Cassandra Alami, Real Estate associate / Courtesy photo. Cassandra Alami Joins Avila Rodriguez Hernandez Mena & Ferri LLP as Associate
Avila Rodriguez Hernandez Mena & Ferri LLP (ARHMF), a South Florida law firm representing domestic and international businesses and investors across various practice areas, announced the addition of a new associate, Cassandra Alami, to the firm’s Real Estate Practice.
Cassandra Alami counsels both international and domestic clients on issues relating to real estate, including acquisitions, dispositions, leasing, finance, and related corporate issues. Ms. Alami graduated from the University of Florida with a Bachelor of Science and earned her J.D. from the University of Virginia in 2012. She is admitted to practice law in Ohio and Florida.
“Given the reinvigorated real estate market, we are pleased that Cassandra decided to join our firm’s Real Estate Practice,” said Alcides I. Avila, Managing Partner at ARHMF.
Prior to joining ARHMF, Ms. Alami practiced real estate at a national law firm, where she represented financial institutions, loan servicers, home builders and healthcare systems in various aspects of real estate.
Large private equity firms are increasingly flexing their scale, balance sheets, restructuring experience and connections with creditors and limited partners to tighten control and enhance return potential on investments, says Fitch Ratings. Recent examples include Apollo’s and TPG’s decision on Jan. 15 to voluntarily place the largest operating subsidiary of Caesars Entertainment Corp. into a Chapter 11 bankruptcy and KKR’s follow-on private placement investment in First Data Corporation last June.
While such activities can bring creditors’ competing interests to the forefront, they also underscore the fiduciary responsibility of alternative investment managers to maximize returns for their limited partners through all available means. To the extent that managers are able to translate these activities into enhanced returns (or minimized losses) it can serve to support future fundraising and the overall franchise, both of which are important rating considerations when assessing investment managers.
In the Caesars case, Apollo has deployed aggressive tactics in an effort to retain control despite minimal recovery prospects for the most junior creditors. Maneuvers have included the sale of assets to affiliates at attractive multiples, repaying junior intercompany debt at par and the release of parent company guarantees of the debt at the weakest subsidiary. Apollo’s reputation and long track record of achieving outsized returns on distressed-for-control situations has helped drive the managers’ efforts and built some consensus among creditors. However, others among Caesars’ creditors have aggressively pushed back, so further legal and court action is possible.
Fitch believes that the largest private equity firms have also become more willing to use their balance sheets as a strategic advantage. This was demonstrated with First Data last year, when KKR itself committed part of the funding for a follow-on $3.5 billion investment in the portfolio company it originally bought in a 2007 LBO. KKR made its investment through a combination of $500 million from its 2006 Fund, $700 million from its own balance sheet, and $2 billion in co-investments from third-party investors. Such maneuvers, while demonstrating flexibility, create the type of balance sheet concentration that can constrain a private equity firm’s rating, or, in a scenario where the investment becomes degraded, potentially pressure the rating.
The Caesars and First Data examples show that as large private equity firms have grown their balance sheets and connections with large limited partners that are increasingly interested in co-investment opportunities, there is greater access to investment capital to weather downturns and improve capital structure positioning for IPOs.
In both the Caesars and First Data examples, private equity’s long investment cycle is providing the time to work through challenges, wait out market declines and achieve the debt reductions necessary to improve the prospect of achieving targeted returns on invested capital.
Photo: Moyan Brenn. Azimut Pruchases 70% of Largest Independent Asset Manager in Turkey
Italy’s independent asset manager Azimut and Turkish Bosphorus Capital Portfoy Yonetimi have signed an investment and shareholders agreement to start a partnership in Turkey.
According to the deal, which is subject to regulatory approval, Azimut, through AZ International Holdings S.A., will purchase 70% of Bosphorus equity capital for €7.4m.
Bosphorus was established as an independent asset manager in 2011 by four partners with an average 20 years investment experience.
Currently Bosphorus is the largest independent asset management company in Turkey thanks to its consistent and positive track record in excess of the local risk-free rate, its direct funds raising capability and the implementation of a successful distribution model via the banking channel.
Furthermore, 20% of Bosphorus’ AUM are linked to institutional clients, mainly insurance companies. On the product side, the range of 10 managed funds span fixed income, equity and balanced strategies.
As of December 2014, Bosphorus had AUM of some TL1bn (equivalent to €390m), of which almost 70% in Turkish domiciled mutual funds and 30% in discretionary portfolios.
The Turkish asset management industry has €22bn in AUM as of December 2014 (of which more than 90% is invested in short term fixed income strategies) with around 40 asset management companies (of which 29 are independent) registered with the Turkish Capital Market Board.
