UBS Partners With Addepar and Mirador to Deliver Wealth Analysis and Reporting for UHNW Clients

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UBS launched a new offering, in collaboration with Addepar and Mirador, that will provide UBS’s ultra high net worth clients in the US with a consolidated, real-time view of their entire portfolio across assets and liabilities, including traditional, non-traditional and illiquid assets.

UBS’s financial advisors will now have access to comprehensive analytics, which will help them more effectively visualize their clients’ investment performance, cash flows, and worth, while assessing the opportunities and risks across their portfolios.

“We recognize that our advisors need an intuitive, visual and modern offering that will provide a complete picture of their clients’ full portfolio – from stocks and bonds to alternative investments and their private art collections,” said John Mathews, Head of Private Wealth Management at UBS. “With this unique offering, our clients will have the ability to gain a deeper understanding of their wealth – guided by their financial advisor – to help them make more informed decisions to meet their financial goals.”

Built with open architecture, Addepar integrates the leading-edge software, data and service partners from across the fintech industry. Addepar’s data, analysis and reporting capabilities will help UBS’s advisors consolidate clients’ performance calculations presented in an easily accessible graphic interface to unlock additional insights on returns and investment trends.

“Our partnership redefines what’s possible for advisors and their clients and truly empowers data-driven investment decisions in a timely, complete and secure way,” said Eric Poirier, CEO, Addepar. “Working with UBS, it’s clear that they recognize the importance of having the best technology, data and solutions to meet their clients’ needs – now and in the future.”

As part of the Addepar partner ecosystem, Mirador’s financial data technology experts will support UBS’s advisors with data management, custom visualization and tailored reporting, as well as operations and system maintenance.

“We are thrilled to have UBS as our first enterprise-wide client,” said Jeremy Langlois, Chief Revenue Officer, Mirador. “We look forward to working with the firm’s advisors to provide tailored solutions to help their clients understand their needs and unique ownership, family and legal entity structures to achieve their financial goals.”

 

‘Expert’ Investors Believe Sustainable Investing Most Likely to Drive long-term Returns

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“Expert” investors are more likely to believe that investing sustainably is key to driving long-term returns compared with people who rate themselves as less knowledgeable, Schroders Global Investor Study 2022 has found.

The sustainability-focused findings of Schroders’ flagship study, which has surveyed more than 23,000 people who invest from 33 locations globally, found that more than two-thirds (68%) of people who class themselves as having “expert/advanced” investment knowledge believe sustainable investment is the only way to ensure profitability in the long term.

This compares with 52% of ‘”intermediate” investors and 43% of those who believe they have ‘”beginner/rudimentary” investment knowledge. Similarly, 69% of “expert” investors share the view that investing sustainably can support positive change when it comes to challenges such as climate change.

Hannah Simons, Head of Sustainability Strategy at Schroders, commented: “The interaction between sustainability and returns has seen some polarising results this year. While beginner investors appear more sceptical, the majority of people believe sustainability is crucial to delivering long-term returns. This is encouraging to see and further emphasises the crucial role asset managers have to play in terms of helping investors better understand how investing sustainably can not only help overcome challenges such as climate change, but also support their long-term returns. Indeed, we see an intrinsic link between long-term sustainable investment returns and solving some of the world’s social and environmental challenges.”

Specifically, the study found that environmental impact was the main reason people are attracted to sustainable investing. However, investing according to social issues has grown in importance compared with previous years. Interestingly, financial gains only ranked third in investors’ list of priorities, having declined over the past two years, falling from 42% in 2020 to 36% this year.

However, a focus on delivering financial returns unsurprisingly still remains a priority for many investors. More than half (56%) seek a fund that focuses primarily on delivering financial returns while integrating sustainability factors. That is particularly the case for people in Asia (61%) and the Americas (60%), while people in Europe were more likely to choose a fund with sustainability characteristics (51%).

The study also found that people would increasingly invest in sustainable funds if they were able to invest in line with their preferences. More than half of investors across all self-defined expertise levels said that the ability to choose investments that align with their personal sustainability preferences would encourage them to increase their allocation to sustainable investments.

In terms of investors’ specific sustainability goals, quality education was seen as the most important globally, with a fifth of those surveyed (21%) ranking this option first.

