Sanctuary Wealth Expands Latin American Client Base With Addition of Fuentes Hondermann Wealth Management

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Sanctuary Wealth welcomes Fuentes Hondermann Wealth Management, the latest internationally-focused team to join the partnered independence network.

Based in Sanctuary’s Miami office, the three-person team with $250 million in client assets under management was previously affiliated with Morgan Stanley Wealth Management and consists of Managing Director, Senior Wealth Advisor Luis Fuentes, Executive Director, Senior Wealth Advisor Rosario Hondermann, and Executive Director, Senior Wealth Advisor Chris Fuentes.

“We created Sanctuary Global specifically as a platform for teams who provide wealth management services to a mix of high-net-worth domestic and international clients. Wealth is a global phenomenon, and Sanctuary is committed to serving every aspect of the wealth management universe”, said Jim Dickson, CEO, and Founder of Sanctuary Wealth.

The principals at Fuentes Hondermann Wealth Management estimate their business as being about 30% from US clients and 70% international with a concentration in the Argentina/Uruguay region as well as Mexico.

The three partners have been together as a team for more than 25 years, first with Merrill Lynch and then, starting in 2012, with Morgan Stanley Wealth Management before deciding that independence offered the most benefits to their clients. 

“When we decided to declare our independence, we looked around the industry at large platforms and boutique firms, but none of them aligned with our needs the way Sanctuary Wealth does,” explained Luis Fuentes, Managing Director, Senior Wealth Advisor at Fuentes Hondermann Wealth Management.

Fuentes add: “Sanctuary gives us the freedom and flexibility to run our business in a way that provides the maximum benefit to our clients, backed with the support and resources of a much larger organization. While we are the owners of our business, we are also part of a global company that understands our clients’ unique situation.”

Luis Fuentes, the senior member of the team, was born in Havana, and spent 41 years of his career with Merrill Lynch as an international financial advisor, leading and mentoring various teams during his tenure and serving wealthy families and institutions in the United States, Latin America, and Europe.

He is a graduate of the University of Miami with a degree in Business Administration and majors in Finance, Economics, and Marketing. He has also completed studies in Portfolio Modern Theory & Risk and Wealth Planning at the Wharton School of Business, University of Pennsylvania.

A wealth manager for more than 20 years, Rosario Hondermann holds degrees in both law and political science from Universidad Nacional Mayor de San Marcos in Lima, Peru. Although born in Lima, she has lived in Miami, Florida with her family for more than 30 years and provides financial solutions and advice to high-net-worth clients and institutions in Latin America, Europe, and the United States.

With more than 25 years of experience as an international financial advisor, Chris Fuentes started his career in 1998 after graduating from the University of Miami, School of Business Administration. Chris specializes in the creation and implementation of global portfolio strategies and asset allocation and like his partners is fluent in Spanish and English.

 

Three Ukraine-Russia Scenarios and Bond Recovery Values for Ukraine, Russia, and Belarus

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Pixabay CC0 Public Domain. Tres escenarios para Ucrania-Rusia y valores de recuperación de los bonos para Ucrania, Rusia y Bielorrusia

In this article, we focus on what we think are the three most likely scenarios of how the war could end, while acknowledging that within each of these stylized scenarios there are also multiple variants. This framework allows us to think clearly of the potential recovery values for Russian, Ukrainian, and Belarusian bonds. As always, our subjective probabilities will be reassessed as the facts change on the ground. 

Scenario 1: Peace deal in the short-term (35% probability) 

Russia and Ukraine are currently engaged in negotiations for a peace deal. It appears that the involved parties are not yet ready for an immediate compromise, but a deal within the next two months appears plausible. The details are yet to be defined, but based on publicly available information, one could expect Russia to agree to withdraw its troops from Ukraine in exchange for the latter giving up its NATO membership ambitions, recognizing Crimea as part of Russia, and limiting the future size of its military. 

A kind of Minsk III agreement would be needed to resolve the struggle with Ukrainian separatists in Donetsk and Luhansk – a conflict that has been ongoing since 2014. Ukraine could potentially recognize the independent People’s Republics of Donetsk and Luhansk (DPR and LPR) under the protection of Russian peacekeepers. Alternatively, DPR and LPR could be granted some independence within Ukraine’s sovereignty. Either way, Ukraine would preserve most of its territorial integrity.

