Wikimedia CommonsFoto: Photog63, Flickr, Creative Commons.. Los inversores estadounidenses de alto patrimonio trabajan con una media de cuatro asesores financieros
New research from global analytics firm Cerulli Associates finds high-net-worth investors in the U.S. maintain an average of 4 investment provider relationships.
“Wealth provides many investors with the privilege of benefiting from institutional products and prices across asset managers, and it also grants them the ability to leverage their status among providers and advisors,” states Donnie Ethier, associate director at Cerulli. “High-net-worth investors continue to steadily diversify their advice providers.”
Cerulli’s latest report, High-Net-Worth and Ultra-High-Net-Worth Markets 2013: Understanding the Contradictory Demands of Multigenerational Wealth Management, analyzes the U.S. high-net-worth (HNW), with investable assets greater than $5 million, and ultra-high-net-worth (UHNW), with investable assets greater than $20 million, marketplaces.
“Overall, high-net-worth investors appear reluctant to terminate existing relationships,” Ethier explains. “In fact, nearly one-quarter of high-net-worth households report their primary provider controls at least 90% of their investable assets.”
A financial services provider that has a longstanding relationship with a high-net-worth investor must recognize that the client is already working with other providers, or, at least, the odds of their willingness to do so. Providers need not panic, because it may be that investors simply value skillsets at different firms, says the report.
“Many high-net-worth investors have moved on from the financial crisis, including recovered assets, optimistic economic outlooks, risk tolerances, and product mix,” Ethier continues. “The damaged trust of many financial institutions post-crisis seems to be a non-factor in the recent increase in provider relationships.”
Cerulli believes the modern trend of investors electing channels that offer greater autonomy, flexibility, and a wide variety of services will continue, and that we may not see a contraction of advice providers until the next generation of beneficiaries elects their own preferred wealth management channels.
Deutsche Asset & Wealth Management (DeAWM) announced that Philip Poole has joined the firm as Head of Research. In this newly created role, Poole will lead research activity across DeAWM’s investment platform globally.
With responsibility for macro research, he will make a key contribution to the house view generated by DeAWM’s Chief Investment Office. He will also run micro research, providing portfolio managers with investable ideas across all asset classes. In addition, Poole will play a prominent role in presenting DeAWM’s investment views to clients and the media.
Based in London, Poole is a Managing Director and reports to DeAWM’s Co-Chief Investment Officers, Randy Brown and Asoka Wöhrmann.
Randy Brown, DeAWM’s Co-Chief Investment Officer, said: “I am delighted to welcome an investment professional of Philip’s calibre to the firm. Having a powerful global research function gives our investment teams a crucial edge as they strive to deliver superior performance to our clients. Philip will help us to make optimal use of our global research resources as well as the best external research.”
Poole was most recently Global Head of Macro & Investment Strategy at HSBC Global Asset Management. From 2004 to 2010 he served as Global Head of Research and Chief Economist for Emerging Markets for the HSBC Group across asset classes. In earlier roles at ING Barings and Barclays, he was closely involved in sovereign debt restructurings in Ukraine and Poland, respectively.
Deutsche Asset & Wealth Management had USD 1.26 trillion of assets under management as of Sep 30, 2013.
ING Investment Management International (ING IM) has launched a new European Sustainable Equity strategy. The new fund is based on an institutional product that has a track record dating back to 2005. ING IM sees growth in demand for sustainable investments. In the last two years, the sustainable equity strategy has quadrupled in size.
The ING (L) Invest Europe Sustainable Equity strategy, which was launched on the 19th of December, invests in a diversified portfolio of sustainable stocks. The strategy combines risks and opportunities linked to environmental, social and governance (ESG) factors with a thorough financial analysis of companies.
Hendrik-Jan Boer, Head of Sustainable Investments at ING IM: “We believe that now is a good time to invest in European equities and we feel that sustainability is an important value driver. It is the key factor in identifying corporate quality. Academic and market research increasingly demonstrate that attention to the quality of environmental, social and governance factors can boost corporate profitability and competitiveness and thus the return of equity portfolios as well”.
The strategy’s portfolio consists of 50 to 90 names. The team targets the best stocks per sector and allocates most of the risk budget to stock selection. The fund aims to outperform the mainstream MSCI Europe Net Index by 2% per year.
