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CISA Trust Believes that Miami is the Ideal City from which to Target the Latin American Client

CISA Trust cree que Miami es la ciudad idónea para dirigirse al cliente latinoamericano — Wikimedia CommonsBy UMCane . CISA Trust Believes that Miami is the Ideal City from which to Target the Latin American Client

A few months ago the Swiss company, CISA Trust, joined the long list of companies which continue to set up business in the area of Brickell Avenue, the financial heart of Miami, to serve high net worth foreign nationals with the purpose of reaching new Latin American clients.

Speaking to Funds Society in this regard, Myriam Bril, tax expert and lawyer and head of the CISA Trust office in Miami, said that the new office “provides high net worth clients with all necessary services and advice on legal and inheritance matters with jurisdictional implications.”

Miami headquarters works as a sales and marketing office and currently has a small group aiming to bring new customers from Central and South America and the Caribbean to the company.

CISA Trust Company, founded in Geneva in 1972, is one of the oldest and most renowned Swiss private trust companies in the industry. CISA, based in Geneva, is owned by a family group headed by John Ryan Jr., president of the company, with John Ryan III as President Emeritus.

For its president, “Miami seems to be the place to be to do business with Latin America. Latin Americans want to come here to meet with their lawyers and bankers, plus they have apartments here.”

Meanwhile, Bril stressed that wealth planning for Latin Americans is a booming business. “There is no better place for this than Miami. Many wealthy South Americans like to visit the city and even have a second home in Miami and they like to do business here, including private banking.”

The executive, aware of the importance that comes from being close to banks and major law firms, explains that her job in CISA is to “adequately structure customer’s investments, by working together with lawyers in order to achieve efficient tax planning while preserving assets for future generations.” She also pointed out that services are personalized and tailored to the needs of each client.

Bril, who has been working for CISA for over a decade, previously worked in Spain for a “big four” as a taxation attorney and specializes in advising high net worth Latin American clients. Bril is a law graduate from the University Pompeu Fabra and specialized in tax law with ESADE. In 2011, after completing an Executive Development Program at IESE in Spain, she was appointed by CISA to expand its business in Latin America from its Miami office.

Bril is certified as a Trust Estate Practitioner by STEP (Society Trust Estate Practitioners) since 2006 and has extensive experience in wealth planning advice within the legal and international taxation aspects of transnational transactions and advises private clients on their investments abroad.

According to its growth plans, the company does not rule out the opening of a New York office in the coming years.

How Does the Global Market in Mexico work?

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¿Cómo funciona el Mercado Global en México? — By Alejandro Mejia. How Does the Global Market in Mexico work?

To mark the tenth anniversary of the International Quotation System (SIC) of the Mexican Stock Exchange (BMV), which allows investors in Mexico to invest in foreign securities, Claudio Curtius and Manuel Olivo of Deutsche Bank spoke to Funds Society to explain the process followed by SIC as well as its market expectations.  

The Global Market (SIC) is the segment of the BMV where securities listed in foreign marketsare registered(whether shares or ETF’s) in order that investors in the country may have access to foreign instruments from any local brokerageand in Mexican pesos.

Ten years ago SIC began operations with 30 U.S. issuers (making up the Dow Jones), and currently operate 903 bonds – 439 ETFs, 353 shares and 111 debt bonds, surpassing 22,000 million dollars.

The amount of capital traded in the global market in 2012 accounted for 21% of trading volume across the BMV and to date about 20%, with over 12,000 investors participating in it. Last year the security with the highest amount traded was the SPDR Trust Series 1 ETF with 4,328 million dollars traded.

Under the SIC structure, the Deutsche Bank Group via Deutsche Bank Securities Mexico, acts before the BMV and the National Banking and Securities Commission (CNBV) as a sponsor of the listing of foreign issuers, providing all relevant and financial information about the issuers present within the local market. In turn, Deutsche Bank New York serves as foreign custodian of SD Indeval for all securities of the issuers listed by Deutsche Securities in Mexico traded on the SIC.

The process for making the list is relatively simple and can be performed in a period of less than a month, provided the bond meets the following characteristics:

It has been traded for at least three months in its market of origin
International Accounting Principles
Exchange of origin under regulators recognized by IOSCO
Be up to date on the delivery of information and on its obligations to the investor
Homogeneous corporate financial information

It is worth mentioning that today 90% of SIC operations, particularly of the private banking segment, are carried out in the BMV’s secondary market, which means there is no extra cost for arbitration to bring the shares from abroad.

