BNY Mellon, a global leader in investment management and investment services, has been appointed by PGGM Vermogensbeheer B.V., the investment management arm of Dutch pension fund administrator PGGM, to provide depositary services under the Alternative Investment Fund Managers Directive (AIFMD) for assets valued at EUR14 billion.
In addition to safekeeping the funds’ assets, which are held within five fixed income investment funds, BNY Mellon will provide oversight functions and perform cash monitoring as required by AIFMD.
Based in Zeist in the Netherlands, PGGM provides pension management, integrated asset management, management support and policy advice for pension funds. PGGM manages about EUR160 billion assets (as at March 2014) on behalf of more than 2.5 million Dutch participants.
Leonique van Houwelingen, Country Executive for the Netherlands at BNY Mellon, said: “BNY Mellon’s local presence and expertise in the Netherlands, our proven depositary and trust capabilities in Europe, and the flexibility we can offer were all key factors in PGGM’s decision to appoint us as their AIFMD depositary.
“We are well-placed to provide comprehensive support for our clients as they prepare for the far-reaching changes that AIFMD will bring. In addition to new requirements around reporting, operational, technology and control infrastructures, the Directive mandates the segregation of risk management and valuation functions from portfolio management. Through our fully licensed Amsterdam branch, we are able to provide comprehensive depositary bank services in The Netherlands to ensure compliance before the final deadlines of each respective regulation.”
Van Houwelingen added: “BNY Mellon has maintained a substantial operational presence in the Netherlands over the years. We are committed to leading the way when it comes to supporting Dutch fund managers impacted by AIFMD. The depository bank function is already a key element of our regional offering, and we have a well-established and robust track record in this space in Belgium, Germany, Ireland and Luxembourg.”
The new mandate extends BNY Mellon’s long-standing custodian relationship with PGGM. BNY Mellon currently services fund assets valued at EUR1 trillion and over 1,600 funds across the region.
Article 21 of AIFMD requires that an AIFM must ensure a single depositary is appointed for each alternative investment fund it manages. The depositary will handle the safekeeping of financial instruments and other assets; ensure proper and effective monitoring of the fund’s cash flows; carry out various monitoring and oversight tasks; and implement client reporting and escalation procedures to the manager and regulators in the event of breaches.
Global alternative asset manager The Carlyle Group has announced that Jeffrey C. Holland has joined the firm as Managing Director and Head of the Private Client Group. Mr. Holland comes to this newly-created position from Cole Real Estate Investments, Inc. where he was President and Chief Operating Officer, overseeing the Private Capital and Real Estate groups. Mr. Holland joined the firm on March 17th and is based in New York.
Mr. Holland will oversee the group responsible for the development of Carlyle’s relationships with individual investors and intermediaries serving these investors. The group led by Mr. Holland will focus on arrangements with bank feeder funds and other financial advisors through which high net worth and other qualified individuals may gain access to an array of Carlyle alternative asset products. Mr. Holland will also be responsible for the development and marketing of additional registered and non-registered products that may become more broadly available, including hedge funds, credit-oriented funds and other trading strategies offered through Carlyle’s Global Market Strategies and Solutions business segments.
David M. Rubenstein, Co-Founder and Co-Chief Executive Officer, said, “Individual investors – private clients who have a broad range of investment capacity – seek the same access to our fund strategies that institutional clients have had for decades. Providing qualified individuals greater access to alternative assets and developing new products and platforms that are accessible to retail investors and mutual funds is a priority for Carlyle, and Jeff brings to this effort extensive experience in designing, developing and launching innovative products.”
Mr. Holland said, “This is a great opportunity to bring Carlyle’s institutional brand and record of excellence into the private client arena, through a variety of products, from retail mutual funds to private placements. I look forward to working with the Carlyle team to further build on their early successes.”
Prior to his work at Cole Real Estate Investments, Inc., Mr. Holland was a Managing Director and Chief Operating Officer for US Retail at BlackRock, Inc. Earlier he was a Vice President of Consulting Services at Raymond James & Associates and held positions with Capital Resource Advisors and McKinsey & Company Inc. Mr. Holland holds a Chartered Financial Analyst designation and is a member of the CFA Institute.
