Wikimedia CommonsFoto: JohnArmagh. Eaton Vance incorpora a un nuevo gestor y analista global de high yield
Eaton Vance Management International (EVMI) announced the appointment of Jeffrey D. Mueller as Vice President, Portfolio Manager and Global High Yield Analyst.
Based in London, Mr. Mueller will be responsible for spearheading continued growth in Eaton Vance’s global corporate credit capabilities. He will lead investment management and credit research for all non-U.S. high yield opportunities.
Mr. Mueller will join Eaton Vance in March 2015 from Threadneedle Asset Management, where he has been a High Yield Portfolio Manager and Investment Analyst since 2009. He managed European high yield credit portfolios, with focused research coverage of the automobile, industrials and services sectors. Mr. Mueller previously spent six years working as a European sub-investment-grade Research Analyst and Trader for Centaurus Capital and Amaranth Advisors, both in London. Mr. Mueller graduated from University of Wisconsin School of Business with a bachelor of business administration degree.
“Jeff’s skills and experience will enable us to further develop the scope and scale of our London-based global corporate credit capabilities,” said Michael W. Weilheimer, CFA, Eaton Vance’s Director of high yield, based in Boston. “Our team’s research analysts have long maintained significant coverage of non-U.S. credits. Jeff’s addition to the team allows us to leverage existing investment capabilities while enhancing the depth of our research and the reach of our global presence. We plan to hire additional global credit analysts later this year who will report to Jeff.”
Eaton Vance Corp., is one of the oldest investment management firms in the United States, with a history dating back to 1924. Eaton Vance and its affiliates managed $296.0 billion (USD) in assets as of 31 December 2014, offering individuals and institutions a broad array of investment strategies and wealth management solutions. EVMI, based in London since 2001, is a subsidiary of Eaton Vance Management, and provides investment services to financial institutions, banks, and asset management firms globally.
Foto: juan Antonio Capo, Flickr, Creative Commons. Dos de cada 3 nuevos fondos nunca llegan a alcanzar los 100 millones de euros
New research highlights the generally low success rate of fund groups in their product launches. Analysis by specialist research house, MackayWilliams, reveals that just 3% of funds launched between 2006 and 2011 reached more than €1bn of assets under management by 2014 (1) and less than 30% ever achieve assets of more than €100m.
“Most groups set the success bar for new products much higher, at around €500m, and with this target they have less than a one in 10 chance of hitting the mark” says Diana Mackay, CEO of MackayWilliams.
In the heavily regulated arena of asset management, the success of new funds has become a critical measure of a group’s asset building achievement. In the course of a year fund groups will launch 2,000 funds, on average, and yet the overwhelming majority will fail to gather meaningful assets. With a product choice of around 35,000 in Europe, why do investors need more?
“New funds are the revenue generators of the future and, like it or not, they are responsible for significant net sales inflow, regardless of whether they are launched by a group with captive clients or are reliant on third party distribution”, explains Diana Mackay. “Of the €2.5trn of asset growth that has occurred over the last five years, nearly half (€1.1trn) has come from funds that were launched during the period. Innovation has always been the lifeblood of the fund management business but with regulatory pressures growing it is taking longer and getting harder to introduce new ideas. Nowadays, product developers and strategists must make every fund work for its space on distributors’ shelves and this means culling the dead wood as well as launching funds that really have appeal with changing investor appetite.”
Increasingly success will be linked to independent evaluation of feedback from fund selectors about where the product gaps exist. An extensive interview process conducted by Fund Buyer Focus provides the voice of clients, and represents a vital additional source of information for product developers. The latest product innovation report highlights rising interest amongst distributors for ESG products, some niche appetite for frontier funds and other thematics, as well as more ‘solutions’.
CC-BY-SA-2.0, FlickrPhoto: David Dennis. MSCI Delays Inclusion of China A-Shares in Index
After nearly one year firmly positioned at #7, the Renminbi has entered the top five of world payment currencies since November 2014, overtaking both the Canadian Dollar and the Australian Dollar by value. Just two years ago, in January 2013, the RMB was ranked at position #13 with a share of 0.63%. In December 2014, the RMB reached a record high share of 2.17% in global payments by value and now trails the Japanese Yen which has a share of 2.69%.
“The RMB breaking into the top five world payments currencies is an important milestone” says Wim Raymaekers, Head of Banking Markets at SWIFT. “It is a great testimony to the internationalisation of the RMB and confirms its transition from an “emerging” to a “business as usual” payment currency. The rise of various offshore RMB clearing centres around the world, including eight new agreements signed with the People’s Bank of China in 2014, was an important driver fuelling this growth”.