Amongst the benefits of operating in this market highlighted by the executives, are those of diversification as well as those oftaxation (as capital gains have a favorable and transparent treatment), being able to trade in Mexican pesos (limiting the risk of exchange rate fluctuations), liquidity (in the event of not sufficient market in Mexico may trade in the market of origin), as well as the possibility of transfer of securities for those investors who hold positions abroad and who, due to changes in regulations derived from the FATCA act, prefer to operate their portfolios from Mexico.

Looking ahead, executives expect “to see growth both on the side of investors as well as on product offering”, of a system which has already been imitated in other countries.

EFG, back to its Traditional Business, is looking for Bankers who are able to build and run their Own Business

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EFG, de vuelta a su negocio tradicional, busca banqueros capaces de armar y dirigir su propio negocio — Wikimedia CommonsJohn Williamson, CEO of EFG, and Victor Echevarría, President of EFG Capital,during the interview.. EFG, back to its Traditional Business, is looking for Bankers who are able to build and run their Own Business

In October 2011, EFG International began major restructuring of its business; this has led to refocusing on what has always been its traditional model, private banking. During this time, its investment strategy has changed, it has moved away from marginal businesses, it has reviewed the entire business of the company, it has liquidated its exposure to Greece, it has improved the productivity of its bankers dispensing with those who were not productive and improving the figures of those who remained. During this phase, all efforts have been focused on leading the company “onto the right path”, as explained by its CEO, John A. Williamson, in an interview with Funds Society.

As part of this restructuring process, part of EFG Financial Products was made public in October and its remaining stake, 20.2%, totaling 70.2 million Swiss francs (about 74 million USD) was recently sold to Notenstein Private Bank.

With all this restructuring completed and with the business redirected towards its traditional model of private banking, the Swiss bank, based in Zurich, is enjoying a period of rapid growth, in which Latin America is one of the main players, as explained to Funds Society by EFG Capital president, Victor M. Echevarria.

Echevarria said that of the 3,000 million Swiss francs which the bank received in new assets in 2012, 500 million were in Latin America, representing a growth of 4%. For this year, the aim is to increase the growth from 4% to 8%, which means doubling the assets acquired to reach 1,000 million dollars under management. EFG has been present in the region for 17 years and 15% of the bank’s total assets, i.e. 11,800 million Swiss francs (12,500 million USD) are in Latin America, according to final data for 2012.

Williamson and Echevarria explained that one of the priorities in the short term is to assemble an advisory panel specialized in Latin American credit in Miami. On a global basis, they have 100 consulting professionals worldwide, of which more than 12 are in EFG Capital’s Miami office.

“We are back to our original business. We have a good model for enterprising people and we believe we offer a platform which is much better than others. This is our business and we don’t want to become distracted,” Williamson emphasized.

In full process of recruitment

In this respect, he added that although during the past year they had dispensed with the services of some bankers, a move which was part of the company’s aforementioned restructuring process, they are currently recruiting new teams and bankers to keep growing. “We are looking to expand our resources and relationships with private bankers in Latin America,” he said.

A few weeks ago Carolina Montiel and Arturo Neto, both from HSBC in Miami joined their ranks within the Investment Strategy department, Carolina Montiel has been appointed as head of the department.

“We don’t push our company’s product”

Williamson wanted to make it clear that EFG doesn’t tell bankers how they have to develop their business model. “They are free to build and run their own business. To develop their business as they see fit”. He added that the consultant is free to choose where they want to operate from and what products or vehicles to choose. “We don’t push our company’s product, particularly given the current regulatory situation. What we do expect is for people to be profitable and we pay a lot of attention to risk control,” he stressed.

He also added that in this respect, their business model is neither in line with that of the broker, nor with the discretionary management business. According to EFG’s CEO, a private banker should be able to build and run their own business as well as being flexible and quick to face the current market conditions. “The bank’s top management is one hundred percent focused on this model of private banking,” he said.

Meanwhile, Echevarría said that after the restructuring, and once out of marginal businesses and some risk positions, they find that many people are labeling them as conservative, although they are not paying this any attention, as he believes that currently their clients are offered great opportunities.