Mr. Holland, 42, earned his B.A. from the University of Puget Sound and his J.D. from Harvard Law School.
Wikimedia CommonsPhoto: World Economic Forum. Euro-Zone Deflation: Making Sure ‘It’ Happens Here?
In one of his most famous speeches, recently retired Chairman of the US Federal Reserve, Ben Bernanke, set out how he would ensure deflation did not take hold in the US economy. The remarks to the National Economists Club in Washington DC were titled ‘Deflation: Making sure ‘it’ doesn’t happen here’.
The speech, which compared the remedy of sweeping tax cuts and open market purchases of assets to Milton Friedman’s helicopter drop of money, led him to be dubbed ‘Helicopter Ben’. The speech, which at the time was addressing the low rates of inflation in the US at the time, actually proved to be prescient and many of the policies set out were implemented in the aftermath of the global financial crisis.
Nearly twelve years after this landmark speech and five and half years after ‘Lehman Day’ is the European Central Bank (ECB) both ignoring Bernanke’s sage words and risking a debilitating debt deflation in the euro area?
Inflation in the euro zone is close to the bottom of the range of historic outcomes available from Eurostat. What then were the factors behind such a sharp and sudden change in euro-zone inflation relative to forecast just a few months previously? According to the report by Investec Asset Management, it is energy that has been driving inflation lower in recent months and, in particular, the base effect from 2012’s large increases, when energy prices were increasing at between 8% and 9%.
However, this is not the entire story. When disaggregating the data into the underlying countries that make up the euro zone, it becomes immediately clear that the peripheral euro-zone countries are flirting with outright deflation, whereas the more solid core countries are comfortably within historical norms.
This, of course, is a direct result of the structural adjustments the stressed euro-zone countries are undertaking without the traditional remedy of currency devaluation. This so-called internal devaluation has seen wages, consumption and government spending slashed. Ben Bernanke would not have been surprised by the flirtation with deflation in the periphery as he made clear in his 2002 speech: “deflation is in almost all cases a side effect of a collapse in aggregate demand – a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers.”
What would Dr Bernanke prescribe?
ECB President Draghi believes Europe will not slip into sustained deflation and has only adopted one of Bernanke’s five measures to avoid deflation.
In his 2002 speech, Bernanke noted that, in the first instance, it was necessary for central banks to preserve a buffer zone, which reduces the risk that “a large, unanticipated drop in aggregate demand will drive the economy far enough into deflationary territory.” There can be little doubt the euro-zone crisis qualifies as large and unanticipated and so it’s too late for buffer maintenance. The table sets out the ex-Chairman’s other recommendations and Investec’s view of whether or not they have been adopted by the ECB.
Investec is concerned that the euro zone is in a fundamentally dis-inflationary environment. At present deflation is concentrated in a limited number of periphery euro-zone countries rather than the core. If it spreads, deflationary alarm bells will start to ring more loudly.
In this environment, Investec prefers German bunds and is underweight in Italy and Spain, and it has a preference for European equities over US equities on valuation grounds.
The Latin American pension system has grown to more than US$900 billion in assets under management, according to new research from global analytics firm Cerulli Associates.
“The pension industry in Latin America has been a key source of allocations for global managers and exchange-traded fund sponsors over the years, and promises to grow in importance as the size of these privatized social security systems quickly expand,” comments Nina Czarnowski, senior analyst at Cerulli. “Local capital markets will eventually be unable to absorb these additional flows.”
“Cross-border distribution to the regional pension industry remains the biggest opportunity. The good news is that, while highly competitive, it remains a fairly low-cost endeavor,” Czarnowski explains. “In fact, some of the top global managers in the region have succeeded in gaining more than US$5 billion each without a local office, or a local product.”
To the credit of the pension managers themselves, performance, global expertise, and on-going support have been the most-sought-after characteristics when choosing among cross-border managers.
“There has been a flurry of merger and acquisition activity in the pension space in Latin America, beginning in the last quarter of 2012,” Czarnowski continues.
