Miami-based Provicapital Partners, Latin America’s premier regional investment banking and advisory firm specializing on the middle market private equity segment, has announced the opening of its second and principal office in Colombia, expanding its presence to the City of Medellin, one of the country’s most dynamic cities and a major economic hub.
“as the country continues to develop its core and industrial infrastructure to compete in today’s global environment, Provicapital is poised and committed to providing investment banking support to help our clients access the capital needed to finance these efforts.”
“In the last few years, Colombia has had impressive levels of economic growth and prosperity, a trend we expect to continue and which is reflected in the increased demand for our services,” said Ricardo Calderon, Partner and Managing Director of Provicapital Partners. He added that, “as the country continues to develop its core and industrial infrastructure to compete in today’s global environment, Provicapital is poised and committed to providing investment banking support to help our clients access the capital needed to finance these efforts.”
As the IMF stated earlier this year in its regular assessment of the country, Colombia’s prudent economic policies and strong policy framework have not only supported its remarkable economic performance in recent years, but has positioned it to absorb any economic shocks attributed to a slowdown in demand for global commodities. As a country with an abundance of natural resources and an industrious population of over 47 million, Colombia has had large inflows of foreign direct investment (FDI), especially in the hydrocarbon sector that is expected to continue growing and developing.
Provicapital’s growing presence in Colombia, where it has been active since 2005, strengthens the company’s Latin American footprint, which today also includes offices in Miami, Mexico, Ecuador and Peru.
Global ETFs and ETPs suffered record net outflows of US$16.77 billion in August after gathering near record net inflows of US$45.26 billion in July, according toETFGI’s Global ETF and ETP industry insights report. ETF and ETP assets have declined from the July record high of US$2.17 trillion to US$2.11 trillion at the end of August 2013. There are now 4,938 ETFs/ETPs, with 9,932 listings, from 211 providers listed on 57 exchanges.
“Investors’ concern and uncertainty over the impact on markets of a potential military conflict in Syria and when and how the Fed will begin QE tapering caused investors to net withdraw US$16.77 billion from ETFs/ETPs in August” according to Deborah Fuhr, Managing Partner at ETFGI.
In August, Equity ETFs/ETPs experienced the largest net outflows with US$13.62 billion. North American/US equity ETFs/ETPs experienced the largest net outflows US$16.60 billion, followed by emerging market ETFs/ETPs with US$5.12 billion, while European equity ETFs/ETPs gathered the largest net inflows with US$5.09 billion.
In August, fixed income ETFs/ETPs saw net outflows of US$5.23 billion. Government bond ETFs/ETPs experienced the largest net outflows with US$3.65 billion, followed by inflation with US$772 million, and high yield with US$618 million, while government/corporate bond ETFs/ETPs gathered the largest net inflows with US$208 million.
Commodity ETFs/ETPs saw net outflows of US$911 million. Precious metals ETFs/ETPs experienced the largest net outflows with US$1.08 billion.
Year to date through end of August 2013, global ETFs/ETPs have gathered net inflows of US$133.44 billion which is below the US$141.71 billion gathered at this time last year.
Vanguard ranks first based on August net inflows with US$3.54 billion, and first in year to date net inflows with US$39.71 billion. ProShares ranks second based on August net inflows with US$1.61 billion and sixth in year to date net inflows with US$5.17 billion. Nomura, the seventh ranked provider by overall assets, ranks third for net inflows in August with US$1.23 billion and ranks 12th with year to date inflows of US$3.09 billion. Meanwhile iShares, which ranks first based on overall assets, suffered net outflows of US$5.23 billion in August and ranks second in year to date inflows with US$27.24 billion. SPDR ETFs, which ranks second in overall assets, suffered US$19.24 billion of net outflows in August and US$7.44 billion of net outflows year to date.
. Fibra Inn Signs Binding Agreement to Acquire Its First Hotel in Mexico City
Fibra Inn, a Mexican real estate investment trust specializing in the hotel industry serving the business traveler, announced the signing of a binding agreement to purchase the Holiday InnMexico Coyoacan hotel.