Hendrik-Jan Boer concludes: “The launch of this new fund is in response to the increasing demand from clients for sustainable products. Recent research published by ING IM demonstrates that three quarters of investors believe that being environmentally and socially responsible – as well as encouraging good governance – is important to the future of the investment industry”.
The ING Europe Sustainable Equity strategy has launched with EUR 40 million in assets under management. It is a Luxembourg domiciled UCITS fund.
With the introduction of its first sustainable strategy in April 2000, ING IM was a pioneer in the European market. The asset manager’s sustainable strategies currently have a total of EUR 1,150 bln in assets under management.
JPMorgan Chase has announced that Kristin Lemkau will become Chief Marketing Officer for JPMorgan Chase. She will continue to report to Gordon Smith, CEO of Consumer & Community Banking. She will continue with her current responsibilities as Chief Communications Officer for Chase.
In this role, Ms. Lemkau will oversee brand strategy and advertising, sponsorships, market research and event marketing across the firm. She will work closely with each of the businesses on their product strategies and marketing approaches, and work to build core brands and overall relationship with customers.
“Kristin has had leadership roles in both the J.P. Morgan and Chase businesses,” said Mr. Smith. “She has a deep understanding of our brands and products, and strong relationships with the business CEOs and marketers across the firm.”
Ms. Lemkau has been with JPMorgan Chase and its predecessor firms since 1998. Since 2010, she has been Chief Communications Officer for Chase and last year, added responsibility for Corporate Brand and Employer Brand firmwide. She served as Chief Marketing Officer and Head of Communications for the Investment Bank from 2005 – 2010, and previously held senior roles in Media Relations and Internal Communications for J.P. Morgan. Ms. Lemkau graduated from Vanderbilt University. She is on the Board of the non-profit organization, the Sandy Hook Promise.
Wikimedia Commons. Pimco and Source Launch an Actively Managed Covered Bond ETF
Pimco and Source have launched the PIMCO Covered Bond Source UCITS ETF. The product offers a way to invest in the covered bond market, combining the advantages of an ETF with Pimco’s approach to active management. PIMCO Covered Bond Source UCITS ETF is managed by Kristion Mierau, senior vice president and head of Pimco’s European covered bond portfolio management team. Pimco has existing assets under management of over EUR 130 billion in the asset class.
The PIMCO Covered Bond Source UCITS ETF is traded on Deutsche Börse and has a first year annual management fee of 0,38%. Distributions are paid monthly. In addition, Pimco has entered into a cooperation with Clearstream, giving investors the possibility to order shares of an ETF through Clearstream’s Vestima platform as a mutual fund with daily fixing. This is a ‘first’ for Vestima and PIMCO.
HowardChan, vice president and product manager for PIMCO’s European ETF products, says: “We have designed this product as a unique solution for a wide range of investors who seek access to the covered bond market, combining Pimco’s active approach to covered bonds with the intra-day pricing and daily portfolio holdings transparency of the ETF vehicle.” Source CEO Ted Hood says: “We are delighted to grow our product offering in partnership with PIMCO, adding to our fixed income ETF suite”.
Why covered bonds?
Covered bonds have traditionally been unique to Europe, first issued in Germany and then followed by other European countries but increasingly they are being issued outside Europe. “This expanding investment universe creates new opportunities for investors and fulfils their increasing demand for ‘safe assets’,” said Mr. Mierau. “In the current low interest rate environment, covered bonds offer attractive risk-adjusted yields and are potentially a compelling alternative to broad European government bonds, as the asset class has historically provided higher returns with lower volatility and lower sensitivity to changes in market yield levels.” At current spread levels, covered bonds also offer investors a more attractive and secure way to gain credit exposure than unsecured senior bank debt, according to him.
For certain institutional investors, covered bonds offer additional advantages from a regulatory perspective. Banks benefit from the treatment of covered bonds as lower risk-weighted assets (RWA) under Basel III. Covered bonds are also considered “liquid assets” under the new Basel III liquidity regulation (LCR). Insurance companies can benefit from the privileged treatment of covered bonds under Solvency II.
