Foto cedidaSimon Brazier, Equity Manager United Kingdom at Threadneedle
. UK Equity, Increasingly in Portfolio Managers’ Radars
A process based on valuation, and long-term perspective, are the two principles that have earned Simon Brazier success at the helm of the UK equities strategy at Threadneedle. After nearly a decade as a specialist in British shares in the team at Schroders, he joined Threadneedle in 2010.
“All decisions are made based on the valuation of the companies, and whether the business model makes sense within the next three to five years. Our vision is long term. We use market volatility in the short term to take advantage of the opportunity of the valuation in the long term,” said the expert in an exclusive interview with Funds Society.
All decisions are made based on the valuation of the companies
A team of 14 people, including managers and analysts, closely follow the British market; visiting and understanding the business of each of the companies they invest in. “Last year we performed more than 1,000 company visits. Many times we have between 3 and 4 meetings a day.”
The analysis of each company is based on three fundamental levels going through the business model, the economic model and the management team. “We are focused on business models with sustainable cash flows and strong dividend yield,” he says. “On the other hand, we analyze that the management team is making the right decisions to allocate capital properly. In general, we focus on companies with a strategy that works for a period of the next 3-5 years.”
Another one of the strengths of strategy is the diversification of the portfolio, which they use as a tool to limit the downside risk. “We have about 70 securities in the portfolio. We diversify by security and by themes, i.e., sometimes we have several names for a particular idea. This allows us to limit the downside risk, both at company and at a sectoral level.”
The UK equity strategy already has almost 1.4 billion pounds (approx. 2.2 billion dollars) in assets under management, and it seems that this asset class is increasingly present in the radar of portfolio managers globally. “We have customers in Israel, Portugal, Kuwait or Chile. The world is increasingly looking at the UK.”
The world is increasingly looking at the UK
According to the expert, the interest in the UK market makes sense despite economic uncertainties; he himself acknowledges that in the longer term, he is more confident in the UK market than in the country’s underlying economy. “British companies are unique in that 75% of profits are not generated within the country. Examples are Diageo or Astra Zeneca. Besides, the equity market in the UK is not only very liquid, it is the third largest in the world after the U.S. and Japan, as big as Germany and France together,” he says.
Wikimedia CommonsSome of the members of the Special Committee of the Senate, last Monday. Chile Approves a Proposal to Create an Alternative Pension System
Amongst the agreements reached by the Special Committee formed by the Chilean Senate to study reforms to the Pension Funds system are: to generate a system in parallel to the existing system administered by the AFPs, to ensure tripartite contribution and to consider how to allocate the regional factor in the calculation.
In the last meeting, which was held on Monday, Senators Eugenio Tuma, Alejandro Navarro, Pedro Muñoz Aburto, Jose GarciaRuminot and Carlos Kuschel analyzed the first five points of the document prepared by this body, which was released in early July. This text will be presented to the Executive in order for them to consign the Commission’s proposals, when reforming the current system, the Chilean Senate reported.
Within the issues approved at the meeting, Senator Tuma, president of this parliamentary group, highlighted the fact that the changes make it compulsory for the employer, whether public or private, to contribute for the total remuneration. “No more non-taxable allowances. This irregular situation has been partly responsible for the current damage to social security contributions,” he explained.
According to the parliamentarian, another issue which will be highly important in a future reform is related to the regulation of fees charged. He commented on the urgency of establishing transparency for these costs, ensuring that while the AFP claim to be applying 2% for this concept, in practice the figure rises to approximately 20%.
In turn, Senator Navarro elaborated on the voting of the points that were addressed. He said there is a marked difference between the government and opposition senators, since the former are committed to improve the existing system, while the second are committed to its elimination altogether.
The congressman said that the next government should consider these proposals, calling on all current presidential candidates from different sectors to pronounce themselves on this issue. In his opinion, the candidate Michelle Bachelet will be responsible for eliminating profiteering in the area of pensions.
