Santiago Ulloa, Maria Elena Lagomasino, and Michael Zeuner launch WE Family Offices

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Santiago Ulloa, María Elena Lagomasino y Michael Zeuner fundan WE Family Office
Wikimedia CommonsMaria Elena Lagomasino y Santiago Ulloa, founder members of WE Family Offices.. Santiago Ulloa, Maria Elena Lagomasino, and Michael Zeuner launch WE Family Offices

WE is seeking to have a more global presence, reaching out to the US market once their business is already well established in Latin America and Southern Europe. Santiago Ulloa, President of WE, explained in an interview to Funds Society that one of its objectives is to render services to individuals who have assets greater than $100 million.

Ulloa, who was the president of GenSpring Family Office International until the beginning of January, explained the process through which they got renamed to WE. Ulloa along with Maria Elena Lagomasino and Michael Zeuner, ex CEO and ex executive director of GenSpring, respectively, joined the new project of WE. Lagomasino, who is a veteran in this sector, was the CEO of JP Morgan Private Banking prior to joining GenSpring, while Zeuner has always worked alongside Lagomasino both in JP Morgan and in the final stage of GenSping International.

The three partners repurchased the business -TBK Investments-, which Ulloa sold 5 years ago to the American company, in an operation that was closed at the beginning of the year and in which several employees of the company were admitted as partners. Since then they have been working under the brand WE, which has integrated a hundred percent of its staff and all of its clients. The repurchased business is the international business while the domestic side remains within GenSpring.

Their goal is to build  WE into a family office that will persist in time, so that 40 years from now it will be one of the major players and benchmarks in the sector. “We have already been the largest, now we want to be the best”, he emphasized.

WE, which manages Ultra-High-Net-Worth individuals, aims to help its clients in their overall needs, including asset management, taxation, legal, family governance and protocol, among other things, for which a non-discretionary service is offered. “In other words, a true family office”, emphasized Ulloa in his interview with Funds Society.

Ulloa states that WE gets its resources solely and exclusively from an advisory fee that is charged to the client for the services of the family office.

He put a special emphasis on the fact that theway they work allows them to differentiate themselves from many other businesses that have expended in recent times, but which, according to him, cannot claim the same level of independency or transparency.

“All values have been lost, all transparency has been lost. There are many players in the field. The problem that 90% of them have is that they dedicate themselves to financial issues. We are 100% aligned with the client. We are not money managers; we are consultants, strategists for the clients with large assets and we help them in all of the needs they may have, and not exclusively with their financial needs”, he explained.

WE identifies the best managers and puts them at the disposal of the client. They are very interested in private equity, while they are more skeptical when it comes to the hedge funds because they believe that currently there are too many players looking for the same opportunities and there are very few that bring any value.

They have an Investment Committee co-chaired by Ulloa and by Jean Brunel, president of Brunel Associates, who was the CIO of JP Morgan Private Bank in the past. From the committee a macro and a strategic vision is addressed, which is supported by an internal research team along with the support of third parties. “The decisions for asset allocation, strategy and product selection are made here”, he stated.

How does an MBA today differ from an MBA in the 90’s?

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How does an MBA today differ from an MBA in the 90’s?
Foto: Mohnishbahl. ¿Cómo difiere un MBA de hoy respecto al de hace 15 años?

“When Bill Gates was asked about who was Microsoft’s main recruiting competitor he answered: Goldman Sachs”, explains Robert F. Bruner, dean of the Darden School of Business at the University of Virginia. “This reflects that everyone –Wall Street, the consulting businesses, industrial producers- is competing for the same pool of talent”, he adds.

Recruiters must renew their propositions. When a candidate asks “what’s the deal in your company?”, you should be able to answer: “If you work for us, we will teach you to be the very best you can be”.

Robert F. Bruner, discusses the evolution of the MBA program with John Rogers, CFA, president and chief executive officer of CFA Institute in a Take 15 Series video that can be watched in the CFA Institute website. Bruner focuses on the changing perspectives of students towards education and employment, while explaining what recruiters and employers can come to expect out of MBA graduates in the 21st century that may not have been the case in the past.