Overall, global RMB payments increased in value by 20.3% in December 2014, while the growth for payments across all currencies was 14.9%. The RMB has been showing a consistent three digit growth over the past two years with an increase in value of payments by +321%. Over the last year, RMB payments grew in value by 102% compared to an overall yearly growth for all currencies of 4.4%.
Photo: LinkedIn. Jean Pierre Mustier Joins Tikehau Capital for Expansion
Jean Pierre Mustier, formerly head of corporate and investment banking at UniCredit, has joined Tikehau Capital as a partner to help the fund manager’s international expansion.
Mustier joined in early January and is based in London. He stepped down from UniCredit at the end of 2014 after a tenure of almost four years at the bank. He is, however, still a member of UniCredit’s international advisory board.
As well as overseeing Tikehau’s international expansion, Mustier will contribute to the fund manager’s existing business.
Tikehau Capital Group manages $5bn for institutional and private investors in various asset classes – listed and private equity, credit, private debt, and real estate – through its asset management subsidiary, Tikehau IM.
Photo: ITU Pictures. Beamonte Investments to Acquire Venture Academy
Beamonte Investments, along with is affiliate, Beamonte Mexico Holdings, announced it has invested in Venture Academy, an educational platform for training entrepreneurs how to raise money through a four day intensive boot camp designed to provide attendees with the information, guidance, and advice to run their businesses. After the closing, Venture Academy will be a wholly owned by Beamonte.
Based in Mexico City and with offices in Boston, MA Venture Academy was born from the idea that with the right information and guidance, any start-up can be successful. The path from business idea to business maturity can be long and difficult, with many uncertainties along the way. Most start-ups know where they want to go, but do not know hot to get there. They have a vision, but lack funding. When money from friends and family is not enough, outside capital is needed.
Venture Capital firms see hundreds, if not thousands, of slide decks per year. Of these, only about 10% ever get a first meeting. A meeting with an institutional investor could be the make-or-break moment for any start-up. Knowing how to approach investors is critical to getting the capital entrepreneurs need to grow their businesses.
“We notice a huge gap between entrepreneurs and private investment firms. We are the guys on the other side of the table, we know what wins and what loses; our goal is to build more bridges between entrepreneurs and investors,” said Claudia Yan, Manager at Venture Academy.
Venture Academy will provide the knowledge and tools to ace this test.The boot camp consists of an intensive program divided in six modules, including management 101, valuations, term sheets, financing, immigration and more. Venture Academy plans to do multiple boot camps each year.
Beamonte has an outstanding track record on Venture Capital in the United States, recently investing in Arthena and Nanostatisfi. They are eager to replicate the same success in emerging markets such as Mexico and Colombia.
Luis F. Trevino, Senior Managing Director at Beamonte Investments commented, “There are talented and driven entrepreneurs with great ideas claiming there are no funds nor financial opportunities to develop their businesses. On the other hand, there are people like us, keen to find the next big project to invest, develop, and grow. The biggest obstacle to sealing a Venture Capital deal is a lack of sophistication during the negotiation process.”
Beamonte Investments is a single family office located in Boston, Massachusetts. Beamonte has been a pioneer in direct venture capital and private equity investments, credit alternatives, and activist investment campaigns, as well as a pioneer in cross border transactions with Latin America. Since its inception, the firm has executed, as principal and agent, over $5 billion USD in transactions.
Guernsey-based Praxis Group and Jersey-based IFM Group have announced plans to merge and create one of the largest independent and owner-managed financial services groups headquartered in the Channel Islands.
With combined revenues of over £23 million, assets under administration of more than $30bn, nine offices around the world and over 200 people, PraxisIFM will offer private and corporate clients an increased range of services and a global footprint. Subject to regulatory approval, the new group will be known as PraxisIFM to reflect the merger of two existing businesses of a similar size with strong performance, proud histories and solid reputations.
‘As long-standing, independently-owned and managed businesses, Praxis and IFM share similar values and culture. Both businesses strive to offer excellent client service, added value and continuity of teams. These will remain at the heart of the PraxisIFM Group,’ said Brian Morris, who will become the merged group’s executive chairman.
PraxisIFM will continue to focus on delivering outstanding private client services, fund administration, corporate and trade services including cross-border trade facilitation, asset finance, pensions and treasury operations. PraxisIFM’s offices will be located in Guernsey, Jersey, Switzerland, Malta, Luxembourg, South Africa, New Zealand, Mauritius and Dubai, with representation in the UK.
