Foto: Urbanrenewal. UBS Global Asset Management divide su negocio de hedge funds
UBS Global Asset Management has announced that itsAlternative and Quantitative Investments (A&Q) hedge fund platform will be reorganized into two separate business areas with immediate effect – Alternative Investment Solutions (the multi-manager and hedge fund advisory business) and O’Connor (the single manager hedge fund business.)
The Alternative Investment Solutions (AIS) business will be led by Bill Ferri. AIS is today one of the largest investors in hedge funds in the world. Under Bill’s leadership, AIS will be expanded to include additional entrepreneurial businesses in the alternatives arena. Bill continues to be a member of the UBS Global Asset Management Executive Committee.
Dawn Fitzpatrick will assume full leadership of O’Connor, in addition to her current role as CIO. Dawn will become a member of the Global Asset Management Executive Committee, reporting to John Fraser, Chairman and CEO of UBS Global Asset Management.
According to John Fraser “the move allows each business to operate as distinct entrepreneurial boutiques – something that is increasingly important for our clients.” He added, “it also provides focused leadership to drive the further growth of these successful alternatives businesses, a key strategic priority for UBS Global Asset Management.”
Foto: Averette. BBVA Compass refuerza su negocio de Private WM con la contratación de Mark Chiappara
BBVA Compass announced that Mark Chiappara has joined its U.S. private wealth management business as a senior private banker, located in Miami.
In his new role, Chiappara will focus on serving ultra-high-net-worth clients and select private institutions in the United States.
“Mark’s tremendous skill set, which includes capital markets and structured lending, have contributed to his position as one of the top private bankers in the country,” said Steve Sanak, director of Private Banking at BBVA Compass. “With a proven track record of capturing new relationships, we expect Mark to have a significant impact on our Wealth Management business.”
Prior to joining BBVA Compass, Chiappara held senior positions at Deutsche Bank, Bank of America, Lehman Brothers and Goldman Sachs. Chiappara earned a bachelor’s degree from Washington and Lee University and a master’s degree in business administration from the University of Chicago, and has achieved the CPA designation.
Foto: Henrickson. RBC Wealth Management nombra co-directores para la región caribeña
RBC Wealth Management has announced the appointment of David Foster and Mike Adams as co-heads of the Caribbean business, based in Cayman and Barbados respectively.
Mr Adams, who was most recently Head of Operational Risk Management for RBC Wealth Management globally, has assumed regional leadership of the teams based in Barbados, with accountability for the corporate and institutional business and providing directional support to the Caribbean-based Operations, Technology and Functional teams. He joined RBC via the acquisition of Barclays’ US private banking operations in 2002, and has, since then, held a series of senior compliance and risk management positions within RBC’s Wealth Management operations worldwide.
Meanwhile, Mr Foster has assumed responsibility for the operation and supervision of the Investments, Trust and Private Client teams, including fiduciary, banking and relationship management solutions delivered through offices in Cayman, Barbados and the Bahamas. He joined RBC Wealth Management in 2012 from Coutts, where most recently he was Managing Director of their Cayman business. Mr Foster has over 20 years of experience in leading teams that advise international high net worth and ultra high net worth individuals and their families.
Both Mr Adams and Mr Foster will report to Stuart Rutledge, Head, RBC Wealth Management – British Isles and Caribbean.
Wikimedia Commons. BigSur Closes its Eighth Commercial Real Estate Transaction in Five Years
BigSur Partners, a multifamily office based in Miami headed by Ignacio Pakciarz and Rafael Iribarren, has completed its eighth Commercial Real Estate transaction in five years. This is the fifth acquisition in the Class A office market. The first acquisition took place in 2009, selling it a year and a half later, and earning an IRR of 30% for its investors. The other properties acquired were an industrial distribution center on the outskirts of Atlanta, Georgia in 2010, 100% of which was leased to General Mills, and a ‘Multifamily’ complex built in 2012 on the outskirts of Dallas-Fort Worth; its acquisition was completed in late 2012.
The latest acquisition is one of the four ‘Pods’ of the Merrill Lynch Campus in Princeton, NJ, which has a covered surface area of 1.8 million square feet. The campus was built in the year 2000 at a total cost of $ 800 million ($ 447/per square foot). Today the campus houses 6,800 employees of Bank of America Merrill Lynch and for the financial institution is an important complex within the private banking sector globally.
BigSur decided five years ago to seek income diversification for its clients and saw an opportunity to take advantage of extremely attractive valuations for what they call “core assets”. What they have been doing since 2009 is looking for investments which are rented with good tenants, in good locations and with the expectation that the yield is achieved by the rental income generated by the properties and not by the potential appreciation of the assets.