The average EFG Capital Latin America client has 1.5 million dollars, although there is another segment consisting of over 30 clients who are high net worth. A special division for family offices is projected within the group, in addition to the existing trust services in the Bahamas and Cayman islands.

Program for bankers

The company is developing a program to serve as a guideline to counselors on how and where they can operate and where they can travel to, among other issues; this guide shall be up to date and address all regulatory changes and due diligence. “Market risks have changed and we must ensure that our teams have all available means at their disposal,” said Williamson.

EFG is present in Switzerland, Europe, UK, Asia and America and has 88,000 million in assets under management. In Latin America they have a presence in Bogota, Quito, Lima, Montevideo and Punta del Este, although they don’t rule out opening elsewhere. Globally they are present in over 30 locations and have 2,300 employees.

FibraHotel Acquires Hotel in Tlanepantla and Opens The One in Guadalajara

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FibraHotel sigue sumando hoteles a su cartera — Foto cedidaFiesta Inn Tlanepantla. FibraHotel Acquires Hotel in Tlanepantla and Opens The One in Guadalajara

FibraHotel, the first real estate investment trust specialized in urban business-class hotels in Mexico, announces last Monday that they completed the acquisition of Fiesta Inn Tlanepantla, as well as the grand opening of the hotel One Tapatío in Guadalajara.

According to a press release, the 6.5 million dollars transaction, which will immediately add 131 rooms in operation, represents the second closing of an acquisition outside of the Acquisition Portfolio and is part of the set of 15 hotels to be acquired and currently under progress, which were announced on March 14, 2013 and April 23, 2013.

The Fiesta Inn Tlanepantla hotel has 131 rooms and is located in the municipality of Tlanepantla, in the State of Mexico. During 2012, the hotel had an occupancy rate of 66%, an average daily rate of Ps. $793 and a RevPAR of Ps. $523.

The trust also announced the opening of the hotel One Tapatío in Guadalajara. A 126-room limited service hotel operated by Grupo Posadas under the One Hotels brand. The hotel is located in Avenida Chapala, in the municipality of Tlaquepaque (Guadalajara), in the State of Jalisco, inside the shopping center Espacio Tlaquepaque, and close to the most important industrial parks of Guadalajara.

With these events, FibraHotel’s portfolio consists of 34 hotels in operation and 3 hotels under development with a total of 5,132 rooms, including 4,798 rooms in operation.

JP Morgan names CEO of Investment Management in Brazil and announces Head of Latin America Funds Management

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JP Morgan nombra nuevo CEO de Investment Management en Brasil y anuncia responsable de distribución para Latam — Foto cedidaPhoto: Vital Menezes. JP Morgan names CEO of Investment Management in Brazil and announces Head of Latin America Funds Management

J.P. Morgan announced that Vital Menezes will become CEO of its Investment Management business in Brazil, effective July 1. He will report jointly to José Berenguer, Brazil Senior Country Officer of J.P. Morgan, and George Gatch, CEO of J.P. Morgan’s Global Funds Management business.

Mr. Menezes most recently was a Partner at Gávea Investimentos, which he joined in October 2011. Gávea Investimentos was co-founded in 2003 by Arminio Fraga, former President of the Central Bank of Brazil. In October 2010, J.P. Morgan Asset Management purchased a majority interest in Gávea.

Before joining Gávea Investimentos, Mr. Menezes served as Global Head of the Financial Institutions Group for Banco Santander, based in Madrid. Prior to that, Mr. Menezes was a Partner with Nitor Investimentos, a São Paulo-based hedge fund.

The Firm also announced the appointment of Giuliano De Marchi as Head of Latin America Funds Management. Mr. De Marchi joins J.P. Morgan from AllianceBernstein, where he was Brazil Country Manager and Latin America Regional Manager, responsible for strategic planning and leadership of client coverage for banks, pension funds, family offices, IFA and other financial institutions. In his new role, Mr. De Marchi will report to Mr. Menezes and to Lee Beck, Head of J.P. Morgan Funds’ Global Strategic Relationship Group.

Marc Saluzzi Re-elected as Chairman of ALFI at Annual General Meeting

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At its Annual General Meeting held on 19th of June 2013, the Association of the Luxembourg Fund Industry (ALFI) elected a new Board of Directors for a period of two years. The new Board of Directors renewed the mandate of Marc Saluzzi as Chairman for two more years.