Wyvern Partners have assisted with the transaction.
Photo: Scott Beale. Recovery Moves Up a Gear as Consumers Step on the Gas
Nadia Grant, Fund Manager at Threadneedle Investments, addresses some of the questions currently on the minds of US equity investors. Overall, she believes that US stocks are very attractively valued in relation to other markets and will gain support from a broad-based economic recovery.
Last year we saw relatively strong economic growth in the US, but a slowdown elsewhere, while oil prices have now halved and the US dollar has surged. Given those developments, how sustainable is the US recovery and will the shape of that growth be affected?
We think the US economic recovery is broadly based and are forecasting GDP growth in 2015 of around 3%, which should provide a very supportive backdrop for equities. We expect the consumer to account for around two-thirds of this growth, at about two percentage points, up from 1.6 percentage points in 2014. The collapse in the oil price is benefitting US consumers enormously. They are now paying an average US$2.14 a gallon, and just US$1.80 in some states, rather than US$3.50 before the oil price drop. These extra dollars provide a considerable boost to lower-income workers, who have a significant propensity to spend. Thus, the lower gasoline price is highly stimulative for the economy.
We expect investment to contribute about one percentage point to overall growth, a level which is also higher than last year.
Interest rates have not risen in the US for nearly nine years but the Federal Reserve has been guiding investors to expect a rise at some point this year. Do you think that this is a reason for US equity investors to be fearful?
No, we do not think investors should be concerned. The Federal Reserve’s guidance reflects the fact that interest rates are abnormally low by historical standards, and more importantly, that the US is on the path to a self- sustainable recovery and thus a normalisation of interest rates. A rise in interest rates would provide concrete evidence of the Federal Reserve’s confidence in the recovery and that view should also support equities. Historically, the market tends to anticipate the first rate hike six months in advance of it taking place and tends to be a lot more volatile during this period. However, historical evidence indicates that rising interest rates have no material impact on the market six months to a year after the first rate hike.
US equity market valuations were at the top of investors’ minds in 2014. Our view was that valuations were quite reasonable and that earnings growth would drive market gains and this proved largely correct. What is your view of valuations going into 2015?
The market has not re-rated but has simply grown in line with earnings and we expect this trend to continue in 2015. The consensus is that equities will be trading at about 15 times PE by the end of the year, which is in line with the market’s long-term historic average. Thus, we think that US equities are neither expensive nor cheap. Given that the US is the sole engine of global growth and given how sound the recovery is, we believe US stocks are very attractively valued in relation to other markets.
What about the inflation?
Low inflation means the rate at which equity cashflow is discounted is also low and historically this has been very supportive for the market. Economic fundamentals and earnings growth should underpin expectations for 2015. As mentioned, we are forecasting 3% GDP growth, which translates into 5-6% revenue growth, some profit margin expansion and buybacks of around 1%. Thus, we anticipate high single-digit earnings growth in 2015, which is high by historic standards.
How are you positioning the American Fund for 2015 and could you provide examples of stocks in which you have the highest conviction?
We focus on companies that are uniquely placed in terms of having secular growth drivers and pricing power. Consequently, in the American Fund we are overweight in the technology and healthcare sectors, which are home to companies that have disruptive new technologies as well as pricing power. Meanwhile, we are underweight in energy and telecoms. We believe energy prices have yet to find a floor, yet the stock price of companies within the sector does not reflect the fall that we have seen in the oil price, while the telecoms sector is subject to intense competition and price erosion, in other words the complete opposite of what we seek.
Photo: Daniel Chapman. Loomis Sayles Adds Investment Strategist to Emerging Markets Team
Loomis, Sayles & Company announced the addition of Esty Dwek as emerging markets global strategist. She is based in the company’s London office and reports to both Peter Marber, head of emerging markets and Christine Kenny, co-managing director of the Loomis Sayles London office.
In this newly created role, Esty is responsible for analyzing emerging market (EM) trends and formulating broad EM country and asset allocation recommendations. As a member of the EM team, Esty will liaise with sell-side analysts, consultants, prospects and existing clients.
“I’m very pleased Esty has joined our team – we worked together previously and I think she is a thoughtful, skilled investor and communicator,” said Peter Marber.
Loomis Sayles has been managing emerging markets assets for over 20 years. Total firm-wide emerging markets assets totaled $16.2 billion, with approximately $8.3 billion in hard currency and $7.9 billion in local currency, as of December 31, 2014.
In 2014, Loomis Sayles announced three new EM portfolio management additions; Joshua Demasi and Michael McDonough were named EM equity portfolio managers in July; Elisabeth Colleran joined the team as EM fixed income portfolio manager in April.