  • Ukraine avoids default or conducts a market-friendly restructuring. This would be possible on the back of significant financial assistance that is currently being provided by western partners that has, so far, allowed Ukraine to continue servicing its external debt. This large financial assistance will also allow for a quick rebuilding of the nation. For example: Iraq’s economy expanded by a cumulative 178% in 2003 and 2004 after the 2003 invasion, Kuwait’s rose by 147% in the two years following the 1991 invasion. The recovery value of Ukraine’s sovereign bonds could be between 70% and 100% depending on whether there’s a restructuring or not.
     
  • Russia may also avoid default depending on potential sanction relief. Russia’s sovereign and corporates have been demonstrating their willingness and ability to avoid default so far, but current US sanctions would prevent bondholders from receiving sovereign bond repayments after 25 May, 2022 (see OFAC General License 9A). If the peace deal occurs before this date and it is acceptable for the US, then there’s a possibility that this and other economic sanctions could be eased allowing Russia’s sovereign to avoid default. This is far from granted though and up to the US to decide. If Russia manages to obtain sanctions relief to avoid default following a satisfactory peace deal, then we would expect Belarus to avoid default as well.
     
  • A large majority of Russia’s corporate issuers avoid default. Only a few corporate issuers that see their revenues severely disrupted could conduct market-friendly restructurings with high recovery values. 

Scenario 2: A prolonged war (45% probability) 

The war could go on for several months if the involved parties fail to reach a peace deal in the short-term. This would inflict much larger infrastructure and humanitarian damage on Ukraine. Russia would likely increase its territorial control of Ukraine, forcing the latter to give up a larger share of its territorial integrity. Some variants of this scenario could see Ukraine divided in two with Russia having control over eastern Ukraine and a legitimate democratic government controlling western Ukraine.

  • Ukraine restructures its external debt; the recovery is highly uncertain. The recovery of Ukraine sovereign bonds will depend on how much of Ukraine’s territorial integrity is preserved as well as on the length of the war, which will determine the degree of infrastructure damage as well as a likely large loss of human capital mainly due to migration.
     

    • In the most optimistic case within this scenario, Ukraine preserves most of its territorial integrity and large financial assistance from western partners allows a quick recovery. A market friendly restructuring sees a recovery between 50% and 70%. 
    • In the most pessimistic case within this scenario, Ukraine loses a large share of its territory. The lowest recovery of a sovereign restructuring in recent history was Iraq’s following the 2003 invasion, where Paris Club creditors accepted an 80% principal haircut. We see this as a lower bound for Ukraine.
       
  • Russia sovereign likely defaults after the 25 May. If the conflict continues for months, we think the US would be less inclined to extend the deadline imposed by General License 9A, which would prevent bondholders from receiving payments even if Russia remains willing and able to pay. Belarus is financially dependent on Russia, thus we see no reason for the former to avoid default if the latter is forced to stop paying.
     
  • No restructuring in sight. US sanctions on Russia’s Ministry of Finance, central bank, and national wealth fund would remain in place, which would prevent the sovereign from restructuring its debts in the foreseeable future. Venezuela’s sovereign bonds, which have been in a similar situation used to trade between 20 and 30 cents on the dollar following the November 2017 sovereign default. 
     
  • Deep recession but not a Venezuelan-style collapse. The Russian economy will inevitably fall into a deep recession this year but an economic collapse like those seen in Venezuela and Lebanon seems highly unlikely in an economy that until now had been well managed, with very low levels of debt and a twin surplus (fiscal and external). Thus, we think that this long default scenario has already been mostly priced in. 
     
  • Most Russian corporate issuers still avoid default. Economic sanctions will affect the revenues of Russia’s corporate issuers but given that most of them are exporters, have low leverage, and have assets abroad that could be seized by creditors, we believe that most of them will avoid default. Corporates with an important share of domestic revenues and those that see their exports severely curtailed by sanctions will have to restructure, but we expect market-friendly restructurings to prevail. 

