to thank Andrew Beeson for his significant contribution to Schroders over the past decade including the past four years as Chairman. We wish him the very best for the future. Although he will not be retiring from the firm until the end of this year, I would also like to take the opportunity to recognise the enormous contribution Massimo Tosato has made to the firm over 21 years as head of our highly successful global distribution business working closely with Michael Dobson as a Director of the Company for over 14 years. He will leave to pursue his entrepreneurial ambitions with our very best wishes.”
Andrew Beeson said: “It has been a privilege to serve on the Board of Schroders for over 11 years. As I look back on my time at the company I believe it has never been in a stronger position than it is today. Michael and Peter will make a formidable team and the firm could not be in more capable hands. I would like to thank Ashley for his contribution to the Board and in particular as Chairman of the Audit and Risk Committee. The appointment of Rhian Davies last year anticipated the need to have a successor for Ashley as he had indicated his executive commitments might prevent him from committing to Schroders in the longer term. As Chairman, Michael Dobson will be reviewing the composition of the Board and will lead the search for new non-executive Directors.”
Ashley Almanza said: “I have enjoyed my time as a Director of Schroders. It is a company I admire greatly. I am fully supportive of the changes announced today and I wish Peter and Michael every success in their new roles.”
CC-BY-SA-2.0, FlickrPhoto: duncan_idaho_2007
. An Ocean Divides European and U.S. Banks
When the market was “throwing its tantrum” in February, Brad Tank, Chief Investment Officer, Neuberger Berman, was in Canada and witnessed how the local financial press marveled at how strong Canadian banks were, having “only” lost 7-10% of their equity value year-to-date while their European and U.S. counterparts were down 20-30%.
“To be frank -he says-, I was marveling, too. One of the many explanations offered for the panic around U.S. bank securities was the amount of bad energy-industry debt they may be exposed to. But if anything, Canada’s banks are even more exposed to these risks. Muted loan demand, negative benchmark rates, flat yield curves, oil and gas exposures—there’s a bit of truth in all of these explanations for the global banking sell-off. By far the most important thing, however, was simple technical selling pressure.”
When the core business is borrowing money short-term and lending it long-term, the current environment is not great for profitability. That is meaningful for shareholders, “but in most businesses profitability has to deteriorate a lot before it affects creditors—in fact a small hit to profitability can be good for bondholders because it can make management more cautious.”
The expert considers banks are different. Because bank leverage is increasingly tightly regulated, sentiment that hits equity valuations can be very damaging if it brings a highly-leveraged bank close to its minimum regulatory-capital ratio. That can make nervous bondholders demand a bigger premium to take the risk of being “bailed-in” in the event of a bank failure. Additional tier-1 capital in Europe’s banks can even be written-down or converted to equity before a bank fails.
But the fact is, he explains, that U.S. banks are not highly leveraged. Since the financial crisis, capital-to-asset ratios have climbed from around 9% to 12%, on average. Moreover, after plummeting in the aftermath of the financial crisis, return on equity has climbed back above 9%. Finally, he adds: “U.S. banks are the best-managed in the world and most have good succession plans in place”. That is why the firm thinks U.S. bank debt is such good value now.
It’s more difficult to enthuse about Europe’s banks although there are bright spots. Many Scandinavian banks entered the 2007-09 crisis efficient and well-capitalized, and have since captured more market share, Tank points out. Elsewhere, high costs, a fragmented international market that discouraged competition and a greater focus on less profitable relationship-based businesses led to structurally lower return on equity and, to compensate for that, higher leverage than in the U.S.
He considers as a reaction to the crisis, Europe’s regulators were much slower to demand action—Eurozone banks still run with only an 8% capital-to-assets ratio, on average—and return on equity has barely recovered from the 4-5% levels it fell to in 2008-09. “That is why we saw a much sharper reaction in European bank bonds than we did in U.S. bank bonds. Some additional tier-1 capital convertible debt fell in value by 20%, in line with the equity itself—just as it was designed to do when things got tough.”
Europe’s banks find themselves straining to build regulatory capital ratios and drive efficiency to raise return on equity—while their regulators get bogged down in politicized debates about banking unions. “It’s do-able, but it’s hard and painful, and it’s the sort of thing that U.S. banks went through much more quickly six years ago within a much simpler regulatory framework.”
“As a result, looking at fundamentals today, we see an ocean between European and U.S. banks in more ways than one. That the market sometimes fails to register this allows steadier hands the opportunity to build positions at potentially very attractive valuations,” he concludes.
CC-BY-SA-2.0, FlickrPhoto: Romtomtom
. Have You Received a FATCA Letter?
