CC-BY-SA-2.0, FlickrPhoto: gualtiero. Investec Asset Management Expands Global Distribution Footprint with Italian Hire
InvestecAsset Management has announced the further expansion of its European Client Group with the appointment of Marco Orsi as Italian Sales Director.
This further supports Investec Asset Management’s expansion across Europe in both the institutional and advisor channel. With both core and specialist asset classes provided to clients through strategies such as Global Equity, Multi-Asset, Emerging Market Debt and Equity, the firm is well positioned to capture client demand for investment opportunities.
Orsi brings with him a wealth of insight from the fund management industry. Marco joins Investec from Allianz Global Investors, where he was Head of Retail Distribution for Italy. Prior to this, he was Head of Retail Business Development for Italy, Greece, Turkey, Malta and Cyprus at BNP Paribas Asset Management.
Orsi joins Sarah Pastore, Italian Sales Manager in focusing on the Italian market.
“We are pleased to add Marco’s experience and insight to our Italian team, supporting our growing European distribution footprint. In Italy, we are committed to growing and strengthening our relationships with private banks, retail networks and institutional clients. We believe there are great opportunities in Italy for our specialist, core and flexible investment propositions”, says Stef Bogaars, Managing Director, European Client Group.
Foto: Iracaz at en.wikipedia. T. Rowe Price extiende hasta 2027 el alquiler de su sede, propiedad del REIT Columbia Property Trust
Columbia Property Trust, Inc. has announced that it has finalized a renewal and extension of T. Rowe Price Associates’ lease that will keep the global investment manager at 100 East Pratt Street in Baltimore through 2027.
T. Rowe Price, which serves as the anchor tenant for the iconic Baltimore property and has approximately 1,300 employees on-site at its worldwide headquarters, will continue to occupy a ground floor Investor Center and 12 floors totaling 424,877 square feet. Terms of the lease were not disclosed.
Columbia Property Trust has owned the 652,988-square-foot Class A+ building since 2005. Long a fixture of Baltimore’s Inner Harbor with T. Rowe Price as one of its original tenants, 100 East Pratt Street includes a 10-story office building completed in 1978 and a 28-story tower finished in 1991. The office property is 96% leased.
“Retaining T. Rowe Price was one of our top priorities for 2013, and we have worked closely with them for a number of months to ensure that our mutual long-term goals for this property, our shareholders and the community could be achieved,” noted Nelson Mills, President, CEO and Director of Columbia Property Trust. “We are pleased they have made such a strong commitment to downtown Baltimore and to 100 East Pratt.”
CC-BY-SA-2.0, FlickrPhoto: NASA. Starwood Capital Group Acquires Portfolio of 10 UK Properties
Starwood Capital Group, a global private investment firm, announced that it had acquired, through an affiliate, a portfolio of UK properties from the Premier Property Group alongside Catalyst Capital, a European investment and asset management company. Terms of the transaction were not disclosed.
The portfolio of 10 properties comprises: Princes Mall in Edinburgh (located adjacent to Waverly Station); three multi-let office buildings — including Kingsgate in Redhill and 26 Cross Street in Manchester; a multi-let industrial estate in Edinburgh; two single fully let industrial units; a retail parade in Lands Lane, Leeds; and two development sites.
The transaction adds to Starwood Capital Group‘s growing portfolio in the UK and Ireland. In August 2013, the firm acquired a pool of 18 non-performing loans secured by 39 Irish commercial properties, which were heavily concentrated in Dublin, but also included sites in Killarney, Limerick and Waterford.
“This new transaction presents an opportunity to acquire assets in UK markets with strong demand generators at significantly below replacement cost,” said Adam Shah, Vice President of Starwood Capital Group. “These markets are recovering rapidly, and we believe that through this uptrend as well as active asset management, value can be added.”
“We are delighted to have completed this portfolio purchase from Premier Property Group with our long-term partner, Starwood Capital Group,” said Guy Wilson, a Partner of Catalyst Capital. “The portfolio provides an opportunity for the whole UK team to deploy its asset management skills across a range of properties.”