Scenario 3: A Russia-controlled Ukraine (20% probability) 

The strong resistance from the Ukrainian military and population, and the constant military equipment provided by the west make a full conquest of Ukraine unlikely, yet it remains a possible outcome. In this worst-case scenario, Ukraine would be governed by an illegitimate pro-Russian government. Ukraine would thus become sanctioned and lose financial support from the west. All three sovereigns default and restructuring would only occur following regime change. The outlook for Russian corporates becomes more uncertain the longer strong economic sanctions remain. We would expect more corporate restructurings than in the previous scenarios.

Outlook

The situation on the ground in Ukraine is extremely fluid, so the scenarios outlined above will change as more information emerges, and international diplomacy continues. We note that the critical factor for bond investors will be policy decisions around sanctions, so we will continue to watch this closely. We are deeply saddened that a prolonged war seems to be the most likely outcome but remain hopeful that a peaceful outcome can be reached as quickly as possible.

Guest column by Carlos de Sousa, Emerging Markets Strategist, Vontobel AM.

Insurers Prioritize Yield-Enhancing Strategies While Navigating Inflation Risk

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Pixabay CC0 Public Domain. Las aseguradoras planean invertir más en private equity y bonos verdes o de impacto durante 2022

Goldman Sachs Asset Management released the findings of its eleventh annual global insurance survey, titled  “Re-Emergence: Inflation, Yields, and Uncertainty.” 

The survey of 328 insurance company participants, representing over $13 trillion in global balance sheet assets, found that as insurers continue to prioritize yield and ESG factors in investment decisions, they plan to increase their allocation most significantly to private equity (44%) and green or impact bonds (42%) over the next year.

In the Americas and Asia, 53% of investors expected to increase allocations to private equity, the highest of any asset class, while in Europe, the Middle East and Africa (EMEA), green or impact bonds were the most favored choice at 59%. 

The survey found that in a sharp reversal from the past two years, insurers now see rising  inflation and tighter monetary policy as the largest threats to their portfolios, with rising  interest rates displacing low yields as the primary investment risk cited by insurers.  

 

Gráfico riesgos

“Against a complex macroeconomic and geo-political environment, demand for yield remains  high, and we expect to see insurers continue to build positions in private asset classes as well as  inflation hedges, including private equity, private credit, and real estate.“These  assets can prove integral to diversifying portfolios while optimizing capital-adjusted returns, particularly over a longer-term time horizon,” said Michael Siegel, Global Head of Insurance Asset Management for Goldman Sachs Asset Management.

Regardless of private equity and sustainable bonds, insurers’ financial managers plan to increase their allocation over the next 12 months to include corporate credit (37%), infrastructure debt (36%), and real estate (31%), among others.

ESG triples in the investment process

According to the survey’s findings, sustainability continues to gain weight among the factors that govern investment decisions and the investment process. Thus 92% of insurance managers take ESG into consideration, almost three times more than in 2017, when only 32% took it into account.

Likewise, now more than one in five respondents (21%) say that sustainability has become a main element. This percentage almost doubles when it comes to companies in Europe, the Middle East and Africa (EMEA), where it is more than 37%. 

More than half of global insurers (55%) expect ESG considerations to have a major impact on asset allocation decisions in the coming years, matching in importance what is so far the main factor for investment, regulatory capital requirements. 

Asked about possible consolidation movements in the global insurance market, almost 96% expect this dynamic of concentration and new deals to continue. Finally, the 2022 survey has again asked CFOs and CIOs about their investments in insurtech and this year also about cryptocurrencies.

The search for greater operational efficiency has once again led to an increase in insurtech investment in all geographical areas of the world, and in the case of the cryptomarket, its gradual maturation explains why 11% of US insurers say they are already investing in this asset, compared with 6% of Asian companies and just 1% of European ones.

Methodology 

The Goldman Sachs Asset Management Insurance Survey provides valuable insights from Chief  Investment Officers (CIOs) and Chief Financial Officers (CFOs) regarding the macroeconomic  environment, return expectations, asset allocation decisions, portfolio construction and  industry capitalization. The survey analyzed responses from 328 participants at global insurance  companies representing more than $13 trillion in balance sheet assets, which represents  around half of the balance sheet assets for the global insurance sector. The participating  companies represent a broad cross section of the industry in terms of size, line of business and  geography. The survey was conducted during the first two weeks of February. 