Text Adopted:
To provide Chile with a public and supportive universal pension system, which enshrines the right of workers to withdraw from the current fund managers, choose the management system they wish to use for their pension funds, end the compulsory contribution to AFP and establish a system of nonprofit pension fund managers with the creation of a supporting fund differnet than individual contribution pension savings.
Restore the principle of Social Security as a right according to international standards of the ILO in Chile.
Incorporate the employers’ share to the social security contribution and gradually increase the contribution dues, achieving a tripartite contribution to the pension system with the participation of workers, employers and the State.
Encourage collective pension savings plans established during the legislation. For these plans, create incentives, such as the possibility of withdrawal of these funds in times of illness, education and purchase of the first home.
Fees should be in line with the results. To adjust the fee amount, the taxable income should be taken into account.
Other items approved by the Commission, the drafting of which remained pending were:
Design a pension system which takes regional factors into consideration.
Ensure that all types of payments made by all types of employers are taxable.
Consider working conditions, positively discriminating when taking heavy work into consideration.
The committee will continue reviewing twenty points in a forthcoming meeting. The debate will begin by resolving the role of workers in managing their pension funds and damaged pension records.
On July 8th, the 22 points that the Senators of this parliamentary body agreed on after nine months of work, were announced. During that time, the body received the various players related with this matter, and even held a seminar on the same issues.
By Laitche. Most Institutions are Abreast of Changes and Ready to Comply with FATCA
The wealth management industry has experienced many changes in recent years, especially in new rules and regulations, something which Steven L. Cantor, Managing Partner of Cantor & Webb, knows quite well, as he has been legally representing and advising high net worth families for 35 years; he has guided and directed those families in the process of complying with multiple tax and regulatory obligations, as well as providing advice on wealth planning.
For Cantor, changes in regulatory matters that are occurring now are causing the business to become increasingly transparent, in clear reference to the FATCA law, a rule orchestrated by the U.S. government which seeks to combat international tax evasion, which is estimated at USD 40,000 million annually.
Therefore, Cantor stresses that private bankers, in their advisory roles, are more aware than ever that clients must be current and meet their respective jurisdictions.
Most institutions are ready
Regarding FATCA, Cantor believes that most of the institutions are ready, as long they know what lies ahead and how to act in order to stay abreast of changes. He says that in the current context what will change is the transparency. “The world changes, just as the rules and regulations that apply change, and in the case of this particular sector is a major breakthrough because it will provide great transparency.”
Steven’s advice to wealth advisors is to keep abreast of regulatory changes and new regulations, but above all, to provide the client with the possibility of putting themselves in the hands of a professional who specializes in the area of tax planning and who may legally advise the client, which eventually avoids many problems.
Regarding the type of client company, Cantor says the typical customer is Latin, “the matriarch or patriarch of a family, with one foot in America and another in Latin America and who is looking to plan their wealth from both a legal and a taxation point of view; structuring their assets to comply in all respects with the tax offices of both the USA as well as that of their respective country.”
Another very common situation is the client who comes from Latin America to reside in the United States, and who was born in the United States but has never before lived in the United States and either did not feel the need, or did not know, that as an American citizen they had the obligation to comply with the U.S. treasury. “When they come here and settle is when the problem begins. They are dual nationality citizens, and they require complex advice”.
FIBA Private Banking Conference in Miami in September
Steven L. Cantor, Managing Partner at Cantor & Webb, who is also a partner of FIBA, talks about the upcoming private banking appointment that FIBA will hold in Miami on the 16 th and 17 th of September, a meeting which will have a large audience, and which will be represented by over 75 financial institutions and professionals from Latin America, Europe …
“As a member of FIBA, I am very pleased to see how FIBA assumes a very active role in understanding, educating, and providing ideas and opportunities for the industry in a very interesting format of working panels which allow to make the most of these conferences.”
In September, Cantor will act as moderator in the panel: “How has asset management and wealth planning evolved in an era of greater fiscal transparency?” The speakers will be Arturo Giacosa, head of Fiduciary and Hispanic Market Wealth Planning, Itau International Private Banking, Stephen Liss, director of Wealth and Investment Management at Barclays Americas and Klemens Zeller, wealth advisor at JP. Morgan.
