Pixabay CC0 Public Domain. Schroders se une a la iniciativa Global Impact Investing Network (GIIN)
Credit Suisse Asset Management and Equilibrium Capital Group, sustainability infrastructure and resource management leader, have joined forces to launch a platform of sustainable real assets that will allow them to expand the resources and capital available to industries and businesses that share their commitment to sustainability.
Credit Suisse revealed in a press release that this partnership follows its establishment in July of an executive board-level function Sustainability, Research & Investment Solutions (SRI). SRI has a commitment to provide at least 300 billion Swiss francs of sustainable financing over the next decade in fulfillment of the bank’s and its clients’ desire to deploy capital sustainably.
In support of this global initiative, Credit Suisse AM and Equilibrium will jointly develop and manage a sustainable infrastructure and resource management platform. The collaboration will allow them to combine Credit Suisse’s global reach and expertise in sustainability with Equilibrium’s industry leadership “in building pioneering, institutional, sustainability-driven real asset and resource management capabilities”, they explained.
Climate change mitigation
“Equilibrium is an ideal partner for our franchise given our shared history in sustainability, alternatives and real assets. This partnership marks another landmark in Credit Suisse’s sustainability strategy to help address pressing environmental challenges”, commented Eric Varvel, Global Head of Credit Suisse AM.
Marisa Drew, Chief Sustainability Officer and Global Head of Sustainability, Strategy, Advisory and Finance at Credit Suisse, said that they are “delighted” to support this collaboration in pursuit of their shared mission to mobilize capital for good. The announcement “builds on Credit Suisse’s long history of ground-breaking sustainability strategies, from co-founding one of the early leaders in microfinance and impact credit, to integrating sustainability into real estate portfolios, and innovating in the fields of conservation and energy transition finance.”
Meanwhile, Dave Chen, CEO of Equilibrium Capital, pointed out that they are excited to partner with Credit Suisse on this mandate to address the changing resource infrastructure landscape. “While we cannot reverse climate change completely, we can mitigate its impact by creating more sustainable infrastructure. By managing the environmental risks around food production, waste, water and energy, we can foster greater stability and security in those areas”, he added.
Pixabay CC0 Public Domain. La FED aprueba la solicitud de Allfunds Bank para abrir su oficina de representación en Miami
Allfunds Bank continues its international expansion process. Yesterday, the Federal Reserve Board approved their application to establish a representative office in Miami (Florida). The new office will be led by Laura González and will serve as Allfunds hub for US offshore activity.
The statement released by the Board says that the office will act as a liaison with U.S. clients and prospective clients of the firm. Also it will “market and solicit new business for banking products and technological services provided by Allfunds”.
The Board thinks that the firm appears to have the experience and capacity to support the Miami Representative Office. “Taking into consideration Allfunds’ record of operations in its home country, its overall financial resources, and its standing with its home country supervisors, it has been determined that financial and managerial factors are consistent with approval of Allfunds’ application to establish the office”, they pointed out.
In a press release, Allfunds informed that González joined the firm in 2011 and has a wealth of knowledge on US offshore after working several years with the Latam market. Currently she serves as Allfunds Global Head of Wealth Management and prior to that she was appointed Head of Iberia and Americas at Allfunds covering both the strategic direction and the firm´s expansion model across the region. She also successfully led the opening of the Allfunds´ Brazilian office.
“We continue to fulfill our expansion plan. The opening of this office is a very important step for the company as it is the first office in the United States. This milestone reinforces our leadership as the world’s leading wealthtech and fund distribution platform and our commitment to the North American market”, said Juan Alcaraz, CEO of Allfunds.
Allfunds has several representative offices in South America and the Middle East and operates branches and subsidiaries in six countries. Its foreign operations include subsidiary companies in Brazil, Luxembourg, and Switzerland; branches in Italy, Singapore, and the United Kingdom; and other representative offices in Brazil, Chile, Colombia, and the United Arab Emirates.
With total assets of approximately $2.5 billion, Allfunds is a Spanish bank providing clearing, settlement, and administration services through a platform offered to financial services firms, including banks, wealth managers, broker-dealers, insurance companies, fund managers, and pensions. It is the largest investment fund administration platform in Europe based on assets under administration, with over $615 billion.