Education and evidence of better performance and impact also key factors to encourage sustainable investment

Countries with higher poverty levels appeared to prioritise addressing poverty over other factors. In India, eliminating poverty was the top priority (having been selected by 21% of investors). In contrast, investors in Switzerland selected educational improvements as the priority.

As well as the ability to choose investments aligned to their personal sustainability preferences, just under half (48%) said that more education around sustainable investing would encourage them to allocate more sustainably. The lack of clear definitions of sustainable investments was cited as one of the most significant barriers to investing sustainably by all knowledge levels.

Completing the top three, some 44% of people stated that more data and evidence showing that investing sustainably delivers better returns would encourage them to increase their investments.

Andy Howard, Global Head of Sustainable Investment at Schroders, said: “This year’s survey results show that environmental challenges remain one of the key reasons individuals are looking to invest sustainably. However, the ‘S’ in ‘ESG’ can’t be forgotten, with human capital, education and equality all top of people’s investment priorities. Financial education is a key element in driving more capital towards sustainable investing. It is clear from our research that what people seek is essentially guidance and clarity. The more people are able to understand the products they invest in and their impact on society and the environment, the more capital we should see flowing into sustainable investing.”

Insigneo and iCapital Partner to Provide US and Latam Investors Access to Alternative Investment Opportunities

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Insigneo and iCapital announced a partnership to provide Insigneo’s US and Latin American financial advisors and their clients with access to iCapital’s private market and hedge fund offerings. 

“We recognize the growing importance of alternative investments, especially in today’s market  environment,” said Insigneo Chairman and CEO Raul Henriquez. “To that end, Insigneo is  proud to partner with iCapital, which enables us to leverage their technological capabilities to  provide Insigneo’s clients with easy access to a premiere lineup of alternative investing  opportunities.” 

Added Mirko Joldzic, Insigneo’s Head of Investment Solutions: “We are excited that our global  client base will greatly benefit from iCapital’s technology and solutions while accessing a broad  range of private market opportunities within private equity, private debt, and real assets, in  addition to a variety of hedge fund strategies.” 

iCapital and Insigneo both recognize a growing demand for private market and hedge fund  investments in Latam. 

“We are pleased to announce our partnership with Insigneo, a distinguished wealth  management firm with a primary focus on Latin America, and support them in our shared  mission to make institutional-quality private market and hedge fund allocations more accessible  to financial advisors and their clients,” says Marco Bizzozero, Head of International at iCapital.  “Latin America is of strategic importance to iCapital, and we are delighted to grow our business  in the region with such an experienced partner.” 

LatAm and the Caribbean Most Exposed to a US Recession

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Latin America (LatAm) and the Caribbean are the most susceptible regions to a US recession, Fitch Ratings says in a new report. This reflects LatAm and the Caribbean’s geographical proximity and various transmission channels, which tie them to US economic cycles and policy decisions.

Fitch cut its US 2023 growth forecast to 0.5% in its most recent Global Economic Outlook published September 2022; it forecasts a mild US recession beginning in 2Q23.

The main transmission channels into LatAm and the Caribbean are trade, remittances, tourism and commodity prices. Within these regions, the countries’ different economic characteristics mean the impact could vary considerably.

Lower US external demand primarily affects Mexico due to its export-dependence and geographical proximity (Mexico is among the US’s top three trading partners).

A large portion of Central American exports are demanded by the US, although these countries tend to have a more diverse export markets base.

South American economies have limited trade links with the US, but are indirectly affected via the impact on global trade and commodity prices.

Weakening US household incomes and employment could imperil migrants’ capacity to send remittances home, and discourage tourism.

Remittances account for more than 20% of GDP for some Central American countries. Caribbean and Central American economies are vulnerable to a sudden stop in tourist arrivals, particularly Aruba (the world’s most tourist-dependent country as a share of GDP).

A US recession, in tandem with Fed tightening, adds to challenges for frontier markets, as costlier external financing could complicate policy options, and for the region’s more developed economies if their current account deficits are large.

We expect limited pressure on LatAm and Caribbean’s sovereign ratings from a mild US recession. Any ratings impact will ultimately depend on the magnitude of the US economic shock and each country’s capacity to absorb it.

‘Latin America and the Caribbean’s Vulnerabilities to a US Recession’ is available at www.fitchratings.com or by clicking on the link above.