Wikimedia CommonsRaimundo Martín is looking for a niche for the opening of the company in Latin America.. Mirabaud AM Seeks its Niche in Latin America and Aims to Reach EUR 1bn in Spain
Raimundo Martín commences the new year 2014 aiming to increase recognition for Mirabaud Asset Management, the firm which he manages in Iberia and Latin America, beyond the private banking business for which the Swiss group Mirabaud is mainly known. This recognition will open the doors of the Spanish and American markets, which he defines as “very competitive” and in which he has been working to position his company for about a year and a half. Although ambitious, Martín faces this challenge with the same blueprint which identifies Mirabaud, a long-term vision which allows him to proceed patiently but firmly. “It is important to define our company clearly and position ourselves accordingly,” he explained during an interview with Funds Society.
Therefore, he defines his firm’s current status within the Spanish market as “in the process of positioning” and is aware that it needs time to assert its funds’ track record in order to reach a “decent market share” in about three years, which he places at EUR1 billion in terms of assets. And all in a scenario in which the fund industry “will continue to grow but it will take years to return to pre-crisis levels.”
Meanwhile, he is looking for a niche for the opening of the company in Latin America. “The Latin American market is very large and offers excellent and varied opportunities. We are exploring them, and when we find them, we will work on them and employ all the necessary resources,” he said. Although this development is still in its infancy, and Martín does not as yet have an asset target in figures or any offices instituted, he can already speak of a twofold strategy.
On the one hand, Mirabaud AM steers towards established markets such as Chile, Peru and Colombia, working with insurance companies and fund managers already investing their pension fund portfolios abroad. The management firm is about to sign a contract with a local representative for these three countries. On the other hand, to markets where their boutique nature and their flexibility allow growth, such as Panama or Uruguay, where they work directly with agencies which place customized orders and for which Mirabaud AM creates private label products. Overall, it has much to do with family offices and private banks, because it fits in with the business of their own group.
And finally, he is analyzing the Brazilian market and potential partnerships with local management firms, after ruling out Mexico, where he thinks there is no place for his company yet. In these markets, in addition to asset management, he is also offering consulting services.
Investors’ Appetite
“Investors in the region have an increasing need to invest abroad, and wealth creation has outgrown the narrow local markets. Therefore, they need better tools to invest externally,” he explains; this provides an opportunity for institutions that offer both interesting products and knowledge on how to invest or manage the risks. According to Martín, the appetite in the region is mainly directed towards high yield debt funds and emerging markets, while in markets like Panama, private banks prioritize the preservation of capital.
In Spain the demand is slightly different, with investors seeking exposure to the Spanish stock market or convertible bonds, but also to high yield, while the interest for emerging markets is gradually returning. In fact, Martín believes that 2014 will be a good year for stocks (including Spanish) and more complex for bonds, although the high yield offers are attractive thanks to coupons. He also believes that it is the right time to enter emerging markets after the sharp correction suffered, with active management looking for quality companies. The directional alternative management (the option of the management company) is also interesting at the moment, since historically, own products have captured 80% of the market rises to 30% of market falls.
The Advantages of Being Boutique
In recent years the company focused on its product range in order to concentrate on those which add value: Spanish, Swiss and British equities (with local managers) and also emerging and global equities. In fixed income it opted for high yield and convertibles and has recently launched a strategic asset allocation in fixed income fund, which had a very good reception; having hired renown managers from large institutions such as BlackRock, Aviva or Crédit Agricole to manage those products, “automate everything, but for the rest you need talent,” he argues, hence the company’s continued recruitment policy. Mirabaud AM thus fulfilled its wish to combine the advantages of a boutique, in terms of flexibility, customer proximity and independence, with management teams which in the past belonged to large fund managers.
Martín believes that the firm’s presence in Luxembourg as well as its boutique nature with the support of a private bank with 200 years of history will help to achieve their objectives both in Spain and Latin America. The acceptance of that boutique nature has been very positive in markets such as the Spanish. “Following the financial crisis, independence, transparency and a customer-minded approach are highly valued,” he said, adding that in Spain there is room for these institutions.