 

Carbon Investing: An Emerging Asset Class

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Pixabay CC0 Public Domain. Inversión en carbono: una clase de activos emergente

A very important tool in combating climate change is to put a price on carbon emissions.  This price factors in the negative externality of climate change and creates an incentive for the invisible hand of the market to move companies and economies away from burning fossil fuels. Achieving Paris Agreement climate targets will require the widespread use of carbon pricing to steer the world onto a low-carbon and sustainable pathway.

Currently, carbon pricing follows two main methods: carbon taxes and cap-and-trade systems (or emissions trading systems, “ETS”).  The advantage of an ETS over a carbon tax is that the total amount of CO2 released by participants in the scheme is capped at a pre-determined ceiling, which is subject to annual reductions. In addition, through the use of tradable emissions allowances, CO2 reduction can be facilitated at the lowest total cost to society.

Carbon allowances have become a liquid and investable asset class that traded approximately US$800 billion in 2021 across physical carbon, futures, and options; this was more than double the volume of twelve months earlier. Carbon has exhibited attractive historical returns and a low correlation with other asset classes, making it potentially attractive within a diversified portfolio.

The World Carbon Fund is a unique investment fund that invests across multiple liquid and regulated carbon markets. It is managed by Carbon Cap Management LLP an investment management boutique based in London.  Carbon Cap have established a team with industry experience gained across carbon pricing, carbon trading and fundamental carbon markets research.

The Fund’s objectives are to generate absolute returns with a low correlation to traditional asset classes as well as having a direct impact on climate change. The Fund uses long-biased allocations across the carbon markets in order to capture the medium-term positive returns forecast in these markets.  It also deploys a range of shorter-term alpha generating strategies including arbitrage and volatility trading.  

There is a widespread acknowledgement that the price of carbon needs to continue to appreciate in order to provide sufficient incentive to meet Paris Agreement targets.  2021 saw significant price rises in each carbon market in which the Fund invests which has helped towards a positive return of more than 70% since its launch early in 2020.  

 

Figura 1

The carbon markets can display high levels of volatility and the Fund operates within clearly defined risk framework in order to maximise risk adjusted returns. In general terms there is low correlation between the individual carbon markets and this apparent anomaly can be used both as an alpha source and to manage down overall portfolio risks.  

The Fund is an Article 9 fund under the EU’s SFDR. It seeks, through its investment activities, to contribute directly to the reduction in global CO2 emissions targets. In addition, the investment manager contributes a fixed percentage of performance fees generated to purchasing and cancelling carbon allowances/offsets.  

Investors in the Fund are institutions, wealth managers, family offices and private clients.  As well as seeking to provide investors with non-correlated returns and climate impact, carbon investing can also act as an inflation hedge as higher carbon prices are seen to be correlated to consumer price indices.  

South Hub Investments S.L, a company founded by Carlos Diez, will be responsible for the distribution of the funds in Spain. The company performs this function thanks to an agreement with Hyde Park Investment International LTD, an MFSA-regulated entity, which has 16 years of experience in European fund distribution.

 

Australia, the Netherlands, and the United States Again Earned Top Grades in the First Chapter of the Global Investor Experience Study

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Pixabay CC0 Public Domain. Australia, Países Bajos y EE.UU. se revalidan como los mercados más favorables para los inversores en cuanto a comisiones y gastos de los fondos

The fees investors pay for their funds are falling, according to Morningstar’s latest global report on fees and expenses in the industry. According to the report’s findings, Australia, the Netherlands and the United States receive the best ratings, while Italy and Taiwan are once again the worst performers.

The report Global Investor Experience (GIE) report, now in its seventh edition, assesses the experiences of mutual fund investors in 26 markets across North America, Europe, Asia, and Africa. The “Fees and Expenses” chapter evaluates an investor’s ongoing cost to own mutual funds compared to investors across the globe. 

As explained from Morningstar, a key point of this report is the analysis it makes on the running costs borne by an investor for owning mutual funds, compared to other investors around the world. And whose result reflects in a global ranking compared to the last edition of this report in 2019.

ranking costes

 

Morningstar’s manager research team uses a grading scale of Top, Above Average, Average, Below Average, and Bottom to assign a grade to each market. Morningstar gave Top grades to Australia, the Netherlands, and the United States, denoting these as the most investor-friendly markets in terms of fees and expenses. Conversely, Morningstar again assigned Bottom grades to Italy and Taiwan indicating these fund markets have amongst the highest fees and expenses

Australia, the Netherlands, and the U.S. earned top grades due to their typically unbundled fund fees. This is the fourth study in a row that these three countries have received the highest grade in this area, according the study.