 

VIS with DWS: Methods to manage currency risk in the portfolio

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Photo courtesy

The continued rise in strength of the U.S. dollar is having profound impacts on the global market. Forecasting spot currencies is never easy, and Investors need to understand how to evaluate whether they should hedge their currency risk in the international markets. In an upcoming Virtual Investment Summit on November 29 at 10:30 am (ET), DWS will bring these issues to the table.

Topics to be discussed include:

  • Portfolio strategies for a strong dollar
  • Learn how to implement a simple FX hedging strategy that may lower volatility, deliver positive carry income, and differentiate your practice in the process
  • Myths and misperceptions uncovered about costs, correlations, and carry
  • The challenges involved in predicting spot currency returns and central bank activity

To register as an attendee to this event click on this link

Host: Aiviel Sanchez, Latin America Coverage, DWS

Aiviel Sanchez is a senior relationship manager at DWS working primarily with institutional and other similar investors in Latin America. He has nearly two decades of financial services experience, having joined DWS in 2018 after previously being head of institutional sales-Chile at BlackRock and before that UBS and JPMorgan. Aiviel earned a BA in Finance from the University of Puerto Rico.

Speaker 1: Dean Allen, Passive Investment Specialist-U.S. Offshore, DWSXtrackers

Dean Allen joined DWS in 2021 with more than 14 years of relevant Passive and ETF experience. Prior to joining the firm he was responsible for wirehouse, private bank, IBD, and RIA clients in U.S. Offshore (UCITS ETFs and mutual funds) at Vanguard. Prior to that Dean was head of product management and ETF capital markets for Vanguard Investments Canada, based in Toronto, as well as having other roles relating to ETFs and distribution in international markets and U.S. businesses. He earned a BS in Finance from the University of Maryland.

Speaker 2: Jason Chen, DWS Research House

Jason Chen is a senior research analyst in the DWS Research House, the firm’s intellectual capital and analytics group focused on market analysis and thought leadership. He has been with DWS since 2018 and prior to his current role was a U.S. product strategist. Before joining the firm Jason focused primarily on multi-asset portfolio management and investment research when he worked at JPMorgan. He earned his BBA in Economics and International Business from Temple University.

Florida governor DeSantis is one of the biggest winners in midterm elections

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Ahmed Riesgo, Chief Investement Officer at Insigneo

Florida Governor Ron DeSantis was one of the night’s biggest winners in the U.S. midterm elections, commented Insigneo’s chief investment officer, Ahmed Riesgo.

The expert explained how DeSantis “outperformed expectations in largely Democratic strongholds like Miami-Dade and Palm Beach Counties”.

In addition, the governor, who was re-elected, polled well among Latin community.

Several political analysts noted how DeSantis was very well positioned for the 2024 presidential race. Riesgo agrees with this view.

“He should be considered the frontrunner for the Republican party Presidential nomination as of today,” he added.

On the other hand, the Insigneo expert, highlight that President Joe Biden is another big winner of the night because although he will lose weight in the House of Representatives, that defeat will be better than what is customary for presidents to suffer.

Riesgo remembered that Presidents and Congressional majorities almost always get flipped in the midterms. “Historically, the Democrats lost this election back in November 2020 when they were first elected,” he commented.

According to the analyst, Democrats “did an above average job of minimizing losses, especially considering the poor macro environment they faced and how many respondents during exit polls claimed that the country was headed in the wrong direction”.

On the other hand, the “red wave” that some pundits claimed was swelling in recent weeks did not hit the beach on Tuesday. Instead, we got merely a “red ripple”.

In that sense, “a divided government is obviously still the base case, but the small Republican majority in the House and the slim majority of either party controlling the Senate means that the debt ceiling will be a major issue for the markets to deal with in 2023,” he commented.

With this scenario, “both parties will have enough opposition critical mass (i.e., scapegoats) to blame the other side for not agreeing on a budget. ” he concluded.

Venture AUM in the Southeastern US has Quadrupled

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Venture capital AUMs in the Southeastern United States has grown nearly 400% over the last 5 years, with a CAGR of 31.7% according to Preqin’s Territory Guide: Venture Capital in the Southeastern US.