Another important decision made by BigSur Partners is to invest jointly and directly with institutional funds in projects personally selected by them, instead of investing through funds or REITS. “What we achieve by this is to offer our clients the option of investing in each property the amount of their choice and they all appreciate this flexibility”, said Rafael Iribarren, founding partner of BigSur.
Although the cost of funding has risen in recent months, BigSur still sees potential in certain sub-markets, although they admit they are seeing fewer projects which are as ‘obvious’ as what they saw two or three years ago. They are currently studying new alternatives for investors who are looking for solid investments which generate fixed incomes with low correlation to the bond market.
Wikimedia CommonsFoto: Poco a Poco. Cayman Islands Signs FATCA Agreement Increasing Pressure on Other Fund Domiciles
USA has reached a preliminary agreement with the Cayman Islands for the Caribbean nation to meet FATCA rules. This could act as pressure for other “tax havens” which for the moment have failed to adopt those rules.
The Cayman Islands have said they will comply with FATCA regulations which will come into force in July 2014, and for which the foundations for an intergovernmental agreement (IGA) have been laid, and, as recorded by Reuters, the official signature will be held soon
FATCA requires for foreign financial institutions to notify the U.S. tax authority (IRS) of the accounts held by U.S. citizens with more than $ 50,000. Financial institutions which do not comply will see their benefits in the U.S. undergo tax withholding of 30%, which in fact, in most cases, means evicting them from the country.
The Cayman Islands are a popular destination for registration of investment funds. The country has no income tax and is often referred to as a “tax haven”. According to industry sources, the thousands of hedge funds, private equity funds and mutual funds domiciled in Cayman Islands were in favor of reaching an agreement to preserve their access to the U.S. market.
The official signing of the FATCA agreement by Cayman Islands will put pressure on other low-tax countries which harbor investment instruments, such as Luxembourg, Bermuda and the British Virgin Islands. Ireland and Switzerland have already signed agreements with the U.S. for FATCA regulation in January and February this year.
August 19th will see the opening of a webpage for banks to register with the IRS and to ensure their compliance with FATCA. The deadline for registration is until April 25, 2014.
Wikimedia CommonsRBC Office, Zonamerica. Royal Bank of Canada Announced the Closure of its Uruguayan Branch
According to a statement distributed by email, the Royal Bank of Canada Wealth Management will close its Uruguay branch on the 31st of October and the 41 employees at the branch will be relocated to other offices of the Canadian bank. The bank has reported that its closure in Uruguay “is part of a strategic review” of its business in Latin America.
RBC has commenced to notify its customers of this decision, offering to transfer their funds to other branches of the bank either in Europe or North America.
Two months ago, RBC facilities in Uruguay suffered a raid at the request of Argentine Judge Norberto Oyarbide amid an investigation for alleged tax offenses. It so happens that the Argentine judge is in charge of a megacause in which he is investigating the transfer of dozens of footballers in money laundering maneuvers worth millions of dollars. However, RBC sources told the El Observador newspaper in Montevideo that the closedown of its business in this country is not related to this incident.
“The criminal investigation involving the Uruguay branch is a separate issue and RBC will continue to work with the authorities to resolve it,” a bank source informed the newspaper.
This raid has caused great concern amongst the international customers of the bank in Uruguay, 70% of who are Argentineans with, on average, about $600,000 in accounts in Uruguay.
The executive director of the Uruguyan Association of Private Banks and former BCU president, Julio deBrun, told the newspaperEl País that the RBC raid caused “concern” and warned that the episode is “a bad sign” because it affects “the image of the bank and of the country.”
Wikimedia CommonsFoto: Danielparker. Calamos Adds Two Portfolio Managers to High Yield Expertise
Calamos Investments announced the addition of two co-portfolio managers to its investment team. Jeremy Hughes, CFA, and Chris Langs, CFA, have joined Calamos with more than 40 years of collective investment experience. Most recently, Messrs. Hughes and Langs worked together at Aviva Investors overseeing high yield assets.
At Calamos, the pair will contribute their expertise to managing the firm’s fixed income/high yield strategies, including the Calamos High Income Fund. Like all Calamos strategies, the firm’s fixed income/high yield portfolios are managed within a team-driven structure.
“A team approach benefits our clients by ensuring continuity of process and philosophy. Each team has specialized responsibilities—in this case, fixed income/high yield—but all teams draw upon each other’s insights and research. This balance of specialization and collaboration gives us an edge in identifying opportunities in the fixed income/high yield market”, stated John P. Calamos, Sr., CEO and Global Co-Chief Investment Officer.
The addition of Messrs. Hughes and Langs to enhance management of the firm’s fixed income/high yield strategies continues a measured and strategic expansion of the Calamos investment team, including the addition of a Value Equity Team and a Long/Short Team in 2012, as well as numerous additional hires at all levels of the investment organization.