Foto cedidaJill Barber, new Global Head of Institutional Solutions at GAM. GAM ficha a Jill Barber para el cargo de directora global de soluciones institucionales
GAM announced the appointment of Jill Barber for the newly-created role of as Global Head of Institutional Solutions. In its quarterly results, the firm revealed that she will join them on 2 November 2020 and will partner with Jeremy Roberts, Global Head of Distribution, to lead sales and distribution.
Hiring Barber has to do with GAM’s intention to focus on growth and cross-selling opportunities between investment management and private labelling. The firm pointed out that further simplification of the business will also bring additional opportunities for efficiency gains in 2021 and 2022.
“The growth pillar of our strategy is progressing well with high levels of client interaction and a strong pipeline of growth opportunities. To support these efforts, we have hired Jill Barber to partner with Jeremy Roberts and lead sales and distribution, focusing on institutional and wholesale clients respectively. We are also seeing encouraging signs of success from collaboration between private labelling and investment management using capabilities from across the firm”, said GAM in its statement.
Before her appointment, Barber was global head of institutional at Jupiter AM for three years, prior to which she worked at Franklin Templeton Investments. Peter Sanderson, group chief executive at GAM, pointed out that she has “an excellent reputation across the industry, in-depth knowledge of the institutional market and demonstrable success in delivering solutions for clients”.
The asset manager also revealed that they will announce shortly a new appointment of the Global Head of Sustainable and Impact Investment, who will lead the sustainable investment strategy and strengthen their client ESG proposition.
Pixabay CC0 Public Domain. Jupiter AM ubica en Denver su primera sede en Estados Unidos
Jupiter Asset Management announced the opening of its first office in the United States, for its recently created US subsidiary – Jupiter Asset Management US LLC (“JAM US”). Three Jupiter employees, including two newly appointed team members, will be based in the office in Denver (Colorado) as the firm initiates its expansion within the onshore US institutional market.
In a press release, the asset manager pointed out that Taylor Carrington has joined the firm as head of US distribution and managing director for JAM US. Reporting to Warren Tonkinson, managing director, distribution, he will lead the firm’s sales efforts in the onshore US institutional market. With 19 years’ experience in asset management, Carrington joins from Allianz Global Investors, where his most recent position was head of North America, institutional client team. “His appointment marks Jupiter’s first step into this client segment, and an important expansion of its international distribution profile”, said the firm.
Initially, he will spearhead the US onshore distribution of NZS Capital’s global growth strategies, following the agreement of the strategic partnership in late 2019, under which Jupiter is the exclusive global distributor of its products. Teh asset manager revealed that Carrington has known the NZS investment team and its client base for many years, having previously worked with NZS co-founders Brad Slingerlend and Brinton Johns at Janus Capital Group.
Following receipt of the appropriate regulatory approvals, he will also lead the distribution of Jupiter’s investment strategies to the onshore US institutional market.
As part of the initiative to build out the US infrastructure, the firm has also hired Tracy Pike as head of investment oversight at JAM US. As stated in the press release, subject to regulatory approval, her primary responsibility is to oversee the delegation of investment activities to NZS Capital in relation to the NZS strategies, or Jupiter Asset Management Limited in the UK.
Pike brings over 24 years’ industry experience and was previously head of sub-advisor oversight at Charles Schwab Investment Management. Prior to this, she was a senior product manager at Janus Capital Group, where she worked closely with Carrington and the NZS investment team. Pike will report to Katharine Dryer, Jupiter’s deputy CIO.
A credit research hub
Joining them in the Denver office will be Joel Ojdana, a US credit research analyst on the fixed income strategy. He has worked at Jupiter since July 2018 and has over twelve years’ experience in investments. Previously based in London, he has made “a meaningful contribution to the firm’s US credit research – an important pillar of Jupiter’s £12.7 billion unconstrained bond offering”, pointed out the asset manager. Ojdana will be Jupiter’s first research analyst based in the US and he will continue to report to Luca Evangelisti, head of credit research, remaining an integral member of Jupiter’s fixed income team.
Jupiter revealed that during 2021, they will be actively exploring the opportunity to establish a local US credit research hub and potentially expanding the team based there, with Ojdana leading this initiative.
A “vital” local presence
“The US institutional market is incredibly significant, and I’m thrilled that we’ve been able to open our office in Denver. Under Taylor and Tracy’s experienced leadership, there is a brilliant opportunity to expand meaningfully, offering both NZS and in time, Jupiter strategies to US institutional investors”, said Tonkinson.
