Robeco announced the restructuring of its American operations into the entity Robeco Americas, headquartered in New York, and the expansion of its agreement with LarrainVial, which includes the wholesale business in US Offshore and Latam, based in Miami.
LarrainVial will continue to distribute Robeco’s funds for Latin American institutional clients as it has been doing for the past twenty years.
María Elena Isaza and Julieta Henke, directors and sales managers of Robeco’s US Offshore and Latam business, will join LarrainVial as managing directors and “will continue to be based in Miami,” according to a memo sent to Robeco’s clients, which Funds Society has accessed.
Both Isaza and Henke will receive full support from Robeco and LarrainVial to continue their growth efforts in the region, offering the same exceptional service and products to clients, adds the exclusive communication for clients.
“This appointment will not have any impact on the operational and contractual aspects of our commercial relationship with our American and Latam Offshore clients. Everything remains the same!”, emphasizes the communication that was not made public.
On the other hand, Robeco will centralize its operations into a single hub, with all Robeco employees based in New York. This hub will serve GFIs, the U.S., Canada, LATAM, and US Offshore.
The amalgamation of Robeco’s activities in America will be led by Ignacio Alcántara and “is driven by the desire to offer efficiency in customer services in a highly regulated and competitive market,” says the statement released by the firm.
The focus also aims to ensure consistency in client interactions, optimize resource allocation, and facilitate ongoing compliance with industry regulations.
“By centralizing our operations in America and forging strong partnerships, like the one we have with LarrainVial, we are better positioned to effectively serve our clients in the future… We have been working closely with LarrainVial in the LATAM markets (excluding Brazil) for over 20 years, and we are excited to extend this cooperation to the US Offshore and LATAM market. LarrainVial’s extensive experience and presence in America align perfectly with our mission to offer top-tier investment solutions to our clients,” commented Malick Badjie, global director of Sales and Marketing at Robeco.
On the other hand, Fernando Larraín, CEO of LarrainVial, said that “with a rich history spanning over 90 years, LarrainVial has amassed extensive experience in the distribution business across America. The US Offshore market is of immense importance to LarrainVial as a key area for growth.”
China is not only the second biggest economy in the world, it’s also the second biggest bond market(1). No wonder that when China sneezes, investors in emerging market (EM) bonds become nervous. But we believe there is no need for panic – for three key reasons.
For a start, China’s economic prospects are not as challenging as they first appear.
Although the real estate sector remains weak, there are some bright spots elsewhere. Domestic tourism is now higher than pre-Covid, and outbound tourism is now back to over 50 per cent of 2019 levels (which also benefits the rest of EM Asia, such as Macau, Hong Kong and Thailand). The service sector more broadly is holding up well and public investment is strong.
Chinese authorities have also been proactive in shoring up growth. They have reduced interest rates and provided support to the real estate sector. Mortgage rates have been cut by 150 basis points from the peak and this tends to impact borrowers with a lag, so the benefits have largely yet to materialise. At the recent Politburo meeting, authorities pledged to step up counter-cyclical measures, which could include plans to help young jobseekers and the easing of purchase restrictions to support the real estate sector. The Politburo meeting omitted the phrase “housing is for living, not for speculation purposes” – an important signal.
Economists have recently downgraded Chinese growth projections for 2023, with consensus expectations converging towards the official forecast of 5 per cent. Although this is lower than initial expectations (of around 6 per cent after a very strong rebound in Q1), it is still a marked improvement compared with last year.
This, in turn, should help emerging markets more broadly to retain an attractive growth differential relative to their developed peers – to the benefit of EM sovereign and corporate bonds.
We see the growth gap at around 4 ppts for this year and next. This is a sizeable buffer and thus, even if China’s growth was to fall short of current expectations, the growth gap between EM and DM would still be significant.
Our analysis shows that historically such a gap has been accompanied by the appreciation of EM currencies versus the US dollar and general outperformance of EM assets (see Fig. 1).
Fading dominance
Secondly, while China is clearly a very important part of the EM universe, its dominance is not as strong as it once was. The fate of other emerging markets has de-coupled from that of China in recent years in terms of both macro and asset class performance.