Wikimedia CommonsFoto: Daniel Schwen. AllianceBernstein adquiere W.P. Stewart, gestora especializada en growth
AllianceBernstein and W.P. Stewart have entered into a definitive agreement whereby AllianceBernstein will acquire W.P. Stewart, an equity investment manager that currently manages $2 billion in U.S., Global and EAFE concentrated growth equity strategies for institutional and retail clients, primarily in the U.S. and Europe. Upon completion of the acquisition, W.P. Stewart’s investment services will be added to AllianceBernstein’s equity offering. W.P. Stewart’s team of investment managers will remain in place and continue to manage their investment services as they do today. At the same time, they will gain access to AllianceBernstein’s global reach and research team,
“I’m excited to be adding W.P. Stewart’s complementary concentrated growth equity services and strong bench of talent to our equity platform,” said Peter S. Kraus, Chairman and Chief Executive Officer of AllianceBernstein. “While our equity business is well-positioned to deliver in many areas, we also understand that our clients want more options, particularly in concentrated strategies that can help improve alpha generation potential within their portfolios”
To help ensure a smooth transition, founding partner William P. Stewart, an esteemed investor with nearly 60 years of industry experience, will stay on through the earlier of the end of this year or the close of the transaction, at which point he will retire from the firm.
At the closing of the transaction, AllianceBernstein will pay W.P. Stewart shareholders $12 per share in cash and will issue to W.P. Stewart shareholders transferable contingent value rights entitling the holders to an additional cash payment of $4 per share if the assets under management in the acquired W.P. Stewart investment services reach $5 billion on or before the third anniversary of the closing. W.P. Stewart currently has approximately 5 million shares outstanding. The closing is expected to occur in approximately four to six months and is subject to customary closing conditions, including W.P. Stewart shareholder approval and requirements relating to retention of assets under management and cash.
Wikimedia CommonsBy auriarte. International Equity and Value Funds Benefit From Bond Fund Sell-Off
Morningstar reported estimated U.S. mutual fund asset flows for July 2013. Investors added $15.9 billion to long-term mutual funds in July, driven by inflows of $7.9 billion into international-equity funds. Outflows from taxable-bond funds ebbed to $1.3 billion after record outflows of $43.7 billion in June, with investors continuing to favor bank-loan and nontraditional bond funds at the expense of more traditional intermediate-term bond categories.
Detroit’s bankruptcy filing kept municipal-bond funds in heavy redemptions; the category group lost $10.3 billion in July to mark the fifth straight month of outflows.
Value offerings led the way among equity funds, which was likely a result of yield-starved fixed-income investors seeking dividend income. Large-value funds collected $3.3 billion, the category’s strongest inflow since February 2007.
JPMorgan led all providers with inflows of $3.4 billion. Dimensional Fund Advisors, Oakmark, Principal Funds, and MFS have also gained market share over the last year.
Investors pulled $7.5 billion from PIMCO Total Return in July, its third month of outflows. The fund has seen outflows of $18.4 billion over the previous three months compared with inflows of $21.5 billion over the 16-month period from January 2012 through April 2013.
Despite declining fund use among advisors, traditional mutual fund managers, particularly large fund complexes, are positioned to play a leading role in the next phase of the ETF revolution, the rollout of active ETFs. This and other findings are included in a report recently released by Cogent Research, a Market Strategies International company. The report, Advisor Brandscape, is conducted annually and is based on a survey among a nationally representative sample of over 1,700 financial advisors in the U.S.
In the last six years, the proportion of advisors selling ETFs has increased dramatically, from less than half (46%) of advisors in 2007 to nearly three-quarters (73%) who use them today. In that same period, advisors’ allocations to ETFs have more than doubled, from 5% in 2007 to 12% in 2013. According to Cogent, most of the ETF gains thus far have come at the expense of mutual funds. Furthermore, for the first time ever, advisors now say they are as likely to invest new dollars in ETFs as they are to invest in mutual funds. However, as interest in active ETFs builds, it appears that traditional fund managers are well positioned to capture (or retain) a portion of future active ETF flows.
“While provider preferences certainly exist in the ETF category, many advisors remain relatively agnostic when it comes to choosing ETFs, particularly those tracking broad indexes,” says Meredith Rice, Senior Product Director and author of the Advisor Brandscape report. “However, the rules of engagement will change significantly when it comes to how advisors approach selecting actively managed ETFs. And that is where traditional active managers, even those late to the game, may find some real traction.”
While these findings may come as good news for active managers considering entry into the ETF marketplace, a potential downside is that advisors, while they are open to paying more for actively managed ETFs, expect these products to be less expensive than their actively managed mutual fund cousins.
“The potential pricing issues will certainly give some mutual fund companies pause,” says Rice. “But they need to look back over the past six years of ETF history, and ask themselves if they are willing to pass on the next wave of ETFs.”
