Wikimedia CommonsFoto: SRGpicker, Flickr, Creative Commons.. Cerca de 19.500 profesionales superaron en diciembre el Nivel I del Programa CFA
CFA Institute, the global association of investment professionals that sets the standard for professional excellence and credentials, reports that 43 percent of the 45,693 candidates that took the Chartered Financial Analyst (CFA) Level I exam in December 2013 have passed and taken the first step to joining the next generation of highly educated and ethical investment professionals. In June and December of 2013 a total number of 93,195 candidates sat for Level I of the CFA Program, a globally recognized, graduate level curriculum that links theory and practice with real-world investment analysis, and emphasizes the highest ethical and professional standards.
The results come at a time when investment professionals worldwide report greater optimism over economic prospects for the coming year, but do not express confidence that the integrity of capital markets is improving, according to the CFA Institute 2014 Global Market Sentiment Survey (GMSS). The dedication shown by investment professionals taking the CFA Program demonstrates a strong desire to build a more trustworthy industry and develop a culture where ethical practice is just as important as investment performance.
“The financial community is dealing with a crisis of investor trust, and industry education at all levels is a critical part of rebuilding that trust,” said John Rogers, CFA, president and CEO of CFA Institute. “The next generation of investment professionals is instrumental in shaping the future of finance, and each one of these successful candidates has the opportunity to build the kind of industry culture that puts investors first and better serves society.”
To earn the CFA designation, candidates must pass all three levels of exam (successful candidates often report dedicating in excess of 300 hours of study per level); meet the work experience requirements of four years in the investment industry; sign a commitment to abide by the CFA Institute Code of Ethics and Standards of Professional Conduct; apply to a CFA Institute society; and become a member of CFA Institute.
The CFA Program curriculum is firmly grounded in the knowledge and skills required every day in the investment profession and covers ethical and professional standards, securities analysis and valuation, international financial statement analysis, quantitative methods, economics, corporate finance, portfolio management, and performance measurement. Level I exams are offered in both June and December and Levels II and III are offered only in June. It takes most candidates more than three years to complete the CFA Program, and requires dedication and determination.
The December 2013 Level I exam was administered in 93 test centers in 70 cities across 39 countries worldwide. Examples of countries and territories with the largest number of candidates that took the Level I CFA exam last December are the United States (10,317), Mainland China (7,823), India (4,179), Canada (3,554), the United Kingdom (3,136), Hong Kong (1,992), Singapore (1,529), South Africa (1,058), and United Arab Emirates (1,030).
Photo: chensiyuan. AZ Legan and Lanin Partners Join Forces To Launch a Latam Long/Short Equity Strategy
AZ Legan, the Brazilian partnership between Azimut Group and Legan Gestora de Recursos (“Legan”), have signed a partnership agreement with Latam specialist Lanin Partners to launch a Brazilian equity fund with a mandate to invest pan-regionally across the most important Latin America markets.
Legan is an asset management company specialized in low volatility strategies, with R$620mn AuM (equivalent to €193 mn) as at 30th November 2013. Legan’s flagship funds, Legan Low Vol and Legan Special, have been constantly ranked among the best Brazilian funds in their categories by Standard & Poor’s, Institutional Investor and Exame.
Lanin Partners is an independent asset manager specialized in Latam equities, with offices in Santiago, Chile, and Sao Paulo, Brazil, and currently manages only non-Brazil based funds with US$95mn in AuM (€71mn). Since its launch in June 2008, Lanin Latam long/short strategy has accumulated a positive return. The strategy is currently invested in Brazil, Mexico, Chile, Colombia and Peru.
Lanin Partners will bring to the partnership the on-the-ground presence, key to conduct in-depth research throughout the region thanks to a team with extensive experience in managing portfolios of Latam stocks. In particular, Sonia Villalobos, CFA, managing partner, has more than 25 years of experience analyzing companies in Latin America. She has worked in Chile and in Brazil, in both research and fund management roles, including five years as Head of Research at Banco Garantia. Sonia was the first person to obtain the CFA Charter in Latin America.