Wikimedia CommonsBy Micah MacAllen. María Jesús Hume Hurtado, New CEO of MBA Lazard In Peru
MBA Lazard, a leading Latin American investment bank, announced that María Jesús Hume Hurtado has been appointed CEO of MBA Lazard in Peru, effective immediately.
Alejandro F. Reynal, Chairman of the Board of Directors of MBA Lazard Holdings said that “María Jesús (Mayu) will bring major benefits to our clients in Peru and across the region. Her wealth of corporate expertise and knowledge of international business will offer our clients in Peru a unique approach and will complement the strong team that we have built in the region.”
Ms. Hume said: “I have great respect for MBA Lazard and I am drawn to its talented professionals, strong presence in Latin America and its ethos of independence. We are in the midst of a pivotal moment in the Peruvian economy. It is an attractive country in which to invest and conduct business, and I believe that MBA Lazard is in a unique position to support our clients in making the most of opportunities and confronting the challenges facing the global economy head on.”
Mayu Hume has more than 30 years’ experience in leadership roles within the public and governmental sectors and is currently serving on various boards of directors at top-ranking firms and non-profit organizations. Ms. Hume is Chairwoman of the Board of Directors at AFP Integra, one of the main pension fund administrators in Peru. Previously, she was the Managing Director and Business Manager at the ING Group in Peru and Colombia, and for 2 years, was the Deputy-Minister for Trade at the Ministry of Economy, Finance and Trade. Ms. Hume studied industrial engineering and economics at the Pontifical Catholic University in Peru.
Since the opening of its Lima office in 2008, MBA Lazard has enjoyed strong growth and a high degree of success for its clients. The past 12 months have seen MBA Lazard participating in the main local and cross-border mergers and acquisitions involving Peruvian-based firms. This includes providing advice to: Alicorp in the acquisition of Industrias Teal; Grupo Breca in the sale of Soldex to Colfax Corporation; Banco de Crédito del Perú in the acquisition of Correval Sociedad Comisionista de Bolsa in Colombia, and San Martín Contratistas Generales in its sale to Empresas ICA, to name but a few.
AllianceBernstein, announced that Nina Tannenbaum has joined the firm as Managing Director of Alternatives sales and client services. Tannenbaum will work with AllianceBernstein’s growing alternatives team to further build out its diverse product offerings as well as service the complex needs of clients to integrate alternatives into their current investment portfolios and risk profiles. Tannenbaum will report to Joel R. Stevens II, Senior Managing Director and head of Institutional Investments.
“With so many firms today competing to build a presence in alternatives, our ability to continue to attract top talent demonstrates that our services are resonating with the industry,” said Stevens. “Nina brings a diverse alternatives background to the group and will be an integral part of our efforts to continue to meet the growing demand among clients for alternatives products and risk aware solutions.”
Tannenbaum joins AllianceBernstein from Napier Park Value Fund, where she was Director of Marketing and Product Management. Prior to this role, Nina held positions at The Blackstone Group’s Alternative Asset Management division, J.P. Morgan & Company and the National Basketball Association. She holds a bachelor’s degree from Columbia University and a master’s degree from the MIT Sloan School of Management.
By RitaLPGarcia . JP Morgan will Analyze Strategic Alternatives for its Physical Commodity Business
JP Morgan Chase & Co announced that it has concluded an internal review and is pursuing strategic alternatives for its physical commodities business, including its remaining holdings of commodities assets and its physical trading operations.
To maximize value, the firm will explore a full range of options over time including, but not limited to: a sale, spin off or strategic partnership of its physical commodities business. During the process, the firm will continue to run its physical commodities business as a going concern and fully support ongoing client activities.
J.P. Morgan has built a leading commodities franchise in recent years, achieving a top-ranked revenue position. The business has been consistently named as a top client business in Greenwich Associates’ annual client surveys and was recently named Derivatives House of the Year by Energy Risk magazine.