Cerulli’s research finds that the compulsory fund systems from Mexico to Chile are doubling in size every five to six years. As they amass large sums of assets, it will be imperative for them to channel greater percentages of their assets outside of their borders.
Giordano Lombardo is Global CIO at Pioneer Investments. The Self-Sustained Recovery in the US Shows no Signs of Being Derailed
The transition towards a self-sustained recovery in the US is supported by strengthening internal demand, driven by recovering capital expenditure and household consumption. Giordano Lombardo, Global CIO at Pioneer Investments, in an update posted in the asset managers blog follow Pioneer, expects to see mixed signals coming from economic activity indicators and labor market as the economy normalizes, but does not expect the trend in the main drivers of growth to be derailed.
Pioneer Investment’s growth estimates for 2014 in the US are:
U.S. GDP growth of 2.8%.
Personal consumption estimated to grow at a moderate pace and then accelerate in the second half of the year.
Inflation expected to remain below 2% but step up gradually during the year.
Non-Residential Investments to accelerate in the second half of the year, giving momentum to acceleration in capital expenditures.
If the economy develops as the Fed currently forecasts GDP growth around 3% in 2014 and 3-3.5% in 2015, unemployment around 6% by the end of 2015 – Pioneer Investments expects QE to be wound down by the end of 2014. Interest rates could then start to slowly increase during 2015 (Fed Fund futures currently project rates to slowly start to rise above the current 0.25% level in the autumn of 2015).
Stronger-than-expected global demand, supported by a stronger economic performance of the Euro Area could support both confidence and exports, and somewhat offset the impact from weaker growth in emerging economies.
A productivity pick-up, accelerating the pace of recent weak growth.
Stable improvements in the consumer sector balance sheet, coupled with stable income growth and progressive improvements in the labor market could support higher patterns of consumption.
Potential Risks to U.S. Economic Growth
A significantly stronger dollar might adversely impact the export sector by making U.S.-produced goods and services more expensive in foreign markets.
After years of shedding debt, the U.S. consumer might be more reluctant to spend, detracting from growth momentum.
Geopolitical tensions, involving directly or indirectly the U.S. could be highly disruptive for the flow of oil and for financial markets in general.
Gabriel Padilla, managing director de GGM Capital en Londres. Foto cedida. GGM Capital nombra a Gabriel Padilla managing director de su nueva oficina en Londres
GGM Capital, Luxembourg-based boutique investment bank, announced it has appointed Gabriel Padilla as Managing Director of GGM Capital Markets to head up its newly opened London office.
Gabriel has over 20 years of international experience (USA, Latin America & Europe) in business development, relationship management, sales, trading and project management in the areas of securities financing, collateral management, securities clearing, settlements and custody in international markets and across different asset classes.
During his banking career he has worked in leading international organizations including JP Morgan Chase, Banco Santander and UBS, among others.
Prior to joining GGM Capital, Gabriel showed his entrepreneurial spirit by creating and leading SecFin Consulting Limited, a London based consulting company. He is a senior advisor with Eleven Canterbury mentoring, and coaching technology and services companies, enabling them to better understand financial institutions.
Guillermo G. Morales, the Executive Chairman of GGM Capital, commented: “We are delighted to have boosted our capital markets credentials with the appointment of Gabriel and expanded into the London market. It’s an exciting time in our development and we welcome such an A class operator to the company.”
Wikimedia CommonsPatrick Lemmens, portfolio manager of Robeco's strategy New World Financial Equities . Regulation Creates Opportunities for Financials Too
The effects of the last major financial crisis have been far-reaching for banks and insurance companies worldwide. Investors tend to look at the negative aspects, like higher capital requirements that put pressure on returns. “But regulation creates opportunities too”, says portfolio manager Patrick Lemmens of Robeco New World Financials Equities, who received the Lipper Fund Award on 31 March for his fund’s strong track record.
Higher capital requirements lead to more expensive banking and insurance services
The banks are responding to the higher capital requirements by charging more for their banking services, says Lemmens. The new global regulatory system for banks, Basel III, is responsible for raising these capital requirements. This system is pushing up the requirements for capital and liquidity, while financial leverage needs to be reduced. Basel III is being introduced to tackle the inadequate regulation that contributed to the major financial crisis of 2008. Lemmers explains the consequences.