“The good news for global fund investors is that in many markets, fees are falling, driven by a combination of asset flows to cheaper funds and the repricing of existing investments. The increased prevalence of unbundled fund fees enables transparency and empowers investor success. However, the global fund industry structure perpetuates the use of upfront fees and the high prevalence of embedded ongoing commissions across 18 European and Asian markets can lead to a lack of clarity for investors. We believe this can create misaligned incentives that benefit distributors, notably banks, more than investors,” said Grant Kennaway, head of manager selection at Morningstar and a co-author of the study.

Highlights

 

The majority of the 26 markets studied saw the asset-weighted median expense ratios for domestic and available-for-sale funds fall since the 2019 study. For domestically domiciled funds, the trend was most notable in allocation and equity funds, with 17 markets in each category reporting reduced fees.

Lower asset-weighted median fees are driven by a combination of asset flows to cheaper funds as well as the repricing of existing investments. In markets where retail investors have access to multiple sales channels, investors are increasingly aware of the importance of minimizing investment costs, which has led them to favor lower-cost fund share classes.

Outside the United Kingdom, the U.S., Australia, and the Netherlands, it is rare for investors to pay for financial advice directly. A lack of regulation towards limiting loads and trail commissions can cause many investors to unavoidably pay for advice they do not seek or receive. Even in markets where share classes without trail commissions are for sale, such as Italy, they are not easily accessible for the average retail investor, given that fund distribution is dominated by intermediaries, notably banks.

The move toward fee-based financial advice in the U.S. and Australia has spurred demand for lower cost funds like passives. Institutions and advisers have increasingly opted against costlier share classes that embed advice and distribution fees. The trend extends to markets such as India and Canada.

Price wars in the ETF space have put downward pressure on fund fees across the globe. In the U.S., competition has driven fees to zero in the case of a handful of index funds and ETFs, and these competitive forces are spreading to other corners of the fund market.

In markets where banks dominate fund distribution, there is no sign that market forces alone will drive down asset-weighted median expense ratios for retail investors. This is particularly evident in markets like Italy, Taiwan, Hong Kong, and Singapore where expensive offshore fund sales predominate over those of cheaper locally domiciled funds.

The U.K. has introduced annual assessments of value, one of the most significant regulatory developments since the 2019 study. These require asset managers to substantiate the value that each fund has provided to investors in the context of the fees charged.

Methodology  

The GIE study reflects Morningstar’s views about what makes a good experience for fund investors. This study primarily considers publicly available open-end funds and exchange-traded funds, both of which are typical ways that ordinary people invest in pooled vehicles. As in previous editions, for this chapter of the GIE study, Morningstar evaluated markets based on the asset-weighted median expense ratio by market in addition to the structure and disclosure around performance fees and investors’ ability to avoid loads or ongoing commissions. The study breaks up the markets into three groups of funds: allocation, equity, and fixed income. The expense ratio calculations consider two perspectives: funds available for sale in the marketplace and funds that are locally domiciled. In this most recent study, we have adjusted the assets used in the weightings for available-for-sale funds in each market to better reflect the propensity of domestic investors to invest in nonlocally domiciled share classes.  

You can read the complete study in the following link.
 

Waves Labs Arrives in Miami To Grow its Crypto and Blockchain Ecosystem in the U.S.

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Corbital LLC has announced the launch of Waves Labs, its intention to headquarter in Miami, and several key hires in their U.S. senior leadership team.

The move comes hot on the heels of the Waves Transformation plan announced in February 2022, according the company’s release.

Waves Labs will become the growth engine for the Waves ecosystem in the U.S. and globally. Their international expansion plan includes the formation of an Ecosystem fund and an aggressive hiring and marketing plan. Waves Labs will look to grow awareness, support projects building on Waves with funding and mentorship, and integrate Waves with leading blockchain protocols.