In his view, establishing a local presence is vital to achieving success in this market and ensures their new US clients will receive the highest level of customer service. “The office opening also represents a key milestone in Jupiter’s international growth”, he added.
Meanwhile, Carrington commented that, having worked in the US institutional market for many years, he is confident that Jupiter’s “broad, high-conviction and genuinely active” fund range will appeal to a wide number of sophisticated investors looking to navigate global markets. “The opportunity to initiate Jupiter’s expansion in the region, as well as to work with the NZS team again, is incredibly exciting and I look forward to helping Jupiter becoming a significant participant in this market”, he said.
Pixabay CC0 Public Domain. PIMCO y GE Capital Aviation Services crean una plataforma de inversión en el sector de arrendamiento de aeronaves
PIMCO and GE Capital Aviation Services (GECAS), a business unit of GE, have reached a preliminary agreement to develop an aviation leasing platform to support up to $3 billion in aircraft asset financings. The firms announced in a press release that the transaction is subject to customary closing conditions and receipt of required regulatory approvals.
This strategic investment platform will enable GECAS and PIMCO-advised accounts to acquire “new and young fuel-efficient aircraft to meet the needs of a diverse set of global airlines over many years”, they explained. The platform looks to provide “much-needed financing” for airlines which are looking to upgrade their fleets.
The portfolio will initially focus on narrowbody aircraft while allowing flexibility to invest in attractive opportunities in the widebody market. PIMCO and GECAS will consider a range of investment criteria including an airline’s assets and credit quality and also geographic factors.
PIMCO is already one of the world’s largest investors in aviation-backed debt. Both firms think that its presence in aviation financing markets combined with GECAS’ leadership role in the aircraft-leasing segment will provide “enormous flexibility” to fund the global airline industry. GECAS will source transactions, act as servicer and provide asset management services for the platform.
Essential liquidity for a critical industry
“As the airline industry struggles with the effects of the COVID-19 pandemic, the PIMCO-GECAS platform will inject essential liquidity into this critical industry by providing financing solutions at a time when there are fewer traditional financing options for airlines,” said Dan Ivascyn, PIMCO’s Group Chief Investment Officer.
In his view, aircraft remain an attractive asset class in a critical infrastructure sector supported by solid long-term growth drivers. He also pointed out that GECAS’ expertise as a world class aircraft lessor aligns with PIMCO’s “longstanding investment strategy” in aviation finance.
Meanwhile, Greg Conlon, president and CEO of GECAS, claimed to be “delighted” to team up with a premier institutional investor such as PIMCO in this strategic relationship which he thinks will enable “opportunistic plays” to support airline customers around the globe.
“While GECAS maintains an industry-leading position, this platform will ensure we can continue providing our airline customers with the aircraft needed to sustain their franchises”, he added.
Pixabay CC0 Public Domain. La relación entre el Reino Unido y la UE después de diciembre y las implicaciones para sus respectivas industrias de fondos
With less than 100 days until the UK definitely leaves the European Union, it is worth reflecting on the practical impact of Brexit on the relationship between the UK and Luxembourg in the asset management and fund industry.
London and Luxembourg are long-standing partners. With 17.1% of AUM, UK asset managers represent the second largest group of initiators of Luxembourg funds. These investment funds (UCITS and AIFs) benefit from European marketing passports. They are distributed in the EU at large, including the UK, and beyond.
The UK is in fact a very important distribution market, with Luxembourg clearly a leader among overseas funds. Roughly 25% of funds distributed in the UK are overseas funds. As at 31 December 2019, there were 8,862 funds/sub-funds distributed in the UK. From this total, 4,341 are Luxembourg-domiciled, which thus represents 49% of all overseas funds registered in the UK.
The vast majority of UK asset managers (HSBC, Invesco, Schroders, Aberdeen, M&G, just to name a few) have established their own UCITS management company or AIFM in Luxembourg. This was already the case before Brexit, but some additional 30 firms have in the meantime set up their own operation in Luxembourg. This allows them to benefit from the European management passport once the UK will have left the EU. This was a logical move when considering that the UCITS Directive and AIFMD feature both a “product” passport, meaning the investment funds themselves, and a “management” passport for UCITS management companies and AIFMs managing these funds.
