Asset Managers and Advisors Gear Up for Next-Generation Investors

  |   For  |  0 Comentarios

Captura de Pantalla 2022-04-12 a la(s) 14
Pxhere. ,,

Cerulli projects that $72.6 trillion in wealth will be passed on to heirs and younger generations through 2045. But, only 42% of advisor practices offer intergenerational planning, according to the latest Cerulli Edge—U.S. Advisor Edition.

 

Advisors hoping to capture and retain beneficiary assets must not only incorporate intergenerational planning into their business model, but also evaluate their existing technology infrastructure to remain attractive to young investors. Asset managers are working to develop new products and restructure current offerings to meet the demands of younger investors.

Evolving service and business models to meet the needs of the next generation is no small task. According to the research, over one-quarter of advisors (26%) identify building multigenerational relationships as one of their greatest practice challenges.

“Advisors are frequently so focused on the daily operational aspects and pressing investment or advice needs, they are unable to properly develop strategy related to developing relationships with the next generation,” says Andrew Blake, senior analyst.

Preparing for this shift could be an opportunity for asset managers to add value to advisors. “Asset managers can play a role in educating advisors on how to best service investors through thought leadership and value-add tools,” Blake adds.

The ability to manage and upgrade technology capabilities stands to play an influential role in determining whether an advisor is effective in appealing to younger investors. Across industries, clients are seeking to work with companies that make it easier for them to navigate accounts, access interactive digital content, and receive customer service through readily available artificial intelligence interactions. Firms with lagging digital client experiences may face substantial roadblocks trying to catch up to more technologically savvy competitors.

Cerulli believes that wealth managers focused on capturing next-generation wealth will leverage technology that promotes the client experience, making it easier and faster for this cohort of investors to transact.

Ultimately, both asset and wealth managers need to adjust their service models to safely transition intergenerational assets. “A comprehensive, cohesive digital strategy beyond a collection of software or online content is needed from both,” says Blake.

“Integrating digital offerings to help drive investor outcomes will help asset managers and advisors win assets from a younger and more technology-focused generation of investors,” he conclude.

Water’s Emerging Potential

  |   For  |  0 Comentarios

LECAMP-Cedric-IMG-0405
Cédric Lecamp, Pictet Asset Management. Cédric Lecamp, Pictet Asset Management

Water scarcity is becoming an ever more urgent problem. Resources are dwindling, while demand for clean water and sanitation continues to increase. According to the UN, only one third of countries in the world will have sustainably managed water resources by 2030 (1). The need for investment is urgent.

Although the developed world is far from immune, the problem is clearly most acute in developing countries. In North America and Europe 96 per cent of the population have access to safe drinking water, but this drops down to 75 per cent in Latin America and the Caribbean, 62 per cent in Central and Southern Asia and just 30 percent in Sub-Saharan Africa (2).

The good news, according to members of the Pictet-Water Advisory Board, is that private investment in water resources is growing across emerging markets

 

Pictet AM

Research by the Advisory Board shows that private sector participation (PSP) in the water sector now covers 21 per cent of the world population, up from 8 per cent two decades ago. Such activity is vital as governments are increasingly unable to provide necessary investment due to tight budgets and ageing infrastructure. The private sector can help breach that funding gap, as well as bring expertise.

Some of the strongest growth has come from within emerging markets in Asia. In India, for example, the private sector had almost no involvement in water and sewage 20 years ago. Today, it covers the water needs of approximately 150 million people – a testament to coordinated efforts by the government and multilateral financial institutions. China has seen also seen private investment grow very strongly, while outside Asia, Brazil and Columbia stand out. 

Investment growth has been particularly high in sewage – an area that is politically less sensitive than drinking water, yet still crucial to our well-being and to the achievement of UN’s Sustainable Development Goals (SDG). SDG 6 calls for universal access to both water and sanitation, as well as seeking to halve the discharge of untreated water and improve water use efficiency. 

Local players

Common to many of these private initiatives is the fact they involve regional and local water companies – a remarkable shift in an industry that has historically been dominated by behemoths like Veolia and Suez. While in 1991-2000 half of all the private water treatment contracts went to international players, in the last decade that proportion dropped to just 14 per cent.

One potential for growth for local water firms is international expansion. Our Advisory Board members point out this is already occurring in South East Asia, with many Singapore-based water firms expanding into China and Malaysian companies into Indonesia.

Populations are growing, urbanisation is increasing and people are becoming increasingly wealthy – all of which leads to more demand for water and sanitation, and more need for investment. By 2030, the Advisory Board’s analysis suggests that an additional 400-500 million people will be covered by PSP across water and sewage.

 

Opinion written by Cédric Lecamp, Senior Investment Manager in the Thematic Equities team at Pictet Asset Management.

 

Discover more about Pictet Asset Management’s expertise in thematic investing.

 

Notes:

(1) https://unstats.un.org/sdgs/report/2021/ 

(2) Our World in Data, WHO/UNICEF Joint Monitoring Programme for Water Supply and Sanitation, data for 2020.

