Photo: DSasso. Investment Outlook for 5 Latam countries, by Global Evolution
In april 2015, Global Evolution attended the World Bank—IMF spring meetings with three objectives:
Country coverage: Conduct face-to-face meetings with IMF/World Bank Mission Chiefs as well as Government officials from emerging and frontier countries
Research collaboration: Discuss joint research with IMF Research Department; planning World Bank-Global Evolution ESG Research Seminar ahead of Annual Meetings 2015
IMF-World Bank relations: To maintain and extend our network with IMF and World Bank mission chiefs.
The firm draws these headline conclusions for five Latam countries:
Argentina: The prospects depend crucially on two themes: A solution with the holdouts on the bonds that (temporarily) are in technical default; and the economic policy management after the elections in the end of 2015. A solution before the elections is highly unlikely—as Kirchner states: “patri o muitres”. Either winner of the elections will likely seek a solution with the houldouts. Macri seems more “market-friendly” than Scioli.
Venezuela: Our view, backed by the dialogue in Washington, is that a default is not imminent since liquid assets to sell are around $70bn. Furthermore, Venezuela may give Jamaica a debt buyback deal similar to the one for Dominican Republic with early repayment—and they made March payments to debt holders indicating their willingness to service debt this year.
Panama: The Panama Canal Authority is extremely well managed. They have their own constitution and governance structure like a separate state. The economy is furthermore thriving with growth likely to reach 7% over the medium term.
Honduras: We are very positive on Honduras. IMF program progress is very convincing with quantitative targets being met with a wide margin. As an example, the fiscal deficit was 7.6% in 2014 with a target of 5.6% but the deficit ended up at 4.3%. The review in May will be very convincing. Honduras remains a positive credit story that seems to have slipped the attention of most other investors.
Nicaragua: The Chinese government is unlikely to support the private sector investor who has intended to finance the canal. Unoffical estimates reveal a 50:50 chance that the investor will pull the plug and drop the investment. This will reduce expectation to growth, employment, and FDI going forward— while boosting the relative expectations for the same in Panama.
Global Evolution, an asset management firm specialized in emerging and frontier markets debt, is represented by Capital Stragtegies in the Americas Region.
The Board of Directors of BBVA named Carlos Torres Vila president & COO at a meeting held today in Madrid, replacing Ángel Cano. The Board also approved a new organizational structure that puts digital transformation at the center of the strategy to accelerate its execution, while creating a function with the sole mission of managing the country’s networks and operations to enhance results.
“Ángel has been a great president & COO during very complex years and now we start a new phase to advance toward our goal of becoming the best universal bank in the digital age,” said Francisco González, chairman & CEO of BBVA.
Amid the disruption underway in banking, with new consumer demands, digital entrants and new business models, BBVA has defined a structure to carry out digital transformation as the Group’s top priority. After the outstanding performance achieved by the team led by Ángel Cano through the most severe financial crisis in recent history, BBVA is now making the needed changes to start the new phase.
“It has been a challenging and intense period and today BBVA is in a position of strength,” Ángel Cano said. “Carlos the ideal person to keep advancing the transformation process.”
Carlos Torres Vila joined BBVA in 2008 as head of Strategy & Corporate Development, and later was named head of the global Digital Banking area. Previously, he was director of corporate strategy and CFO of Endesa. Prior to Endesa, he was partner at McKinsey & Company. Carlos Torres Vila graduated from the Massachusetts Institute of Technology (MIT) with a BS. in Electrical Engineering and a BS. in Management Science, and also holds a Law degree from the Universidad Nacional de Educación a Distancia. He earned an MBA from MIT.
With his appointment as president & COO, he will be able to accelerate the digital transformation process globally and in every geography, strengthening the efforts initiated at the Digital Banking area.
“Transformation is our responsibility, a responsibility for everybody who is part of BBVA, because it will allow us to lead the banking industry and to continue the success story of this great Group,” Carlos Torres Vila said.
The new structure will strengthen the results of the franchises through a function with the sole mission of managing the country’s networks and operations. To meet that goal the new model includes the following areas:
Country Networks: Vicente Rodero will lead this newly created area that will be fully dedicated to managing the networks and operations of all of the countries in order to boost the results of the franchises of the Group. The country managers will now report to the head of the area. Vicente Rodero will also stay on as head of BBVA Bancomer.