A long expansion in the global and U.S. economy is expected to last for a total of eight years (2009 to 2017) according to BNY Mellon Chief Economist Richard Hoey in his most recent Economic Update entitled, “Eight-Year Economic Expansion.” Global GDP growth should accelerate by one-half to three-quarters of one percent faster than in 2012 and 2013.
“Because the global and U.S. economy grew at only a slow pace since the recession low in mid-2009, the upsurge of inflation that one would normally expect to occur after many years of economic expansion has not occurred,” Hoey says. “As a result, developed world monetary policy is not poised to become aggressively restrictive in order to stifle inflation any time soon, but rather can remain stimulative for an extended period of time. It is true that the central banks of the U.S., Japan and the Eurozone are worried about inflation, but they are worried that inflation is too low.”
While Hoey believes that inflation will rise eventually, he thinks it will drift higher only gradually over the coming years and that governments and central banks will be tolerant of that gradual upward drift in inflation.
“We expect that a gradual upward drift in wage inflation, core inflation and reported inflation over the next several years is likely to be well-tolerated by (1) public opinion, (2) governments and (3) central banks,” says Hoey. “In the U.S., it has been three and a half decades since the double-digit inflation peak in 1980. The share of labor compensation in GDP is near the lowest level in half a century. In that context, a gradual upward drift in domestic wage inflation over the next several years should be well-tolerated by most and welcomed by many.”
Hoey believes that the U.S. economy expansion will go through three phases: (1) four years of growth averaging about 2%, which ended in mid-2013, (2) a minimum of three years of growth averaging about 3% and (3) a slower pace of growth in the final quarters of the eight-year expansion.
Sustainable economic expansion in the Eurozone
While Hoey cites long-term Eurozone challenges, including an aging demographic, high energy prices, excess debt, an elevated currency due to its current account surplus and a fragile financial system in peripheral Europe, he expects a sustainable economic expansion in the Eurozone, with the pace of real GDP growth in 2014 in the 1% to 1.5% range.
Japan: uncertainties over the long term
The country faces a “very choppy year in 2014” due to the increase in the value-added tax scheduled for April 1. Consequently, Hoey expects sharply declining economic activity for three or four months, followed by renewed expansion. Hoey is more uncertain about the long-term outlook, given challenging demographics and debt ratios.
China: the most complex issue
Hoey believes that the most complex issue in the global outlook for 2014 is the Chinese economic and financial outlook. Stating that the Chinese government has a choice whether to rebalance the economy and financial system gradually or rapidly, Hoey expects Chinese 2014 economic growth can persist gradually at about the same pace as in 2013, roughly 7.5%.
“Overall, we believe that global economic growth should accelerate in 2014, 2015 and 2016 to a growth rate one-half to three-quarters of 1% faster than in 2012 and 2013,” Hoey concludes. “We expect an ‘eight-year economic expansion’ in the global economy and the U.S. economy.”
CC-BY-SA-2.0, Flickr. Ignis registra en España su fondo de retorno absoluto con deuda emergente
Ignis Asset Management has registered the Ignis Absolute Return Emerging Market Debt Fund for sale in Spain. The fund, which was launched in Luxembourg in November 2013 is now €75.6 million in size, and is based on the same strategy that has been run in for a UK institutional client for two years, since January 2012.
The Absolute Return Emerging Market Debt Fund is managed by Dan Beharall, Head of Emerging Markets Fixed Income, who joined Ignis in December 2010 having previously worked for Henderson Global Investors. Dan is supported by Sailesh Lad, Deputy Portfolio Manager, and Mikhail Volodchenko, Market Analyst.
The fund aims to deliver a positive total return in excess of cash on a rolling twelve month basis, independent of bond market conditions, by taking long or short net exposures to emerging market fixed interest securities and to foreign exchange and financial derivative instruments. The fund will appeal to investors who are seeking an absolute return from exposure to emerging market bonds through a proven, low volatility investment strategy.