The commercial and industrial integration of Azimut Portföy, AZ Notus Portföy and Azimut Bosphorus Capital Portföy creates Turkish largest independent player with a diversified product range and a distribution network with both proprietary financial advisors and third party distributors.
Capital Strategies Partners, a third party mutual fund distribution firm, holds the distribution of AZ Fund Management products in Latin America
CC-BY-SA-2.0, FlickrFoto: Fut und Beidl. ¿Aciertan las estrategias 'top-down'?
A new global survey commissioned by State Street amongst 235 hedge fund professionals reveals strong optimism within the industry. The findings show that respondents (55 percent) expect pension funds to increase their exposure to hedge fund strategies over the next five years. This figure increased to 63 percent when the question was asked more broadly about institutional investors increasing their exposure to hedge funds in the next five years.
Of the 55 percent of hedge fund professionals who expect pension funds to increase their allocation, 53 percent believe the main driver of this is the performance challenges facing investors’ portfolios. 35 percent believe it will be a growing focus on portfolio diversification and 13 percent who think it will be improved terms offered by hedge funds.
However, to really capitalise on the growing appetite for hedge fund strategies, nine out of ten industry professionals interviewed believe hedge funds will be required to more clearly demonstrate their value to prospective investors.
Maria Cantillon, global head alternative investment solutions sales at State Street said, “Despite the challenges facing the hedge fund industry, our findings show that many working in the sector are optimistic about its future prospects. This is being fuelled by challenges facing asset owners as they search for better returns and greater diversification. The hedge fund industry is maturing and becoming more transparent and competitive.”
In terms of how hedge fund professionals see their own firms changing over the next five years, 60 percent expect to broaden the range of investment strategies they manage; 37 percent anticipate that they will expand abroad and one in ten expects to acquire another company.
According to the survey, regulation will continue to have a significant impact on hedge fund managers. However, the full impact of Basel III is yet to be determined, with 29 percent of respondents believing that it will significantly increase their firm’s cost of financing, compared to 42 percent saying it wouldn’t and the remainder (29 percent) saying they don’t know. The findings also suggest growing competition from alternative mutual funds. Half of those interviewed believe that over the next five years, they will seize market share from traditional hedge fund strategies.
CC-BY-SA-2.0, FlickrPhoto: HSLO. MSCI Reports Record Surge in Demand from ETF Providers for Factor Indexes in 2014
MSCI Inc. a leading index provider to the ETF industry worldwide, is reporting a surge in demand from ETF providersfor its factor indexes, with almost half of new MSCI index-based ETFs launched in 2014 linked to MSCI Factor Indexes.
Overall, 95 ETFs based on MSCI indexes were launched in 2014, almost twice as many as the next index provider, with 42 (45 percent) of these linked to Factor Indexes, compared to six in 2013. 12 new ETFs tracking MSCI Multi-Factor Indexes, which combine more than one factor, were launched in 2014.
“2014 was a year of strong growth in the number of ETFs based on our indexes, in particular our factor indexes,” said Baer Pettit, Managing Director and Global Head of MSCI’s Index Business. “These numbers are evidence that our innovative index offering, combined with the strength of our brand, continue to make MSCI indexes the first choice of ETF providers around the world.”
Certain factors have historically earned a long-term risk premium and represent exposure to systematic sources of risk and return. Factor investing is the investment process that aims to harvest these risk premia through exposure to factors. MSCI currently calculates indexes on six key equity risk premia factors: Value, Low Size, Low Volatility, High Yield, Quality and Momentum.
With over 675 ETFs2 tracking MSCI indexes globally, more ETFs track MSCI’s indexes than those of any other index provider.
Hector Chacon, CEO of Texas Border Region, BBVA Compass. BBVA Compass Names Hector Chacon CEO of Texas Border Region
BBVA Compass announced today it has named Héctor Chacon the bank’s Texas border region CEO in a move aimed at fostering deeper ties to clients and communities in the region that stretches more than 800 miles from El Paso to Brownsville.
Chacon will lead the bank’s efforts to further tap into opportunities in the region, which has been important to BBVA since the global financial services firm entered the U.S. market with its acquisition of Laredo-based Laredo National Bancshares in 2004. BBVA Compass, BBVA’s U.S. franchise, now has a leading market share position in the upper and lower Rio Grande Valley, El Paso and Laredo.
Chacon’s new role is part of the bank’s broader reorganization, which was announced in November and combines BBVA Compass’ lines of business — Retail, Wealth Management and Commercial — into one unit. The new Consumer and Commercial Bank is designed to provide more comprehensive customer service while increasing productivity and revenues, and its emphasis on local market leadership builds greater accountability in meeting community needs.
