Foto: Brocken Inaglory. La gestión de patrimonios en América Latina, un mercado cada vez más competitivo
Offshore wealth management as an industry remains under intense and increasing pressure, particularly from tax authorities in the U.S. and Western Europe. In its latest Global Wealth Report BCG notes how many European countries have agreed to share citizens’ bank-account and tax data, and U.S. tax authorities, through the Foreign Account Tax Compliance Act (FATCA), have become much more aggressive in tracking the foreign accounts of U.S. citizens.
To fight against this backdrop BCG highlights that offshore centers must position themselves not only as possessing skills and expertise that cannot easily be found onshore but also as embracing full transparency and integrity. Larger centers such as Singapore are already touting their reputations as trusted financial centers—for example, by revising tax treaties with other countries—and smaller offshore centers may need to make similar moves.
According to the report, UHNW and HNW client segments hold the bulk of today’s offshore money. And although these segments will invest part of their new money onshore, they will continue to seek diversified solutions, ensuring that some new wealth will continue to flow offshore. There is limited offshore growth potential from other wealth segments, which for the most part will seek improved onshore-banking offerings.
BCG highlights that one overarching trend in Latin America is that the wealth management market is becoming far more competitive than in previous years. There are several reasons for this. First, offshore offerings in the region are becoming more sophisticated as international offshore players enter the market and develop an onshore presence. Other new players are breaking into the market as well, such as asset managers that are moving into the wealth management space and universal banks that are developing new wealth-management products. Family offices are deepening their own offerings. Overall, concludes this report, the global relevance of regional Latin American players is increasing.
Photo: Thomas Wolf, www.foto-tw.de. Robeco’s Low Volatility Range of Funds Approved by the CCR of Chile
The CCR of Chile, in its June meeting has approved 7 mutual funds by Robeco, including its family of conservative minimum volatility quantitative funds.
It has also approved two ETFs by iShares, one of them also following a minimum volatility philosophy. The CCR has also approved 10 mutual funds by UBAM.
List of Approved International Mutual Funds:
BNY Mellon Investment Funds – Newton Emerging Income Fund – United Kingdom
Robeco Capital Growth Funds – Robeco Active Quant Emerging Markets Equities -Luxembourg
Wikimedia CommonsFoto: Hernando de Soto. What happens if the rule of law is not obeyed?
Hernando de Soto, Peruvian economist, talks with Robeco about the importance of the rule of law in building a successful economy. What happens if the rule of law is not obeyed?
Photo: Jerry Brewin and Marcelo Assalin . ING IM announces senior appointments to EMD team
ING Investment Management International (ING IM) announced two senior appointments to its Emerging Market Debt (EMD) team. Jerry Brewin joins as Head of EMD while Marcelo Assalin has been appointed Lead Portfolio Manager Local Currency.
Brewin joins from Aviva Investors in London, where since 2001 he was Head of Emerging Market Debt. He will be based in The Hague and report to ING IM Chief Investment Officer Hans Stoter. He will be responsible for the overall management, the investment process and the investment results of all EMD portfolios/strategies globally, as well as providing leadership to his team.
Assalin joins ING IM International in Atlanta from its sister company, ING US Investment Management, where he was Senior Vice President/Head of EMD Sovereign Debt. He will assume the position of Lead Portfolio Manager for Local Currency strategies and report to Brewin.
Upon Brewin’s arrival, Sylvain de Ruijter, acting Head of EMD since January 2013, will resume his position as Head of Core Fixed Income.
Brewin and Assalin bring more than 50 years of investment experience to ING IM and both have highly successful track records as investors. Their appointment builds further upon the proven expertise and performance of ING IM’s EMD team, which is a pioneer in this asset class having invested in EMD strategies since 1993.
Brewin, who has extensive experience in the Middle East and Asia, has held positions within BNP Paribas, Citibank, Gulf Investment Corporation and ABN AMRO. Brewin played a leading role in the building of Aviva Investors’ EMD capabilities and launched the organisation’s first EMD fund in 2000. Assalin has more than 13 years’ experience managing EMD portfolios, most recently overseeing USD 2 billion in EMD assets at ING US Investment Management.
Hans Stoter, CIO ING Investment Management International:“I’m very pleased to welcome two highly experienced and talented investors to ING Investment Management. Jerry and Marcelo are valuable additions to ING IM and will help ensure that our EMD team – which aims to offer excellent returns for clients – remains at the forefront of this asset class.”
Stoter continues: “These appointments are a recognition of the fact that EMD is and will remain a large and important asset class for ING Investment Management. We are committed to offering a full range of highly attractive EMD strategies and, under Jerry’s leadership, will continue to develop our already broad range of products in order to meet the evolving needs of our clients.”
In addition to the appointments of Brewin and Assalin, ING IM has also recruited three credit analysts for the EMD corporate debt team, demonstrating the company’s commitment to continuing to allocate ample resources to its EMD strategies.