Different approaches to Covid-19 lockdowns and policy responses have resulted in diverging paths for growth, rates, and inflation. China locked down more severely than many other countries. It is thus only now recovering economically and has not seen the sharp rise in inflation witnessed almost everywhere else in the world, to varying degrees.
While other EM central banks, especially in Latin America, have proactively raised interest rates over the past two years, the People’s Bank of China (PBOC) has stayed on an easing path to support growth. Now, other EM central banks are getting ready to ease monetary policy, which would potentially offer a huge boost for their local debt markets. Chinese assets won’t get such a marginal boost as the PBOC is already in easing mode, although its current monetary stance should be a slight positive rather than a hindrance to the general EM monetary easing theme.
The divergence also underscores decreased dependence of other EM economies on China through the commodity price link. Back in the 2000s, Chinese demand for commodities was a major boost for the developing world given the dominance of commodity exporters in the EM universe at the time. However, nowadays, EM is a much more diverse group and has a much more balanced ratio of commodity exporters and importers. Therefore, today’s lack of commodity demand from China is much less of a problem for the rest of EM than would have been the case 10 or 20 years ago.
Not surprisingly, markets are also differentiating between Chinese assets and those in other EM (see Fig. 2).
The JP Morgan Local Sovereign index, GBI-EM, is up 10.5 per cent year-to-date in USD terms, whilst its China sub index is down 0.7 per cent over the same period. This mirrors currency performance – while, for instance, LatAm currencies have rallied this year, led by the Brazilian real, the Chinese renminbi has lost 3.3 per cent versus the US dollar(2).
Opportunities beyond China
Thirdly, we see some very positive developments across the developing world, which give rise to potentially rewarding investment opportunities.
Mexico is benefiting from companies shifting production closer to the US market. Real estate vacancy rates have dropped significantly in major Mexican cities, while asking rents are rising. Overall, we expect near-shoring to boost Mexican exports by almost 3 per cent of GDP through near- and medium-term opportunities. Similar trends are also at play in other Latin American countries. Some of this investment is being diverted away from China due to geopolitical tensions between Washington and Beijing. China’s loss, therefore, will be the gain of other EM economies.
India and Indonesia, meanwhile, are both seeing an improvement in economic growth, which is largely domestically driven. This bodes well not only for sovereign debt, but also for credit in some sectors. Our EM credit teams particularly like green energy companies in this region, as well as infrastructure and transport in India and consumer companies in Indonesia. Financials should do well as strong economic growth translates into increased lending.
We are also seeing positive developments in some frontier markets. Nigerian authorities have recently harmonised the country’s myriad exchange rates, signalling a move to more focused and predictable monetary policy and a non-interventionist currency regime. They have also cut expensive fuel subsidies, raising the possibility of an improvement in Nigeria’s fiscal balances, which in turn should increase investor confidence and capital inflows into the country.
Zambia, meanwhile, has struck a breakthrough debt refinancing deal, and Ghana is expected to follow suit.
For now, we believe some of these opportunities are more compelling than those on offer in China itself, where a number of our portfolios are positioned more neutrally. We nonetheless think that in the medium term, China remains an important part of a diversified (EM) portfolio; its large domestic economy allows it to tailor-make policies uncorrelated to developments elsewhere in the world.
Currently, within China, we like the technology sector. There have been much more friendly policy signals recently after three years of regulatory crackdown. Conversely, we remain cautious on the real estate sector.
Overall, we believe China’s slowdown is manageable, especially as it has already triggered further support from authorities, with the trough likely behind us in Q2. Prospects for emerging market debt remain strong, with some attractive opportunities to be found within China and many more beyond it.
(1) Pictet Asset Management, IMF World Economics Outlook as of Oct 2020.
(2) As of 24.07.2023
Piece of opinion written by Sabrina Jacobs, Senior Client Portfolio Manager of Pictet Asset Management, and Echo Chen, Investment Analyst of Pictet Asset Management.
Julius Baer will change its regional structure, create encompassing responsibility for client experience, and strengthen the importance of people management and culture. As a result, the Group makes new appointments to the Executive Board. The changes in structure and leadership are designed to enhance the delivery of its targets for the 2023–2025 strategic cycle and beyond.
As of the beginning of 2024, Julius Baer Group complements its leadership team through a number of in-house promotions and select new hires.