 

 

Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to risks and uncertainties that could cause actual results to differ materially from those presented herein.

Important notes

This material is for distribution to professional investors only. However it is not intended for distribution to any person or entity who is a citizen or resident of any locality, state, country or other jurisdiction where such distribution, publication, or use would be contrary to law or regulation.

The information and data presented in this document are not to be considered as an offer or sollicitation to buy, sell or subscribe to any securities or financial instruments or services. 

Information used in the preparation of this document is based upon sources believed to be reliable, but no representation or warranty is given as to the accuracy or completeness of those sources. Any opinion, estimate or forecast may be changed at any time without prior warning.  Investors should read the prospectus or offering memorandum before investing in any Pictet managed funds. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future.  Past performance is not a guide to future performance.  The value of investments and the income from them can fall as well as rise and is not guaranteed.  You may not get back the amount originally invested.

This document has been issued in Switzerland by Pictet Asset Management SA and in the rest of the world by Pictet Asset Management (Europe) SA, and may not be reproduced or distributed, either in part or in full, without their prior authorisation.

For US investors, Shares sold in the United States or to US Persons will only be sold in private placements to accredited investors pursuant to exemptions from SEC registration under the Section 4(2) and Regulation D private placement exemptions under the 1933 Act and qualified clients as defined under the 1940 Act. The Shares of the Pictet funds have not been registered under the 1933 Act and may not, except in transactions which do not violate United States securities laws, be directly or indirectly offered or sold in the United States or to any US Person. The Management Fund Companies of the Pictet Group will not be registered under the 1940 Act.

Pictet Asset Management (USA) Corp (“Pictet AM USA Corp”) is responsible for effecting solicitation in the United States to promote the portfolio management services of Pictet Asset Management Limited (“Pictet AM Ltd”), Pictet Asset Management (Singapore) Pte Ltd (“PAM S”) and Pictet Asset Management SA (“Pictet AM SA”). Pictet AM (USA) Corp is registered as an SEC Investment Adviser and its activities are conducted in full compliance with SEC rules applicable to the marketing of affiliate entities as prescribed in the Adviser Act of 1940 ref.17CFR275.206(4)-3.

Pictet Asset Management Inc. (Pictet AM Inc) is responsible for effecting solicitation in Canada to promote the portfolio management services of Pictet Asset Management Limited (Pictet AM Ltd) and Pictet Asset Management SA (Pictet AM SA).

In Canada Pictet AM Inc is registered as Portfolio Manager authorized to conduct marketing activities on behalf of Pictet AM Ltd and Pictet AM SA.

 

Pictet Asset Management: Unsettling Times

  |   For  |  0 Comentarios

Luca Paolini Pictet AM

With the Russia-Ukraine war entering its second month, expectations for even slower economic growth and higher inflation are mounting. Given weaker consumer sentiment and persistent volatility in energy prices, the global economy is unlikely to expand as much as initially hoped. While many economies will still grow above trend, we believe risks to corporate earnings are skewed to the downside.

Against this backdrop, we downgrade US equities to negative. A growth-oriented market with the most unattractive valuation in the world, we think US stocks are likely to bear the brunt of the adjustment, with sectors sensitive to interest rates and economic cycles especially under pressure.

That said, we don’t think an outright negative stance on equities is warranted. Investor morale is bouncing off very depressed levels, offsetting deteriorating fundamentals at least in the short term. We therefore remain neutral on equities and bonds. 

Pictet AM

In our analysis of the business cycle, we downgrade our global growth forecast to 3.5 per cent this year from 4.4 per cent; we expect emerging economies and the euro zone to suffer more than other areas, given their proximity to the Ukraine conflict.

Our global inflation forecast this year rises to 7 per cent from 5.1 per cent, although we expect to see a peak in price pressures in the coming few months.That said, the world economy has room to absorb the double shock from higher oil prices and tightening monetary policy.

In the US, energy intensity, which measures the quantity of energy required per unit output or activity, has fallen sharply since the 1970s, while household balance sheets remain healthy with their debt service ratio 4 percentage points below 2008 levels. Other buffers built through the Covid pandemic include excess savings, which stand at 10 per cent of GDP.

We are turning more bearish on the euro zone than the consensus, with our 2022 growth forecast downgraded to 3.2 per cent from 4.1 per cent. Our leading indicators are slipping into territory consistent with recession and are now at their lowest in more than a year. Consumer sentiment indicators are dropping precipitously, which augurs badly for consumption in the coming months.

China’s economy saw some strong momentum following its initial recovery from the pandemic in the fourth quarter. However, a renewed surge in Covid cases and fresh lockdown measures may hurt short-term growth prospects in the world’s second largest economy, eclipsing early signs of a turnaround in construction activity.