C&IB: Juan Asúa continues as head of the wholesale banking area at BBVA.
On the other hand, the new structure adds critical competencies and global talent to compete in the new landscape, with the following goals:
To globally boost the development of digital products and services, taking full advantage of design, technology and information to best meet client needs, retail and corporate alike.
To transform the business model of each geography to offer the best solutions to our customers, deploying and adapting the global solutions to each market.
To accelerate cultural change at the Group toward a more flexible and agile organization and to obtain and develop intellectual capital in key disciplines for digital transformation such as digital marketing, design of customer experience, software development and big data.
To fulfill the goals, the structure has the following areas:
Talent & Culture: Donna DeAngelis, with extensive experience in transforming large global organizations such as Publicis Groupe as well as executive management roles in digital companies such as Digitas, will lead the area, responsible for managing talent and driving cultural change.
Customer Solutions: Mark Jamison will lead the creation and promotion of global products and solutions, including Global Payments. The area includes customer experience, design, quality and big data. Before joining BBVA, Mark Jamison was chief digital officer of Capital One Bank, and prior to that he held key positions at companies such as Charles Schwab and Fidelity.
Marketing & Digital Sales: Javier Escobedo will lead e-commerce, marketing and brand management. Prior to BBVA, Javier Escobedo worked for Expedia, responsible for Hotels.com in Latin America. During his career he has held relevant roles in the development of renowned brands, such as Procter & Gamble, Microsoft and Univision.
Engineering: Ricardo Moreno, currently country manager of BBVA in Argentina and with ample experience in the area of Technology and Operations, and of Transformation at BBVA, will be the head of software development and of the management of technology and operations. Martín Zarich, currently head of Business Development in Argentina, will replace Ricardo Moreno as country manager.
The Business Development (BD): the function will be responsible in each country for retail and commercial offerings and for the deployment of global developments. BD Spain, with David Puente, and BD U.S., led by Jeff Dennes, will now report to the president & COO. The rest of the countries (Turkey, Mexico and countries in South America) will be included in BD Growth Markets, led by Ricardo Forcano, who will also report to Carlos Torres Vila. Ricardo Forcano is currently head of strategy and finance at Digital Banking.
New Digital Businesses: Teppo Paavola, reporting to the president & COO, continues as head of the area responsible for investing and launching new digital businesses, including BBVA Ventures, as well as promoting the collaboration with the ecosystem of startups and developers. Before joining BBVA, Teppo Paavola was head of development of global businesses and M&A at PayPal.
Regarding other areas, relevant changes include:
Global Risk Management: Rafael Salinas, head of risk management at C&IB with global responsibilities for large corporates’ credit portfolio and markets and counterparty risks, and with more than 10 years in risk management, takes over as head of Global Risk Management.
Strategy & M&A: Javier Rodríguez Soler, reporting directly to the chairman & CEO, will be responsible for defining the digital transformation strategy, as well as carrying out the M&A operations and alliances of the Group.
The area of global retail lines of business (LOBS) & South America is reorganized. The region’s country managers, as the rest of country managers, will report directly to Vicente Rodero. Asset Management is included in Country Networks. Consumer Finance moves to Strategy & M&A to focus on the execution of alliances and joint ventures to help the franchises boost results.
Communications: Paul G. Tobin will head Communications.
Regarding the rest of areas of support and control there are no changes, and Jaime Sáenz de Tejada continues as the Group’s chief financial officer.
“Based on the three pillars of the Group –principles, people and innovation- and with this new phase that starts today, BBVA takes a significant step forward in its ambition to become the best universal bank of the digital age,” Francisco González said.
Standard Life Investments, the global asset manager, has announced the appointment of Jon Stewart as Real Estate Equities Analyst (Europe), to be based in Edinburgh.
He joins the growing global real estate equities team reporting to Svitlana Gubriy, with analysts based in Edinburgh, Boston and Hong Kong.
Jon was previously at Liberum Capital as a European Real Estate Equities Analyst and has eight years’ investment experience. He will be responsible for identifying new listed real estate investments in the UK and continental Europe.