CC-BY-SA-2.0, FlickrMark Breedon, co-Head of 4Factor Equities at Investec. Earnings Quality and Technical Momentum Support US Equities, But What About Valuation?
Mark Breedon, co-Head of 4Factor Equities, highlights the team’s most important themes and market sectors for 2014.
What are the most important themes that could drive returns in 2014?
a. Valuation – We think global equity market valuations are justified relative to fixed income, but in absolute terms it is more difficult to evaluate. However absolute value is not a prerequisite for markets to go higher and there is no doubt that we are seeing decent strength in some momentum measures as we are seeing the feed-through of money coming out of fixed interest and cash into equities. Our proprietary 4Factor screen has been highlighting the US as the most attractive region for some time on the basis of quality and earnings and technical momentum. However the valuation case is now difficult to make in a broad sense relative to other regions around the world.
Emerging markets are ranked as the least attractive area by our screen at present. Earnings revisions have been generally poor due to the higher weighting of commodity stocks, and also rising costs (especially labor). However an interesting positive factor has been the improvement in quality which we put down to improved corporate governance. It is also evident that there is now a clear value case for EM relative to other regions.
b. Utilization of cash balances/CAPEX – Levels of operating profitability, measured by cash flow return on investment (CFROI), have remained relatively high since the global financial crisis but this has been achieved primarily due to cost cutting. As a result, companies have been beating expectations in terms of bottom-line profits but top-line sales growth has been disappointing for some time. Although companies have remained relatively profitable, they have not been using cash to invest in new plant and equipment, as expectations for demand have remained subdued. Merger and acquisition activity has also been limited. As a result, balance sheets currently contain a lot of cash and this is putting downward pressure on returns on equity. Like many investors we are hoping for more in the way of topline growth coming through because that should drive up the confidence levels needed to invest for the future.
Where is the consensus perhaps wrong?
Consumer staples look expensive relative to history and relative to the market. The only support you get for this sector is high quality but there is little value, negative earnings revisions and poor technical momentum.
Which sectors look attractive?
a. Insurance – We like insurance, primarily in US and Europe. Momentum in the form of business volumes in the sector have picked up at the same time as yield curves steepen; insurance companies should make more money. Annuity books are increasing in value as they will be investing at a higher rate and they become more profitable. Capacity seems to have come out of that side of the business, so pricing has remained firm. Capital issues have been resolved over the years partly from selling businesses and partly from becoming more profitable. As capital is building they’re giving that money back to shareholders in terms of stock buy- backs and dividends.
b. Materials – Materials have underperformed considerably and many people are potentially looking to invest based on the value case. However we feel that the sharp deterioration in earnings expectations has hindered optical value for profit driven metrics. The two areas where we’ve been a bit more interested in within materials have been US alternative energy and US refining. Both of which are scoring relatively well in a poor sector. The reasons for this are fracking and horizontal drilling. The big US refineries will start moving towards exporting product as they become more competitive as a result of cheaper feedstock. There are clearly infrastructure bottlenecks but they are being cleared. So we have quite a strong exposure to US refiners, and to drillers.
c. Technology – Technology has continued to be a relatively strong steer from our screen. But performance has been disparate within different sectors. We like semconductor manufacturers where things have not been as bad as many feared. In semi-conductors part of the issue has been the concern that people aren’t going to buy more PCs. That is true but actually there has been a pick-up in demand for chip content in other areas such as mobile internet and cars where demand has been rising around 10% a year. Also valuations here are very low but technicals are weak, so the market hasn’t latched on to this idea as yet.
d. Services – One area where we’ve been seeing the better side of revisions has been the services sector. There is quite good value, reasonable quality, earnings revisions have been at the high end and technical trends have been better. It is a very broad disparate group; so therefore a good area for finding attractive companies.