Our liquidity reading continues to deteriorate because of central bank tightening in the US and UK. We think the US Federal Reserve has completed 40 per cent of the tightening we expect it to deliver in this cycle and should reach 75 per cent by the year end. If anything, investors should be wary of even faster tightening, which will put pressure on the economy. China’s liquidity conditions are improving but the pace of monetary policy easing is slower than the central bank rhetoric suggests.

Japan’s liquidity conditions are tightening slightly as the Bank of Japan continues to phase out its ultra-easy monetary policy. The central bank, however, is pledging to defend its yield cap against the global tide of higher interest rates by offering to buy unlimited amounts of 10-year Japanese government bonds. This is leading to a sharp sell-off in the yen (see Fig. 2).

Pictet AM

Our valuation indicators for bonds have turned positive after the recent sell-off in major government bonds. Investment grade credit, which is the worst performing major asset class this year, appears oversold and attractive relative to riskier bonds.

The overall score for equities is still negative. With deteriorating liquidity and higher real yields, a further decline in price-to-earnings multiples is possible. In the following 12 months, we expect a contraction of around 5 per cent, which suggests total equity returns could end up flat in 2022 compared with the previous year. That said, pockets of value are opening up in euro zone and Chinese stocks. US and technology stocks remain unattractive from a valuation standpoint.

Technical indicators support our neutral stance for equities. Investor sentiment has bounced off strongly from depressed levels, in line with falling implied volatility in the asset class. A drop in implied volatility below the realised measure makes protection from future sell-offs cheaper. This, in turn, is making it more attractive for investors to take on more risk.

 

Opinion written by Luca Paolini, Pictet Asset Management’s Chief Strategist.

 

Discover Pictet Asset Management’s macro and asset allocation views.

 

  

Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to risks and uncertainties that could cause actual results to differ materially from those presented herein.

Important notes

This material is for distribution to professional investors only. However it is not intended for distribution to any person or entity who is a citizen or resident of any locality, state, country or other jurisdiction where such distribution, publication, or use would be contrary to law or regulation.

The information and data presented in this document are not to be considered as an offer or sollicitation to buy, sell or subscribe to any securities or financial instruments or services. 

Information used in the preparation of this document is based upon sources believed to be reliable, but no representation or warranty is given as to the accuracy or completeness of those sources. Any opinion, estimate or forecast may be changed at any time without prior warning.  Investors should read the prospectus or offering memorandum before investing in any Pictet managed funds. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future.  Past performance is not a guide to future performance.  The value of investments and the income from them can fall as well as rise and is not guaranteed.  You may not get back the amount originally invested.

This document has been issued in Switzerland by Pictet Asset Management SA and in the rest of the world by Pictet Asset Management (Europe) SA, and may not be reproduced or distributed, either in part or in full, without their prior authorisation.

For US investors, Shares sold in the United States or to US Persons will only be sold in private placements to accredited investors pursuant to exemptions from SEC registration under the Section 4(2) and Regulation D private placement exemptions under the 1933 Act and qualified clients as defined under the 1940 Act. The Shares of the Pictet funds have not been registered under the 1933 Act and may not, except in transactions which do not violate United States securities laws, be directly or indirectly offered or sold in the United States or to any US Person. The Management Fund Companies of the Pictet Group will not be registered under the 1940 Act.

Pictet Asset Management (USA) Corp (“Pictet AM USA Corp”) is responsible for effecting solicitation in the United States to promote the portfolio management services of Pictet Asset Management Limited (“Pictet AM Ltd”), Pictet Asset Management (Singapore) Pte Ltd (“PAM S”) and Pictet Asset Management SA (“Pictet AM SA”). Pictet AM (USA) Corp is registered as an SEC Investment Adviser and its activities are conducted in full compliance with SEC rules applicable to the marketing of affiliate entities as prescribed in the Adviser Act of 1940 ref.17CFR275.206(4)-3.

Pictet Asset Management Inc. (Pictet AM Inc) is responsible for effecting solicitation in Canada to promote the portfolio management services of Pictet Asset Management Limited (Pictet AM Ltd) and Pictet Asset Management SA (Pictet AM SA).

In Canada Pictet AM Inc is registered as Portfolio Manager authorized to conduct marketing activities on behalf of Pictet AM Ltd and Pictet AM SA.

 

 

 

Four Pockets of Optimism Amid the Global Equity Sell-off

  |   For  |  0 Comentarios

focos
Pixabay CC0 Public Domain. Cuatro focos de optimismo en medio de la venta global de acciones

Global equities have had a challenging start to 2022 amid a perfect storm of bad news: Russia invaded Ukraine, inflation is rising at its fastest clip in decades in most developed economies, and central banks have begun to tighten monetary policy. Equity valuations—which had benefitted from unprecedented liquidity injected into financial markets to blunt the impact of the Covid pandemic—responded in kind.