“Héctor knows the region and he knows Mexico and that makes him an excellent choice to lead our efforts in the border cities, which have different needs and demands than customers in larger metro cities,” said BBVA Compass Chief Operating Officer Rafael Bustillo, who leads the Consumer and Commercial Bank. “He has the expertise to help our clients in this growing region.”
Chacon joined Bancomer, BBVA’s subsidiary in Mexico, in 1986, and its U.S. operations in 1997. Most recently, he led BBVA Compass’ International Wealth Management unit.
Photo: Kai Schreiber. WE Family Offices and MdF Family Partners Form Transatlantic Alliance for Global UHNW Families
As Ultra High Net Worth Families from the US, Europe and Latin America face accelerating change and globalization in all aspects of their wealth management, and as wealthy families continue to increase their demand for independent, conflict-free advice, two leading independent, family focused wealth advisors have established an alliance to collaborate in serving global wealthy families.
WE Family Offices, with offices in New York and Miami currently serves more than 65 families and advises in more than $3.4 billion. MdF Family Partners, based in Madrid and with offices in Barcelona, Geneva and Mexico City, currently serves more than 20 families and advises on more than €1 billion. The two firms have signed an alliance agreement, providing each firm and its clients access to the others resources, network and intellectual capital.
“As families themselves, as well as the investment opportunities and challenges they face, become increasingly global, we are forming the alliance to leverage the intellectual capital and expertise of each firm”, said Maria Elena Lagomasino, Managing Partner and CEO of WE Family Offices.
“MdF and WE were both founded on the same principles of independence and trust, and both have built successful businesses based on providing independent, conflict free, boutique advisory services to a select group of wealthy families”, said Daniel de Fernando, Managing Partner of MdF Family Partners.
Advisory clients of each firm will continue to be advised by that same firm but will benefit from access to a deeper global investment platform, and broader wealth planning services across multiple jurisdictions, including the United States, Latin America, The European Union, and Switzerland,” added Ms. Lagomasino.
“The Managing Partners of each firm –Ms. Lagomasino, Mr. de Fernando, Jose Maria Michavilla, Michael Zeuner– and I are confident that the values, culture and vision of each of our firms are highly compatible and aligned. Through the alliance, we can provide excellent service to international families from the US, Europe and Latin America”, said Santiago Ulloa, Managing Partner of WE Family Offices.
Oficinas de Dominick & Dominick en Miami. Wunderlich completa la adquisición de Dominick & Dominick Wealth Management
Wunderlich Securities has completed its acquisition of the wealth management assets of Dominick & Dominick, a privately-held investment firm based in New York. Wunderlich, a leading full-service investment firm headquartered in Memphis, Tennessee, now has more than $10 billion in client assets under administration and 600 associates in 33 offices across 18 states. Approximately 150 Wunderlich associates are based in the New York area, the largest concentration in the firm’s footprint.
“We are pleased to have successfully completed our largest acquisition to date, both in terms of client assets and associates,” said Gary Wunderlich, Wunderlich CEO. “Through this combination, our firm has grown by approximately 20%, adding 43 financial advisors and more than $2 billion in client assets. Looking forward, we are excited about the opportunity to further expand our presence in New York, Miami and Atlanta.”
“After working together to prepare for this acquisition, we are even more confident that our similar cultures and shared focus on client relationships will ensure a smooth transition for Dominick & Dominick clients,” added Wunderlich. “Dominick & Dominick financial advisors are now able to offer their clients additional resources and expertise available through Wunderlich.”
Dominick & Dominick (D &D) will operate as a division of Wunderlich Wealth Management, the firm’s private client group. Robert X. Reilly, who was chief operating officer of D &D, joins Wunderlich as a Senior Managing Director. Reilly will serve as regional manager over D &D offices in New York, Atlanta and Miami, as well as two existing Wunderlich Wealth Management offices in the New York area.
Kevin McKay, previously D &D CEO, has been named General Counsel of Wunderlich Securities. Michael J. Campbell, former D &D chairman, will join the Wunderlich Securities board of directors. Both will continue to be located in the D &D New York office at 150 East 52nd Street.
Terms of the transaction were not disclosed. Keefe, Bruyette & Woods, Inc. served as Wunderlich’s exclusive financial advisor in the transaction. Baker Donelson served as counsel.
Photo: Lucy B.. A Positive Outlook for Equities Despite EU’s Growth Gloom
Yet while the macro backdrop remains pretty cloudy –with significant squalls forecast from the election in Greece, difficulties in Spain and the early summer UK election– not all is actually that bleak in Europe, explained Neil Dwane, CIO of Equity Europe at Alliance GI in his last “Perspective on Europe”.