Alessandro Citterio, Lanin’s other managing partner, has pioneered the hedge fund industry in Chile, after having worked 17 years in London in several financial institutions, such as Goldman Sachs, Credit Suisse, Nomura and Bankers Trust.
The Brazilian fund, which will initially receive seed money from Azimut and Legan, will be structured as a “multimercado long and short” fund. It will be one of very few equity long/short funds in Brazil with exposure to the rest of the Latam region.
Sonia Villalobos says: “Expanding the geographical mandate of the fund doubles its investable universe, compared to investing in Brazil only. That creates many more investment opportunities and makes the return less dependent on the Brazilian market.”
Alessandro Citterio, founder of Lanin Partners, comments: “We expect this Brazilian fund to be only the first of many launched in partnership with AZ Legan. We are a Latam equity specialists, but AZ Legan’s knowledge of the Brazilian market is key for the success of our project together.”
Wikimedia CommonsPhoto: CEphoto, Uwe Aranas. Time to Switch from Emerging Market Debt to Equities
Emerging market equities are now more attractive than the debt of these nations, prompting a change of strategy at Robeco Asset Allocation. Debt values in emerging markets had a rough year in 2013, hurt in particular by currency devaluations, but the worst now seems to be over for stocks from these markets, says Lukas Daalder, Portfolio Manager Global Allocations.
And as the debt sector may get worse this year, due to a raft of economic problems in these countries, Daalder believes the time is right to take action. The Robeco Asset Allocation team is selling emerging market debt to make the sector ‘underweight’ in its portfolio and buying emerging equities to increase its allocation to ‘overweight’.
The team manages more than EUR 20 billion of assets in multi-asset portfolios for institutional and retail clients from its office in Rotterdam.
“Emerging market debt posted one of the weakest performances of the various fixed income asset styles last year, as well as the worst full-year result on record,” says Daalder. “Yields rose, currencies weakened and returns disappointed.” The wide devaluation of emerging market currencies has been a particular problem because it cuts returns when the bond values are translated into euros for the fund.
Three reasons why emerging debt will underperform
Daalder and his colleagues believe there are three reasons why emerging market debt will continue to underperform, due to economic factors, devaluing currencies, and the relative volatility of the sector against others.
Economic factors: growth is still weak in emerging markets. China has problems with the structural rebalancing of its high-growth economy, while lower commodity prices will reduce revenue for those nations reliant on natural resource sales. Meanwhile, stubbornly high inflation is persisting in some countries, particularly Indonesia and Brazil.
Currency problems: “We in general expect the downward pressure on emerging currencies to continue for now,” says Daalder. “Weaker economic fundamentals and higher current account deficits mean emerging market countries may allow their currencies to weaken even further as this will help their export sectors.”
High volatility: “Investors who had entered the market expecting stable and predictable bond-like returns found out the hard way that due to the currency component, emerging market debt volatility lies markedly above volatility for the high yield sector,” Daalder says. “Emerging market debt does not yet price in a sufficient risk premium for this unwanted volatility, so we have now decided to cut emerging debt to underweight.”
Volatility: high yield offers a better risk premium. Source: Bloomberg
In the multi-asset arena, the key question for the team is which asset is preferable if you start selling emerging debt, and another form of fixed income was briefly considered. “Within our tactical asset allocation methodology, we compare emerging market debt with high yield, which make sense as they are both fixed income categories,” says Daalder.
“However, given that we are already quite overweight in high yield, and given the relative illiquid nature of this asset class, we are hesitant to increase our position further. Instead, we prefer to switch from emerging market debt to equities.” So the money raised from selling emerging debt will be spent on equities, he says.
Three reasons for preferring emerging stocks
Indeed, there are three reasons to switch into emerging market stock markets, due to more favorable currency factors, the fact that equities are quite cheap, and better exposure to any improving outlook, says Daalder.