While many investors are taking a “risk-off” approach, we remain sanguine about the long-term outlook for global equities, especially in non-US markets, including developed Europe and China. Opportunities now are more selective as a function of drying liquidity and rising interest rates, but we see four areas of interest for investors to consider today: equity performance dispersion in certain markets, quality firms with pricing power, bargain hunting amid higher volatility, and digital Darwinism.

Equity performance dispersion favors certain markets

For the first two months of 2022, the MCSI All Country World Index lost 7.4% as expectations rose about how many times key global central banks (i.e., the US Federal Reserve and the European Central Bank) will hike interest rates. In January the consensus was for the Fed to hike three time this year. As of mid-March, expectations were for a total of seven.

The end of an era of loose monetary policy—which bolstered equity valuations in 2019 (MSCI ACWI up 26.6%,) 2020 (16.2%) and 2021 (18.5%) and contained volatility—has sparked a rotation from growth to value stocks for many investors. This rotation, in turn, has generated a widening dispersion of returns, as volatility rose, and allocations were adjusted at the stock, sector, country, region and style-factor levels. For example, within the US, the tech-heavy NASDAQ dropped 12.4% in the first two months of the year, significantly underperforming the Dow Jones Industrial Average, down 6.9%.

That dispersion reflects the sharpest growth-to-value rotation in a decade, as does the strong relative performance of London’s FTSE 100, weighted heavily to value sectors, such as banks, energy and miners. In Europe, by the end of February, the MCSI Europe Value index outperformed the MSCI Europe Growth index by 11.1%.

The performance dispersal is also evident in China’s various stocks markets. The MSCI Overseas China, dominated by mega-caps trading as ADRs, fell 38% in 2021 versus gains of 3.2% for the all-cap MSCI China A Onshore Index, (stocks traded in Shanghai and Shenzhen,) which better reflect the growth potential of the domestic Chinese economy.

The takeaway is that selectivity is paramount. A recent MSCI paper found that high cross-sectional volatility in equity markets offers “greater opportunities for active managers.”

Quality firms with pricing power should outperform amid high inflation

Albeit important in the short run, the debate about whether to rotate from growth stocks to value stocks should be, in our view, of less concern to long-term investors. In other words, what’s most important over the longer term is investing in great companies—ones with the ability to structurally grow long-term cashflows and earnings—irrespective of whether they are considered as growth or value. Investors wondering what qualities make for great companies can review Porter’s Five Forces, a framework for evaluating the competitive strength and long-term potential of a business. Of particular interest now are companies with pricing power that can pass on higher prices to end users while inflation is high. We are already seeing greater differentiation in earnings results between companies that can pass on higher input prices to customers and those left compressing their own profit margins—a topic likely to make plenty of headlines in the coming quarters as earnings reports reflect this new reality.

Volatility creates bargains

In volatile markets, investors need to take the time to separate the signal from the noise. Global stocks have been awash with liquidity thanks to key central banks’ rapidly growing balance sheet. The Fed, for example, has doubled its balance sheet to just under $9 trillion since early 2000. To use a fishing analogy, that liquidity is like dropping dynamite in a lake: fishermen can easily pick any floating fish and likely profit, even with the most speculative firms. Today, as liquidity is withdrawn, the lake still has plenty of fish, but investors must work harder to find good ones. Having said that, it is noteworthy that the recent sell-off has been top-down, dragging down many companies with strong fundamentals that reported very strong 2021 results. That suggests many of these firms are victims of the rising-rates narrative, creating a bottom-up opportunity for bargain hunters.

Digital Darwinism is reshaping the economy

The Covid-19 pandemic has accelerated the trend of digital Darwinism, whereby companies that establish superiority in crucial new technologies can gain a long-term, transformative advantage. Having reimagined the consumer tech world, this trend is now sweeping the business-to-business tech ecosystem. Key industries at the forefront of such change include artificial intelligence, cloud computing, robotics, industrial automation, electric vehicles, renewable energy technology, among others. While consumer-facing US tech behemoths outperformed in recent years, many European companies are now providing the underlying technology, software or hardware to facilitate many of these business-to-business (B2B) thematic trends. Likewise, China is investing heavily in these areas, too, attracting a record $131 billion in venture capital in 2021, according to the research firm Preqin. Given that, investors should diversify and look for opportunities in regions that were largely overlooked in the recent tech boom.

Amid such volatility, investors should get back to basics, seeking out quality companies that can thrive in these challenging times. The opportunity extends beyond the US, Europe and China to such places as South America, the Middle East, Africa, Japan and Australia. As tough as volatile markets are, with the right research and by taking a longer-term view, investors can benefit.

Opinion by Marcus Morris-Eyton, Growth Equity Portfolio Manager based in London, and Christian McCormick, Senior Product Specialist based in New York, both at Allianz Global Investors.

 

 

Goldman Sachs Completes Acquisition of NN Investment Partners

  |   For  |  0 Comentarios

ceo goldman
Foto cedidaDavid Solomon, presidente y Consejero Delegado de Goldman Sachs.. Goldman Sachs completa la adquisición de NN Investment Partners

The Goldman Sachs Group announced the completion of the acquisition of NN Investment Partners from NN Group N.V. for €1.7 billion ($1.84 billion). 