Following the internal review, J.P. Morgan has also reaffirmed that it will remain fully committed to its traditional banking activities in the commodity markets, including financial derivatives and the vaulting and trading of precious metals. The firm will continue to make markets, provide liquidity and offer advice to global companies and institutions that have, for years, relied on J.P. Morgan’s global risk management expertise.
Wikimedia CommonsBy Jikatu. The Raid and Search on Royal Bank of Canada in Uruguay has already led to the outflow of funds to other centers
The raid and search proceeding conducted a few weeks ago at the offices of the Royal Bank of Canada in Uruguay by Argentine judge Norberto Oyarbide, has caused a chain reaction and a lot of fear among the more than 10,000 Argentine clients with offshore private banking accounts in the neighboring country possessing an average of $600,000, and also amongst customers in other countries, as reported by the Uruguayan newspaper El Pais.
Some of these clients, Argentineans as well as clients from other nationalities, whose accounts are found in offshore institutions operating in Zonamerica, have already requested for their funds to be transferred to accounts abroad for fear of the recurrence of raids like the one requested by the Argentine judge on 13th June.
Judge Oyarbide requested authorization from Uruguayan authorities to conduct the operation. It so happens that the Argentine judge is in charge of a mega cause in which he is investigating millionaire money laundering maneuvers through the transfer of dozens of footballers.
As for the chain reaction and fear experienced by Argentine and foreign clients with capital in institutions operating within Zonamerica, El Pais newspaper says that according to a source who asked not to be identified, that after the raid “Argentine clients as well as clients from other countries are calling with much concern and some have specifically asked for their accounts to be withdrawn from Uruguay and taken them somewhere else …. It is not easy to be able to tell the customer that he shall not experience any problems because they have all the documentation.
“Putting myself in the shoes of a bank customer in Zonamerica, I understand how this has created suspicion and uncertainty about whether the bank is making available to third parties any information regarding their account, their name and their movements, and people do not want anything to do with that”, said the same source.
In Zonamerica, Uruguay’s most extensive free trade zone, there are currently about 60 banks and investment advisory firms in operation, including local and foreign banks which can only serve foreign clients and bank representations operating as a link between potential investors and the central office of institutions located outside the country.
We must bear in mind that customer funds in Zonamerica are not actually in Uruguay, since they use the country as “booking”, as the money is actually in bonds, stocks or funds in Switzerland, USA, Germany, Austria and Singapore.
The advantage of establishing within this zone is that it is a territory which is exempt from any taxes, and where companies do not have to give the Uruguayan state explanations of any kind, neither about invoicing nor about their customers, whilst it benefits the country as an employment generator.
Argentineans have deposits totaling 2,663 million dollars which are currently in Uruguayan accounts, as 71% of the 3,751 million dollars of non-resident accounts are Argentinean. The paper highlights that 90% of that money has been declared in Argentina and that only 10% would not be, according to financial market estimates.
Wikimedia CommonsFoto: Bill Ingalls. ING IM lanza un fondo crédito multi-estrategia
ING Investment Management launched the ING Renta Fund First Class Yield Opportunities with currently assets of EUR 35 million (USD 46,5 million). The fund seeks to deliver attractive returns by investing in a diversified multi-strategy credit portfolio.
The First Class Yield Opportunities strategy combines the skills of three key investment teams, the Multi-Asset, Credit and Emerging Market Debt boutiques. The strategy profits from ING IM’s proven bottom-up credit selection skills of the various specialized teams as well as the top-down asset allocation skills of the Multi-Asset boutique.
Ewout van Schaick (Head of Multi-Asset strategies) and Roel Jansen (Head of European Investment Grade Credit) act jointly as lead managers for the fund, setting the investment policy and the top down allocation over asset classes. The individual bonds are selected by ING IM specialized teams for investment grade credit, global high yield and emerging market debt. The fund volatility is monitored and can be scaled down depending upon market conditions, which makes it a risk-controlled investment.