Following the most recent appointments, the EMD team consists of 24 specialists. ING IM intends to make additional hires, bringing the total size of the team to 28.
Wikimedia CommonsPhoto: Sbork. The CONSAR May Enforce Higher Fines on Afores Not Complying With Best Practices
Oscar Franco, President of the Mexican Association of Afores (Amafore), has announced that as financial reforms move ahead, the fines and sanctions applied by Mexico’s National Commission for Retirement Savings (Consar) to the Mexican Pension Funds Managers (Afores) not compliant with its protocols, as well as in other areas of the financial sector, will increase. He qualified this statement by saying that the reforms will not have a negative impact on the Afores.
In an interview with the newspaper El Economista, the official mentioned that the Retirement Savings System Law (SAR) would be modified by paragraph 11 of the financial reform, allowing the regulatory body overseeing the Afores to apply heavier fines and sanctions to the pension funds managers.
Under the new regulation – subject to the approval from the Chamber of Deputies – in the cases where the Specialized Retirement Fund Investment Companies (Siefores) do not comply with the investment procedures, the maximum fine amount goes from 5,000 to 20,000 days of salary, whilst fines for non-compliance on employee record procedures increase from 500 to 5,000 days of salary. The sanction for the Afores that do not update their information adequately or publish disclosure documents for employees, is doubled from 5,000 to 10,000 days of minimum salary and in the case of Afores that do not register their operations in time at the Mexican Stock Exchange (BMV), instead of 1,000 days of minimum salary, they must pay up to 10,000 days.
These adjustments, according to Franco, “will not cause a negative impact on the fund managers.” He added, “the revision of norms and sanctions frameworks is a very current theme in all the segments of the financial sector, and not exclusive to the SAR.”
The fines owed by Afores from 2012 until the current date reach 46 million pesos, or 3,64 million US dollars. The 11th paragraph of the financial reform, that refers to foreign sanctions and investments, is available at this link.
By NASA. David Buenfil, New CEO for Old Mutual in Latin America and Asia
David Buenfil, until now the CEO of the Skandia Group in Colombia, has been appointed as the CEO of the Old Mutual Group for Latin America and Asia, as revealed in an internal memo the Funds Society has been privy to.
Buenfil is substituted in his role by Daniel Cortés-McCallister, a professional with an impressive career trajectory in the financial sector, in the segments where Skandia has participation: pensions, trusts, stockbroker companies and insurance.
Buenfil, after four years at the frontlines of Skandia in Colombia, now moves on to take care of Latin American and Asian business for Old Mutual Group, Skandia’s parent company. During his time at Skandia he has had the opportunity to drive the company into a strengthened market position. Cortés-McCallister will report directly to Buenfil and the latter will stay connected to Columbia from his new post, as well as remaining on the Board of Directors.
Daniel Cortés McCallisteris a business administrator and accountant who graduated from Wharton School of Finance at the University of Pennsylvania. During his career Cortés has been linked to important companies in the financial sector, both inside Colombia and outside it; like Citibank, Bank of America, Banco Santander, BBVA, Porvenir and Davivienda, in which he fulfilled the role of Executive Vice-president of Capital and Investment Markets, until joining the Old Mutual company in Colombia.
Foto: Scalleja. Dos inversores BRIC marcan un nuevo record en el mercado de oficinas de Nueva York
Brazil’s Safra banking group and the families of Chinese real estate developer Zhang bought a 40% stake in New York’s General Motors Building for about $1.4 billion, as reported by the Wall Street Journal.
The stake was bought through an entity called Sungate Trust, owned by the Zhang family, who is the billionaire founder and chief executive officer of Soho China Ltd. (410), the biggest developer in Beijing’s central business district and M. Safra & Co., the New York-based investment firm of the Safra family.
The price paid implies that the 2 million-square-foot tower is valued at about $3.4 billion, the highest total value for a U.S. property since the GM Building sold in 2008.
The sellers were Goldman Sachs Group Inc.’s U.S. Real Estate Opportunities Fund, which invests on behalf of the sovereign wealth funds of Kuwait and Qatar; and Meraas Capital LLC, a Dubai-based private-equity firm, the person said. The sale was completed on May 31.
Boston Properties Inc. (BXP) retains a 60% stake in the building and manages it.
. Merk Investments Calls for Currency Diversification, Away from Safe Havens
Axel Merk, president and CIO of Merk Investments talks with Funds Society about the benefits of investing in currencies and his preferences in the market.
With a low rate environment and increasing prices in equities fueled by the extra liquidity in the market, the search for performance is increasingly more complex, reason why Merk recommends investors capable of living “in a world with no safe havens” to diversify on the currency side. In the expert’s opinion, currency diversification offers opportunities to create diversified portfolios with low correlations which are relatively less complicated to operate than the equity market.