Martín envisions a market in which there is room for both the large management companies and the boutiques, while there will be consolidation moves in the medium-sized institutions. As for international management companies in Spain, he firmly believes that some of these companies, regardless of size will no longer establish offices, but many will register their products and will have local distributors (as is the case in Chile for example). “The institutions which are distributors of third party funds, will not only represent small and medium sized institutions, but large companies also,” he predicts.
Wikimedia CommonsFoto: WhiteCat, Flickr, Creative Commons. Apollo Global Management cierra su fondo insignia de private equity en 17.500 millones
Apollo Global Management, together with its consolidated subsidiaries, “Apollo”, has announced that it held the final close of its current flagship private equity fund, Apollo Investment Fund VIII, L.P., on December 31, 2013 with USD17.5 billion of commitments from third party investors.
Fund VIII will seek to continue Apollo’s history of successful value-oriented and contrarian private equity investing to achieve superior risk-adjusted rates of return across all economic cycles. Apollo’s private equity funds have focused on three primary types of transactions including distressed investments, corporate carve-outs and opportunistic buyouts.
“We are very grateful for the overwhelming support for Fund VIII, which includes significant commitments from a preeminent global investor base consisting of both longstanding existing limited partners as well as many new investors. Fund VIII benefited from the support of a diversified group of investors, including many public pensions, sovereign wealth funds, corporate pensions, endowments and foundations, funds of funds and high net worth investors”, says Leon Black, Chairman and Chief Executive Officer.
In demonstrating an alignment of interest with its fund investors, Apollo and affiliated investors, including senior professionals, committed approximately USD880 million of additional capital to Fund VIII.
Apollo’s previous flagship private equity fund, Fund VII, which was raised in 2008, has generated annual gross and net internal rates of return of 38% and 29%, respectively, from its inception through September 30, 2013.
Apollo’s private equity segment had assets under management of approximately USD43 billion as of September 30, 2013, and 92 investment professionals around the world.
Foto: Biliwander, Flickr, Creative Commons. ¿Qué opinan los gestores sobre China?
Invesco has expanded its suite of low volatility products by launching the Invesco Low Volatility Emerging Markets Fund. Managed by Invesco Quantitative Strategies (IQS), the strategy will seek to outperform the MSCI Emerging Markets index over the long term with a lower risk profile.
“Invesco continues to provide investors alternative beta solutions such as actively managed low volatility strategies that have the potential to deliver higher risk-adjusted returns and help to preserve wealth during stressed market cycles,” said Donna Wilson, Director of Portfolio Management for IQS. “Managing volatility can help investors diversify their equity allocation beyond the traditional active and passive benchmark-centric strategies”.
Wilson follows: “Equity market risk is generally high compared with other asset classes, especially when considering emerging markets equity. We will seek to achieve a competitive long-term return while targeting a level of total risk (volatility) lower than the market index by relaxing traditional benchmark-centric constraints (e.g., country/sector exposures, market capitalization, and style). This creates a very broad opportunity set, allowing us to seek out securities with the most attractive risk/return profile”.
With approximately 24 billion dollars in assets under management, IQS has been offering actively managed global and regional low volatility strategies since 2005, primarily to institutional investors. On July 31, 2013, Invesco transitioned two long-standing US and Global Core Equity retail funds managed by IQS to focus on lower volatility and higher yield.
Low volatility strategies can be attractive for investors looking for potential risk reduction or return enhancement while maintaining exposure to the equity markets. Invesco already offers a passively managed approach to low volatility investing that seeks to track low volatility indexes, with Invesco PowerShares.
Ken Hsia, portfolio manager at Investec.. Globally Focused European Companies Offer Pockets of Value for Stock-Pickers
European equities have risen on a turnaround in economic sentiment in the region and global tailwinds from the US and Japan. Yet whilst European equities are not as glaringly cheap as they were, pockets of value do persist. Globally focused European companies have driven recent equity returns in the region, and European-centered businesses that have survived and which are able to exert pricing power in what are now less competitive market segments are likely to benefit. It is the market view of Ken Hsia, European Equity Portfolio Manager and member of the Investec Global 4Factor Equity.
Where is Europe in stock market terms?
Europe’s economy appears to be slowly recovering. The recovery is still fragile and the disparity between countries is stark, as highlighted by France, which saw its PMI slip to 48.0 in November 2013. Meanwhile, gross domestic product (GDP) per capita for many major European economies, except Germany, are still some way below 2007 pre-crisis levels.