Andrew Jackson, Head of Wholesale and Listed Real Estate, Standard Life Investments said: “We are delighted that Jon is joining our growing real estate team. Jon brings a breadth of experience to the team from his background on the sell-side covering UK and continental European real estate companies. His expertise will further enhance our capability in this area as we continue to focus on offering our clients innovative and unrivalled real estate solutions.”
Photo: Juan Antonio Canales. Raymond James Completes Cougar Global Acquisition
Raymond James Financial has completed its acquisition of Cougar Global Investments, an ETF-focused asset manager headquartered in Toronto.
As a result of the deal, which was recently approved by Canadian regulators, Cougar Global will become of an affiliate of Raymond James subsidiary Eagle Asset Management, which will offer Cougar Global’s asset-allocation strategies to its worldwide client base, the company announced.
Founded in 1993, Cougar Global is a global asset-allocation ETF strategist with $1.5 billion under management that markets its investment services to high-net-worth individuals, families, foundations, trusts and institutions in Canada and the United States.
Eagle Asset Management has more than $32.8 billion in assets under advisement from institutional, mutual fund and high-net-worth clients.
“This acquisition continues to enhance our presence within the asset-management industry by providing us with an important suite of investment options that our clients are seeking,” said Richard Rossi, president and co-chief operating officer of Eagle.
CC-BY-SA-2.0, FlickrPhoto: Jimmy Baikovicius. BMS Group Names Jose Astorqui CEO, Latin America
BMS Group Limited announced the launch of its Miami Hub with the appointment of Jose Astorqui to the newly created role of Chief Executive Officer, BMS Latin America.
The new Miami office is part of BMS’s stated strategy to expand its proposition in selective international markets. The independent specialist insurance and reinsurance broker sees an attractive opportunity for growth in the region and will use Miami as its base to service business from Latin America, Central America and the Caribbean.
Reporting to Nick Cook, BMS CEO, Jose Astorqui joins BMS from Howden Insurance Brokers. Jose has a strong track record of managing a portfolio across the region and has been based in Miami as Howden’s Director of Latin America since 2008.
Jose Astorqui said: “BMS have a compelling vision for growth and I am honored to have been asked to lead their new venture in the region.” Mr. Astorqui has attracted eight members of his former team at Howden to new posts at BMS at Miami, Uruguay and New York.
Nick Cook: “BMS are delighted to have secured a candidate of Jose’s calibre to lead our new Miami office. His experience will help accelerate our presence in the region as we seek to capitalise on Latin America’s rapid economic growth. The opportunities in this region are complementary to our growth strategy and Jose’s appointment is another exciting development for BMS.”
Jose Astorqui, holds a 20 years experience in the insurance brokerage industry. He first worked for the Spanish leading company Gil y Carvajal, based in London. He then joined Howden and Marsh in Spain, following the acquisition of Gil y Carvajal by Aon in 1999. He finally rejoined Howden in London in 2004 as Head for Iberia and Latin America and moved to Miami in 2008.
Artivest, a cutting-edge technology platform that connects leading private equity and hedge funds with a wider audience of suitable investors, announced today a $15 million round of funding led by prominent global investment firm KKR, with existing investors RRE Ventures, Peter Thiel, Nyca Partners, Anthemis Group and FinTech Collective participating as well. Artivest will use the funding to accelerate the growth of its technology, infrastructure and sales teams and the execution of its product roadmap.
“Artivest combines leading technology with operational tools for feeder funds that will further open the door for financial advisors and high net worth investors looking to commit capital to a wide variety of top private equity funds. Most private equity firms are very interested in accessing this capital but do not have the technical or operational capability to do so today. We look forward to partnering with Artivest as they expand their business,” said Ed Brandman, KKR’s Chief Information Officer, who will join Artivest’s Board of Directors.
Founded in 2012 and headquartered in New York City, Artivest provides access at lower investment minimums to a select assortment of privately offered alternative investment funds. To date, Artivest has offered premier private equity and venture capital funds and will soon be offering hedge funds.
“The process of investing in private placements—previously inefficient for all involved–has not changed in any meaningful way for decades. A number of trends have come together, including alternative funds’ increasing focus on individual investors and investors’ growing appetite for all types of alternatives. At this crucial moment, we are bringing private investing a much-needed digital upgrade,” said Artivest CEO and Founder, James Waldinger. “It’s a great honor and a meaningful endorsement to be backed by KKR, one of our first partners.”