Many U.S. expatriate taxpayers are receiving “FATCA” letters from offshore banks around the world. The banks are sending the letters in anticipation of their I.R.S. FATCA reports of U.S. taxpayer offshore financial information, explains Foodman CPA’s & Advisors. A FATCA letter is a letter from a Foreign Financial Institution (FFI) requesting certain information about a taxpayers’ U.S.A. tax filing status. “The letter will most like have a W-9 or W-8 BEN form which the foreign bank will want back relatively quickly within a certain time limit. The foreign bank wants the signed filled in forms back confirming whether the letter recipient is a U.S. taxpayer and subject to FATCA reporting,” they add. Moreover, receipt of FATCA Letter means that the taxpayer has already been identified as a U.S. taxpayer by the FFI, and his or hers name and financial account information will be disclosed to the I.R.S. Chances are, if the account holder’s account is in certain countries, that this information has already been released to the I.R.S., as the first FATCA exchange of information took place in September of 2015.
Banks annually review their client records. If the bank records contain certain indications of a U.S. taxpayer connection, i.e. – a Power of Attorney (POA), or third party authority in favor of a person with a U.S. address, or a birthplace in the United States (which automatically makes an account holder a U.S. citizen) – the bank will write to inquire about the taxpayer’s U.S. tax, and residence status, say the experts of Foodman CPA’s & Advisors. Banks that fail to disclose account data of a “U.S. Person” are penalized under FATCA. In sum, banks have been drafted to act as third party reporters for the I.R.S.
It is very important NOT to ignore a FATCA Letter. Here is what to do, or not do, according to the firm:
If the taxpayer is fully compliant and receives a FATCA Letter, simply reply back to bank, and provide the information requested.
If the taxpayer ignores the FATCA Letter, then the bank account could very well be closed by the foreign bank. In addition, the taxpayer’s detail will still be sent to the I.R.S. The taxpayer will be red flagged and labeled as uncooperative or recalcitrant. This approach is never recommended and will only yield very negative results.
If a U.S. taxpayer is not U.S. tax filing and reporting compliant, it is best to contact a qualified tax professional, and take advantage of I.R.S. programs designed for minimizing potential negative consequences for offshore non-compliant U.S. taxpayers.
The taxpayer would still need to respond to the Bank, and inform them that they are in the process of filing. Banks usually provide a 30 – 45 day extension.
U.S. offshore non-compliant taxpayers should not be victims of their own making. They should consider taking advantage of the I.R.S. Voluntary Disclosure Programs available to them now. This is especially urgent if they have received a FATCA Letter.
According to Detlef Glow, Head of EMEA research at Lipper, assets under management in the European mutual fund industry faced net outflows of €42.6 bn from long-term mutual funds during January.
The single fund markets with the highest net inflows for January were France—driven by money market products (+€21.7 bn), Switzerland (+€1.7 bn), Norway (+€1.2 bn), Germany (+€1.0 bn), and Belgium (+€1.0 bn), while Luxembourg was the single market with the highest net outflows (-€33.5 bn), bettered by Ireland (-€13.6 bn) and the United Kingdom (-€12.2 bn).
Equity Eurozone (+€1.9 bn) was the best selling sector for January among long-term funds.
In terms of asset types, Bond funds (-€20.2 bn) were the one with the highest outflows in Europe for January, bettered somewhat by equity funds (-€19.7 bn), mixed-asset funds (-€5.3 bn), and “other” funds (-€0.08 bn) as well as commodity funds (-€0.04 bn).On the other side of the table alternative UCITS funds (+€2.2 bn) saw the highest net inflows, followed by real estate products (+€1.0)
Amundi, with net sales of €8.2 bn, was the best selling fund group for January overall, ahead of Credit Mutuel (+€3.4 bn) and Natixis Global Asset Management (+€2.5 bn). Legg Mason Western As US Mor-Backed Securities Acc (+€0.7 bn) was the best selling individual long-term fund for January.
Photo: Thomson Reuters. Seilern Investment Management Wins Two Lipper Awards
Seilern Investment Management, the long-term investment management company, won two awards at the Thomson Reuters Lipper Fund Awards in Switzerland. For its range of equity funds it won the Best Equity Group award (in the Small Company category) and for its flagship fund, Stryx World Growth GBP, Seilern won the 5 Year Performance award out of 358 Global Equity funds.
These awards, coming shortly after Stryx World Growth reached its 20-year milestone, may be attributed to Seilern’s highly focused strategy; commitment to investing in quality growth businesses and holding them through the business cycle.
Seilern combines a rigorous process and proprietary research to identify the highest quality growth companies with superior business models, stable and predictable earnings, and a sustainable competitive advantage. The resulting shortlist, of no more than 70 companies in the world, forms the ‘Seilern Universe’, and from this pool of companies the fund managers select 17-25 stocks per fund providing investors with a concentrated high-conviction portfolio. Once invested, these companies are then held by the funds for the long-term, often for a period of many years.
Peter Seilern-Aspang, founder of the company and architect of the investment process commented: “It is very much a team effort at Seilern, so these awards mean a tremendous amount. We are very focused on finding the best companies and leaving them to grow, an approach that has worked well over the last 20 years.”
Capital Strategies Partners has an strategic agreement to cover Spain, Italy, Switzerland and LatAm market for Seilern Investment Management.