Another possible way of retaining access to distribution in the EU is to set up the fund in Luxembourg while appointing a third-party management company, should the UK asset manager not have its own operation in the EU.
By far and large, ALFI’s feedback from its members is that virtually all firms have taken the necessary steps to anticipate a hard Brexit: either setting up presence for those few that needed a presence in the EU as just mentioned, or re-domiciling UK funds to Luxembourg, and making the necessary adjustments in the allocation of assets.
Unlike in other segments of the financial sector such as the clearing of derivatives, trading venues or CSDs, the concept of equivalence plays little if no role when it comes to the management and marketing of EU and non-EU funds. Indeed, the UCITS directive and the AIFMD already offered pre-Brexit a relatively clear framework.
The impact on UK and Luxembourg
What does this mean in practice for UK funds? Any fund that is not a UCITS is by definition and from a European perspective an AIF. Those UK-domiciled UCITS will lose their UCITS label. They will qualify as non-EU AIFs as from 1 January 2021. They may still be marketed to European investors subject to the conditions set out in the AIFMD, which are obviously more restrictive. Non-EU AIFs can indeed only be placed subject to the terms of the National Private Placement Regimes, if any, of each individual EU Member State. They will no longer benefit from a marketing passport as the AIFMD 3rd country passport has not been activated.
And for Luxembourg? Any Luxembourg UCITS that is today marketed in the UK will similarly no longer be viewed by the UK as a UCITS from 2021 onwards. That said, there is wide consensus among policymakers and asset managers that it is key, from an investor choice’s perspective, to keep the UK market open to overseas funds, especially when considering that UCITS are retail products with a high degree of investor protection. Today, most money market funds and ETFs marketed in the UK are overseas funds, almost invariably domiciled in Luxembourg or Dublin.
To avoid any disruption, the UK government and the FCA implemented a Temporary Permissions Regime (TPR) which enables relevant firms and funds which passport into the UK, to continue operating in the UK when the passporting regime ceases to exist on 31 December 2020. All Luxembourg investment funds registered for distribution have made use of the TPR mechanism.
The TPR is obviously a short-term facility to bridge the gap until new legislation is passed and effectively implemented in the UK. It is expected that this will take two or three more years from now.
2021 and beyond
From January 2021 onwards, the UK will become a 3rd country. The legislator may impose additional requirements on overseas funds like this is currently the case with EU funds distributed in other 3rd countries such as Switzerland, Hong Kong etc.
The UK Government (HM Treasury) launched a Public Consultation on the Overseas Funds Regime (OFR) post Brexit, to which ALFI responded in early May. ALFI generally agrees on the approach taken, in particular the concepts of outcomes-based equivalence set out in this Consultation. The main challenge for overseas funds will obviously lie in the additional requirements (such as the requirement to comply with FCA PS18/8 on the Assessment of Value) that the UK legislator, being no longer bound by EU legislation, may impose on overseas funds. It may trigger additional costs hence each overseas fund will need to weigh the costs and benefit of continuing marketing in the UK.
Delegating management
A major point of attention in the relationship between the UK and the EU post Brexit is the delegation of portfolio management. Delegation is explicitly permitted in the UCITS Directive and AIFMD. Cooperation agreements between EU Member States and third countries must be in place in case of delegation, which will be the case.
The designation of delegates in and outside the EU is subject to strict requirements of initial and ongoing due diligence, and oversight of delegates. A framework with the required protections and safeguards is already in place. As a result, there is a wide consensus in the industry that they are no reasonable grounds to revisit the delegation framework in the context of the reviews of the AIFMD and UCITS Directive.
US equities were lower during the month of September, ending a streak of five consecutive months of gains. Investors sold shares as a reaction to the news of a resurgence of coronavirus cases in Europe. The “Big 5” tech companies as well as other growth/momentum stocks contributed to the weakness for US equities over concerns of crowded positioning and stretched valuations.
Fears are intensifying over a resurgence of COVID-19 from students going back to school, colder weather and the start of influenza season. However, increased optimism about the progress of a vaccine and treatment trials have investors hopeful that the economy will not endure another global shutdown.
While dialogue has remained open for a bipartisan deal for additional coronavirus stimulus, political tensions have made negotiations difficult and unclear. The upcoming presidential election has added more volatility to the markets as well as the political uncertainty associated with a potential delay of declaring a winner due to mail-in ballots and likely litigation.