High Yield Default rates slip modestly in 2013

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High Yield Default rates slip modestly in 2013
Wikimedia CommonsFoto: Expedition 20 Crew, NASA. La tasa de default de la deuda high yield cae ligeramente en 2013

According to a recent report by Fitch Ratings, the U.S. high yield par default rate continues to track closely to the 2012 year-end rate of 1.9%. At the end of February, it slipped modestly to 1.8% (mostly due to the market’s larger size), and Fitch projects a similar level for the first quarter.

March has added filings from gaming operator Revel AC, Inc. and phone directory publisher, Dex Media, and two missed interest payments from oil and gas company GMX Resources and healthcare concern Rotech. These add an estimated $1.5 billion to the year’s default tally of $2.8 billion through February, slightly above the $2.5 billion count of the first two months of 2012. An update of default, recovery rates and other metrics can be found by clicking on the report link below (login required – no cost).

Fitch U.S. High Yield Default Insight — February 2013

ING IM: High Yield bonds offer high single digit returns for 2013

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ING IM: High Yield bonds offer high single digit returns for 2013
Foto cedidaMichel Ho, Client Portfolio Manager ING IM. ING IM: la deuda high yield sigue ofreciendo retornos atractivos

High yield strategies had a great year in 2012. Michel Ho, Client Portfolio Manager for High Yield in ING IM gives a hint of what happened in the fourth quarter of last year and which are the main drivers for the asset class in 2013.

“It all started in December 2011, attracting a lot of investors to this asset class in 2012”, he explains in a recorded interview in ING WebTV. “Supportive monetary policies by European Central Banks and the FED translated in a lower probability of tail risks, the low rate of defaults and general appetite by investors searching for yield were supportive for this asset class in 2012.”

With the strong flows, at the end of December of 2012 cash levels were slightly high, and ING IM has been very active in the new issue market at the beginning of 2013. In terms of strategy positioning ING IM remains slightly above risk in general, overweighed in Asia, holding a slight underweighted position in Europe, but overweighting risk, and with a neutral stance in the US market.

Asked about expected returns for the asset class and the strategy in 2013, Michel Ho explains:  “it’s difficult to say where we’ll be. We expect interesting returns as credit fundamentals are strong, defaults remain low and search for yield is still high, so we see continued inflows in the asset class. Index levels point to a yield of 5% to 7% for the asset class and as active investors we hope to add around 200 bp to this levels”.

Economist Shushanik Papanyan has joined the BBVA Compass economic research team

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Economist Shushanik Papanyan has joined the BBVA Compass economic research team
Foto cedidaShushanik Papanyan. La economista Shushanik Papanyan se une a BBVA Compass

Economist Shushanik Papanyan has joined the BBVA Compass economic research team. Before joining the bank, Papanyan taught at the University of North Texas and the University of Texas at Arlington. Most recently, she worked as a consultant for the Globalization and Monetary Policy Institute of the Federal Reserve Bank of Dallas.

“We are pleased to have Shushanik join us and help us enhance our macroeconomics research,” said Nathaniel Karp, chief economist for BBVA Compass. “Her knowledge about monetary policy, business cycles and international economics will help us improve our models and forecasts.”

Papanyan earned a doctorate in economics from the University of Houston and a master’s degree in international studies from the University of Notre Dame. She earned her bachelor’s in international economics from Yerevan State University in Armenia and is fluent in Russian and Armenian.

Papanyan is often invited to present her research on U.S. business cycles, as well as global economic fluctuations at various academic conferences in the U.S. and abroad. Her work has been published in the Journal of Forecasting, an industry publication.

Karp’s team analyzes the U.S. economy and Federal Reserve monetary policy. For its analyses, the economists create models and forecasts for growth, inflation, monetary policy and industries. The economic research team also follows a variety of issues that affect the Sunbelt states where BBVA Compass operates.

The bank’s economic research group includes Kim Fraser, Jason Frederick, Boyd Nash-Stacey, Marcial Nava and Alejandro Vargas.