Yet whilst European equity markets have risen over the past two years, only a few stock markets have exceeded their 2007 peaks, and the MSCI Pan Europe Index is still 30% off peak levels. It is not surprising that Denmark and Switzerland, home to some of the highest quality companies, have breached previous stock market peaks.
What are the drivers of opportunity?
Global winners
A closer analysis of the MSCI Europe Index reveals that the biggest constituents are global leaders such as Nestlé, HSBC, Roche Holdings and Vodafone. These companies have a global revenue footprint that is not heavily influenced by their European operations. These global businesses are numerous, not exclusively large cap, and are often not well known outside their area of expertise. They remain a compelling reason to invest in European equities.
Improved margins
There is great scope for margin improvement in Europe. In tandem with global growth, we are seeing signs that European earnings are improving. This is attributable, in part, to some industries taking action to tackle low capacity utilization by implementing rationalization plans, taking out costs and stripping out excess capacity, so that supply becomes balanced with demand. The end result is often fewer competitors, which is good for the survivors.
Deleveraging
Low capacity utilization remains an issue in many European markets. As a result, and as profitability improves, Investec believes we will see deleveraging of corporate balance sheets as the need to invest will remain tempered. Deleveraging has the impact of transferring value from debt holders to equity holders, but should share buybacks occur this has the dual effect of enhancing return metrics and showing good capital discipline, which generally sees investors mark the company’s shares up.
Relative valuation
European equities were trading at a 15% discount to developed market equities in 2012. Strong market movements have since narrowed the gap substantially and on a forward P/E basis European equities definitely look more fairly valued in aggregate. However, Investec believes that compared to history, on a P/BV basis, European valuations can lift from here, especially as Europe already ranks well on returns and risk.
What are the risks?
The most obvious risk is instability in the euro zone. However, there is no evidence of this presently. A central assumption surrounding our investment case is stability in the region (and indeed globally). We continue to see bond yields of those countries with stretched public balance sheets fall indicating investors are becoming ‘less stressed’.
Macroeconomic risks are still a factor – for example we are somewhat wary of the re-rating of certain southern European stocks we have seen during 2013. We believe a disciplined evidence-based investment approach should ensure one gets the balance between conviction and more hopeful optimism right. The biggest risk is the gradual withdrawal of stimulus by the US Federal Reserve and the influence that has on all markets. In this environment, our view is that a bottom-up stock-picking approach is beneficial given its focus on company-specific risk over market risk.
Deutsche Bank announced it has reached the USD 100 million commitment target for Global Commercial Microfinance Consortium II, a first-ever fund to support the growth of microfinance institutions (“MFIs”) that pursue a high level of client care, transparency of operations and pricing, and product innovation.
Consortium II’s goal is to encourage and facilitate a renewed focus on client service and product innovation in microfinance, while continuing to develop the field of social investing. To date, Consortium II has supported more than 30 client-focused MFIs operating in Eastern Europe, Latin America, and Asia. In addition to loan capital, Consortium II borrowers have access to technical assistance to improve customer service and achieve Smart Campaign certification for the Microfinance Client Protection Principles, which aims to embed client protection practices into the institutional culture and operations of the microfinance industry.
Consortium II also provides new opportunities to invest in social enterprises in the fields of healthcare, education, energy, agribusiness and technology that operate at the base of the economic pyramid. Consortium II has already disbursed a USD 2 million loan to the Indian School Finance Company.
Consortium II represents a partnership with investors who share a focus on responsible microfinance, including AXA France VIE, AXA Germany, Calvert Foundation, CNP Assurances, Développement international Desjardins (DID), Everence Community Investments, KfW, Left Hand Foundation, Money in Motion LLC, Overseas Private Investment Corporation (OPIC), State Street, Swedish International Development Cooperation Agency (SIDA), Storebrand and University of Denver’s Daniels College of Business.
“Global Commercial Microfinance Consortium II aims to provide access to much-needed capital for microfinance institutions that make customer service a priority,” says Jacques Brand, Chief Executive Officer, North America, Deutsche Bank.