The changes in regional structure will create maximum proximity to clients and their needs, thereby accelerating the growth of the Group’s franchise. The newly created division Client Strategy & Experience will set global standards in client service, providing support, segment management, marketing, and front risk management for all Regions. With the representation of Human Resources in the Executive Board, the updated leadership structure further reflects the central role of people and culture in Julius Baer’s strategy of focus, scale and innovate.
Commenting on the changes, CEO Philipp Rickenbacher said: “Creating value for our clients and stakeholders is at the heart of our purpose – it is the key to our success. Our organisational structure and freshly composed leadership team, with its blend of in-house and new talent, will create the momentum and continuity needed to achieve our targets. It is also the optimal structure to fuel Julius Baer’s ability to capitalise on the growth opportunities in the wealth management industry.”
Further changes effective 2024
Yves Robert-Charrue decided to leave the Group at the beginning of 2024 and will therefore step down from the Executive Board. Philipp Rickenbacher said: “The unrivalled position that Julius Baer enjoys today in Switzerland, Europe, and the Middle East is an outstanding achievement of Yves Robert-Charrue and his teams. A highly esteemed and valued colleague since 2009, I would like to thank Yves for his leadership and loyalty and wish him the very best for his professional and personal future.”
Beatriz Sanchez will also step down from the Executive Board, reflecting her wish to relinquish operational responsibilities, and assume the strategic role of Chair of Americas at Julius Baer as of January 2024. Philipp Rickenbacher said: “Betty Sanchez has been invaluable in re-structuring the Americas business and positioning it for renewed growth. I am immensely grateful for her great contribution and delighted that she will continue to work with us in her new role.”
Background on new Executive Board members, with designated roles
Sonia Gössi, Switzerland & Europe, will join Julius Baer on 1 January 2024 from UBS, where she was Sector Head Wealth Management Europe International North. She started her career in audit and business consulting and joined UBS in 2004, where she held senior client-facing roles in wealth management as well as various risk control and risk management positions.
Carlos Recoder Miralles, Americas & Iberia,today Head Western, Northern Europe & Luxembourg at Julius Baer, joined the Group in 2016 from Credit Suisse, where he started his career in private banking in 1997 and last held the role as Head Private Banking Western Europe.
Rahul Malhotra, Emerging Markets, is currently responsible for Julius Baer’s Global India franchise (onshore and non-resident), Japan, and Asian clients served out of Switzerland and Japan. He joined from J.P. Morgan in 2021. Rahul will be based primarily in Dubai, recognising the financial hub’s central role for these growth markets.
Thomas Frauenlob, Intermediaries & Family Offices,will join on 1 April 2024 from UBS. He is currently the Head of UBS’s Global Financial Intermediaries Business and was previously in charge of their Swiss Global Family Office and Ultra High Net-Worth franchise. He started at UBS in 2010 as Head Equities Switzerland, following roles in the institutional business of Deutsche Bank and Goldman Sachs.
Sandra Niethen, Client Strategy & Experience,is currently Chief of Staff and Head of Strategy at Julius Baer, a role she has held since 2020. Her financial services career of over 20 years spans a number of senior positions in private wealth and asset management, in international client-facing, strategy development, and sales management roles at Deutsche Bank and DWS.
Guido Ruoss, Chief Human Resources Officer & Corporate Affairs,has been Global Head Human Resources at Julius Baer since 2015. Previously he was responsible for business and product management in the Bank’s Investment Solutions division. He joined Julius Baer in 2008, after several years in the asset management and alternative investment industry.
Christoph Hiestand, Group General Counsel, has been with Julius Baer since 2001 and has held the role of Group General Counsel since 2009. Before joining the Bank, he worked as an attorney-at-law in law firms in Germany and Switzerland.
Photo courtesyLisa Golia, COO UBS Wealth Management US & Jason Chandler, Head of Wealth Management at UBS US
UBS has hired Lisa Golia as Chief Operating Officer for its Global Wealth Management US segment, Jason Chandler, Head of Wealth Management for the Americas at UBS, reported on LinkedIn.
“As COO for Wealth Management US, we know you will do great things for our advisors and clients. Described as a “leader’s leader” in just her first few days, her passion for people and service is clear”, he said.
The executive comes from Morgan Stanley and will work in UBS’s New York office.