High net worth investors, a crucial and complicated customer base
Qualified investors, including those served by the rapidly growing independent advisor community, are fueling a new wave of demand for alternative strategies and are, in fact, the fastest growing segment of assets allocated to alternative funds. With equity markets periodically testing new highs and publicly available fixed income investments providing unsatisfactory yields, clients and their advisors are actively seeking alternative solutions for compounding wealth over long time periods. Top private equity and hedge funds, which have historically raised capital exclusively from institutions and those capable of writing institutional-sized checks, are compelled by this investor base but challenged by the implications of sourcing, onboarding and serving a much more fragmented clientele.
Artivest provides a multi-pronged solution to connect these two constituencies at scale. Key Artivest features for qualified investors include more accessible investment minimums, online access to intuitive displays of fund metrics and electronic completion of all legal documentation. Funds utilize Artivest technology to manage investor relations and client operations at scale. Both user types benefit from best-in-class-security and encryption protection.
CC-BY-SA-2.0, FlickrVictor Rodriguez is Senior Portfolio Manager of emerging market debt for NN Investment Partners (formerly ING Investment Management) - Courtesy Photo. EMD: "There Is No Better Market to Invest in Corporates"
Victor Rodriguez is Senior Portfolio Manager of Emerging Market Debt for NN Investment Partners (formerly ING IM) and confesses that there are so many changes in emerging economies that some of his answers may vary over the short term. What remains unchanged is the attractiveness of these markets, which for the same rating and duration allow greater yield. “There is no better market” he declares, although he is aware of the problem that volatility and any small lack of liquidity may involve. As this market works almost entirely in USD, some companies who are not exporters are also at risk from fluctuations in exchange rates. “When the value of the dollar is rising, it is better to stick with exporters. You can only pick the best of the best.”
Korea’s stability can make it attractive at certain times, yet it currently doesn’t play in its favor. However, when it comes to China’s growth forecasts, the Atlanta based expert estimates GDP growth at 6.8% or more by the end of this year, and 6.5% for 2016, making that country his major option, as he believes that even if there are changes, the real estate sector can bring long-term value, and economic development in the country will improve in the second half of this year. His vision for Indonesia is also positive thanks to the improving economy and growth-forecasts, likewise for some banks in Hong Kong and Singapore; he sets India aside however, as he considers that, although it will continue to grow, the opportunities it offers are no longer as attractive.
In Latin America, he stresses his preference for Peru, which he justifies by his opinion that there are good opportunities for finding value in specific companies within the banking and mining sectors, although the country’s growth is slowing down; as regards Chile and Colombia, the portfolio manager believes that there are only isolated opportunities in some companies, for example in the Utilities industry, while insisting that there are no attractive sectors, but specific companies which are. Another country that is growing and will continue to grow, albeit more slowly, is Mexico, where you can also find value in certain corporations, although, being a country which has been affected by falling crude oil prices, it previously offered some very good potential investments and now those opportunities have been reduced.
We must remain alert to new opportunities that will come from frontier markets, as the expert expects Mozambique, Vietnam, and Sri Lanka to follow the path of growth.
As regards the options in other regions of the world, Rodriguez believes that, although there is still value in Russia, it is no longer as attractive as it was a few months ago, even though it seems that the country begins to improve, with the Ukrainian crisis taking a turn for the better, and the rising oil prices; he is more optimistic about Kazakhstan, as he believes that it currently already has an interesting valuation, and shall present good opportunities towards the end of the year. He also confirms that it is possible to find some good options in South Africa, which does not happen with the Middle East region, as local investors themselves have placed their own assets there, pushing spreads down.