NN Investment Partners will be integrated into Goldman Sachs Asset Management with the company’s more than 900 employees joining the Goldman Sachs family and the Netherlands becoming an important location in Goldman Sachs’ European business and a center of excellence for sustainability in public markets investing. 

The acquisition brings Goldman Sachs’ assets under supervision to approximately $2.8 trillion and affirms its position as a top five active asset manager globally with leading franchises in fixed income, liquidity, equities, alternatives and insurance asset management. It also brings assets under supervision in Europe to over $600 billion, aligning with the firm’s strategic objectives to scale its European business and extend its global reach. 

The combination further strengthens our platform and provides an expanded product range and dedicated service to clients globally, bringing together the best of both organizations to deliver investment solutions  at scale, across all asset classes. 

NN Investment Partners is highly complementary to Goldman Sachs Asset Management’s existing European footprint, adding new capabilities and accelerating growth in products such as European equity  and investment grade credit, sustainable and impact equity, and green bonds. 

NN Investment Partners has been successful in incorporating Environmental, Social and Governance (ESG) factors across its product range, with ESG criteria integrated into approximately 90% of assets under supervision. Over time, Goldman Sachs Asset Management intends to leverage the expertise of  NN Investment Partners to complement its existing investment processes, helping the firm to deepen  ESG integration across its product range and deliver on clients’ sustainable investing priorities. 

David Solomon, Chairman and Chief Executive Officer of Goldman Sachs, said: “This acquisition advances our commitment to put sustainability at the heart of our investment platform. It  adds scale to our European client franchise and extends our leadership in insurance asset management. We are excited to welcome the talented team at NN Investment Partners, a center of excellence in  sustainable investing, to Goldman Sachs and together we will focus on delivering long-term value to our  clients and shareholders.” 

As part of the transaction, Goldman Sachs Asset Management has entered into a long-term strategic partnership agreement with NN Group to manage an approximately $180 billion portfolio of assets, reflecting the strength of the business’ global insurance asset management capabilities and alternatives franchise. 

The partnership also strengthens Goldman Sachs Asset Management’s position as one of the largest  non-affiliated insurance asset managers globally, with over $550 billion in assets under supervision, and the acquisition will provide a foundation for further growth in the firm’s European fiduciary management  business, building on the success of its platform in the United States and United Kingdom.

US Consumers Expect War Will Cause Prices to Rise Significantly Over Months Ahead

  |   For  |  0 Comentarios

Captura de Pantalla 2022-04-08 a la(s) 23
. ..

A special poll conducted by The Conference Board, the March Consumer Confidence Survey, focused on the perceived impact of the war in Ukraine on overall inflation in the US, as well as its impact on a wide swath of expectations ranging from energy and food prices to economic growth and international travel.

Consumers expect the overall impact of the war in Ukraine to be negative, as well as wide reaching. The most pronounced impacts are expected to be felt in energy prices. In fact, more than half of consumers said that prices at the pump would likely be the hardest hit. With gas prices hovering well above $4 a gallon, energy prices are likely to remain a top concern among consumers.

Notably, 6 out of 10 consumers believe the conflict will cause prices to rise significantly over the next several months, while about another 3 out of 10 consumers feel the impact on prices would likely be moderate.

Consumers expect the overall impact of the war in Ukraine to be negative, as well as wide reaching. The most pronounced impacts are expected to be felt in energy prices. In fact, more than half of consumers said that prices at the pump would likely be the hardest hit. With gas prices hovering well above $4 a gallon, energy prices are likely to remain a top concern among consumers.

The Conference Board

Meanwhile, consumers expect the impact on food prices to be somewhat more subdued. However, this may be partially due to increases in this sector that will take a bit longer to filter through the supply chain before consumers see visible changes on store shelves.

Less than a quarter expect the US economy to be very negatively impacted, but nonetheless expectations are that growth will slow in the near future.

Overall, consumer confidence continues to be supported by strong employment growth and thus has been holding up remarkably well despite surging geopolitical conflict. However, expectations for inflation over the next 12 months reached 7.9 percent in March—an all-time high—and are likely to rise further in the coming months.

The Conference Board

The impact of rising prices, especially for less affluent consumers, is likely to curb spending in 2022. These consumers will have fewer discretionary dollars to spend on dining out, entertainment outside of the home, travel, and vacations. Thus, in-person services industries trying to bounce back from the pandemic may remain challenged, though to a lesser degree than during the worst of the COVID-19 crisis.

We expect headwinds from higher inflation and the war in Ukraine to persist in the short term, and these may well dampen confidence and cool spending and economic growth in the months ahead.

CI Financial Announces Intent to Take its U.S. Wealth Business Public

  |   For  |  0 Comentarios

Captura de Pantalla 2022-04-07 a la(s) 09
. ..