“Waves Labs has already hired a senior leadership team of experienced fintech and crypto specialists”, said the firm.

The new hires are Head of U.S. operations Aleks Rubin, Head of Ecosystem Coleman Maher, Marketing Lead Jack Booth, and V.P. of Finance and Operations Tiffany Phan.

The team boasts a wealth of experience and a history of success. Coleman Maher previously led business development at Origin Protocol, Tiffany Phan, who led strategic finance at User Testing and presided over a $2B IPO; and Jack Booth, who led partner and product marketing at Oasis Protocol, during a time of record growth.

“I am excited to lead this dynamic team as we expand visibility and enhance the utilization of Waves protocol in the North American market,” says Rubin, a former banker with over 20 years of corporate finance experience.

Waves Founder and Lead Developer Sasha Ivanov will take on an advisor role to the company, focusing on strategic direction and technical know-how.

“Waves Labs is a key component of the Waves plan to grow exponentially in 2022. Despite a period of record growth of our ecosystem, Waves still remains relatively unknown in the U.S. crypto space. With the founding of Waves Labs, the ecosystem fund, and the extremely talented team in place, I do not doubt that Waves will reach mass adoption in 2022 and beyond,” says Sasha Ivanov, Founder of Waves.

Santander Wealth Management & Insurance Hires Laura Blanco and Augusto Caro for Its Sustainable Investment Unit

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Laura Blanco, new head of ESG in Santander WMI, y Augusto Caro, global head of ASG's team in Santander AM. Copyright: LinkedIn. santander

Santander Wealth Management has hired Laura Blanco to lead its ESG unit, which was created last year to support Grupo Santander’s efforts to combat climate change, protect human rights and promote good corporate governance.

Blanco, who has over 20 years of professional experience, directed Knowledge and Outreach for Impact Investment at Spain’s National Advisory Board since its creation in 2019. She began her career as an equities analyst at UBS before moving to Credit Suisse in 2003. She also worked at Lusight Research, Haitong Securities, Baring Asset Management and Nakatomi Capital. 

To further strengthen the team, Blanco has also appointed Ana Rivero as sustainable investment director. She began career at Banif, before moving to Santander Investment Bolsa Sociedad De Valores and then to Santander Asset Management (SAM), where she held several senior roles, including head of Product and Market Intelligence and head of ESG. 

Augusto Caro (CFA) joins Santander Asset Management as global head of ESG from Grupo Caixabank. He held a number of senior roles in the Investment team at Bankia AM (pensions, equities and balanced funds), where he also chaired its sustainability committee. He will report to José Mazoy, global CIO of Santander Asset Management.

“We are firmly committed to supporting the ecological transition and helping build a more sustainable world. These appointments will help strengthen our leadership in ESG in Europe and Latin America”, said Víctor Matarranz, head of WM&I, the bank’s asset management, private banking and insurance division.

WM&I aims to raise EUR 100 billion in sustainable funds by 2025. So far, it has raised EUR 27 billion across private banking and its fund manager. The target forms part of Santander’s push to raise or facilitate EUR 120bn in green finance by 2025 and EUR 220bn by 2030; cutting its worldwide exposure to thermal coal mining to zero by 2030; and reduce emissions relating to its power generation portfolio. Featured in the Dow Jones Sustainability Index 2021 for the 21st year in a row, with top marks in financial inclusion, environmental reporting, operational eco-efficiency and social reporting.

Banco Santander’s fund manager has its own ESG analysis team and SRI rating system. It became the first Spanish fund manager to join the global Net Zero Asset Managers initiative, which aims to achieve net-zero CO2 emissions in all AUMs by 2050. Last November, it also announced its target to halve the net emissions stemming from its AUMs by 2030. The targets for net-zero AUMs (which are subject to emissions gauging and metrics) align with the Net Zero Asset Managers initiative. Santander Asset Management became the first Spanish multinational to join the Institutional Investors Group on Climate Change (IIGCC), a European body that promotes collaboration between investors on climate change matters and represents investors committed to a low-carbon future. It is also a signatory to the UN’s Principles for Responsible Investment (PRI)

 

Schroders Announces Milagros Silva New US Offshore Sales Director

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Schroders announced that Milagros Silva has joined the US Offshore team as Sales Director.