While technology stocks have been the primary beneficiaries during COVID-19, other areas of the economy (including housing, retail consumer spending, business capital expenditures, and government-backed infrastructure related spending) will likely lead in a recovery. As stock pickers, we can use the current volatility as an opportunity to buy attractive companies, which have positive free cash flows, healthy balance sheets and are trading at discounted prices.
Merger activity in the third quarter topped $1 trillion, an increase of 94% compared to the second quarter and the strongest quarter for dealmaking since the second quarter of 2018. Worldwide M&A now totals $2.3 trillion year-to-date, a decrease of 18% from 2019 levels. Technology, Financials and Energy & Power were the most active sectors accounting for 43% of all dealmaking. Europe and Asia Pacific have remained bright spots for M&A, increasing 15% and 19% respectively, while dealmaking in the U.S. has declined in 2020 by 42% to $815 billion. Global deals valued between $5 and $10 billion have increased 23% over 2019, while mega deals (deals valued over $10 billion) have declined 33%.
Column by Gabelli Funds, written by Michael Gabelli
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GAMCO MERGER ARBITRAGE
GAMCO Merger Arbitrage UCITS Fund, launched in October 2011, is an open-end fund incorporated in Luxembourg and compliant with UCITS regulation. The team, dedicated strategy, and record dates back to 1985. The objective of the GAMCO Merger Arbitrage Fund is to achieve long-term capital growth by investing primarily in announced equity merger and acquisition transactions while maintaining a diversified portfolio. The Fund utilizes a highly specialized investment approach designed principally to profit from the successful completion of proposed mergers, takeovers, tender offers, leveraged buyouts and other types of corporate reorganizations. Analyzes and continuously monitors each pending transaction for potential risk, including: regulatory, terms, financing, and shareholder approval.
Merger investments are a highly liquid, non-market correlated, proven and consistent alternative to traditional fixed income and equity securities. Merger returns are dependent on deal spreads. Deal spreads are a function of time, deal risk premium, and interest rates. Returns are thus correlated to interest rate changes over the medium term and not the broader equity market. The prospect of rising rates would imply higher returns on mergers as spreads widen to compensate arbitrageurs. As bond markets decline (interest rates rise), merger returns should improve as capital allocation decisions adjust to the changes in the costs of capital.
Broad Market volatility can lead to widening of spreads in merger positions, coupled with our well-researched merger portfolios, offer the potential for enhanced IRRs through dynamic position sizing. Daily price volatility fluctuations coupled with less proprietary capital (the Volcker rule) in the U.S. have contributed to improving merger spreads and thus, overall returns. Thus our fund is well positioned as a cash substitute or fixed income alternative.
Our objectives are to compound and preserve wealth over time, while remaining non-correlated to the broad global markets. We created our first dedicated merger fund 32 years ago. Since then, our merger performance has grown client assets at an annualized rate of approximately 10.7% gross and 7.6% net since 1985. Today, we manage assets on behalf of institutional and high net worth clients globally in a variety of fund structures and mandates.
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The GAMCO All Cap Value UCITS Fund launched in May, 2015 utilizes Gabelli’s its proprietary PMV with a Catalyst™ investment methodology, which has been in place since 1977. The Fund seeks absolute returns through event driven value investing. Our methodology centers around fundamental, research-driven, value based investing with a focus on asset values, cash flows and identifiable catalysts to maximize returns independent of market direction. The fund draws on the experience of its global portfolio team and 35+ value research analysts.
GAMCO is an active, bottom-up, value investor, and seeks to achieve real capital appreciation (relative to inflation) over the long term regardless of market cycles. Our value-oriented stock selection process is based on the fundamental investment principles first articulated in 1934 by Graham and Dodd, the founders of modern security analysis, and further augmented by Mario Gabelli in 1977 with his introduction of the concepts of Private Market Value (PMV) with a Catalyst™ into equity analysis. PMV with a Catalyst™ is our unique research methodology that focuses on individual stock selection by identifying firms selling below intrinsic value with a reasonable probability of realizing their PMV’s which we define as the price a strategic or financial acquirer would be willing to pay for the entire enterprise. The fundamental valuation factors utilized to evaluate securities prior to inclusion/exclusion into the portfolio, our research driven approach views fundamental analysis as a three pronged approach: free cash flow (earnings before, interest, taxes, depreciation and amortization, or EBITDA, minus the capital expenditures necessary to grow/maintain the business); earnings per share trends; and private market value (PMV), which encompasses on and off balance sheet assets and liabilities. Our team arrives at a PMV valuation by a rigorous assessment of fundamentals from publicly available information and judgement gained from meeting management, covering all size companies globally and our comprehensive, accumulated knowledge of a variety of sectors. We then identify businesses for the portfolio possessing the proper margin of safety and research variables from our deep research universe.