Hans Stoter, Chief Investment Officer at ING Investment Management: “Global credit markets have proven to be an attractive investment over time and can be an attractive diversifier for a government bond oriented fixed income portfolio. Returns across global credit markets as well as returns over time deviate significantly which illustrates the importance of dynamic asset allocation. The need to fully understand the issuers and issues and to select the bonds with the most favourable estimated risk-adjusted returns requires analysis by credit specialty teams. The new First Class Yield Opportunities Fund combines our knowledge and experience in all of these fields.”
The strategy focuses on bonds that offer an attractive yield taking into account an estimate of the inherent risks. In order to be able to meet its return and risk objectives, the portfolio managers have the possibility to allocate in a flexible and dynamic manner between the various credit markets, with a strong focus on bottom-up instrument selection, top-down allocation and downside risk management.
Photo by DAVID ILIFF. Azimut Reaches an Agreement for the Acquisition of a 51% Stake in Augustum Opus
Azimut , Italy’s leading independent asset manager, reached an agreement with the partners of Augustum OPUS SIM (“A.O.”), an independent asset management company with headquarters in Milan and Perugia and AuM of just above € 800 million (USD 1.000 million)
On the basis of the agreement, Azimut will initially buy 51% of A.O. to be increased to 100% following the sixth year. The consideration paid for the 51% stake is € 10 million, and the remaining 49% will be determined on the basis of the profitability of the partnership throughout the period (ca. 10 times net profit: in between € 10-20 million).
A.O. is an asset management company specialised in individual portfolio and OICR, founded in 2009 by a group of independent portfolio managers with more than twenty years experience in the industry. With this transaction, Azimut enlarges its competencies in the individual portfolios and OICR, given the brilliant results and awards obtained by OICR products managed by A.O.
A.O. will continue to conserve within the group its autonomy in the management of client relationship and management of OICR, also throughout a special dedicated vehicle. A.O. thanks to the agreement with Azimut will increase its product range, innovation capabilities and competencies which will help to bring the Group at an international level in line with its natural evolution in the asset management field.
Capital Strategies Partners, firma especializada en intermediación de fondos de inversión, tiene un acuerdo con AZ Fund Management para distribuir sus productos en Latinoamérica.
Wikimedia CommonsFoto: mattbuck. Decalogue for world conquest
Emerging companies are standing up to the West in the global market. Until relatively recently, brands like Acer Electronics, Corona Beer, Emirates Airlines, Tata Motors and Concha y Toro wines were names unknown to the public.
In a new book, “The launch of the brand: How brands become global emerging”, Nirmalya Kumar and Jan-Benedict Steenkamp, discusses how emerging companies are learning how to position itself in the global market. In what may be termed the emerging consumer Decalogue, the authors set out eight steps.
The more traditional so far has been selling cheap products to gain market share and gradually raise the quality and prices. This is the strategy followed by Pearl River, a world leader in pianos, or appliance maker Haier, both Chinese companies.
A second alternative is to focus on business customers, then go to the final consumer. An example is Mahindra & Mahindra, the Indian company that began manufacturing tractors and now produces cars.
The third is to follow immigrants and sell their products in their host country, as did Goya Foods or Bollywood films in the United States. Or take advantage of tourism and local produce market once tourists return home. Corona beers or Mandarin Oriental hotels are two good examples.
Another strategy is to buy directly prestigious Western brands such as Tata Motors has made to acquire Jaguar Land Rover, or Lenovo IBM Thinkpads.
The authors point to other steps, such as the one followed by Brazil Havaianas, relying on the image of beach and fun, and the Chilean Concha y Toro in the country’s beauty, or institutional campaigns “country brand” as being launched India or Taiwan.
Emirates is a good example of how to achieve success by creating a brand image. The airline of Dubai has grown at double digits in recent years, making the country a center for business and tourism. One of the main components of the strategy of Robeco Consumer Trends emerging consumption both Western companies positioned in the developing countries as companies from these countries are making headway in the most advanced markets. Global brands enjoy much higher margins to local.