Economist Shushanik Papanyan has joined the BBVA Compass economic research team

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Economist Shushanik Papanyan has joined the BBVA Compass economic research team
Foto cedidaShushanik Papanyan. La economista Shushanik Papanyan se une a BBVA Compass

Economist Shushanik Papanyan has joined the BBVA Compass economic research team. Before joining the bank, Papanyan taught at the University of North Texas and the University of Texas at Arlington. Most recently, she worked as a consultant for the Globalization and Monetary Policy Institute of the Federal Reserve Bank of Dallas.

“We are pleased to have Shushanik join us and help us enhance our macroeconomics research,” said Nathaniel Karp, chief economist for BBVA Compass. “Her knowledge about monetary policy, business cycles and international economics will help us improve our models and forecasts.”

Papanyan earned a doctorate in economics from the University of Houston and a master’s degree in international studies from the University of Notre Dame. She earned her bachelor’s in international economics from Yerevan State University in Armenia and is fluent in Russian and Armenian.

Papanyan is often invited to present her research on U.S. business cycles, as well as global economic fluctuations at various academic conferences in the U.S. and abroad. Her work has been published in the Journal of Forecasting, an industry publication.

Karp’s team analyzes the U.S. economy and Federal Reserve monetary policy. For its analyses, the economists create models and forecasts for growth, inflation, monetary policy and industries. The economic research team also follows a variety of issues that affect the Sunbelt states where BBVA Compass operates.

The bank’s economic research group includes Kim Fraser, Jason Frederick, Boyd Nash-Stacey, Marcial Nava and Alejandro Vargas.

Robeco: Five lessons from the Cyprus bail-out

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Robeco: Cinco lecciones a aprender del rescate de Chipre
Foto cedidaRonald Doeswijk, Chief Strategist at Robeco. Robeco: Five lessons from the Cyprus bail-out

Chief Strategist Ronald Doeswijk,  on what can be learned from the last ten days.

There are five key lessons to be learned from the 11th hour deal that Cyprus struck with the international lenders to secure its EUR 10 billion bail-out, says Ronald Doeswijk.

1. Deal was the best of a bad bunch of solutions

First, he says, the deal is not ideal but it is the best option from a bad set of potential solutions. “In the last week, as in the whole debt crisis, there have been events where there are only bad solutions on offer,” he argues.

This “least-bad” deal is structured so that the unacceptable plan to levy depositors with savings of less than EUR 100,000 that was included in last week’s initial proposal—and which was voted down by the Cypriot parliament—has gone.

Instead, the weight of the bail-out rests on richer depositors in the country’s two main banks, with more than EUR 100,000 in their accounts, and senior bank bondholders.

These pressures mean that there are no simple solutions left for future flare-ups in the eurozone debt crisis—and such flare-ups are inevitable. “This will not be the last choice between bad solutions. And a bad solution always brings the risk of a final break up of the eurozone, either directly or indirectly. Also, politicians have not always shown great awareness of unintended consequences,” he cautions.

2. EUR 100,000 deposit guarantee repaired but doubts will linger

The second lesson is that politicians have realized that it was a mistake to threaten the eurozone-wide EUR 100,000 deposit guarantee. In the proposal that the Cypriot parliament rejected last Monday, deposits with less than EUR 100,000 were facing a 6.75% haircut.

In the new deal, the EUR 100,000 guarantee is being honored. “In that sense, you could say that things have only changed marginally in the last ten days,” says Doeswijk.

And yet. Only a week ago, Europe’s policymaker elite were prepared to plunder small savers’ deposits. That’s a difficult cat to get back in the bag. “People have been made aware that the rules may change from today to tomorrow,” says Doeswijk.

3. Contagion risks in the short term are small: bank runs unlikely in Spain & Italy

Even though Spanish and Italian savers might thus be alarmed by the planned deposit grab in Cyprus, Doeswijk is not expecting bank runs in either country. That’s Doeswijk’s third lesson. “We still think contagion risks are small in the short term,” he says. “People will see Cyprus as a special case.”

That said, he acknowledges his concern about a possible restart of the silent bank run in Spain: “it’s a key issue,” he says. In Spain, money flows out of banks recently reversed: people have been putting money in again. Now, the worry is that, prompted by Cyprus, outflows will start again.