By the end of 2021, VC AUM in the region rose to $37bn from just $9.4bn in December 2016 at a compound annual growth rate (CAGR) of 31.7% . That asset growth was on pace with the larger national trend that saw VC allocations jump sharply in 2021 when regional VC firms added $13bn in AUM.

Amid this increase in assets, the number of managers and funds based in the region also rose. Last year, 75 funds closed about $5.2bn in aggregate assets. On 2020’s $2.8bn closed across 41 funds. Through the first nine months of 2022, 44 funds closed a total $2.4bn, on pace to fall below the highs of the year before.

Most recent Preqin data shows that 758 VC managers are operating in the Southeastern US, investing both in the region and globally. More than a quarter of those managers began operations since 2017, and are concentrated in Florida, Georgia, Virginia, and North Carolina. That growth has recently slowed in 2022 as equity markets, particularly tech, sold off.

Despite fewer managers opening funds this year, the number of funds managed in the region increased. More than 570 2021-vintage year funds came to market last year, followed by another 507 through the first nine months of 2022. On average, about 340 funds began investing annually between 2016 and 2020. Again, these funds were highly concentrated in the states mentioned above.

In 2021, total deal value in the region neared $15bn as VC investment across the country experienced a surge. While that number may seem insignificant in comparison to other regions like the Western US ($177bn),
VC investment in the Southeastern US rose at a five-year CAGR of 38.9% as of December 2021, just ahead of the national average of 35.6%.

Through the first nine months of 2022, private companies based in the Southeastraised $12.7bn in total.

The pandemic played a part in the redistribution of the US population, but the seeds of growth had already been planted. US census data shows that several parts of Southern US saw net gains in population from 2020 onward, but places like Miami (Florida), Northern Virginia, and Charlotte (North Carolina) were already mestablishing themselves in the VC space, particularly as tech hubs far from Silicon Valley.

VC investment in the Southeastern US has historically been on par with the Midwestern US. Yet the draw of lower taxes, better weather, and, at the time, laxer COVID-19 policies swung the balance southward, particularly for employees with the freedom to work remotely. The 1,088 deals made in the Southeastern US between 2021 and 2022 made up 8.3% of total US VC deals over that period, ahead of both the Midwestern US (6.5%) and the Southwestern US (4.5%)

In dollar terms, the $28bn in aggregate deal value was also ahead of both the Midwestern US ($19.2bn) and the Southwestern US ($15bn) over the 21-month period ended September 2022.

In 2022, the average deal size for the Southeastern US was $35mn, up from $27mn the year before. It’s important to note that average deal size jumped between 2019 and 2020, from $14mn to $23mn. While the pandemic attracted headlines in 2020, the global response to dropping interest rates was a major factor in the rise in valuations. Although deal prices have remained stubborn in the face of rising rates, it’s uncertain they’ll hold as recessionary pressure builds.

It remains to be seen how this year’s macroeconomic challenges – a down equity market, high inflation, and increasing interest rates – will impact the tech sector.

Private markets tend to lag public market corrections, something that is still yet to be seen in the Southeastern US. So far in 2022, the average information technology deal has been slightly lower than the average deal size at $30mn, however, this is still $4mn higher than that of 2021.

 

Market Volatility Drives Demand for Financial Planning Services

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In volatile markets, investors, particularly those experiencing it for the first time, look to their advisors for guidance. Advisors can seize upon this opportunity to engage existing clients and gain new ones by offering financial planning services, using effective communication strategies, and implementing financial planning software, according to the latest Cerulli Edge—U.S. Asset and Wealth Management Edition.

Nearly 75% of advisors’ clients receive some form of financial planning, a share that is expected to rise to 82% by 2023. 18% of investors working with a financial advisor do not have a financial plan in place but consider it important. Cerulli recommends advisors consider re-introducing their planning services to those who may not be aware of this service offering, particularly during periods of market volatility.

In addition to financial planning services, advisors should consider developing a communication strategy to attract and retain advisory relationships. Close to 40% of retail investors consider it extremely important that their advisor maintains an appropriate amount of contact with them.

Advisors can implement this by distributing timely information about the current market and economic situation and offering their own analysis, which clients are likely to share with their own personal networks. “A thoughtful stream of touchpoints can buoy client satisfaction even as markets falter, allowing advisors to be best positioned for client retention and growth,” says Scott Smith, director.