“This helps banks boost returns on their capital in order to retain access to the international capital market. There are not many other options for improving profitability. Reducing costs is harder, as cuts have already been made here.” In his opinion, this also applies to insurance companies. The introduction of Solvency II is impacting the European insurance sector. The objective of this European directive is to make sure insurers have sufficient capital reserves. “Covering longevity risk costs more in the Netherlands than in other countries as a result of the regulators’ high capital requirements.”
There is also another reason why higher capital requirements can lead to raised costs. The regulators are scaring off newcomers with more stringent capital requirements and reporting obligations, says Lemmens. “They are putting up daunting barriers that make it increasingly hard for newcomers to enter. This prevents new companies that are willing to slash prices from gaining access and thus benefits the established order.”
But European payment transactions offer opportunities for newcomers
There is one section of the banking world where competition is increasing, however, and where this monopoly is being broken: European payment transactions. The reason for this is that banks in the European Union are required to provide client data to competitors to make it easier to switch from one company to another. “This should make payment transactions cheaper and easier. In the case of client data, for instance, this includes account holders’ direct-debit and standing-order authorizations,” says Lemmens.
“The banks’ monopoly on payment transactions is disappearing. Competition will increase as new players start processing payment transactions for stores and webshops, for instance. A power shift is taking place amongst those parties handling payment transactions, making way for new innovative players. This is why I invest in companies such as Optimal Payments and Wirecard. These companies are expected to show rapid growth in the coming years.”
Lemmens sees opportunities in payment transactions mainly for innovative companies that challenge the established order, and therefore does not invest in large technology companies. “I often wonder what Google is up to in the banking sector. I don’t think they intend to become a bank. Clearly, they have a lot of search data that can make them money. And they can simply buy up a bank to obtain a banking license. But the downside of such a takeover is that it puts you in full view of the regulator, who could then easily decide that Google is a systemically important bank and must maintain additional capital buffers.”
IT companies benefit from increased outsourcing
The pressure of regulation on banks and insurance companies has increased in the aftermath of the financial crisis and has led to the outsourcing of IT activities, says Lemmens. Banks and insurance companies can no longer handle these activities on their own and are finally prepared to outsource them. In his opinion, dealing with IT has become too great a challenge to handle alone.
“Just providing the regulators with all the different loan data is a massive task for the banks. This does not happen simply by pushing a button – it is a complex process. Much of this data is sourced from diverse IT systems and is subject to different methods of administration. Nevertheless, you are expected to provide it in a uniform way, and so banks have to process, match and check their loan data.” “This requires extra investments in IT. Banks now no longer want to do the work themselves and are engaging third parties to handle it for them. An added advantage of outsourcing IT is that it enables you to make the related costs more variable, causing you to become less sensitive to the economic cycle.”
“Companies such as Cognizant, Simcorp and Temenos that supply IT services for banks will benefit from this outsourcing trend. They also happen to be the companies I have in my Robeco New World Financials portfolio.”
Lemmens sums up the consequences of regulation as follows: “Regulation is generating opportunities for investors. While strengthening the established order by setting up entry barriers, it can also generate opportunities for new players such as IT companies that provide services for the financial sector and for specialized companies active in handling payment transactions.”
Responding to strong demand from overseas investors, EARNEST Partners has announced the launch of an offshore vehicle to meet such demand. The UCITS platform will offer European, Asian, and other non-U.S. investors the ability to easily access a suite of EARNEST Partners’ equity strategies, including Global Emerging Markets Equities, Pan-Asian Equities, Frontier Markets Equities, Global ex U.S. Equities, and Global Equities. The firm has been managing equities since 1999.
The UCITS vehicle is domiciled in Ireland, where the Central Bank of Ireland is the regulatory authority with responsibility for authorizing and supervising the UCITS.
When asked about the opportunity that this presents, Paul Viera, the founder and CEO of the firm stated,“We seek to offer vehicles to clients that provide regulatory oversight as well as economies of scale. The UCITS structure is seen by investors as possessing important investor protection, regulatory, and disclosure characteristics. As a global firm with investments around the world, I am pleased to expand access to those opportunities.”