The flow of capital into fixed income is increasing and Victor Rodriguez expects the trend to continue. “Everyone is looking for spread products because you cannot concentrate the entire portfolio on equities. In addition, the wealth of emerging markets has grown, as has its investment in debt. Insurance companies continue to invest more, and more in fixed income, and are aware that they must continue to increase their commitment, and pension plans should definitely increase their placement in emerging fixed income. “
With regard to oil, the Lead Portfolio Manager of Corporate Debt for IP NN Emerging Markets Debt team believes that a deficit situation will be reached by the fourth quarter, since OPEC is stable in its production, and will remain roughly at current levels unless Libya starts to produce, and US production will peak in April-May, and then go down. According to the expert, the end of this quarter will still be good time to invest in companies involved in oil, with price estimated at US$65 a barrel for WTI by the end of 2015 and US$70 by the end of 2016. “There is no doubt that oil will rise, although not excessively. We will not see the barrel at US$100, because if prices started climbing very quickly, greater supplies would be released into the market. “
“The FED will not raise rates as early as people expect. If oil stays along the aforementioned lines and there is no inflation, the other central banks will increase liquidity and the dollar will rise, and exports and job creation in America will both fall,” says Rodriguez, who concludes by predicting that “the FED will not raise rates. If it does so, it will be by 25 basis points, and not before September.”
Victor Rodriguez is Head for NN IP’s Emerging Markets Corporate Debt strategy. The team has offices and analysts in The Hague, Atlanta, and Singapore. EMD Group’s Total assets (sovereign, local, and corporate included) stand at 7 billion dollars. Rodriguez has over 25 years’ experience in emerging markets, corporate bonds, and investment banking. Before joining ING in 2003, he worked in GMA Partners, Wachovia Securities, and Prudential Capital. He holds a Cornell University A.B. degree, and an Emory University MBA.
CC-BY-SA-2.0, FlickrMeeno de Vreeze, Andrea Ajila y Damian Zamudio. Aberdeen’s Andrea Ajila Appointed Business Development Manager for the International Wealth Management Group
Andrea Ajila, previously an Advisor Services Associate at Aberdeen Asset Management, has recently been appointed Business Development Manager for Aberdeen’s International Wealth Management team focusing on the Miami and Latin American (ex Brazil) businesses. Andrea has been a key member of the business development team alongside the Head of the team, Menno De Vreeze and Business Development Manager, Damian Zamudio.
Previously, Andrea came from Punch & Associates, an investment management firm based in Minnesota, where she was part of the Wealth Strategies Group supporting private clients and later institutional investors. Andrea has also previously worked at Ameriprise Financial Services with a wealth advisory group in New York.
Bev Hendry, Co-Head of Americas said, “ We are delighted with Andrea’s appointment. Aberdeen has made a strong commitment to the U.S. Offshore space over the last several years and is looking to grow its business in both the U.S. offshore market and in Latin America. With recent key event sponsorships in Miami, Panama, and Uruguay so far this year, and with further plans for fund manager road shows and marketing initiatives in both the U.S. and Latin America, the Aberdeen team continues to make headway.”
Because of Aberdeen’s continued commitment to Latin America, it is timely to announce that on June 30th and July 1st 2015, Aberdeen’s Don Amstad, Director of Business Development – Asia, will be traveling to Uruguay and Chile for further updates on the firm’s Asian fixed income and multi-asset capabilities.
For further information on Mr. Amstad’s trip to the region and for information on Aberdeen’s investment capabilities, please contact Andrea Ajila at andrea.ajila@aberdeen-asset.com
CC-BY-SA-2.0, FlickrPhoto: Chris Potter. Three Reasons the Dollar Should Stay Strong
After a decade of weakness, the U.S. dollar has appreciated strongly over the past couple of years, with a particularly strong surge in the first three months of 2015. Some market observers have begun to wonder if the rally has run its course. PIMCO doesn’t think so. “Although the currency markets will likely experience bouts of volatility, we believe the dollar should remain strong over the next several years. Here are three reasons why”, point out Scott A. Mather, Chief Investment Officer U.S. Core Strategies at PIMCO.
1) Diverging global growth and monetary policy trends
Recent economic data has raised some concerns that the U.S. economy may be cooling a bit. Nevertheless, we continue to believe the pace of growth in the U.S. will lead the developed world, while the eurozone and Japan will fall well short of self-sustaining growth.
On the policy front, the U.S. Federal Reserve has clearly signaled its intent to embark on a monetary tightening cycle in 2015. The first rate increase could come as early as June, though a disappointing jobs report for March and other soft economic data may make a September move somewhat more likely.
Other central banks, however, are on a very different path. Since December, a parade of some 27 central banks from around the world – including most major central banks, save the Fed – have eased monetary conditions by slashing policy rates toward zero or even below zero.