With more than two decades of experience, Golia joined Morgan Stanley in 1999 where she held various positions as portfolio associate, head of Branch Advocate and administrative Head of Wealth Management between 2006 and 2016.
In May 2017, she was appointed head of Wealth Management Strategic Services, a position she held until landing at the Swiss bank, according to her LinkedIn profile.
Golia’s appointment adds to a series of departures from Morgan Stanley in its wealth management division after the firm implemented changes for international accounts, mainly those corresponding to clients in some Latin American countries.
UBS, Bolton, Raymond James and Insigneo were the firms that attracted the most advisors.
Fee reforms introduced by Chinese regulators in July are likely to influence multiple aspects of the mutual fund industry, going beyond cuts in management fees and custody fees to impacting company revenues, and creating the potential for consolidation. Despite the immediate challenges faced, both investors and the overall fund industry are expected to benefit from fee reforms in the long run, according to The Cerulli Edge—China Edition, 3Q 2023 Issue.
On July 8, 2023, the China Securities Regulatory Commission (CSRC) issued a work plan for mutual fund fee reform to guide the industry in lowering fund fees in a reasonable and orderly manner.
The reform proposes to reduce active equity fund fees by the end of 2023. Among the changes, newly registered products’ management and custody fee rates are capped at 1.2% and 0.2%, respectively. Existing products’ management and custody fee rates are to be reduced to the same levels.
Mutual fund managers have responded quickly and positively to the reforms. Soon after the measures were announced, 19 large managers took the lead in reducing the fund and custody rates of some of their equity funds, and other managers followed suit.
As of September 5th, the number of managers that announced fee cuts topped 130, and the number of funds with reduced fees exceeded 3,500. Most of these are active equity products, although a small number of bond funds and index funds have also lowered custody fees.
In the short term, the fee reforms are expected to have a significant impact on fund managers’ costs. According to Cerulli’s preliminary estimates, the industry will see management and custody fees fall by about RMB14 billion (US$1.9 billion) and RMB2 billion after the stipulated reductions to 1.2% and 0.2%, respectively.
Cerulli also expects that management fee income will drop by up to RMB1 billion, with 36 managers facing double-digit reductions. Compared with their management fee income at the end of last year, without considering the impact of asset changes in the first half of this year, the decline in total management fee income of large managers will average about 10%.
Several leading managers have been ranked highly by management fee income in the past few years, so it is likely that they will face greater pressure to cut costs and increase efficiency, but this can be offset by their large assets under management.
On the other hand, small and medium-sized managers, especially those focusing on equity products, are likely to see profits squeezed. In the long run, they may need to make painful decisions on trimming their workforce or cutting salaries; some could even face the prospect of liquidation. With their relatively cheaper rates, better product performance, and more qualified talent, larger firms could further strengthen their leading positions, resulting in greater industry concentration and consolidation.
“In the short term, the fee reduction will lead to a decrease in managers’ income and further intensify industry competition,” said Joanne Peng, research analyst with Cerulli Associates. “In the long term, however, the reform is conducive to promoting high-quality development of the mutual fund industry, attracting medium- and long-term institutional investments and encouraging distributors to strengthen buy-side investment teams and better serve the wealth management needs of mass retail investors. Managers with outstanding investment and research abilities that can create value for investors in the long term will be able to compete effectively.”
State Street Global Advisors, the asset management business of State Street Corporation, released the results of its Gold ETF Impact Study: Advisor Edition, which was designed to better understand investor attitudes and behaviors around investing in gold.
According to the research, there is significant opportunity for investor education when it comes to gold investments, and advisors are playing an important role in helping clients understand its role in portfolios.
The study found that lack of knowledge is the number one reason why, among the options provided, surveyed investors do not invest in gold, with more than a third indicating they do not have gold in their portfolio because they do not know enough about the ways they can invest in gold. Furthermore, only 41% of surveyed investors agree that they understand what influences the price of gold, compared to 75% among those who actually do have gold in their portfolios.
When it comes to investing in gold ETFs, the advisors’ role as educator is critical. Nine out of 10 (91%) surveyed investors who own gold ETFs indicated they were informed by their financial advisor about the different ways to invest in gold. A similar percentage (91%) of surveyed investors indicated discussing an investment in gold with their financial advisors.