The purchase price of this hotel is Ps. 468 million ($35 million), plus Ps.46.6 million in taxes and acquisition expenses. The price includes a 1,500 m2 lot, which is utilized for customer parking for groups and events arriving via bus; these rooms may be used for future room expansion. This acquisition will be paid in cash from proceeds derived from the initial public offering that took place on March 13, 2013 and has a stabilized cap rate of 9.5% calculated based on the amount of the total investment including acquisition expenses.
The Technical Committee approved this acquisition on August 29, 2013, which will represent 12% of the value Fibra’s portfolio. In accordance with Fibra Inn’s by-laws, the Technical Committee must approve acquisitions exceeding 5% of the total equity value, while the Shareholders’ Meeting must approve acquisitions that exceed 20%.
The Holiday Inn Mexico Coyoacan is Fibra Inn’s first hotel in Mexico City, which will increase its diversification and national presence. The hotel is located in Calzada de Tlalpan and has a steady client base from the government sector with a high demand for rooms and event space. There is potential growth stemming from demand in the southern portion of the city from companies within the television, laboratory, hospital and financial sectors. Fibra Inn has a sales office in Mexico City with a solid client base to strengthen its position at this hotel.
The Holiday Inn Mexico Coyoacan is a full-service hotel with 214 rooms. It has ample capacity to meet the high demand for event services with 11 conference rooms, as well as guest rooms that can be converted into event rooms in order to accommodate up to 1,800 people. It is located 20 minutes from the Mexico City International Airport, 5 minutes from Coyoacan and 15 minutes from downtown Mexico City. During 2012, the occupancy rate was 65%, ADR was Ps. 1,002 and the RevPar was Ps. 652. Of 2012 total hotel revenue, 43% corresponded to revenue from event room rentals and 6% from sales of food and beverage revenue; in addition to room revenue.
This hotel will be operated by Fibra Inn’s Hotel Operator. With this acquisition, Fibra Inn owns 18 hotels with a total of 3,336 rooms, 300 of which are under construction.
Photo: Diego Delso. Loomis Sayles Welcomes New Head of Emerging Markets
Loomis, Sayles & Company announced that Peter Marber has joined the company as head of emerging markets investments. Peter’s responsibilities will encompass emerging markets fixed income and equity investing. He will report to Jae Park, chief investment officer.
Peter joins Loomis Sayles from HSBC Global Asset Management. He held several roles during his tenure within HSBC’s emerging markets group including chief business strategist, global head of emerging markets debt, and portfolio manager. Prior to its acquisition by HSBC in 2005, Peter was founding partner, senior portfolio manager and chief investment strategist for The Atlantic Advisors. Peter was also president of the emerging markets subsidiaries at Dresdner Kleinwort (formerly Wasserstein Perella) and he began his career at UBS. He has been a faculty member at Columbia University since 1993, teaching at the Business School and School of International and Public Affairs, and has also taught at John Hopkins and Universidad Francisco Marroquin in Guatemala City, Guatemala.
Peter assumes leadership in an emerging markets product team that includes portfolio managers David Rolley, Eddy Sternberg and Peter Frick, and emerging markets senior credit strategist Elisabeth Colleran. The team is supported by over a dozen emerging markets specialists who work within Loomis Sayles trading or sovereign, credit, equity and quantitative research groups.
“As emerging markets have grown in importance we have continued to add investment professionals focused in this area. Peter’s depth of experience and expertise will help ensure we bring the full power of our firm’s resources to bear in identifying emerging markets investment opportunities for our clients’ portfolios,” said Jae Park.
Loomis Sayles has recently added four key EM resources, including Bianca Taylor, emerging markets senior sovereign analyst; Celeste Tay, Asia sovereign analyst; Li Ping Yeo, Asia senior credit analyst; Nada Oulidi, emerging markets senior bank analyst.
Driehaus Capital Management announces the launch of the Driehaus Event Driven Fund as of August 26, 2013. A new liquid alternative offering, the mutual fund seeks low correlations to major asset classes while providing lower volatility than the S&P 500 Index with superior risk-adjusted returns.
The fund will be managed by K.C. Nelson, who leads the Driehaus Long/Short Credit Team. Mr. Nelson and his team currently manage distinct event-driven trading strategies in their long/short credit funds. According to Mr. Nelson, “We have found that event-driven trades often exist because of the complexity of the capital structure, the nontraditional nature of the investment opportunities, or the unwillingness of investors to participate in trades with binary outcomes. We believe this creates opportunities for positive asymmetric returns with low correlations to the equity and credit markets.”