Currency factors: “Equities are to some extent hedged for a decline in currencies, in the sense that a weaker exchange rate boosts the earnings outlook for export-oriented companies,” says Daalder. “The case of Japan is a clear example: the weaker yen has had a high correlation with earnings, as well as the performance of the Nikkei.”
Inexpensive values: “Whereas we think there is no sufficient premium in emerging market debt, stocks from these regions are currently cheap compared to the pricing seen in developed markets. In other words, risks are better aligned with potential rewards,” he says.
Improving outlook: “If the emerging market outlook does improve (contrary to what we currently believe), we expect to see a better return in equities than in bonds,” says Daalder. Given the difference of the composition of the Emerging Equity benchmark (with much bigger weights for Taiwan and Korea), Daalder also expects this turnaround to materialize earlier in equities than in bonds.
Photo: Txd. Alternative UCITS Finish 2013 on a Strong Note
In Q4 2013, the alternative UCITS sector grew by 21 percent compared to Q4 2012, showing continued demand and investment in alternative strategies, according to the Alceda Quarterly UCITS Review. Strong equity markets, rallying into the year end, supported the demand for Alternative UCITS strategies and drove the Q4 performance up 2.7 percent, bringing year to date gains to 6 percent.
“The universe saw Assets under Management grow by over EUR 25 billion over 2013, translating to a growth rate of 21 percent. With investor confidence growing, and more funds being driven into Alternative UCITS strategies, as well as a supportive regulatory environment, we expect this positive trend to continue into 2014”, said Michael Sanders, Chairman of the Board, Alceda FundManagement S.A.
Tracking the Absolute Hedge Alternative UCITS Index, which encompasses 468 funds, assets under management reached a total of EUR 159.4 billion, an increase in AUM of 3.2 percent on the previous quarter. As equity markets continued their strong performance in the last quarter of the year, the AH Equity Long Short Index kept its position as the top performing strategy in the year with a 12.3 percent increase over 2013, following the 4.3 percent uplift in Q4 2013.
In addition, AUM within Equity Long Short reached EUR 18.4 billion, registering a 17.2 percent increase over the quarter. FX strategies were hard hit with both gains and assets declining 15.4 percent and 33.3 percent, respectively, in Q4 2013, leading to an overall decline in performance of 1.3 percent in 2013. Managed Futures funds, which declined 2.4 percent in Q3 2013, rebounded in the last quarter adding 6.1%, making it the best performing category in the quarter; however AUM declined 3.2 percent over the quarter showing the strategy is still facing some challenges.
Macro funds control the largest share of total AUM with EUR 42.4 billion invested, with assets growing by 6 percent over Q4 2013. The AH Macro Index advanced 1.4 percent in Q4 2013 and 2.3 percent over the year. Q4 2013 was a particularly active quarter with regards new alternative UCITS launches, with 17 new funds across strategies coming to market, primarily within the Equity Long Short and Credit Indices. The AH Credit Index ended the year with gains up 3.37 percent (+1.23 percent in Q4 2013) as investors reacted to the dislocation of bond markets. In line the new issues across strategies, the report reveals that investors are increasingly happy to support new products with new funds achieving significantly higher launch assets, often within their first year.
“The results of the Alceda UCITS Review in Q4 2013, and over the full year, demonstrate the growing investor confidence in the global economic recovery and the continued demand for alternative UCITS strategies. While the overall results were encouraging, there was a significant dispersion in performance between the best and worst performing funds in the space. Equity Long Short, the strongest performing category over the year, outperformed FX strategies by over 60 percent, demonstrating the importance of good fund selection and portfolio diversification. Assuming equity markets continue to rally, we expect Equity Long Short funds to benefit and maintain their levels of performance”, according to Sanders.