“Investors have good instincts about where – and when – to get objective advice. But it’s likely they will need even more guidance to achieve their financial goals as markets continue to react to higher interest rates, lower consumer sentiment and stubborn inflation,” said Allison Bonds, Head of Private and Independent Wealth Management at State Street Global Advisors.
Among surveyed investors with a financial advisor and holding a gold ETF in their portfolio:
91% have discussed investing in gold with their financial advisor compared with 36% of all surveyed investors with financial advisors;
89% report their financial advisor has explained the benefits of having gold in their investment portfolio compared with 35% of all surveyed investors with financial advisors;
83% noted that their financial advisor recommended gold for their long-term investment portfolio versus 26% of all surveyed investors with financial advisors; and
55% reported their financial advisor recommended gold as a short-term investment given current markets compared to 17% of all surveyed investors with financial advisors.
The survey also revealed approximately three in four gold ETF investors (73%) agree that gold ETFs have improved the performance of their investment portfolio, with three-fourths (76%) reporting that ETFs are a more cost-effective way to invest in gold.
Notably, across all surveyed investors (advised and self-directed) those who hold gold ETFs are more likely to have investable assets of $500,000 or more (82%) than those surveyed investors who do not hold gold ETFs (64%).
The top three variables surveyed gold ETF investors considered when buying a gold ETF are:
Expense ratio (65%)
A structure that is physically backed by gold (55%)
Following the SEC adoption of new rules for cybersecurity risk management, strategy, governance, and incident disclosure by public companies, 64.8% of public company executives say their organizations will strengthen their cybersecurity programs, according to a new Deloitte poll.
Over half of executives surveyed will also push their third parties to strengthen cyber programs (54.1%) in response to the new SEC rules.
Looking back, 53% of public company executives say that their organizations have been planning for and anticipating the newly issued SEC cyber rules. Within that group, executives’ organizations have prepared along various timelines inclusive of up to six months (17%), six to 12 months (19.1%) and more than a year (16.9%).
While one-quarter of those surveyed have yet to begin preparing to comply with SEC cyber rules ahead of their finalization (26.1%), they say their organizations will be compliant by mandatory deadlines.
“Leading public companies have invested considerable time into maturing their cyber, risk management and governance capabilities in anticipation of the now finalized SEC cyber rules,” said Naj Adib, a Deloitte Risk & Financial Advisory principal in cyber and strategic risk, Deloitte & Touche LLP.
In response to the new SEC cyber rules, just 33.9% of polled public company executives’ organizations have evaluated communications with third party service providers. An additional 27.4% are in the process of evaluating the same presently.
“Whether organizations are publicly traded or do business with public companies, clear communication from top leadership about cyber risk management expectations can help mitigate security risks within organizations themselves, but also within their broader supply chains and ecosystems,” said Daniel Soo, Deloitte Risk & Financial Advisory’s strategy and extended enterprise leader and a principal, Deloitte & Touche LLP.
“Increasingly, more executives understand cybersecurity is not just a CISO’s responsibility, but a multifaceted business risk that demands many groups work together to support. Responses to requirements like new SEC cyber rules should help make cyber risk management improvements that benefit many organizations whether they are publicly traded or not,” he added.
Dante Neyra and Conny De La Torre are the latest international financial advisorsto join Bolton Global Capital from Morgan Stanley.
The Neyra & De La Torre Group cover high-net-worth clients from various Latin American and European countries. As a team they manage approximately $200 million in assets under management.
Neyra has more than three decades in the financial industry. He has spent the last nine years as a Senior Vice President at Morgan Stanley in Fort Lauderdale and before that he served a fifteen-year tenure at Merrill Lynch. He started his career at Barnett Bank/Bank of America in 1989.
Conny De La Torre is a Financial Advisor, Portfolio Manager and Certified Financial Planner™. She started her career in 2013 at Merrill Lynch, where she began working with Mr. Neyra and in 2014, they both joined Morgan Stanley.
“The arrival of Dante and Conny to Bolton Global Capital is another testament to our firm’s successful efforts in recruiting top financial advisors. Many of their client relationships extend back three or more generations, which is a true testament to their professionalism and the trust their clients place in them. We are very pleased to welcome Dante and Conny to the firm” said Michael Averett, Bolton’s Head of Business Development. Thus far this year, Bolton has hired five advisor teams from Morgan Stanley with total client assets of $800 million.