Trades within the Driehaus Event Driven Fund will have a defined catalyst that will unlock the value of the trade in the near to intermediate term. “By combining the credit, equity and derivatives resources across our firm, we’ll identify opportunities globally to source mispricings in long, short and arbitrage trades based on hard catalysts, such as product launches, earnings releases, restructurings, and corporate actions,” said Mr. Nelson.
While the event-driven space has been a significant segment of the alternatives universe for more than two decades, relatively few liquid alternative event-driven funds are available to investors. “We believe investors will appreciate access to a liquid and transparent vehicle for a strategy that offers a differentiated market exposure,” said Rob Gordon, President and CEO of Driehaus. “We also expect investors to take comfort knowing that the fund is offered by a firm that has proven itself in the liquid alternative space and is managed by a team with significant experience with event-driven trades.”
BBVA Compass announced thatGabriel SanchezIniesta has been named its new chief information officer following Sergio Fidalgo’s appointment as Spain-based head of Applications & Architecture for BBVA Group.
Until now, Sanchez Iniesta served as BBVA Group’s Multichannel Technologies director. A native of Madrid, he was responsible for developing the multichannel architecture BBVA developed in many countries across its global footprint and the core banking platform it currently uses in Spain. He came to BBVA Group in 1997 following several years with Accenture.
Fidalgo, who was in charge of BBVA Compass’ Technology and Support Services unit for five years, successfully led a major transformation of the bank’s legacy technology into a core banking platform that enables real-time transactions. American Banker called it an “epic” project and “one of the largest bank core overhauls in the U.S.,” while one analyst told the Houston Business Journal it had the makings of a “game changer” for the banking industry.
Sanchez Iniesta inherits that ground-breaking platform and is well-positioned to lead the next phase of the bank’s technology growth, which will focus on multichannel banking, said BBVA Compass President and CEO Manolo Sanchez.
Wikimedia Commons. James Boyne deja su puesto de COO en Calamos Investments por la filantropía
Calamos Investments, announced the planned departure of James Boyne, President and Chief Operating Officer, effective September 30, 2013. Until that time, Mr. Boyne will act in an advisory role and assist the company in the orderly transition of his duties and responsibilities.
Boyne joined Calamos Investments in April 2008 and served in a number of executive positions since then. He has decided to pursue a leadership position in the non-profit sector, focusing on the betterment of children and young adults. Boyne and his family will be relocating to Steamboat Springs, Colorado.
“I appreciate Jim’s leadership during his tenure at the firm and wish the best to him and his family,” said John P. Calamos Sr., Chairman, Chief Executive Officer and Global Co-Chief Investment Officer.
The firm does not plan to replace the role of President and COO, and Boyne’s responsibilities will be assumed by other senior leaders at Calamos, including the firm’s Executive and Operating Committees.
Vincent Oswald, cofundador de Azure Partners. (Foto cedida por Azure. Los fondos de fondos de microfinanzas, “una inversión de atractivos retornos”
Azure Partners’ team offers one of the longest track record investing in microfinance and combines a total of 24 years of direct microfinance field experience combined with solid entrepreneurial background. For the co-founders of Azure Partners, Jack Lowe and Vincent Oswald, launching funds of funds was a natural step after managing the largest microfinance debt fund at BlueOrchard Finance from 2004 to 2008.
As explained byOswald, in an interview with Funds Society, microfinance provide an excellent investment case:
De-correlated investment
Stable returns and low volatility
Fast growing markets
Access to the real and informal economy
Vast social impact
Azure Partners, a swiss based investment advisor specialized in microfinance, advises two microfinance funds of funds:
– Azure Global Microfinance Fund (AGMF) is the first fund of funds managed by professional from the microfinance investment industry. It offers a diversified exposure to different investment funds with specific microfinance strategies, from traditional debt funds, to balanced debt and private equity funds, to Private Equity funds.
– Azure Microfinance Private Equity Fund (AMPEF) which aims to focus on investing in strong locally managed microfinance Private Equity funds focused on specific countries or regions with a hands on approach. The fund will combine 20% co-investments with 30% secondary purchases and 50% primary funds to deliver strong returns to our investors.