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Disclaimer:
The information and any opinions have been obtained from or are based on sources believed to be reliable but accuracy cannot be guaranteed. No responsibility can be accepted for any consequential loss arising from the use of this information. The information is expressed at its date and is issued only to and directed only at those individuals who are permitted to receive such information in accordance with the applicable statutes. In some countries the distribution of this publication may be restricted. It is your responsibility to find out what those restrictions are and observe them.
Some of the statements in this presentation may contain or be based on forward looking statements, forecasts, estimates, projections, targets, or prognosis (“forward looking statements”), which reflect the manager’s current view of future events, economic developments and financial performance. Such forward looking statements are typically indicated by the use of words which express an estimate, expectation, belief, target or forecast. Such forward looking statements are based on an assessment of historical economic data, on the experience and current plans of the investment manager and/or certain advisors of the manager, and on the indicated sources. These forward looking statements contain no representation or warranty of whatever kind that such future events will occur or that they will occur as described herein, or that such results will be achieved by the fund or the investments of the fund, as the occurrence of these events and the results of the fund are subject to various risks and uncertainties. The actual portfolio, and thus results, of the fund may differ substantially from those assumed in the forward looking statements. The manager and its affiliates will not undertake to update or review the forward looking statements contained in this presentation, whether as result of new information or any future event or otherwise.
Alantra AM has announced in a press release the acquisition of a 49% stake in Indigo Capital SAS, a pan-European private debt asset manager.
Based in Paris, Indigo is an independent, established player in the alternative finance market specializing in the financing of small and medium-sized European businesses worth between €20-300 million through a combination of private bonds and preferred equity. Since inception, the firm’s 7 investment professionals have completed over 50 investments for a total value of more than €800 million across France, Italy, the Netherlands, Switzerland, and the UK.
“The investment in Indigo Capital represents yet another step in the growth plan of Alantra AM, and follows the incorporation of Grupo Mutua as its strategic partner to support the firm’s ambition of building a diversified pan-European asset management business”, said the firm in the press release.
Through its existing teams and the strategic stake in Indigo Capital, Alantra and its affiliates will have over €1 billion of assets under management covering different private debt strategies, including senior debt, unitranche and private bond solutions to corporates and long-term flexible financing for real estate companies.
The different teams actively cover 7 European markets.
Pixabay CC0 Public Domain. El coste de riesgo de la banca casi triplica los niveles anteriores a la pandemia
Lombard International Group announced the expansion of its Institutional Solutions Practice (Practice) globally. This will provide institutional investors, based across the globe, with more effective ways to invest in U.S. private markets. Also, “it will assist U.S. and non-U.S. investment managers to raise capital through compliant investment structures that can more efficiently enhance net returns”, stated the firm in a press release.
The Practice focuses on improving global access to U.S. private markets for institutional investors such as pension funds, corporations, sovereign wealth funds, foundations, endowments and funds of funds, to enable their investment allocation to be “more efficient and effective”, says the wealth manager.
Operating across major global wealth hubs, the Practice is headed up by financial services veteran John Fischer, who leads a multi-disciplined team of senior executives. In the U.S., this includes Tom Wiese, Executive Managing Director; Sandy Geyelin, Executive Managing Director, and C. Penn Redpath, Senior Managing Director. Also, Jason Tsui, Managing Director, will lead the distribution strategy in Asia; Juan Job, Senior Managing Director, will be in charge of Latin American operations; and EMEA will be led by Peter Coates, who recently joined Lombard International as Global Director of Institutional Solutions.
“Institutional Solutions has been one of the key drivers of our growth. We’re excited to launch this internationally expanded Practice across the major global wealth hubs in Asia, Europe, LatAm and the U.S. Our team’s many decades of experience in combining insurance solutions and investment for optimized outcomes, as well as their subject matter expertise in alternative investments, means they are perfectly positioned to assist strategic partners and clients focused on U.S. private markets, which present attractive investment opportunities”, said Stuart Parkinson, Group Chief Executive Officer.