Wikimedia CommonsEdificios en Europa. Los fondos inmobiliarios europeos vuelven al radar de los inversores
Pan-European real estate fund returns rose sharply in 3Q 2013, reaching 1.9%, their highest quarterly level since March 2011. While total inflows look healthy, there are plenty of negative numbers or weakening net new flow statistics at country level.
“Spanish funds have had a torrid time with many retail funds still in wind-down mode. German funds were also hit hard, caught out by redemption requests and liquidity issues,” commented Barbara Wall, Europe research director at Cerulli Associates. “Many German funds have closed their doors to redemptions-for some funds the move has been permanent. That has led to a divergence in performance between the zombies and the survivors.”
In the year to end-November active funds substantially outperformed those in liquidation, returning 2.2% against -6.4%, but investors are still wary. German trade body BVI reports a dramatic fall in flows into offenen Immobilienspezialfonds in 2Q and 3Q. A primary cause is the introduction of the Alternative Investment Fund Manager’s Directive.
Added to that are property-specific measures. From July 22, 2014, new investors will have to hold their property fund investments for at least two years and give one year’s notice for redemptions. A mini-rush preceded implementation, only for sales to be crushed from August onward.
“A return to the good old days seems unlikely-we expect more closures and mergers,” said Cerulli senior analyst Angelos Gousios.
Photo: Francisco Diez. RBC to Sell its Jamaican Banking Operations
Royal Bank of Canada (RBC) has announced that it has entered into a definitive agreement to sell RBC Royal Bank (Jamaica) Limited and RBTT Securities Jamaica Limited (collectively “RBC Jamaica”) to Sagicor Group Jamaica Limited. The transaction is subject to customary closing conditions, including regulatory approvals and is expected to be finalized in the coming months.
“Consistent with our strategy of being a competitive leader in the markets where we operate, we determined after a careful and thorough review that the best decision for the long-term future success of RBC Jamaica was to sell it to Sagicor,” said Suresh Sookoo, CEO of RBC Caribbean. “Sagicor is a well established financial franchise in Jamaica with the size, scale and complementary capabilities that RBC Jamaica does not currently possess.”
“RBC has operated in the Caribbean for over 100 years and remains committed to this region. This transaction will allow us to successfully reposition our Caribbean business for the future and focus on regions where we have significant market share,” said Dave McKay, group head, Personal & Commercial Banking, RBC. “We are focused on strengthening our business performance, service and competitiveness in markets where we can be a leading competitor over the long term.”
While financial terms of the transaction were not disclosed, the purchase price approximately reflects the book value of RBC Jamaica. RBC expects the transaction to result in an estimated loss of C$60 million (before and after-tax) as a result of International Financial Reporting Standards, largely related to an estimated writedown for the proportionate share of RBC Jamaica goodwill and other intangibles acquired by RBC in connection with its acquisition of RBTT Financial Group in 2008. The transaction is not expected to have a material impact on RBC’s Basel III Common Equity Tier 1 ratio.
The loss is based on current estimates and is subject to change and will be reflected in the results of the first quarter ending January 31, 2014. RBC will release its first quarter 2014 results and host an earnings conference call on February 26, 2014.
Wikimedia CommonsJohn Stopford, Co-Head of Multi-Assets. What Are the Investment Prospects for 2014?
John Stopford, Co-Head of Multi-Assets at Investec AM, does not think we should be concerned about rising interest rates per se, but more of an issue is that as investors begin to anticipate higher interest rates in 2015 or 2016, that is probably not yet fully priced into government bond yields.
Click on the video to view the complete interview.
The leadership appointments as Deputy Chief Investment Officersare Mark Kiesel (a Managing Director in the Newport Beach officer, a Generalist Portfolio Manager and Global Head of the Corporate Bond Portfolio Management Group); Virginie Maisonneuve (a Managing Director in the London Office and Global Head of Equities); Scott Mather (a Managing Director in the Newport Beach office and Head of Global Portfolio Management); and Mihir Worah (a Managing Director in the Newport Beach office and head of the Real Return Portfolio Management team).