4. Bondholders continue to be at risk

The fourth lesson is that bondholders are now more at risk. As part of the Cyprus deal, the senior unsecured debt of Laiki Bank looks set to be completely wiped out, while senior bondholders of Bank of Cyprus face a haircut. “Senior bank debt holders will bleed,” says Doeswijk. “That is good in the long term.” Why is this good? “Sometimes risk has to materialize to prevent moral hazard,” he says. “You can’t use taxpayers’ money every time.”

5. Focus to shift back to political instability in Italy

The fifth lesson concerns the next steps in the broader eurozone crisis. While Cyprus gets used to its new normal—a shattered business model, a drastically shrinking economy and higher levels of debt to GDP—Doeswijk believes that the spotlight is likely to shift away.

It is not that this deal solves Cyprus’s problems. “But we believe that if Cyprus implements what the Troika is telling it to do, it will receive another bail-out if needed,” he says. “A eurozone exit is too dangerous.”

Where will the spotlight come to rest? Doeswijk suggests Italy. “Political instability in Italy could worry financial markets,” he says. After all, there is no stable government. And fresh elections are possible within a few months. “Are the new policymakers willing to put forward enough reforms to satisfy the Germans?” he asks.

That is unlikely to be the only negative taking the spotlight away from Cyprus. The dire state of the eurozone economy will also be competing for attention. “We have to see how the economy does in the months ahead. Data from France has been very bad,” he notes.

Still, despite the flare-ups, the most likely scenario is that, with the backstop of the ECB’s OMT (outright monetary transactions) and softened austerity, politicians will gradually push through economic reform. “In those circumstances, we may be able to avoid a test of the conditionality of the OMT, which we believe to be truly conditional,” says Doeswijk

Apex to Offer Free Office Space and Advisory Service for Fund Start Ups

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Apex to Offer Free Office Space and Advisory Service for Fund Start Ups
Wikimedia CommonsBy Wilfredor. Apex to Offer Free Office Space and Advisory Service for Fund Start Ups

Apex Fund Services, an independent fund administration companie, announces the launch of its free office facilities and fund incubation service to fund managers looking to start a new fund, said the firm in a press release. 

The new office facilities service forms part of a new division, Apex Emerging Manager Incubation Services (EMIS) aimed at helping new fund managers establish their funds in the most cost-effective way, with the best infrastructure to ensure the funds’ post-launch success. 

In addition to providing office space, EMIS offers free advisory services regarding fund structure, jurisdiction selection, launch platforms, cloud hosting, broker networks, administration and, via Apex Technologies, Order Management and Portfolio Management Systems. 

EMIS launches in New York, Miami, Toronto, London, Malta, Mauritius and Sydney where a number of new fund managers are already benefiting from EMIS office space. EMIS is in the process of being rolled out to all Apex locations and will be available to fund managers launching a new fund. 

EMIS will be managed by Bill Wiggin who is a Member of Parliament in the UK and has over 13 years financial services experience having worked at Union Bank of Switzerland, Dresdner Kleinwort Benson and Commerzbank AG amongst others. Bill will work closely with all of Apex’s Managing Directors around the world to ensure new fund managers receive the most objective and highest quality advice when launching a fund.

“Up to 75% of all new fund launches fail, a statistic that is far too high and Apex’s EMIS has been launched to turn the tide and ensure more fund managers succeed”. “New funds often carry too high a cost base at launch which can be a major drag on the growth of the fund, restricting its chance of success. EMIS brings solutions to all of these potential hurdles and brings the key infrastructure needed to make funds investable”, said Bill Wiggin.

 

Aberdeen Launches Latin American And European Equity Funds

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What the Fund?
Foto: Mattbuck. What the Fund?

Aberdeen Asset Management announced the launch of two new mutual funds: Aberdeen Latin American Equity Fund (Class A Ticker: ALEAX ) and Aberdeen European Equity Fund (Class A Ticker: AEUAX).  

“Aberdeen Asset Management has been investing in Latin American and European equities for nearly three decades and the strategies represent part of the firm’s core competencies,” said Gary Marshall, Aberdeen‘s Chief Executive.  “The launch of the new funds comes amid rising demand from Aberdeen‘s U.S. clients for global exposure at a regional level. Aberdeen is delighted to be able to expand our product offering and deliver these new strategies in the U.S.”