But importantly, global central banks aren’t just cutting policy rates; they are printing money through enormous quantitative easing (QE) programs. The European Central Bank (ECB) announced in January a €1.1 trillion QE program – much larger and more open-ended than the markets had expected. In December, the Bank of Japan redoubled its QE efforts by increasing its monthly purchases to ¥80 trillion. At this pace, the balance sheet of the BOJ will reach 70% of GDP by the end of 2015. So not only policy rate divergence, but also QE divergence, will drive the dollar higher compared with the euro and the yen.
2) The experience of past strengthening cycles
Moreover, it’s important to put the recent strength of the dollar in context. First, as Figure 2 shows, the dollar started from a multi-decade low relative to other major trade-weighted currencies. So while the recent appreciation has been impressive, the dollar has a long way to go given how low it started. Second, when the dollar appreciates, it is typically part of a multi-year trend. Again referencing Figure 2, previous strengthening cycles have occurred over many years with ups and downs along the overall path to greater strength. From 1980 to 1985, the dollar appreciated by more than 60%, and by more than 40% from 1995 to 2002.
Related to global monetary policy divergence, central bankers also recognize this imbalance and are choosing to hold more dollars than euros and yen. Remember, central banks rank among the biggest players in the foreign exchange markets and exert tremendous influence on perceptions in the currency market. To provide a frame of reference, central bank reserves totaled $12.6 trillion in 2013, according to the World Bank. Following the 2008 financial crisis, central banks made a concerted effort to diversify the foreign exchange reserves they hold away from the dollar. In 2009, the share of foreign exchange reserves held in euros had risen to 28%. However, with Europe’s debt crisis in 2010, the euro’s appeal as a reserve currency began to decline. Last summer, in an effort to fend off recessionary pressures, European monetary policymakers reduced the central bank’s deposit interest rate to less than zero for the first time in history. That, plus the ECB’s aggressive program of quantitative easing officially begun in March, has made the euro significantly less attractive as a reserve currency and heightened the dollar’s appeal.
Investment implications
So what does this mean for investors? “The dollar will likely continue to appreciate, though the extent and pace of further gains will depend in part on the timing of the Fed’s initial tightening move. Nevertheless, given current economic fundamentals, the divergence in global monetary policy, the length of prior dollar strengthening cycles and the dollar’s persistence and prominence in central bank reserves, we continue to favor the dollar relative to the euro and the yen in particular. For those investors who find global stocks and bonds attractive – and PIMCO does – then carefully consider the currency exposure, lest the rising dollar sink your global gains”, said Chief Investment Officer U.S. Core Strategies at PIMCO.
Alex Stern es el nuevo CEO de asesorameinto financiero de Lazard - Foto: Business Wire. Lazard nombra a Alexander Stern CEO de la división de Asesoramiento Financiero
Lazard announced that it has named Alexander F. Stern as Chief Executive Officer, Financial Advisory, and Matthieu Pigasse as Global Head, M&A and Sovereign Advisory. The appointments will drive the next phase of Lazard’s advisory growth plan, while delivering the highest quality advice to clients.
“As CEO, Financial Advisory, Alex will lead and drive strategy for our global investment banking businesses. Alex’s expertise in advising clients for over 20 years, combined with his skills and experience in strategy and operations, make him uniquely positioned to lead the industry’s strongest advisory-focused franchise,” said Kenneth M. Jacobs, Chairman and Chief Executive Officer of Lazard.
“Alex and Matthieu will work closely together with our senior Financial Advisory leadership, the most formidable team in the industry,” said Mr. Jacobs.
Mr. Stern has served as Chief Operating Officer of Lazard since November 2008 and as Global Head of Strategy since February 2006, while continuing to advise clients. He was named a Managing Director in January 2002. Mr. Stern joined Lazard in 1994.
Mr. Pigasse, CEO of Lazard France since 2009, has led Lazard’s global Sovereign Advisory Group since he joined the firm as a Managing Director in 2002 and will be responsible for intensifying the firms client focus.
Messrs. Stern and Pigasse will continue to serve in their current roles as Chief Operating Officer of Lazard and Chief Executive Officer of Lazard France, respectively.
