The Board of Directors of Santander Holdings USA (SHUSA) announced yesterday that Scott Powell has been named Chief Executive Officer, effective immediately.
Mr. Powell brings extensive experience in retail banking, risk management and consumer and auto lending to Santander. He has held a variety of roles at J.P. Morgan Chase & Co., including Head of Banking and Consumer Lending Operations, CEO of Consumer Banking and Retail Investments, Head of Consumer Lending, as well as Chief Risk Officer, Consumer. He also spent 14 years at Citi in a variety of risk management roles. Most recently, Mr. Powell was Executive Chairman of National Flood Services Inc.
Santander Group Executive Chairman Ana Botín said: “We are delighted to have Scott join our team. His expertise and experience in retail banking, consumer finance and risk management will be a great contribution as we work to improve customer service, enhance our U.S.-wide oversight and embed our banking culture across the U.S.”
SHUSA Non-Executive Chairman T. Timothy Ryan, Jr., said: “Scott’s appointment is an important step toward our goal of strengthening Santander Holdings USA to manage our U.S. businesses. This will include bringing all the U.S. units together within SHUSA by the middle of this year.”
Santander Holdings USA, a fully-owned subsidiary of Banco Santander of Spain, owns 100% of Santander Bank, N.A. and 60.5% of Santander Consumer USA Holdings Inc. of Dallas. Besides these units, Santander activities in the U.S. include a private bank in Miami, Banco Santander International, and businesses in Puerto Rico, including Santander Bancorp. These units’ operations will be consolidated within SHUSA by the middle of 2015.
Román Blanco will continue as CEO of Santander Bank.
Ana Botín said: “I would like to thank Roman for his very able leadership of Santander US. I am delighted he will continue to lead Santander Bank, where his focus will be on strengthening the Bank in its U.S. northeast footprint by improving customer service, attracting new customers and deepening customer relationships.”
CC-BY-SA-2.0, FlickrFoto: Sebastien Bertrand. La Fed, a punto de pasar de muy acomodaticia a acomodaticia
As explained in last week’s FridayMail, by AllianzGI, more and more high-quality issuers can afford to offer negative bond yields. Attractive bond yields are becoming scarcer around the globe, putting investors on a diet. At the same time, the Greek budget is in for lean times, too. Even if Athens has agreed with the “institutions” on an extension of the bail-out programme until the end of June, it will not receive financial support immediately. The agreement will bring some relief for Greek banks, though (not least because Greek bonds will probably become eligible for ECB refi operations again).
Despite the tense situation, not least with regard to the still unresolved conflict in Ukraine, stock prices rose in both Europe and the US at the beginning of the week and crossed the thresholds of 18,000 (Dow Jones) and 11,000 (DAX), respectively. Market participants‘ trust in the central banks‘ willingness to act works like a sedative, and the ECB’s ultra-expansionary monetary policy is a treat for the European stock markets in particular.
Speaking of monetary policy, Allianz GI believes that even though Fed Governor Janet Yellen’s testimony statements were largely regarded as dovish, the Fed is slowly moving towards its first rate hike – while the global bond markets are still not willing to believe that. A repricing of the Fed’s and the Bank of England’s (BoE) monetary policy will therefore remain one of the key investment themes during the coming months, said the week’s FridayMail of AllianzGI.
Meanwhile, the PMIs suggested that the US upswing is still intact, despite recently disappointing data. While the downtrend in consumer prices might trigger a deflation discussion in North America, too, the oil price slide is the main reason for the price decline. In the medium term, the economic uptrend – and the labour-market recovery in particular – should increase inflationary pressures. Interestingly, according to the minutes of its January meeting, even the Bank of Japan does not seem to see any necessity for additional monetary stimulus, as downward risks to inflation abate.
Photo: vice1. Asian Debt Is Expected to Outperform Developed Market Bonds in 2015
Asian debt is expected to outperform developed market bonds in 2015, thanks to healthy corporate credit dynamics, supportive global liquidity, stable economic and political environments and investors’ demand for yield.
Joep Huntjens, head of Asian Debt at ING IM said: “Although the anticipated rise in US interest rates may present a challenge for Asian bonds, the Federal Reserve is still only likely to remove its zero-rate monetary policy gradually. Furthermore, the impact of this will be outweighed by the spread cushion offered by Asian credit/high yield and the additional yield offered by the region’s local currency bonds.”
ING Investment Management anticipates Asian credit, including USD-denominated, High yield and Local Currency bonds, to deliver a total return potentially as high as 8.6% in 2015, although the base case is between 2.0 to 4.0%. Asian high yield could be as high as 11.4%, with the base case between 5.3% and 7.3%.