The UCITS vehicle, EARNEST Partners Global Funds plc. is structured as a Self-Managed Investment Company. State Street Fund Services (Ireland) Limited is the Administrator and State Street Custodial Services (Ireland) Limited is the Custodian.
EARNEST Partners has its headquarters in Atlanta, Georgia, and offices in Beijing and Rio de Janeiro.
Location, size, number of bedrooms and bathrooms are some of the most important things to the super-rich when looking to purchase a luxury home, however some are willing to sacrifice on space if the location is right, LuxuryEstate.com has revealed.
Type of property is very important to luxury buyers, about 45% of LuxuryEstate.com clients wish to have both a country house and city pad. For those only looking to purchase one property, there is an equal spilt between the city and the countryside; 27% opt for city living whilst 26% seek a rural retreat.
Location is everything for wealthy buyers. Currently, London leads the pack in desirable cities for the super-rich, with New York close behind. However an interesting new edition to the top-ten list is Miami, which sits at number seven.
Silvio Pagliani, President of LuxuryEstate.com, said: “Miami has seen a real estate boom in recent years, fuelled by low tax rates and instability in many South American countries. Miami is the nearest ‘safe’ playground for these international rich and luxury property is seen as a good investment.”
Many buyers are sacrificing on space if it means a house in the perfect location. In the most prized locations, such as central London, a quarter of LuxuryEstate.com clients dropped their standard on space to 100sqm as their absolute minimum size for a pied-à-terre. However a fifth believes they could not live in less than 1,000sqm.
Silvio Pagliani, President of LuxuryEstate.com, said: “Size is the ultimate status symbol to those wanting to buy a home in the countryside, but in London for example proximity to Harrods will often trump concerns over square footage for a residence.”
Bedrooms and bathrooms are also important factors to luxury home buyers. Around 25%, the largest percentile group, of LuxuryEstate.com clients six or more bedrooms in their homes. When it comes to bathrooms, even in smaller homes a minimum of 2 bathrooms is a must (27%), though with larger houses an ensuite for every room is required, reflected in the 22% of clients requiring six or more bathrooms in their home.
Wikimedia CommonsCarlos Deupi es el nuevo consejero general, vicepresidente ejecutivo y secretario corporativo de Brilla.. Brilla Group incorpora a sus filas a Carlos Deupi como consejero general
Brilla Financial Group has announced that it has hired Carlos Deupi as General Counsel, Executive Vice President and Corporate Secretary. Brilla is an international financial group catering to institutional and private clients worldwide, with broad expertise in private equity, asset management, banking, brokerage, financial advisory, insurance and trust services. Mr. Deupi will oversee and advise on general corporate, financing, and transactional and compliance matters for Brilla and its private equity funds and financial service providers.
Deupi is a corporate and securities lawyer with 25 years of experience at major law firms in New York City, Washington, D.C. and Miami. He joins Brilla from the Miami office of Squire Sanders, where he represented multinational corporations, financial institutions, banks, private equity funds and real estate firms in a variety of M&A, fund formation, investment, financing, workout and disposition deals with several billion dollars in value, as well as in regulatory matters. He also has significant experience in structuring real estate, hospitality and infrastructure transactions, including investments, financing, property acquisitions and sales, commercial leasing, construction and development.
Deupi is Chairman of the Miami Finance Forum, a leading nonprofit networking and educational association of investment and finance professionals in South Florida. He is a frequent speaker on financial and legal topics. He has been AV-rated by Martindale Hubbell since 2000, the highest possible ranking from this renowned firm.
Deupi received a B.S. in Finance from the Wharton School of the University of Pennsylvania in 1985. He graduated from Boston College Law School in 1988, where he was Articles and Citations Editor of the Boston College Third World International Law Journal. He has been admitted to practice law in New York, California, the District of Columbia and Florida.
“We’re delighted to have Carlos join Brilla and bring his legal background to the firm. He will be a key resource for the expansion of the group,” said David Brillembourg, Chairman & CEO of Brilla.