Respect to its investment process, Oswald said that they have a 5 steps investment process. “In comparison to more traditional fund of funds, we also conduct Due Diligence of underlying Microfinance Institutions in our portfolio, especially for Private Equity funds. This is a key part of our analysis and a clear added value to the decision process”.
Asked if the fund has a charitable side, the co-founder of Azure reply that investing in microfinance has a vast impact. “By its activity and type of clients, Microfinance generates an impact for millions of micro-entrepreneurs in the countries where we invest in”.
“We do not see the fund as charitable, as it delivers a credible financial return to its investors. However, we pay high attention to our investments social impact. Therefore, we developed our own Social Performance rating to analyze the funds we invest in and include it in our investment decision process”.
He also explained that they have atop-down / bottom-up approach in selecting their investment opportunities. “Usually, debt funds offer a worldwide exposure to microfinance markets and we focus in choosing the best one for the fund”.
He added that regarding the regional and private equity funds, they perform region and country analysis in order to chose the country, which will fit the investment allocation and diversification requirement of the funds. “We will then look for opportunities in these regions/countries. The fund managers looking for investors in their funds also directly contact us”.
Oswald explained that their fund is focus on microfinance activity only and in that sense, is very sector focus. Each product they advise has its own specific regional, country and single fund exposure limits.
At the end of June, AGMF had 6 investments positions, presenting indirect access to 169 Microfinance Institutions in 48 countries, providing financial services to more than 670.000 micro-entrepreneurs in the world. “For AMPEF, we are in fund raising mode and we plan to make 10 to 15 investments”.
In terms of sales policy, “for AGMF we use a combination of banking platforms (large banks promoting our fund to their clientele) and fundraising companies with a geographic focus. For AMPEF, we have signed a number of fundraising agreements also with geographical focus. We obviously also use our personal networks acquired through our years of activity in the investment world but we do not internalize investor relations or fundraising”.
AGMF has currently more than $6M of AuM and is expected to reach over $20 million by the end of the year. For AMPEF they are looking to raise $100 million in the course of two years.
Oswald believes that compared to other similar funds, “the funds of funds in microfinance offers a differentiated investment strategy to deliver attractive returns while managing the risk efficiently. It provides an active regional and country allocation, an exclusive access to secondary opportunities, access to smaller more innovative funds, access to regional funds, access to opportunities dedicated only to microfinance investors. In that sense, it’s an ideal product for an investor seeking a global exposure to the microfinance investment universe”.
They invest only in funds, holdings or SPVs. They do not do direct investments into Microfinance Institutions except co-investments. The YTD performance of AGMF is 0.92%, which represents 2.21% annualized. The back tested performance presents a 5% – 6% net return in USD once the fund will reach its target size. For AMPEF they are targeting a relatively net return to investors.
Despite the crisis, international fund management companies have grown almost continuously within the Spanish market in recent years. With the exception of some periods in which their assets have fallen (as was the case in early 2012), collective investment institutions of foreign companies which are available for sale in Spain have doubled their assets under management in a period of three years. As Inverco’s latest estimates indicate, the assets of foreign CIIs in Spain would be around Euro 60 billion ($80 billion) as at the end of June. This figure doubles the Euro 30 billion estimated by Inverco in late 2009.
Inverco, which performs its estimates with the data from the CII’s from which it receives information (in this case, extrapolating data from 24 fund management companies with Euro 45.5 billion in assets under management, which are approximately 75% of the total), estimates that figure as the amount traded in assets amongst all domestic customers, both retail and institutional. The data shows an increase of 13.2%, a total of Euro 7 billion, in the first half of the year. The capital gain is comparable to that managed by national fund managers, which, according to Inverco and Ahorro Corporación, during the first half of the year saw asset gains of almost Euro 10.6 billion, i.e. around an 8.5% growth.
A 30% share
Inverco estimates that the total CII assets marketed in Spain, both national and international, would be close to Euro 200 billion (137.5 billion managed by domestic companies, and 60 billion by foreign ones, according to data as at the end of July). According to this information, foreign managers have achieved close to a 30% share of the Spanish market, the highest in history. That figure would be lower when using data from the CNMV ( National Securities Market Commission), which takes into account all fund management companies; according to its latest available data, as at the end of March 2013, the securities supervisor estimates the assets managed by international asset management companies at 44.5 billion. Even so, foreign CIIs would have a weight in the industry of around 20%, which is four times higher than the March 2009 share (7%). And the money keeps rolling into them: in total, the amount of net subscriptions to foreign collective investment schemes which facilitate their data to Inverco stood at Euro 2.9 billion in the second quarter of 2013.