The Aberdeen Latin American Equity Fund will be managed by the company’s highly-regarded Emerging Markets Equity team, led by Devan Kaloo, Head of Global Emerging Markets Equities. By employing Aberdeen Asset Management’s disciplined bottom-up equity investment process, the team will seek to achieve long-term capital appreciation by investing in equity securities of Latin American companies.

The Aberdeen European Equity Fund will be managed by Aberdeen‘s Pan European Equity team based in London, led by Jeremy Whitley, Head of UK and European Equities. Also employing Aberdeen Asset Management’s bottom-up equity investment process, the team seeks to achieve long-term capital appreciation by investing in equity securities of European companies.

“With the developed world facing anemic growth rates, high unemployment and continued government austerity measures, we believe investors need to look to the developing world for opportunities and growth. In this regard, we believe that the outlook for Latin America is compelling. In our view, the region benefits from improved economic fundamentals, vast natural resources, a significant pool of consumers with favorable demographics, low public debt, and financially strong companies.  We believe Latin America should not be overlooked in a well-diversified global portfolio”, said Devan Kaloo, Head of Global Emerging Markets at Aberdeen,

The crisis in the Eurozone has led many U.S. investors to avoid a European allocation. We believe that Europe as a whole is underappreciated and the time is right to gain exposure to strong global franchises by investing in quality European companies.  In our opinion, Europe possesses many quality companies with strong business models, quality management teams and extensive intellectual capital, which are supported by strong corporate governance models and robust legal frameworks. While European governments may be in poor financial health, we feel that investors can find high-quality companies at attractive valuations across Europe.”, said Jeremy Whitley, head of UK and European Equities at Aberdeen

Credit Suisse to Acquire Morgan Stanley’s Private Wealth Management Businesses in EMEA

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Credit Suisse to Acquire Morgan Stanley’s Private Wealth Management Businesses in EMEA
Foto: NASA. Credit Suisse adquiere el negocio de wealth management de Morgan Stanley EMEA

Credit Suisse today announced that it has signed an agreement to acquire Morgan Stanley’s wealth management businesses in Europe, Middle East and Africa (EMEA), excluding Switzerland. The businesses with a total of over USD 13 bn of assets under management are based in the UK, Italy and Dubai, serving predominantly international Ultra High Net Worth (UHNW) and High Net Worth (HNW) clients across Europe.

The transaction complements Credit Suisse’s leading wealth management business in Europe and reinforces the bank’s focus on growing its UHNW and HNW client segments. The acquisition will add scale to the bank’s core growth markets in EMEA including the UK, Italy, Nordics, Russia and the Middle East. In the UK market, the acquisition will significantly increase Credit Suisse’s client base, making the bank a top ten player and leading wealth manager.

The businesses acquired will be integrated into Credit Suisse’s Private Banking & Wealth Management division. The acquisition will offer Morgan Stanley’s private banking clients, relationship managers and other employees an opportunity to benefit from a leading product platform and client offering, broad expertise and the highest quality standards of one of the world’s longest established private banks.

Romeo Lacher, Head of Private Banking for Western Europe at Credit Suisse, said: “Accelerating our growth momentum in our international markets and in our UHNW client segment remains a key priority for Credit Suisse. Morgan Stanley has developed a strong foothold in wealth management over the past years and its high quality client base and experienced employees perfectly complement our ambitions to grow our share in these areas. We look forward to welcoming Morgan Stanley’s clients and employees to Credit Suisse and working with them to deliver a strong portfolio of products, services and expertise across our private banking platform.”

Credit Suisse combines the strengths and expertise of its Private Banking & Wealth Management, including Asset Management services, and Investment Banking. The unique value proposition of Credit Suisse’s integrated banking services remains a key strength in its client offering. It enables the bank to offer customized and innovative solutions to its clients, especially to UHNW clients, the fastest growing segment at Credit Suisse.

The acquisition is structured as an asset purchase for the businesses involved. Subject to satisfying certain closing conditions, it is expected to close later this year.