In her new role, Mrs. Silva will focus on building Schroders’ ability to directly address client needs and grow the firm’s US offshore distribution efforts, according the company’s memo. She will work on business development for the Schroders brokerage business. 

She will report to Nicolas Giedzinski, Head of US Offshore. Calling on her prior experience and extensive knowledge of the industry, Mrs. Silva will work alongside Nicolas and the team to elevate Schroders’ strategies and increase market capitalization across different asset classes, the firm said.

Nicolas Giedzinski, Head of US Offshore commented: “We are excited to welcome Milagros to our team and to further expand Schroders’ footprint in the US Offshore region. Her role will continue to expand our consultant approach to the market – helping to build our capabilities amid the rapidly evolving needs of the industry. Milagros’ deep understanding of this sector will be extremely helpful as we actively maintain our high-quality client services and gain new prospects.”

Silva joins Schroders in 2022 from Unicorn Strategic Partners, where she served as Sales Manager and was responsible for marketing and distribution in the US Offshore market. Her territory coverage included Miami, Texas, California, Canada and the Caribbean.  

Previously she was a Hybrid Wholesaler at Legg Mason Global Asset Management, where she served as the primary relationship manager for a select group of preferred partner firms in the broker dealer and RIA channels focused on the offshore market in Miami and South America

Mrs. Silva spent six years at Alliance Bernstein Wealth Management, where she became Senior Team Leader. As such she was the primary contact for all service-related needs of HNW Private Clients and acted as the direct liaison between the advisors, clients, portfolio managers, legal and compliance departments to complete any new and existing client requests. 

Milagros has over 15 years of sales experience. She holds an MBA from McCombs School of Business at UT Austin

 

 

Sanctuary Global opens new Brickell Avenue office

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Sanctuary Wealth’s new division, Sanctuary Global, opened its new office in Miami

The new office located on Brickell Avenue demonstrates the growth of $21 billion in assets with more than 60 partner teams nationwide, the company told Funds Society. 

“A year ago we launched Sanctuary Global with a physical presence in Miami to focus on attracting financial advisors who are interested in becoming independent and who also serve international clients. Here we offer them a multi-custody platform that includes broker dealer, RIA and family office model options,” said Elisa Granados, director of Sanctuary Global.

Granados evidenced her team’s enthusiasm for the future of their Miami division. 

“We are motivated and look to the future in Miami with a lot of optimism. There is great interest in the market due to the structural decisions made by large firms in recent years. Our value proposition offers financial advisors control over their destiny by guiding them in building and growing their own businesses,” he explained.

The 15-strong staff will be expanded in the coming days with two new teams that, according to the advisor, “recognize the collaborative culture we have formed by enabling financial advisors to grow and gradually plan for the succession of their firms.”

In addition, the firm is flexible about working from home. 

“Some are eager to return to a shared office with other teams to exchange ideas and feel part of a culture like ours. Some prefer their offices near their residences or in their own homes.  In any case, they are delighted to have access to our conference rooms on Brickell Avenue overlooking the beautiful Biscayne Bay,” concluded Granados.

 

The Rotation From Growth to Value May Now Gain Strength

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U.S. stocks closed lower for the month of February as inflation and monetary policy implications continued to be key fundamental risks for investors. Russia’s invasion of Ukraine sent shocks throughout global markets, marking an escalation to a conflict that began in 2014. This represented the largest military assault by one European state on another since World War II. Market volatility spiked as investors gage the economic impacts of war. Russia’s invasion of Ukraine is an unprecedented move of aggression by President Vladimir Putin, who is now plagued with a plethora of new sanctions from the U.S. and Europe aimed at restricting Russia’s economy. Despite Ukrainian resistance holding firm, Russia has intensified its assault.

Although a more hawkish Fed has already been a main theme for markets this year, the rise in January’s U.S. Consumer Price Index may be an indication that the Fed could be more aggressive in raising rates than originally anticipated. The U.S. Consumer Price Index rose 7.5% year-on-year, leading to the largest annual increase in inflation in 40 years. The probability of a “stagflationary” outcome in the U.S. has likely risen.

COVID-19 trends improved during the month, with cases dropping ~90% from a pandemic record set just over a month ago during the spread of the Omicron variant. To date, 215 million Americans are fully vaccinated, representing ~65% of the population.