They join Dan Ivascyn (Managing Director in the Newport Beach office and Morningstar 2013 Fixed-Income Fund Manager of the Year (US)) and Andrew Balls (Managing Director in the London office and Head of European Portfolio Management) as Pimco’s Deputy Chief Investment Officers, reporting to Founder and Chief Investment Officer Bill Gross.
“Our six Deputy CIOs demonstrate the strength, depth and breadth of investment talent at Pimco. Individually and as a team they have delivered for clients consistently, and they will now help lead Pimco’s investing excellence into the future”, said Gross. “Together with our newly appointed CEO Doug Hodge, who has 25 years at Pimco, and President Jay Jacobs with a 15-year tenure (much of it globally), they will lead Your Global Investment Authority. The future here is bright, and it will get even brighter in the months and years ahead!”
The firm has also hired Sudi Mariappa, who will re-join Pimco as a Managing Director and Generalist Portfolio Manager, based in the Newport Beach office. Mr. Mariappa will return to Pimco from GLG where he has served since 2012 co-managing that firm’s absolute return fixed income offering. He was previously at Pimco from 2000-2011 as a Managing Director, Portfolio Manager and Senior Advisor.
The departures
Charles Lahr, a Managing Director and Equities Portfolio Manager, has decided to leave the firm pursue other opportunities, including spending more time with his family. Marc Seidner, a Managing Director and Portfolio Manager, has decided to return to Boston to take a role outside of Pimco. They both joined the firm in 2009.
Roger Yates, nuevo presidente de la Junta de Pioneer Investments.. Pioneer Investments da forma a una nueva Junta Directiva con mayoría de independientes
Following Pioneer Investments’ (Pioneer Global Asset Management “PGAM”) ordinary shareholders meeting held on January 22, the company announces the completion of its new board of directors with the appointment of its fifth independent member, Robert Glauber, Former Chairman and Chief Executive Officer of NASD now Finra (2000-2006) and currently Chairman of the Board of XL Group Plc and Northeast Bancorp.
Mr. Glauber, whose appointment brings the number of independent directors of Pioneer Investments’ board to a majority of five, joins other well-known individuals in the industry who were appointed to the board in May of last year: Claude Kremer, Partner of Arendt & Medernach law firm, former Chairman of ALFI (2007 – 2011), former President of EFAMA (2011 – 2013); Alessandro Leipold, Former Acting Director of the European Department at the IMF including a variety of senior management roles (1982-2008), currently Chief Economist of the Lisbon Council, a Brussels-based think tank; and Antonio Vegezzi, Former Member of the Management Committee & the Board of Capital Group, currently independent director at Banque Mirabaud & Cie and visiting professor at Geneva and USI universities, former Trustee & Member of the Executive Committee of the International Financial Reporting Standards Foundation (2005-2010).
In addition, Axel Börsch-Supan, Director of the Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy & currently Professor for the Economics of Aging at the Technical University of Munich, an existing member of the company’s board is the fourth independent director.
Confirming the strategic direction already set for the company, Roger Yates, a non-executive member and former CEO of Pioneer Investments before Sandro Pierri took over this role in July 2012, was appointed chairman of the board. Commenting on his appointment, Roger Yates said, “Having been closely associated with Pioneer during my tenure as CEO, I have seen the company grow from strength to strength. As a member of the board, I have been monitoring the progress of the strategic plan and I am pleased to see the excellent results achieved in 2013 under Sandro’s leadership. It’s a fantastic time to be chairing the Pioneer board at this key stage of the company’s growth.”
The other non-independent directors are Sandro Pierri (CEO, Pioneer Investments), Giordano Lombardo (Group CIO & Deputy CEO, Pioneer Investments) and Marina Natale (CFO, UniCredit). The term of this board will be April 2016.