At the AGM, ALFI also presented its Annual Report for the year 2012 and a revised version of the Code of Conduct.

The Annual Report revealed that the year was marked by the strong net inflows of EUR 123.09 bn into Luxembourg funds. Luxembourg therewith experienced the strongest net inflows in Europe. Altogether, Luxembourg funds finished the year up 13.70% or EUR 287.31 bn, reaching again a historic high of EUR 2,383.83 bn. This positive trend continued in the first month of the year 2013 with an additional 7.61% increase of assets under management until the end of April 2013, reaching EUR 2,565.56 bn.

Mr Saluzzi commented on the positive results with a word of caution: “The Luxembourg fund centre remains a leader in Europe and worldwide. However, we will in no way rest on our laurels. ALFI remains committed to its ambition plan and the five priorities it has identified. These five priorities are still, if not even more, relevant for the next two years”:

Defend the concept of regulated funds, especially UCITS, against the side effects of the regulatory agenda
Help alternative fund managers and institutional investors to leverage the concept of a regulated AIF introduced by AIFMD
Innovate again, with a special focus on responsible investing
Facilitate cross-border distribution in existing and new distribution markets
Remain the global fund management industry partner of choice

He continued: “The regulatory agenda is intense; the competition inside and outside Europe is sturdy. But I am confident that with the continuous support of our membership, we will manage to safeguard Luxembourg’s position as a partner of choice for asset managers around the globe.”

Morgan Stanley Receives Approvals to Purchase Remaining 35% Interest in MSSB Wealth Management Joint Venture

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Morgan Stanley announced this friday that it has received all regulatory approvals to acquire the remaining 35 percent interest in Morgan Stanley Smith Barney Holdings from Citigroup, fulfilling a key strategic priority. Upon the close of the purchase, Morgan Stanley will own 100 percent of the business, which operates under the name Morgan Stanley Wealth Management.

Morgan Stanley will notify Citigroup that it intends to exercise its right to purchase the remaining interest at a previously established price of $4.7 billion, payable in cash. The closing is expected to take place on or about June 28, 2013. Morgan Stanley will record a negative adjustment to capital (i.e., shareholders’ equity) of approximately $200 million (net of tax) to reflect the difference between the purchase price for the 35 percent redeemable non-controlling interest in MSSBH ($4.725 billion) and its carrying value. This adjustment will negatively impact the calculation of basic and fully diluted earnings per share for the three- and six-month periods ended June 30, 2013.

Additionally, MSSBH will redeem all of the Class A Preferred Interests in MSSBH owned by Citigroup and its affiliates for a purchase price equal to their liquidation preference plus accrued and unpaid distributions, or approximately $2.028 billion in aggregate, simultaneously with Morgan Stanley’s purchase of the remaining interest.

James P. Gorman, Chairman and Chief Executive Officer of Morgan Stanley, said: “This is a historic day for Morgan Stanley. It is the culmination of a multi-year effort to transform our business model into one that offers stronger shareholder returns and greater stability in volatile markets. Immediately upon closing, we expect to start seeing the benefits of 100 percent ownership – including an expanded deposit base, unique syndication and distribution capabilities and enhanced opportunities for both our wealth management and institutional clients.

3.77% Decrease in Investment in Government Debt by Afores

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Disminuye en 3,77% la inversión en deuda gubernamental por parte de las Afores — Wikimedia CommonsBy David Tuggy. 3.77% Decrease in Investment in Government Debt by Afores

According to data provided at the end of May 2013 by (Consar), “Comisión Nacional del Sistema de Ahorro para el Retiro” (National Commission of Savings System for Retirement), the Afores administered resources worth 1,994,319.7 million pesos (USD 156.936 million), which in accordance to the valuation of the instruments that make up the investment portfolio at market prices on May 31, 2013, represents a 3.88% fall from the previous month.

Regarding the portfolio composition, we note that government debt continues to lead but decreases from 53.2% to 51.2% of the resources invested, while domestic private debt increases from 17.5% to 18.3%, followed by international equities with 15.2%. Mexican equities stand at 9.3%, structured funds at 3.9%, international debt remains stable at 2.1% and commodities are at 0.055% of the portfolio.