Huntjens said Emerging Asia is once again set to generate the fastest rate of global growth with the region’s largest economies China, India and Indonesia set to continue economic reforms. Lower oil and commodity prices will result in better external balances and lower inflation for most Asian economies and will afford policymakers a greater degree of freedom to enact expansionary policies..
The key risk to Asian local bonds, said the head of Asian Debt at ING IM, comes from currency performance versus the greenback. Aggressive central bank policies aimed at stocking growth and warding off disinflation in Japan, Europe and elsewhere are likely to help the dollar strengthen. However, performance is relative, and versus other regional EM currencies, such as Latin America, Asia should outperform given its respectively lower average volatility.
Foto: Andrea B. Gloria y Emilio Estefan ponen a la venta una mansión en Star Island
According to The Real Deal, “Nena’s Villa,” a Star Island mansion owned by entertainment industry heavyweights Gloria and Emilio Estefan, has hit the market asking $40 million.
The Estefans — who have collectively received 26 Grammy Awards — actually live in another mansion at 39 Star Island Drive. “They own a beautiful property on two acres, on Star Island,” said Jill Eber of Coldwell Banker, who listed the home with her partner Jill Hertzberg. “This was a guest house for them that they were not using any more” informs The Real Deal.
Always according to this source, the 1.34-acre estate, located at 1 Star Island Drive in Miami Beach, last sold in November 1993 for $1.84 million. The property consists of a main house, built in 1940, and a guest house built in 1995, property records show. The main villa has 4,747 square feet, with four bedrooms and five bathrooms. The 2,661-square-foot guest house has three bedrooms and three bathrooms. It was offered as a rental for $30,000 a month in 2013.
“The property is phenomenal,” Eber told TRD. “It’s a just under 60,000-square-foot lot, with 240 feet on the bay with spectacular views to downtown and the bay.”
In addition to the Estefans, Star Island is home to Sean “Diddy” Combs; the “Boob God” Leonard Hochstein and his wife, Lisa, of the Real Housewives of Miami — who have torn down their home and are constructing a new mansion; billionaire Phillip Frost and Lennar Corp. Chief Executive Stuart Miller, who is seeking Miami Beach design review board approval to rotate his home and build a new 22,00o square-foot mansion the newly created space, concludes TRD.
BBVA Compass announced that Jason Leal has been named its market president of the Upper Rio Grande Valley, where he will lead efforts to increase brand awareness and represent the bank’s interests in the growing market.
Leal will provide leadership for all commercial banking activities, including business development and market leadership coordination, in an area that is experiencing solid growth in the health care and retail industries. He joined the BBVA Compass team eight years ago and most recently served as a commercial underwriting center manager.
“Jason’s a proven local leader and a Rio Grande Valley native, so this is a natural fit,” said BBVA Compass Texas Border Region CEO Hector Chacon. “He has adapted to change, maintained a strong reputation in the community and has remained committed to our success. I am certain he will continue to establish and strengthen our client relationships in the market and help contribute to our future success.”
Leal, who began his career in 1989 at the Rio Grande Valley-based Texas State Bank, has 24 years of banking experience with BBVA Compass and its legacy banks. He holds a bachelor’s degree from the University of Texas at Brownsville, is a board member and vice president of Affordable Homes of South Texas, board member and president of the McAllen Country Club, board member and chairman of the Leadership McAllen Alumni Association and was recently placed on the University of Texas-Pan American Foundation Board of Trustees.
Invesco Perpetual wins the Overall Fund Group, plus two individual fund awards, at the 2015 Lipper Fund Awards. The Lipper Fund Awards honour funds and fund management firms that have excelled in consistently strong risk-adjusted performance relative to their peers.
“As advocates of active fund management, we’re delighted to have won Lipper’s Overall Fund Group Award in 2015 which recognises the strength and depth of our product offering”, said the firm in a press release.
“At Invesco Perpetual, we’ve built a renowned investment culture in Henley-on-Thames which supports our talented and experienced fund managers. Alongside our long-established equity and fixed interest capabilities, we’ve expanded our product range to include a multi-asset offering, which further supports our focus on long-term solutions for clients”, said.
In addition to the Overall Fund Group Award, the Invesco Perpetual High Yield and Global Equity Income Funds were also award winners.
Lewis Aubrey-Johnson, Head of Fixed Income Products commented: “We’re delighted to have received this award from Lipper in recognition of the fund’s risk-adjusted performance. This is the third award for the Invesco Perpetual High Yield Fund in the last 12 months, and with the addition of Asad Bhatti as Deputy Fund Manager, we aim to maintain our strong investment track record in future years.”