Equities remain attractively valued and offer a significant yield pickup against the financially repressed bond and credit markets, said Dwane. “Corporates are now actively engaging in industry restructurings, where, in general, Europe is at least 10 years behind the US. A weakening euro will boost European earnings in 2015, turning a five-year headwind into a tailwind at last and allowing European earnings to grow faster than US earnings for the first time since the start of the global financial crisis”.
With little correlation between economic growth and corporate profits, European companies are busily restructuring and refocussing, which is underpinning returns to shareholders and creating a good base for future profitability, argued the expert of Allianz GI. “A weak oil price is also good for Europe, releasing approximately 1 per cent of GDP to be redeployed into consumption and investment. The EU infrastructure plan may also be the first of a series of fiscal plans to truly boost demand in the coming years”, he continued.
“In Europe, investors now truly have to take more risk to obtain a return, as nearly all sovereign bonds and over half of the investment-grade credit markets yield less than 1 per cent – yet this allocation to fixed income represents approximately 80 per cent for many investors! A regional rebalancing for European investors in search of a reasonable return should see a rotation from bonds into equities in 2015”, added Dwane.
Foto: Jimmy Reu, Flickr, Creative Commons. Los inversores que invierten en real estate europeo a través de vehículos luxemburgueses son cada vez más globales
The Association of the Luxembourg Fund Industry (ALFI) has released the 2014 version of its annual real estate investment fund (REIF) survey, showing the development of the Luxembourg-domiciled REIF market as at the end of 2013.
According to the survey, 2013 was a good year for Luxembourg domiciled REIFs. 15 new Direct REIFs were launched, slightly down compared with 25 launches in 2012. Early signs for 2014 are very positive, with an additional 15 Direct REIFs launched in the first six months, bringing the total of Direct REIFs surveyed to 237, with an additional 40 Funds of Real Estate Funds completing the total survey population of 277 funds.
Marc Saluzzi, Chairman of ALFI, observes: “The sector has grown 276% since 2006, a compound annual growth rate of 21%. The continued growth in the number of REIFs in Luxembourg demonstrates that Luxembourg remains a favoured location to establish and maintain multi-national and multi-sectoral regulated real estate investment funds which continue to appeal to institutional investors and fund managers around the world.”
He continued: “The introduction of the AIFMD has impacted REIFs and the slight slowdown followed by an acceleration were expected. We believe Luxembourg continues to appeal to the global REIF industry as a domicile, as it combines investor protection with well-established industry practices at a reasonable cost.”
Key findings of the survey include:
Almost all of the new REIF launches were initiated by initiators in Europe with Benelux, German, and Swiss initiators again being the most active;
The most common target sector is still‘multi-sector’, with, 57% of the surveyed REIFs investing in a variety of sectors, with a preference for ‘office’ at 27% and for ‘residential’ at 21% in 2013. 30% of early 2014 launches, meanwhile, were in the more traditionally preferred ‘retail’ sector.
A single country investment focus still represents only 41% of the geographic investment strategies. This is a rise compared with 27% and 35% in the 2012 and 2013 ALFI REIF Surveys and supports a move toward simplification, but nevertheless underlines the suitability of Luxembourg investment vehicles for multi-national investments. The vast majority of the Direct REIFs surveyed invest in Europe, whereas eight funds invest in the Americas only and eleven in the Asia/Pacific region;
Although umbrella fund structures remain popular due to practical and cost considerations, the trend over the last few years has been towards a simplification of structures and strategies; as indicated by 64% of the funds surveyed having a single compartment structure.
In total 70% of Direct REIFs are closed-ended, reflecting the inherent illiquidity of real estate as an asset class and the difficulties of achieving investor liquidity on demand;
Similar to the findings of the previous two ALFI REIF surveys, average fund sizes continue to decrease, with the most common net asset value range between EUR 100 and 200 million and with the most common gross asset value range between EUR 400 and 800 million. Funds are becoming smaller, which reflects the more cautious capital raising forecasts of 2014 and preceding years.While target gearing is down in most of the ranges, the results are mixed, indicating some optimism in relation to the ability to borrow.
Investors are predominantly European, but a significant number also come from the Americas, Asia and the Middle East. Direct REIFs are widely distributed (but with a focus on specific geographical areas), with only 27% limited to a single country, and 24% being sold in more than six countries. The growing trend toward wider distribution confirms the global appeal of the Luxembourg real estate investment vehicles, especially those set up under the Specialised Investment Fund (SIF) regime, which has accounted for all new launches over the last 30 months;
Luxembourg domiciled Direct REIFs and funds of REIFs are mainly used for small groups of institutional investors, with 84% having less than 25 investors. Only 2% reported having more than 100 investors.
Luxemburg Real Estate Investment Fund (REIF) Survey can be downloaded here.