In the first month with decreases in the managed resources this year, basically all types increased their share except for government debt which fell by 3.77% and commodities which were stable.

“Felices y Forrados” Evaluates Starting an AFP

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Felices y Forrados estudia abrir una AFP — Foto cedidaGino Lorenzini . “Felices y Forrados” Evaluates Starting an AFP

“Felices y Forrados” continues to create controversy within the pension fund industry. Gino Lorenzini, founder of the website, said he is evaluating the possibility of opening an AFP to compete in the market, following the polemic that has ensued by the mass transfer of contributors from one fund to another.

As stated by him in an interview with Radio Cooperativa, they have already begun their search for capital.

“I will seriously assess the raising of capital, and that’s what I’m doing, to form an AFP and compete one on one with the AFPs themselves, from there on we’ll let the market decide. Don’t you love a free market? I’m fascinated by it, but I like a real free market, not a colluded one. We’ll face it head on,” Lorenzini said to Radio Cooperativa.

The founder of the website said he was prepared to lose his venture should the multiple pension funds be ruled out and the AFPs regress the law back to its original 1980 version, which would restore the 5% fluctuation reserve fund, the mechanism which guaranteed against losses and which, in the event of high yields, these were passed on to the members.

“Felices y Forrados” is a consulting firm dedicated to providing pension fund transfers to improve profitability, and was precisely responsible for most of the recent profile changes which led to the revision of the regulations.

Colombia Streamlines and Increases the Transparency of the Investment Fund Industry

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Colombia dinamiza y hace más transparente la industria de fondos de inversión — Foto cedidaMauricio Cárdenas (middle), Colombian Ministry of Finance and Public Credit. Colombia Streamlines and Increases the Transparency of the Investment Fund Industry

The Colombian Ministry of Finance and Public Credit has undergone a major change which affects the management of investment funds and securities custody activities respectively. These changes are the result of a coordinated effort between various Colombian financial market players, lasting over a year and a half.

Mauricio Cardenas, Colombian Minister of Finance and Public Credit, said on Monday that these decrees allow Colombians easier, safer and more reliable access to the stock market. “These rules aim to boost this industry which on a worldwide basis is one of the most efficient means to channel the savings of individuals and companies to the capital markets,” the official assured.

In this regard, the Ministry issued Decrees numbers 1242 and 1243 of the year 2013, which amended Decree number 2555 issued in 2010, in connection with the administration of collective investment funds and securities custody activities, respectively.

The main issues covered by the decrees are:

In order that ordinary people may access collective investment funds as an efficient and safe method for saving their resources in the capitals market, the specialization of the different activities necessary for the operation of the aforementioned aspects (management, administration, distribution and custody) is permitted. This allows the reduction of costs for investors and provides greater access to these types of products.
Investors may turn to brokerage firms, trust companies and investment management companies to invest their resources in collective investment funds. Relevant studies will be conducted in those institutions as to their risk profile and other aspects which will allow determining the most appropriate investment for each investor, therefore adequately protecting their interests.
It eases the process of authorization and distribution of collective investment funds which invest in traditional assets such as stocks and bonds, creating a faster channel in which the Financial Superintendence of Colombia authorizes fund families for this type of products.
For funds which invest in non-traditional assets (invoices, commodities, court decisions, etc.), on which most investors do not have a very deep understanding, the standards of obligations of expert advisors are broadened, and should be provided by institutions conducting the distribution of investment funds individually, to each of the investors who require it. Establishing special cases such as funds with any type of borrowings above the amount of fund resources (leverage), in which the type of client that may access them shall be limited.
In order to protect investors’ resources and prevent them from being used to fulfill transactions belonging to either the management companies or to other clients, securities custody activity is introduced into national regulation, which involves the obligation of guaranteeing the custody of securities of collective investment funds with a trust company. This development puts the country in line with international safety standards and transparency in managing funds’ resources.
Additionally, in order to encourage the implementing of the aspect of custody in the stock market, the possibility of exercising it voluntarily in the administration of third party resources by brokerage firms and investment trusts administered by trust companies is established.

The Colombian government expects that this reform will speed up the development of this important, although still small industry, which manages assets of close to 6% of GDP, which is low compared to other economies in the region such as Chile where funds manage 15 % of GDP, or Brazil, where it reaches levels similar to those of advanced economies with 60% of GDP.