Neyra and De La Torre will be based out of the Las Olas Financial District in Fort Lauderdale.
Christopher Shea joins Balanz USA after 16 years at Citi to establish Shea Wealth Advisory.
The 25-year industry veteran, who also previously worked at Morgan Stanley, has decided to leave the large financial firms to focus on delivering clients a more robust product offering and unparalleled client experience, which the large institutions have abandoned.
As stated by Claudio Porcel, Balanz Group President, “there is a drive towards independence, advisors are looking for a culture that is both client and advisor friendly, Balanz aims to provide this culture”. With this, Chris will continue to service high-net-worth clients globally and expand his practice, from Balanz’s new Coral Gables, Miami office.
As one of Citi’s most successful advisors, Chris has spent his entire career developing a substantial wealth management business that encompasses a global footprint that aligns perfectly with our strategy and growth trajectory, said Balanz USA CEO Richard Ganter.
Shea will continue to deliver guidance and advice to his clients, and now, with the resources of the Balanz global brand and independence-driven culture, he will undoubtedly grow his practice to the next level. Is a significant hire for our firm and creates what we consider to be an enormous opportunity for him and his clients, added Ganter.
In the same sense, Balanz USA Managing Director Fred Lucier said, “with his knowledge and expertise, Shea will be an important catalyst for our future growth”.
A graduate of Florida International University’s College of Business, and a recent Barron’s Top advisor, He focuses on comprehensive wealth management for ultra-high-net-worth families and individuals.
“With Balanz’s open architecture platform and superior technology stack I can be far more proactive with clients, provide best in class solutions, and will have access to unique intellectual capital”, said Shea.
Diego Daza will be joining together with Shea, and he will be his second-hand in the process of establishing his wealth advisory practice in Balanz USA. Daza is a highly experienced and accomplished portfolio registered associate, with a proven track record in esteemed financial institutions, including JP Morgan Chase and Citibank.
With 12 years of combined experience, including the last 7 years at Citibank, Daza has established himself as a specialist in servicing high-net-worth clients, the release added.
“His extensive experience and comprehensive knowledge of the industry have enabled him to understand and cater to the unique needs of affluent individuals. Diego’s expertise led him to become a valued member of Citibank’s top producer’s team as a Registered Service Associate, where he efficiently helped manage a book of over $250MM (AUM) in assets”, the firm said.
In addition to his vast industry experience, Daza holds a B.B.A from Towson University.
Shea’s hire is the first of many to come and sets the tone for Balanz USA moving forward: the firm will continue to hire top-tier financial advisors, offering them sophisticated wealth management services and independence, with the goal of helping these advisors grow their practice and give their clients best-in-class plans, strategies, and solutions to achieve their financial goals.
Safra New York Corporation, the holding company of Safra National Bank of New York (“The Bank”), announced the successful completion of its acquisition of Delta North Bankcorp, including its subsidiary Delta National Bank and Trust Company.
This strategic acquisition is a significant milestone for Safra National Bank and underscores the Bank’s continuous expansion in the private banking and wealth management business.
The acquisition strengthens the Bank’s market position among high-net-worth clients in the United States and Latin America, where the Bank has been providing premier private banking and financial services and has a long and successful track record.
Jacob J. Safra, Chairman of Safra National Bank of New York: “We are proud to have completed this acquisition, which represents an excellent strategic fit to our existing business in these markets. Clients will benefit from an organization that is fully dedicated to wealth management, providing the service, products and expertise that best meet their specific needs. We are confident that the Bank has all the attributes required to continue growing and prospering in a sustainable manner.
Simoni Morato, Chief Executive Officer of Safra National Bank of New York: “We very much look forward to working closely with Delta’s clients and employees and developing long term relationships. Together we will build on the strengths of our organization, not only in the United States, but also throughout Latin America.”
Headquartered in New York, with branches in Aventura, Miami and Palm Beach, and offices throughout Latin America, Safra National Bank is a leading private bank with approximately US$ 30 billion in clients’ assets. Safra National Bank of New York is part of the J. Safra Group.