As firms continue to encourage financial planning, scale becomes an important consideration. “Well-integrated financial planning solutions can help advisors meet investor demand for bespoke planning services efficiently, which can prove invaluable, especially in times of market volatility,” says Smith. According to the research, 74% of advisors use financial planning software within their practice, and by 2023 this percentage is expected to reach 82% among firms polled.

Ultimately, according to the research, advisors who offer financial planning find that their clients are better positioned to stay the course and remain calm despite declining market performance while enabling advisors to develop enduring client relationships.

“Financial planning shifts the focus to progress made toward achieving goals rather than investment performance,” says Smith. “This frames volatility in the context of a bigger picture, which helps clients feel prepared when market shocks arise.”

Merrill Introduces Premium Access Offering to High-Net-Worth Clients

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Bank of America announced Premium Access Strategies, a suite of third-party investment strategies reviewed by the Chief Investment Office, including the added benefits of access to investment management teams and the ability to request expanded portfolio customization.

The new strategies are fully integrated into Merrill Lynch Investment Advisory Program to help support comprehensive planning discussions, as well as seamless implementation and inclusion in annual review materials.

“Premium Access Strategies is the latest example of Merrill offering personalized investments to align with clients’ goals and financial situations,” said Keith Glenfield, head of Investment Solutions at Bank of America. “The new offering is designed to address clients’ unique needs and provide further customization, all while being fully integrated into the Merrill Lynch One Platform.”

Premium Access Strategies allow clients to enter into a dual contract relationship by signing an agreement with Merrill and entering into an investment manager agreement with the selected manager, who can provide customized, professional investment management for a personalized portfolio at a negotiated manager rate. Managers planned to be available for the November launch, include AllianceBernstein, BlackRock, Franklin Templeton, Lord Abbett, Natixis Investment Managers/Loomis Sayles, Nuveen and PIMCO.

Premium Access strategies will address the unique needs of eligible clients by offering the ability to request enhanced portfolio customization to help clients’ investments align with their needs and goals; a relationship where clients can connect with the investment manager to discuss investments and receive reporting directly from the manager and portfolios governed by a separate agreement, directly with the investment manager with negotiable terms, including investment management fees.

This is the latest example of Merrill’s growing suite of products and solutions tailored to the needs of high-net-worth clients, a growing client segment.

The new offering is designed for clients with at least $5 million in combined assets at Merrill and Bank of America or at least $10 million in investable assets, including assets outside of Merrill and Bank of America.

HSBC U.S. Private Banking Enhances Wealth Management Solutions with Addepar

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HSBC U.S. Private Banking announced today that it has selected Addepar, a technology platform purpose built for investments, as its consolidated client performance reporting platform.

HSBC’s U.S. Private Banking serves domestic and international high net worth and ultra high net worth clients, as well as family offices, with $65 billion in assets under management.

Addepar’s software and data platform for wealth and investment managers is a proven leader in the space, with a client base that includes more than 800 of the world’s top family offices, registered investment advisors, private banks and large financial institutions across more than 30 countries.

Addepar will provide HSBC U.S. Private Banking with critical tools, such as comprehensive portfolio views and in-depth analytics, which will optimize the client experience. The platform will also improve reporting on private and alternative investments, leverage multi-currency capabilities, and provide tailored reporting for sophisticated needs of internationally-minded high net worth and ultra high net worth clients, as well as family offices.

“This new partnership with Addepar combines best-in-class technology with advanced analytics that will help us best serve our clients based around the world,” said Jessie Zhu, Head of Investments and Wealth Solutions, WPB US and Americas, HSBC. “We look forward to working with Addepar to manage, grow and preserve clients’ wealth for generations to come.”

“Investment professionals are facing constantly shifting environments and markets as they navigate the current financial landscape, with a need for technology and quality data being more acute than ever. We are thrilled to partner with the forward-thinking team at HSBC to bring Addepar’s category-defining platform to their U.S. Private Banking business,” said Eric Poirier, CEO, Addepar.

“The scalability, flexibility and security of our platform unlocks the ability for us to serve the fast-changing needs of the largest banks around the globe, and in turn, for them to provide exemplary service to their clients. We look forward to continuing to grow with HSBC in the years ahead.”