Before joining Loomis Sayles, Esty was an investment strategist in the private bank at HSBC for nearly six years in London. Previously, Esty attended HSBC Private Bank’s graduate program in London, Geneva, New York and Singapore. She earned a BA from Princeton University and holds the CISI accreditation.
Photo: Giuseppe Milo. Irish Domiciled Mutual Funds Continue to be Repositioned in Chilean AFPs’ Portfolios
2014 ended with about US$52.5 billion invested in international funds (excluding ETFs) by the Chilean AFPs. The year was marked by the return of funds registered in Ireland to pension funds’ investment portfolios, since Chile’s Risk Classification Committee Risk (CCR), decided in September 2011 to remove all mutual funds domiciled in Ireland from its list of approved funds, due to Ireland’s perceived risk at that time in the context of the euro crisis.
This situation was reverted during 2014, normalizing steadily as the CCR gradually re-approved funds domiciled in Ireland. In total, at the end of December there were US$2.2 billion invested by Chilean pension funds in funds registered in Ireland. We continue to see new additions to this list monthly. In December, one of the three funds which premiered among Chilean AFPs was domiciled in Ireland; this was the Muzinich Short Duration High Yield Fund, which becomes part of the list of international funds in the hands of Chilean AFPs with US$40 million in assets. Nicolás Lasarte, head for Latin America at Capital Strategies, a company which is the exclusive distributor of Muzinich funds in Latin America, expressed his “great satisfaction” to Funds Society with this change which provides the opportunity to increase the availability of niche products for Chilean pension funds. “Although since 2011 we have been increasing Muzinich assets very steadily in the Chilean market, we could not be completely satisfied without access to pension funds and other institutions in the scope of influence of the CCR” added Lasarte. This is the first Muzinich fund which has obtained assets from Chilean pension fund management companies.
During the month of December, there have been only two other international funds, excluding ETFs, that have become part of this select group of funds. These are the Luxembourg domiciled Aberdeen Global Japanese Equity Fund, which has obtained assets of US$30 million from pension funds, and the Henderson UK Equity Income and Growth Fund, a fund domiciled in the UK which has obtained inflows of US$3.5 million.
For the time being, Luxembourg continues to be the quintessential home of international funds in which Chilean AFPs invest, with US$40.6 billion in assets at the end of December. Following is a list of the 10 international funds with most assets invested by the AFPs:
Foto: BCE Official. ¿Ha cambiado el programa QE el comportamiento de los inversores?
A recent post noted that the oil price has fallen by more than 30% over six months on five previous occasions since World War Two. The global economy was stronger a year after these drops: the six-month increase in industrial output was higher than its starting level in all five cases, said Simon Ward, economist in financial markets at Henderson Global Investors.
Three of the five oil price falls (1991, 2001 and 2008) were associated with US/global recessions, he explains. A fourth (1998) reflected the Asian economic crisis. The 1986 decline bears the closest resemblance to today. It was partly the result of a mid-cycle global economic slowdown but the more important drivers were a large rise in non-OPEC supply and a structural reduction in demand due to energy conservation in response to a sustained high price in the early 1980s.
The first chart, writes Ward in his last article, overlays the path of spot Brent in the mid 1980s on its recent movement, with the 1980s price rescaled by multiplying it by four. Based on the earlier episode, Brent could bottom at below $40 during the first quarter before recovering to $70-80 by end-2015.
The recovery could be stronger if non-OPEC supply is more price elastic than in the 1980s, as some analysts contend.
The oil price bottomed in July 1986. G7 industrial output growth embarked on a strong recovery soon after, reaching a boom level by late 1987, highlights Ward.
G7 consumer price inflation fell sharply in 1986 but retraced most of this decline in 1987.
Falling US inflation contributed to the Federal Reserve cutting its target Fed funds rate by 2.125 percentage points between December 1985 and August 1986. The Fed, however, reversed course in December 1986 and was forced to tighten aggressively in 1987 as the economy boomed. Longer-term Treasury yields bottomed in April 1986 ahead of the oil price, moving sideways over the remainder of the year before rising sharply from March 1987.
The relevant comparison today may be with the Eurozone. “ECB President Draghi is using a temporary fall in headline consumer prices to push through further easing despite monetary trends and leading indicators suggesting improving economic prospects, with Germany already at full employment. In 1986, the Fed started to raise rates only four months after its final cut. The QE could find ECB opponents that may have strong grounds for calling for a suspension later in 2015″, concludes Henderson’s economist.