Brown Brothers Harriman (BBH) has announced that Michael McGovern has joined the firm as Managing Director, Chief Information Officer and Head of Systems. In this capacity, McGovern is responsible for the management and leadership of the firm’s technology strategy, application development, and systems infrastructure across all business lines. McGovern is based in New York and reports to BBH Partner and Global Head of Technology, Taylor Bodman.
McGovern joins BBH from Citi Transaction Services where he spent the last decade serving as Managing Director and Global Technology Head of Securities & Fund Services. McGovern’s 26 year career in information technology includes posts at Chase Manhattan Bank and Chemical Bank.
“For many years, clients have selected BBH’s financial services because of the depth and specialization of the technology behind them,” said Taylor Bodman. “Since the establishment of our Infomediary business a dozen years ago, BBH has offered technology services independently of financial services. With over 150 leading asset gatherers now serving their clients using BBH technology as their own, we have two synergistic businesses. Mike has joined BBH to lead these mission critical activities as we expand the geographic and functional scope of our technology.”
“Through the flexibility to export our technology to help large enterprises scale their businesses, BBH is supporting an underserved growth segment of the market. Meanwhile, BBH continues to invest heavily in the ongoing evolution of technology required across its key business lines. That’s very exciting for the industry and our clients”, said Michael McGovern.
CC-BY-SA-2.0, FlickrFoto: @Doug88888, Flickr, Creative Commons.. Diane Sobin, nueva responsable de Renta Variable estadounidense en Threadneedle tras la marcha de Cormac Weldon
Cormac Weldon, Head of US Equities at Threadneedle Investments, has resigned and will leave the firm in April following full transition of his responsibilities, announced the asset management firm. Portfolio Manager Stephen Moore will also leave Threadneedle.
Diane Sobin becomes Head of US Equities reporting to Leigh Harrison, Head of Equities at Threadneedle. In addition to investing in the London based team, Threadneedle announced that it would increase its collaboration with Columbia Management’s substantial US Equities team. Columbia Management is the US-based asset management subsidiary of Threadneedle’s parent company, Ameriprise Financial. Threadneedle and Columbia manage a combined $117bn AUM in US Equities, with 56 Portfolio Managers and 58 analysts located in London, Boston, New York, Minneapolis, Portland, Hartford and Stamford, managing a full range of strategies.
According to Citywire, Cormac Weldon and Stephen Moore will be joining Artemis, a London-based asset management boutique, in April.
Mark Burgess, Chief Investment Officer at Threadneedle said: “Cormac has decided to leave Threadneedle after 17 years and we wish him well and thank him for his valuable contribution to the firm. Following his departure, we will continue to invest in our London team under Diane’s leadership, while also better and more fully utilizing the research resources of Columbia Management.”
Campbell Fleming, Chief Executive Officer at Threadneedle said: “Threadneedle has a well-established team-based investment process that has produced a strong and consistent track record of results for clients and this will not change. The extensive additional resources and expertise available to our US Equities team will provide added depth to our overall offering.”
Diane Sobin joined Threadneedle in September 2011 from Columbia Management, where she was a New-York based US Equities Portfolio Manager. Diane has 30 years’ experience in the industry, 28 years managing US Equities. She joined Columbia Management in 2001, and co- managed large and mid-cap value mutual funds and institutional portfolios. Diane will assume lead manager responsibilities for the Threadneedle American Select Fund. Diane currently co- manages the Threadneedle American Smaller Companies Fund along with Cormac and she will assume responsibility for this fund.
Nadia Grant, whose appointment was announced on 20 January and who starts at Threadneedle on February 3, 2014, will join Diane. Nadia joins from JP Morgan Asset Management where she was a portfolio manager focusing on US equities within the global multi-asset group, managing over $5bn in multi-asset solutions.