The Board of Directors of CI Financial Corp. announced CI’s intention to sell up to 20% of its U.S. wealth management business via a U.S. initial public offering.

The company plans to submit a Form S-1 to the SEC this year.

Since entering the U.S. wealth sector in early 2020, CI has become the country’s fastest-growing wealth platform and the U.S. wealth management business has grown to become CI’s largest business unit by assets. Once all outstanding acquisitions are completed, CI’s U.S. wealth management assets will reach approximately US$133 billion.

“The growth in our U.S. wealth management business is incredible; however, in our opinion, the value we have created isn’t reflected in our share price today,” said Kurt MacAlpine, CI Chief Executive Officer.

“After a thorough evaluation of our strategic options, we are confident that a U.S.-listed subsidiary IPO is the best route to shareholder value creation. The U.S. wealth management business now has sufficient scale to stand alone as a public company, creating an attractive, long-term destination for clients and advisors. We believe this is the best path to realizing our vision of becoming the leading ultra-high-net-worth and high-net-worth business in the U.S,” he adds.

CI intends to use the net proceeds from the IPO to pay down debt.

CI will remain the majority shareholder of the U.S. wealth management business and currently has no intention of spinning out or otherwise divesting its remaining ownership interest.

A final decision on the IPO size, conditions and timing is pending and will be subject to market conditions.

 

Lazard Names Evan L. Russo CEO of Asset Management

  |   For  |  0 Comentarios

Russo Lazard
Foto cedidaEvan L. Russo, nuevo CEO de Lazard AM.. Lanzar elige a Evan L. Russo nuevo CEO para su negocio de gestión de activos

Lazard announced that Evan L. Russo, Chief  Financial Officer (CFO) of Lazard, will succeed Ashish Bhutani as Chief Executive Officer (CEO) of Lazard’s Asset Management business.

Mr. Bhutani has decided to retire as CEO of Lazard’s  Asset Management business and from the Board of Directors of both Lazard Ltd and Lazard  Group as of June 1, 2022, to pursue philanthropic and personal interests. Mr. Bhutani will continue  serving as Chairman of Asset Management and as a Vice Chairman of Lazard through the end  of the year. Mr. Russo will continue serving as Lazard’s CFO and work with Kenneth M. Jacobs,  Chairman and CEO of Lazard, to expeditiously identify his successor.  

Mr. Russo joined Lazard in 2007. He has served as CFO and as a key member of Lazard’s  executive leadership team since October 2017. In his role as an executive officer, he helped to lead strategic priorities for the firm, developing a deep understanding of the Asset Management business. As CFO, Mr. Russo significantly increased engagement with Lazard’s stakeholders. He also developed a deep bench of talent and enhanced the capabilities of the finance team worldwide. He successfully led projects to modernize and improve the firm’s global financial  capabilities and optimized the firm’s capital structure. Prior to becoming CFO, Mr. Russo served  as Co-Head of Lazard’s Capital Markets and Capital Structure Advisory practice in the firm’s Financial Advisory business.  

Mr. Bhutani joined Lazard in 2003, was shortly thereafter appointed head of Lazard Asset  Management and became a member of the Board of Directors in 2010. Under his leadership,  Lazard’s Asset Management business has become a leading global asset manager with over  $250 billion in assets under management. Mr. Bhutani, along with the senior management team,  has built a business based on a culture of innovation and entrepreneurship, with a passionate  commitment to serving clients with excellence. It is this culture that underpins Lazard’s success  and will continue to be a driving force in its future growth. 

Mr. Bhutani is Chairman of the Lazard Foundation in the U.S. in addition to being active in a  number of philanthropic organizations, including serving as a Board member of City Harvest. He  now plans to focus more on his personal philanthropic efforts.  

“Over his two decades at Lazard, Ashish has led the transformation of our Asset Management  business into a leading global franchise driven by a world-class team, and for the past 12 years  he has served as a valued member of our Board of Directors,” said Mr. Jacobs. “Ashish has been  an inspirational partner, and I admire him as a leader and as a philanthropist. On behalf of  Lazard’s Board, I thank Ashish for his substantial achievements as a senior leader of the firm and  his contributions as a Board member.” 

“The success of our Asset Management business over the past 20 years has been driven by our  innovative and entrepreneurial culture, and an unwavering focus on delivering the best of Lazard  to our clients,” said Mr. Bhutani. “I am confident that under Evan’s leadership, working closely  with our experienced senior management team, the business will reach new heights in delivering  best-in-class investment solutions and service to our clients.” 

Lazard’s Asset Management business provides a world-class suite of investment solutions across  a diverse range of asset classes, regions and investment styles, with operations in 24 cities,  supporting clients in more than 50 countries across the globe. 