On the award for the Invesco Perpetual Global Equity Income Fund, Chief Investment Officer Nick Mustoe said: “Where some equity income funds look to maximise income in the short term by focusing on the highest yielding parts of the market, this fund focuses on sustainable income. We refer to this approach as ‘quality income’ and as such, are pleased to learn that Invesco Perpetual Global Equity Income Fund is a top performer in the IMA Global Equity Income sector over five years in the UK. Over the long term, we employ a ‘quality income’ approach that seeks to deliver a diversified portfolio of stocks that provide an attractive mix of income, dividend growth and capital appreciation.”
Photo: Antonio Tajuelo. Higher Returns Thanks to ‘Sin Stocks’
If you’d invested a dollar in American tobacco shares 115 years ago, you’d be USD 6.3 million better off now. If you’d have invested the same dollar in the wider American market on that same day, you’d have to make do with USD 38,255 today.
This 5% outperformance by the tobacco industry over such a long period is impressive – and it’s not hidden behind a smokescreen either. Mark Glazener, fund manager of Robeco NV, summarizes the success in four words: “A good business case. How many products are there that elicit such a sudden moment of panic in users: ‘Have I got any at home, or on me?’ Not many.”
Twenty percent of the Western population smokes – a market share that is shrinking only very slightly – and the demographic development in emerging markets is providing tailwind. The degree of penetration is reasonably stable, but the population is growing and therefore the number of users continues to rise.
And then you have the pricing power, which according to Glazener is of unprecedented importance. “Rounded off, the tax on a packet of cigarettes is four euros and is raised occasionally by the government. And tobacco manufacturers have the opportunity to increase their margins each time the excise duties are raised. Basically, volumes are falling slightly worldwide – but this is more than made up for by the margins. In addition, the production costs rarely increase and tobacco manufacturers are not allowed to advertise – saving them millions each year. Unilever invests 11% of its budget in advertising.”
Exclusion from portfolios
Another advantage is that there has been no major consolidation in the tobacco industry. Barring a few specific American players, there are but three big global names: British and American Tobacco, Philip Morris and Japan Tobacco. The competition from e-cigarettes doesn’t pose much of a threat either. “The nicotine hit from e-cigarettes is much less intense. You don’t get the same level of satisfaction from taking a drag.”
Glazener believes that the momentum in the tobacco industry can be maintained at least until 2020, thanks to the increasing prices that are compensating for the slight decline in volumes. But the prices of cigarettes cannot continue to rise without challenge, in particular because the majority of users are from low income groups. “During the crisis, the turnover in Italy and Spain plummeted because smokers switched to imitation brands, bought via the illegal circuit.”
Tobacco shares are examples of ‘sin stocks’ – shares in controversial sectors and activities, like the weapons industry and alcohol and gambling companies. As a result, these shares are avoided by a growing group of investors that is guided by principles concerning ESG (Environment, Social, Governance). But not by Glazener, who applies the best in class principle for his fund. “Excluding certain sectors limits your possibilities and opportunities as a fund manager and we only do that when it is required by law, like with cluster bomb makers. At the end of the day, you are judged by your returns in the financial sector.”
Immune for headwind
Shares that are excluded by groups of investors tend to be traded at a discount. Due to the taint on the sector or industry, as a rule they are valued lower than the market average. This doesn’t apply to tobacco shares – these certainly aren’t cheap.
The merits of investing in shares in tobacco firms outweigh the disadvantages of the tobacco industry. “As long as these shares continue to perform above average, investors will continue to buy them.” Shares in tobacco will keep doing surprisingly well for now, even against the sentiment of the modern world. “The industry has survived billions in claims, the ban on smoking in public places, shocking messages on cigarette packs and even a ban in Australia on printing brand names on packets. But these shares have proven exceptionally immune to every type of headwind.”
The 5% extra return is obviously just too tempting to resist. Even the pension fund for GPs was investing in tobacco shares until a year ago. It has excluded this industry now, as has PGGM’s Zorg & Welzijn (Health & Welfare) pension fund. A complete end to investing in tobacco shares is not in sight either.
But that time may come, thinks Glazener. “If further government restrictions cause the sector to lose its appeal, for instance.” Until then, investors remain caught in the devil’s dilemma of return versus ESG considerations. Glazener too, despite the fact that the management team of Robeco NV is looking into whether tobacco shares can be replaced in the portfolio – preferably by an alternative with the same risk-return profile.
Despite the leading banks’ zero interest rate policy and weak oil prices, the global economy is in danger of a slowdown, according to Guy Wagner, Chief Investment Officer at Banque de Luxembourg and Managing Director of BLI – Banque de Luxembourg Investments, and his team, in the monthly market analysis, ‘Highlights’.