Speaking about specific currencies, Merk- who recently participated in the 66th annual CFA conference-, mentions that when looking to diversify, although many investors are too optimist on peso, they believe –because of its high correlation with the SP500- that there are better opportunities with other currencies such as the Swedish Krone, Canadian dollar, Sterling and surprisingly, the Euro, mentioning that even though “the entire world loves México and hates the Eurozone, we tend to buy euro”.
Amongst the reasons why they are bullish on the euro he mentions that there is a misconception that ties economic growth to a strong currency, and that having the European Central Bank returning many of the loans they had, could boost the euro. Merk also mentioned that there are many yield-hungry investors happy to acquire yields offered by peripheral European securities, which valuations have been damaged by the less than optimal macro environment some euro countries are currently experiencing.
Axel Merk, author of the book “Sustainable Wealth”, is an expert on macro trends, and international investing focused on currencies. He holds a B.A. in Economics (magna cum laude) and a M.Sc. in Computer Science from Brown University.
Photo: Yatkin S Krishnappa . Hiring of Financial Executives Rose in Chile During the First Quarter
During the first quarter of the current year, there was a slight increase in the hiring of local financial executives in Chile, as compared with the last quarter of last year. According to a study by Seminarium Penrhyn, reported in this Tuesday’s Diario Financiero, the increase was of 3.5%, while the last quarter in 2012 showed an increase of 2.7%.
During the first part of the year, there were 44 hires of first line executives, as opposed to the 34 recorded for the last part of 2012. AFPs -pension funds- was the sector showing greater executive mobility, increasing from 6.5% recorded for last year´s October-December quarter, to 8.7% during the January-March period of the current year. Mutual fund asset managers (AGFs) were in second place with an increase of 5.2%, although this sector slowed down as compared to the 6.8% they recorded last quarter, as explained by Rafael Rodriguez, President of Seminarium Penrhyn.
The report indicates that the general insurance sector only hired at a rate of 1.5%, while multi-family offices showed no movement at all.
Regarding the origin of new hires, internal movements accounted for 73% of all cases, as compared to the 59% for the last quarter. In this respect, two hires stand out: Ignacio and Diego Yarur, sons of the president of BCI Bank, as managing directors for Banco Retail and Banco Comercial, respectively. Both of them had been executives at their respective banks for several years filling key executive positions.
Despite the increase, which shows a higher performance as compared to the three last months of 2012, Rodriguez notes that the 3.5% increase recorded during January to March period of the current year is lower than the 5.8% increase recorded for the same period last year. “There is a consistent decrease, with some sectors showing little or no movement at all, and this points to a trend of less hires of top executives in the current year, as compared to 2012”.
The report indicates that the most hired professionals in the financial sector are those with university degrees, mainly specialized commercial and civil engineers, representing 34% and 32% of all hires respectively. On the other hand, hiring of accountant/auditors increased during the first quarter from 3% to 11%; while hiring of lawyers increased from 3% to 5%.
Finally, it should be noted that hiring of foreign professionals decreased by almost 50%, going from 15% to 7% in the period being reported.
. WE hires Joseph Kellogg as Head of Wealth Planning in Miami
Joseph C. Kellogg has joined WE Family Offices in Miami as head of Wealth Planning, a position from which he will work hand in hand with the clients’ lawyers, the clients, and the company’s management, as he explained to Funds Society.
Kellogg’s work will always be closely connected with that of the lawyers representing WE clients, he will also work closely with the company’s managers and clients as legal advice expert for wealth planning and management.
Kellogg, who comes from HSBC in Miami, sees this new phase as “an excellent opportunity to work with a group of highly experienced and reputed professionals.” He added that in his new job as an advisor he can perform in a more flexible manner and without the conflict of interests he had experienced previously.
Kellogg, J. D., LL.M. (Tax), CFP, is an attorney licensed in New York and Florida. He previously provided wealth planning services to private banking clients of HSBC and of UBS AG in Miami. In 2002, Kellogg opened and managed the Miami representative office for the Amicorp Group, where he provided corporate and fiduciary structures both for businesses and individuals.
From 1997 to 2002, Kellogg worked for Citco Group from Curacao, Netherlands Antilles, and later in the British Virgin Islands. He is currently the president of the Miami Society of Trust and Estate Practitioners (STEP).
The new WE executive received his JD from the American University in Washington, his DC and his LL.M. (Tax) at the University of Miami and studied a Master’s degree of one year’s duration in the program of Legal Studies at the “Escuela Libre de Derecho” (Free School of Law) in Mexico City.
WE is a family office, with offices in Miami and New York, which serves clients Ultra High Net Worth clients (UHNW). The firm offers comprehensive management on fiscal and legal matters, family business governance and protocol, amongst others, as well as non-discretionary management.