Alexander F. Stern, President of Lazard, to retire from the firm at year end  

Lazard also announced today that Alexander F. Stern, President of Lazard since 2019 and an  investment banker in its Financial Advisory business for nearly 30 years, has decided to retire from the firm at the end of this year. He will continue serving in his current role as President  through year-end 2022 and will also continue as Executive Chairman of Lazard Growth  Acquisition Corp. I, a Special Purpose Acquisition Company.  

“Alex has been an invaluable partner to me for many years and an important advisor to Lazard’s  Board,” said Mr. Jacobs. “He has been a key member of our executive leadership team as  President. In his prior role as Global Head of Strategy, he was responsible for our key strategic  initiatives, and as Chief Operating Officer he ensured our successful transition to being a public  company. As CEO of Financial Advisory until 2019, Alex steered the development of our Financial  Advisory business globally, enhanced collaboration and productivity across our workforce and  strengthened our relationships with our investment banking clients. On behalf of our Board, I thank  him for his years of service and unwavering commitment to the firm, our clients and our culture.”  

 

 

Global Government Debt Set to Soar to a Record $71.6 Trillion in 2022

  |   For  |  0 Comentarios

rocket-gac21dc7ac_1920
Pixabay CC0 Public Domain. La deuda pública mundial se disparará en 2022: 71,6 billones de dólares

2022 will see global sovereign debt rise by 9.5%, up by $6.2 trillion to a record $71.6 trillion, according to the second annual Janus Henderson Sovereign Debt Index. The increase will be driven by the US, Japan and China in particular, though almost every country is likely to borrow further. 

Global government debt jumped to a record $65.4 trillion in 2021. On a constant-currency basis, public debt levels rose 7.8% as governments borrowed an additional net $4.7 trillion. Since the pandemic began, global sovereign debt has soared by over a quarter, up from $52.2 trillion in January 2020 to today’s record.

Janus Henderson

Every country Janus Henderson examined saw borrowing rise in 2021. China’s debts rose fastest and by the most in cash terms, up by a fifth, or $650 billion. Among large, developed economies, Germany saw the biggest increase in percentage terms, with borrowing rising by one seventh (+14.7%), almost twice the pace of the global average.

Despite surging levels of borrowing, debt servicing costs remained low. Last year, the effective interest rate on all the world’s government debt was just 1.6%, down from 1.8% in 2020. This brought the total cost of servicing the debt down to $1.01 trillion, compared to $1.07 trillion in 2020. The strong global economic recovery meant the global debt / GDP ratio improved to 80.7% in 2021 from 87.5% in 2020 as the rebound in economic activity outpaced the increase in borrowing.

2022 will see debt servicing costs significantly increase

The global interest burden is set to rise by around one seventh on a constant-currency basis (14.5%) to $1,160bn in 2022. The biggest impact is set to be felt in the UK thanks to a rising interest rates, the impact of higher inflation on the large amount of UK index-linked debt, and the cost of unwinding the QE programme. As interest rates rise, there is a significant fiscal cost associated with unwinding QE. Central banks will crystallize losses on their bond holdings which have to be paid for by taxpayers. 

Bond market divergence signals opportunities for investors

During the first couple of years of the pandemic, bond markets around the world converged. Now, the theme is divergence. The US, UK, Europe, Canada and Australia are focused on tightening monetary policy to squeeze out inflation – both through higher interest rates and with tentative steps towards unwinding quantitative easing programmes. By contrast, the Chinese central bank is stimulating the economy with looser policy. 

Janus Henderson

Janus Henderson sees asset allocation opportunities in shorter-dated bonds as they are less susceptible to changing market conditions. Janus Henderson believes markets are expecting more interest rate hikes than are likely to materialise and this means shorter-dated bonds will benefit if the tightening cycle ends sooner. 

Bethany Payne, portfolio manager, global bonds at Janus Henderson said: “The pandemic has had a huge impact on government borrowing – and the after-effects are set to continue for some time yet. The tragedy unfolding in Ukraine is also likely to pressure Western governments to borrow more to fund increased defence spending. despite recent volatility, opportunities exist for investors in sovereign bonds markets.”

Payne adds tha during the first couple of years of the pandemic, the big theme was how bond markets around the world converged. Now, the theme is divergence; regime change is underway in the US, UK, Canada, Europe and Australia, which are now focused on how to tighten monetary policy to squeeze out inflation, while other regions are still in loosening mode. Regarding Asset Allocation, there are two areas of opportunity.

“One is China, which is actively engaging in loosening monetary policy, and Switzerland, which has more protection from inflationary pressure as energy takes up a much smaller percentage of its inflationary basket and their policy is tied, but lagging, to the ECB”, she adds. 

Thematic Equities as Impact Investments

  |   For  |  0 Comentarios

Pictet Asset Management
Pictet Asset Management. Pictet Asset Management

Impact investing is generally considered the purest form of responsible investment. Modelled on ideas developed in the 1970s by the social entrepreneur Muhammad Yunus, it has traditionally involved directing capital to specific ecological or socially-responsible projects.

The approach has twin aims: to generate financial returns and to deliver material environmental and social benefits.