Corpbanca in Chile. CorpBanca Agrees to Merge with Itaú in Chile and to Combine Businesses in Colombia
CorpBanca and Itaú Unibanco announced that they have entered into a definitive agreement to merge CorpBanca and Banco Itaú Chile in a stock-for-stock transaction. The transaction will create a new Chilean Bank that will operate under the Itaú name. Through this merger, Itaú Unibanco and CorpBanca will combine their banking businesses in Chile and Colombia to create an Andean banking platform.
Following the closing of the transaction, Itaú Unibanco and CorpGroup will sign a shareholders’ agreement to determine aspects related to corporate governance, transfer of shares and liquidity among others. The new Chilean Bank will control CorpBanca ́s and Itaú Unibanco ́s Colombian subsidiaries.
This transaction is subject to regulatory approvals from the Brazilian, Colombian, Chilean, Panamanian and United States regulators and also subject to Banco Itaú Chile’s and CorpBanca’s shareholders’ approval.
If approved, CorpBanca’s current shareholders will own 66.42% of the bank resulting from the merger of CorpBanca and Itaú Chile while Itaú Unibanco will own the remaining 33.58%. Prior to the closing of the merger, Itaú Unibanco will make a US$652 million equity infusion into Itaú Chile. Management expectsto receive all required approvals by the end of the fourthquarter of 2014. CorpBanca anticipate that closing will occur shortly following the receipt of all required regulatory approvals.
CorpBanca will be the surviving entity. Under the merger agreement, Itaú Unibanco will exchange all of the shares of Banco Itaú Chile in exchange for 172,048MM newly issued shares in CorpBanca, representing a 33.58% direct stake ofthe Chilean Bank immediately following the closing. Following the closing, the new Chilean Bank will acquire and control 100% of Itaú Colombia.
Key corporate governance terms to be included in the shareholders’ agreement are related to the Board of Directors and senior management teams. The Board of Directors of the new Chilean Bank will be comprised of 11 directors and 2 alternate directors, while the Board of Directors of the Colombian bank will be comprised of 9 directors. CorpGroup will be entitled to appoint the Chairman of the Board of directors. CorpGroup expects to appoint Mr. Jorge Andrés Saieh to serve as Chairman of the new Board of Directors in Chile as of the closing.
The Chief Executive Officer of the new Chilean Bank will be appointed by Itaú Unibanco. Mr. Boris Buvinic, current CEO of Itaú Chile, is expected to be appointed as CEO of the new Chilean Bank effective as of the closing. Mr. Fernando Massú, current CEO of CorpBanca,will become a member of the new Board of Directors. Other senior management members will be appointed by the Board of Directors following recommendation of the Management and Talent Committee.
As a result of the partnership, the new Chilean Bank will enjoy several benefits, including:
Combined franchise will have a greater scale and resources to compete more effectively:
Greater market share in Chile by gross loans with approximately 12.4% market share (excluding gross loans from CorpBanca Colombia and Helm Bank);
Opportunity to partner with a premier Latin American franchise;
Ability to leverage Itaú Unibanco ́s strong global client relationships;
Combined entity has the potential to generate significant synergies in Chile; and
Sustainable dividend flow supported by greater scale and earnings capability of the combined enterprise.
The transaction enables the creation of additional synergies through: synergies related to optimization of cost structures; savings derived from enhanced branch network; relevant savings derived from scalable IT systems; the improvement in cost of funding; and the ability to further leverage Tier I Capital.
The new Chilean Bank is expected to be the fourth largest private bank in Chile with US$43billion in assets, US$33 billion in loans and US$27 billion in deposits. With this greater scale, the institution will be able to exploit various cross-selling opportunities and access funding at lower cost.
Capital soundness of the new bank will be strengthened by the US$652 million capital increase that Itaú Unibanco will inject into Itaú Chile prior to the merger. As a result of this merger, customers of all entities involved will have access to a greater array of product offerings as well as a more extensive branch network (217 branches in Chile and 172 branches in Colombia).