Michael Gordon, US CEO & Global COO, commentedthat, as markets remain volatile and uncertain, the institutional appetite for U.S. private markets is increasing. “Despite recent events, financial markets remain globally connected, and non-U.S. institutional investors in particular continue to be a key driver of asset flows into U.S. private equity, private debt and real assets. I’m delighted to spearhead the growth of this practice globally, to help institutions better achieve their unique investment objectives”, he added.
Meanwhile, Fischer, Executive Vice President and Head of Distribution,pointed out that their aim with this internationally expanded Practice is to truly make every basis point count. “We have created an effective global offering, using time-tested insurance structures which help investors reduce the friction associated with U.S. private assets, improving investment yields and reducing administrative burdens. Importantly, our solutions are cost-efficient, transparent and highly customizable to the unique needs of institutional investors”, he said.
Foto cedida. Morgan Stanley cierra un acuerdo para adquirir Eaton Vance por 7.000 millones de dólares
Morgan Stanley has entered a definitive agreement to acquire Eaton Vance, a provider of advanced investment strategies and wealth management solutions with over $500 billion in assets under management (AUM), for an equity value of approximately $7 billion.
The acquisition will make Morgan Stanley Investment Management (MSIM) a leading asset manager with approximately $1.2 trillion of AUM and over $5 billion of combined revenues. The asset manager stated in a press release that it avances its “strategic transformation” with three world-class businesses of scale: Institutional Securities, Wealth Management and Investment Management.
MSIM and Eaton Vance consider themselves “highly complementary” with limited overlap in investment and distribution capabilities. Eaton Vance is a market leader in key secular growth areas, including in individual separate accounts, customized investment solutions through Parametric, and responsible ESG investing through Calvert. “Eaton Vance fills product gaps and delivers quality scale to the MSIM franchise. The combination will also enhance client opportunities, by bringing Eaton Vance’s leading U.S. retail distribution together with MSIM’s international distribution”, points out the press release.
“Eaton Vance is a perfect fit for Morgan Stanley. This transaction further advances our strategic transformation by continuing to add more fee-based revenues to complement our world-class investment banking and institutional securities franchise. With the addition of Eaton Vance, Morgan Stanley will oversee $4.4 trillion of client assets and AUM across its Wealth Management and Investment Management segments”, said James P. Gorman, Chairman and Chief Executive Officer of Morgan Stanley.
Meanwhile, Thomas E. Faust, Jr., Chief Executive Officer of Eaton Vance stated that by joining Morgan Stanley, they will be able to further accelerate their growth by building upon their common values and strengths, which are focused on investment excellence, innovation and client service. “Bringing Eaton Vance’s leading brands and capabilities under Morgan Stanley creates a uniquely powerful set of investment solutions to serve both institutional and retail clients in the U.S. and internationally”, he added.
The details of the transaction
The firms point out that this transaction is attractive for shareholders and will deliver long-term financial benefits. “Both companies have demonstrated industry-leading organic growth and have strong cultural alignment”.
The combination will better position Morgan Stanley to generate attractive financial returns through increased scale, improved distribution, cost savings of $150MM – or 4% of MSIM and Eaton Vance expenses – and revenue opportunities.
Under the terms of the merger agreement, Eaton Vance shareholders will receive $28.25 per share in cash and 0.5833x of Morgan Stanley common stock, representing a total consideration of approximately $56.50 per share. Based on the $56.50 per share, the aggregate consideration paid to holders of Eaton Vance’s common stock will consist of approximately 50% cash and 50% Morgan Stanley common stock.
The merger agreement also contains an election procedure allowing each Eaton Vance shareholder to seek all cash or all stock, subject to a proration and adjustment mechanism. In addition, Eaton Vance common shareholders will receive a one-time special cash dividend of $4.25 per share to be paid pre-closing by Eaton Vance to Eaton Vance common shareholders from existing balance sheet resources.
The transaction will not be taxable to Eaton Vance shareholders to the extent that they receive Morgan Stanley common stock as consideration. The transaction has been approved by the voting trust that holds all of the voting common stock of Eaton Vance, says the press release.
The acquisition is subject to customary closing conditions, and is expected to close in the second quarter of 2021.