The range of activities financed under the impact investing umbrella is wide. Recent examples include land rewilding, the construction of wind farms, the improvement of water networks and the development of orphan drugs.

It is the ethical focus of impact investing that explains why it tends to be seen as the preserve of private finance. Its moral orientation is widely deemed to be at odds with the principles of those who invest in – and construct portfolios containing – listed stocks. Yet recent developments in sustainable finance suggest this interpretation is in need of some revision.

Impact investing is, in any case, defined by its objectives not by the type of asset or transaction. According to the Global Impact Investment Network (GIIN) the primary aim of impact investing is to deliver a positive, measurable social and environmental impact alongside a financial return irrespective of whether that is through a public or private transaction. A key feature, therefore, is the explicit intention to contribute to positive societal or environmental outcomes.

Reinforcing that point is research by Kölbel et al. (2020)(1), which suggests positive impact can be generated in public markets across two fronts – by the issuer of securities (a company, for example) and by the investor.

These observations have important investment implications. They provide a roadmap indicating how investors can apply the concepts of impact to listed stocks. While investing with impact in publicly-traded companies might appear more challenging than via private markets, it is nevertheless vital given the scale of the problems the approach is seeking to address.

But impact investing via listed firms comes with several caveats. First, for the approach to work, it must target listed businesses with exceptionally positive environmental and societal credentials or firms with the potential to improve across those two fronts. Second, success also depends on what follows once investments are made. Portfolio managers that can exert an ongoing positive influence on the companies they invest in are better able achieve their financial and sustainability goals. Third, those positive, non-financial, contributions must be measurable.

While many conventional equity strategies claim to integrate environmental, social and governance (ESG) principles, few possess the characteristics that impact investors deem the most relevant to bring about change. Thematic equity portfolios with an environmental or societal orientation are a potential exception. Not only do such strategies focus on companies directly involved in the building of a sustainable, more equitable economy, but they also play a role in embedding responsible investment principles across the broader financial ecosystem.

 

Opinion written by Marc-Olivier Buffle, Senior Product Specialist, Sandy Wolf, Head of Impact and Analysis, and Steve Freedman, Head of Sustainability and Research, all members of Pictet Asset Management’s Thematic Equities team.

 

Download the report for more insights.

 

Notes:

(1) Kölbel et al. (2020)

 

Information, opinions and estimates contained in this document reflect a judgment at the original date of publication and are subject to risks and uncertainties that could cause actual results to differ materially from those presented herein.

Important notes

This material is for distribution to professional investors only. However it is not intended for distribution to any person or entity who is a citizen or resident of any locality, state, country or other jurisdiction where such distribution, publication, or use would be contrary to law or regulation.

The information and data presented in this document are not to be considered as an offer or sollicitation to buy, sell or subscribe to any securities or financial instruments or services. 

Information used in the preparation of this document is based upon sources believed to be reliable, but no representation or warranty is given as to the accuracy or completeness of those sources. Any opinion, estimate or forecast may be changed at any time without prior warning.  Investors should read the prospectus or offering memorandum before investing in any Pictet managed funds. Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future.  Past performance is not a guide to future performance.  The value of investments and the income from them can fall as well as rise and is not guaranteed.  You may not get back the amount originally invested.

This document has been issued in Switzerland by Pictet Asset Management SA and in the rest of the world by Pictet Asset Management (Europe) SA, and may not be reproduced or distributed, either in part or in full, without their prior authorisation.

For US investors, Shares sold in the United States or to US Persons will only be sold in private placements to accredited investors pursuant to exemptions from SEC registration under the Section 4(2) and Regulation D private placement exemptions under the 1933 Act and qualified clients as defined under the 1940 Act. The Shares of the Pictet funds have not been registered under the 1933 Act and may not, except in transactions which do not violate United States securities laws, be directly or indirectly offered or sold in the United States or to any US Person. The Management Fund Companies of the Pictet Group will not be registered under the 1940 Act.

Pictet Asset Management (USA) Corp (“Pictet AM USA Corp”) is responsible for effecting solicitation in the United States to promote the portfolio management services of Pictet Asset Management Limited (“Pictet AM Ltd”), Pictet Asset Management (Singapore) Pte Ltd (“PAM S”) and Pictet Asset Management SA (“Pictet AM SA”). Pictet AM (USA) Corp is registered as an SEC Investment Adviser and its activities are conducted in full compliance with SEC rules applicable to the marketing of affiliate entities as prescribed in the Adviser Act of 1940 ref.17CFR275.206(4)-3.

Pictet Asset Management Inc. (Pictet AM Inc) is responsible for effecting solicitation in Canada to promote the portfolio management services of Pictet Asset Management Limited (Pictet AM Ltd) and Pictet Asset Management SA (Pictet AM SA).

In Canada Pictet AM Inc is registered as Portfolio Manager authorized to conduct marketing activities on behalf of Pictet AM Ltd and Pictet AM SA.