Diversification and product offers
According to experts, this trend of capital raising and growth is due to several factors, including the smaller business volume of international institutions in Spain, which allows them greater potential for growth, and the strong commitment which private banks have made since last year to international funds domiciled in for example, Luxembourg, as a way of diversifying against the risk of peripheral countries.
The gradual return of investors to mutual funds, encouraged by the improvement of the economic situation but also by the decision by the Bank of Spain of penalizing “extratipados” (extra high interest rate) deposits earlier this year, also explains the positive dynamics of international, as well as of the domestic CIIs. The fund management companies surveyed also point out the innovative supply of products, which is in line with market developments. By type of products, the fall of extratipos on deposits and on the Spanish risk premium has led investors towards absolute return funds or actively managed fixed income as the great alternative, as well as towards those which distribute income and dividends. Those institutions which are active in such funds, such as Deutsche Asset & Wealth Management, JP Morgan AM or Swiss & Global AM, are amongst those which are attracting more deposits (see table).
The leading management company in terms of new deposits was BlackRock, with Euro 885 million. “These results demonstrate the strength of our global platform which allows us to offer innovative solutions in any asset class, in any investment style or in any geographical region. Such flows also reflect greater investor confidence in the recovery of the global economy”, says Armando Senra, CEO of the aforementioned management company in Latin America and the Iberian Peninsula.
Trend Continuity
The question which follows the semester’s figures is whether this rate of growth in foreign CIIs marketed in Spain can be maintained. Some market sources believe that it will not remain the same in the coming months, due to the mark left by the falls in emerging market bond funds which had been set up as an alternative to conservative funds, and which will cause further rejection by investors in the coming months. Thus, some experts talk of a slowdown in inflows from here to the end of year, but are more optimistic regarding their evolution in the long term. “It is important for the industry to grow as a whole, both the domestic and international fund management companies, to avoid cannibalization preventing the sustainable growth of companies,” says an expert.
INTERNATIONAL ASSET MANAGERS WITH MORE INFLOWS IN SPAIN. Second Quarter 2013
Asset Manager
Net inflows (Euro million)
BlackRock Investment
885
Franklin Templeton Investments
716
JP Morgan AM
422
Swiss & Global AM
257
Deutsche Asset & Wealth Management
239
Source: Inverco. Estimates for June 30th, with data from 24 asset managers with Euro 45.5 billion in AUMs.
Wikimedia CommonsPhoto: Ikiwaner. The Effects of Rising Bond Yields on Markets
Investor risk appetite is getting depressed by the renewed rise in treasury yields in developed markets. In contrast to the correction in May/June, credit and commodity markets are holding up well. Real estate equities are having a hard time, while emerging market assets continue to struggle.
In this enviroment, ING Invesment Management scaled back their position in global real estate to neutral. Rising (real) interest rates in developed markets weigh relatively heavily on real estate equities as funding costs increase for this more leveraged asset class.
Real estate is very sensitive to the rise in treasury yields
Correction in equities, real estate and emerging markets
The renewed rise in government bond yields of developed markets has clearly started to weigh on investor risk appetite. With 10-year treasury yields in the US, UK and Germany increasing by 20 to 30 basis points in the past two weeks, especially equity and real estate markets have started to correct. The most probable reasons behind this are fears of an erosion of growth prospects and higher funding costs.
Also, emerging market (EM) assets have seen another round of downward pressure as higher US treasury yields further increased the risk of intensifying capital outflows. Especially emerging market currencies suffered last week, but also EM debt and equity markets underperformed their global peers.
Notable differences compared to last correction
At first sight, these dynamics look similar to the market evolution that occurred in late May and June. Some interesting differences are also visible below the surface, however. Most notable is the substantially higher resilience that is seen in credit and commodity markets. Both have hardly lost performance over the past two weeks, while they fell significantly during the May-June correction. Also, cyclical equity sectors are holding up quite well, while a notoriously “high beta” region like Europe is outperforming in equity space.
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