In the United States, the GDP increase in the 4th quarter of 2014 was driven by domestic consumption, while investments and exports showed signs of weakness. “Outside the United States, economic activity is fragile in most regions,” says Guy Wagner. “In Europe and Japan, the recent slight improvement in the main economic indicators does not point to a significant upturn, given the weakness of the comparison bases.” In China, the slowdown in economic growth looks set to continue and could prompt the public authorities to embark on support measures in the coming weeks.
Government bonds continue to surprise with their extraordinary performance
The ECB’s pronouncement of a massive programme of quantitative easing has prompted a further fall in long rates, even though they were already extremely low. In the Eurozone, yields on 10-year government bonds fell in Germany, Italy and Spain. Bond yields have also dropped in the United States. “Despite the miserable level of long rates, government bonds continue to surprise with their extraordinary performance,” says the Luxembourg economist. “The only scenario in which government bonds can continue to pull off good surprises would be if negative interest rates were introduced on a grand scale by the central banks – something that cannot be excluded given the prospects of economic slowdown.”
Investors consider equities as the default investment
In January, stock market developments were largely determined by fluctuating currency values. The euro’s weakness helped the Stoxx 600 Index to grow in Europe, while Japan’s Topix and the MSCI Emerging Markets (in JPY and USD respectively) stagnated and the S&P 500 (in USD) fell. Guy Wagner: “Given the euro’s decline against the dollar and the yen, stock market investments produced particularly decent results for a European investor in January. In a zero interest rate environment, investors continue to view equities as the default investment despite the steady advance of deflationary pressures – well illustrated by the escalating devaluation race.”
The dollar’s upward march is likely to continue
In January, the euro fell sharply against the US dollar as a result of the ECB’s announcement of a massive programme of quantitative easing. “Although the dollar’s impressive rise in January would suggest a temporary period of stabilisation is due, the currency’s upward march is likely to continue until and unless a rise in US interest rates is called into question.”
BNY Mellon Investment Managementannounced that it has partnered with Amherst Holdings, LLC, a leading financial services provider to institutional investors in the mortgage and structured finance sectors, to launch Amherst Capital ManagementLLC (ACaM), a real estate credit investment management platform that will offer a wide range of both traditional and alternative strategies. BNY Mellon and Texas Treasury Safekeeping Trust Company (Texas Trust) have made significant capital commitments to the platform.
ACaMis being launched as a majority-owned subsidiary of Standish, BNY Mellon’s fixed income focused investment boutique, and will be co-owned by Amherst Holdings. ACaM will utilize Amherst’s proprietary data, analytics and market insight, giving the platform a unique perspective on the fundamental elements driving asset performance. As a result, Standish will be able to leverage ACaM’s significant real estate and mortgage expertise and proprietary analytics to support its multi-sector investment strategies. ACaM will initially be focused on direct lending opportunities, with plans to launch additional strategies in the future.
Sean Dobson, a seasoned veteran of the real estate finance markets will serve as CEO of ACaM. Upon completion of the transaction, Amherst Holdings will continue to operate subsidiaries specializing in mortgage and residential real estate assets.
The addition of ACaM is a natural complement to BNY Mellon Investment Management’s broader array of global real estate investment solutions currently offered by its CenterSquare, Insight, Siguler Guff[i] and Alcentra investment boutiques.
Melia Gorriones (Fuerteventura) Foto: Michael . Starwood Capital Group y Meliá se unen para adquirir resorts en España
Starwood Capital Group and leading Spanish hotel operator Melia Hotels International announced that they have established a joint venture that has agreed to acquire a collection of hotels across key resort locations in Spain.
The initial portfolio for the joint venture consists of seven well-established beachfront hotels representing 2,933 keys that are currently owned by Melia Hotels International and will continue to be managed by Melia upon completion of the transaction. The properties will be acquired by the joint venture in a transaction valued at €176 million ($198 million), subject to the approval of the European Union Merger Control Office.
Included in the initial portfolio are the Sol Principe in Malaga, the Sol Lanzarote and Melia Gorriones (Fuerteventura) in the Canary Islands, the Sol Ibiza and Sol Pinet Playa in Ibiza, and the Sol Mirlos and Sol Tordos (Palmanova, Mallorca). The hotels will all be fully refurbished.
A controlled affiliate of Starwood Capital will own 80% of the joint venture company, while Melia Hotels International will own the remaining 20%. The joint venture plans to seek out opportunities to integrate additional properties into the portfolio.
The joint venture represents Starwood Capital Group’s second transaction in Spain over the last several months. In late October, the Firm completed the acquisition, through a controlled affiliate, of a portfolio of loans from BFA-Bankia Group that included a significant number of real estate properties as underlying collateral. Starwood Capital Group has acquired more than $63 billion of real estate assets globally since its inception in 1991, including approximately 2,300 hotels and resorts.