Nadia Grant will become lead manager of the Threadneedle American Fund. Ashish Kochar and Neil Robson will become co-managers of the Threadneedle American Extended Alpha Fund and the Threadneedle American Absolute Alpha Fund. Ashish and Neil currently manage the Threadneedle Global Extended Alpha Fund, which has achieved first quartile performance over 1, 3 and 5 years. Ashish joined Threadneedle in 2008 and has nine years’ experience in asset management. He previously worked as an analyst in the US Equities team. Neil Robson joined Threadneedle in 2011 and has 25 years’ experience as a fund manager covering global equities.
Photo: Guanajuato city. Fibra Inn Announces the Acquisition of Hotel Mexico Plaza Leon Centro Max, to Be Converted to Wyndham Garden
Fibra Inn, a Mexican real estate investment trust specializing in the hotel industry serving the business traveler, announced the acquisition of Mexico Plaza Leon Centro Max Hotel, located in the state of Guanajuato. This hotel will be converted to the Wyndham Garden brand.
This is the third hotel acquired from Grupo Mexico Plaza, which is a regional hotel chain primarily present in central Mexico. The acquisition price was Ps. 150 million, excluding Ps. 6.9 million in expenses for brand name change. Fibra Inn’s internal committees approved the purchase of this property at a stabilized cap rate of 10.1%. The acquisition was paid in cash with the proceeds from the initial public offering that took place on March 13, 2013.
The conversion of this property to the Wyndham Garden brand will be completed by April of 2014. This property has 126 rooms, will operate under the limited service segment and its operation will be conducted by the Fibra Inn´s Hotel Operator, subcontracting the current Hotel Operator.
Fibra Inn opted to purchase this hotel for the following reasons: Bajio is an area with high economic growth, driven by the automotive industry, with an increase in direct foreign investment that has led to occupancy growth rates and increased demand for groups and extended stay. Leon is a market with a strong hotel demand, as it is the Bajio’s most important city in terms of highest hotel occupancy as reported by the Ministry of Tourism and the largest in the state for its economic activity. Leon in one of the most benefited cities due to the Bajio’s economic growth, capturing the majority of the hotel demand compared with other cities of the area; it is the most complete in services and installations, which makes it a more attractive option compared to other less important cities of the state of Guanajuato. The hotel has experienced a solid performance with the regional Mexico Plaza brand, which is expected to improve even more upon conversion to the international Wyndham Garden brand. It is a hotel focused on suites, which is a segment with longer duration of stay and less competition.
With this acquisition, Fibra Inn has 20 hotels in its portfolio, plus two under development, with a total of 3,976 rooms, of which 3,312 are currently in operation.
German and Australian stocks are among the more attractive equities singled out in the Mellon Capital Management Corporation Investment Perspective for Winter 2014. Equities across the regions appear poised to benefit from positive earnings forecasts and attractive valuations, the report said.
“We see moderate overall growth for the global economy, with positive momentum in the U.S. and Europe, which is similar to the projections we made in the third quarter of 2013,” said Jeff Zhang, executive vice president and chief investment officer for Mellon Capital. “We did see slight easing in leading economic indicators for both Japan and the UK.”
Among developed markets, Mellon Capital believes German equities are positioned to benefit from their exposure to the improving global economy, particularly as demand for autos increases in the U.S. and emerging markets. In addition to attractive valuations, Australian stocks also appear to offer higher dividends and lower volatility than in many other markets, Mellon Capital said.
In Asia, Mellon Capital said it is positive on Korean equities as they are supported by strong earnings forecasts and a potential pickup in exports if the developed market economies recover in 2014 as the consensus is expecting.
Mellon Capital said it is negative on Latin America. In Brazil, government policies could create market volatility prior to the October election; and Mexico appears hampered by a slow recovery and high valuations, the report said.
In the U.S., Mellon Capital said it expects a moderate-growth environment that could create investment opportunities in information technology and energy.
Mellon Capital said it continues to favor stocks over bonds due to a combination of reduced macro uncertainty, a benign backdrop for earnings growth, and a potential increase in term premia as the Federal Reserve tapers its bond purchase plan.