After several false starts, a rotation from Growth to Value may finally gain traction and provide a tailwind for the appreciation of the undervalued, cash generative entities we favor. As Value Investors, we continue to navigate the current market volatility as an opportunity to buy attractive companies, which have positive free cash flows, healthy balance sheets, and are trading at discounted prices.

Merger Arb activity remained strong in February with many deals that closing or made considerable progress towards closing. Xilinx completed its deal to be acquired by AMD after the parties refiled for antitrust approval in the U.S., and IHS Markit was acquired by S&P Global after the companies received foreign antitrust approvals. We Newly announced deals in February included First Horizon’s $13 billion deal to be acquired by TD Bank, South Jersey Industry’s $8 billion deal to be acquired by IIF, and Tower Semiconductor’s $5 billion deal to be acquired by Intel.

Lastly looking toward the convertibles market, February was another difficult month. In the U.S., with inflation stubbornly high, much of the month was spent focused on the fed and how they will raise interest rates. This continued to weigh on growth equities and by extension had a negative impact on convertibles. As the month came to a close, the war in Ukraine upset markets further, adding to volatility. Convertibles have outperformed their underlying equities through this period, but the drawdown has been larger than we anticipated coming into the year. Issuance has been off to a slower start than last year but we are starting to see it pick up.

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To access our proprietary value investment methodology, and dedicated merger arbitrage portfolio we offer the following UCITS Funds in each discipline:

GAMCO MERGER ARBITRAGE

GAMCO Merger Arbitrage UCITS Fund, launched in October 2011, is an open-end fund incorporated in Luxembourg and compliant with UCITS regulation. The team, dedicated strategy, and record dates back to 1985. The objective of the GAMCO Merger Arbitrage Fund is to achieve long-term capital growth by investing primarily in announced equity merger and acquisition transactions while maintaining a diversified portfolio. The Fund utilizes a highly specialized investment approach designed principally to profit from the successful completion of proposed mergers, takeovers, tender offers, leveraged buyouts and other types of corporate reorganizations. Analyzes and continuously monitors each pending transaction for potential risk, including: regulatory, terms, financing, and shareholder approval.

Merger investments are a highly liquid, non-market correlated, proven and consistent alternative to traditional fixed income and equity securities. Merger returns are dependent on deal spreads. Deal spreads are a function of time, deal risk premium, and interest rates. Returns are thus correlated to interest rate changes over the medium term and not the broader equity market. The prospect of rising rates would imply higher returns on mergers as spreads widen to compensate arbitrageurs. As bond markets decline (interest rates rise), merger returns should improve as capital allocation decisions adjust to the changes in the costs of capital.

Broad Market volatility can lead to widening of spreads in merger positions, coupled with our well-researched merger portfolios, offer the potential for enhanced IRRs through dynamic position sizing. Daily price volatility fluctuations coupled with less proprietary capital (the Volcker rule) in the U.S. have contributed to improving merger spreads and thus, overall returns. Thus our fund is well positioned as a cash substitute or fixed income alternative.

Our objectives are to compound and preserve wealth over time, while remaining non-correlated to the broad global markets. We created our first dedicated merger fund 32 years ago. Since then, our merger performance has grown client assets at an annualized rate of  approximately 10.7% gross and 7.6% net since 1985. Today, we manage assets on behalf of institutional and high net worth clients globally in a variety of fund structures and mandates.

Class I USD – LU0687944552
Class I EUR – LU0687944396
Class A USD – LU0687943745
Class A EUR – LU0687943661
Class R USD – LU1453360825
Class R EUR – LU1453361476

GAMCO ALL CAP VALUE

The GAMCO All Cap Value UCITS Fund launched in May, 2015 utilizes Gabelli’s its proprietary PMV with a Catalyst™ investment methodology, which has been in place since 1977. The Fund seeks absolute returns through event driven value investing. Our methodology centers around fundamental, research-driven, value based investing with a focus on asset values, cash flows and identifiable catalysts to maximize returns independent of market direction. The fund draws on the experience of its global portfolio team and 35+ value research analysts.

GAMCO is an active, bottom-up, value investor, and seeks to achieve real capital appreciation (relative to inflation) over the long term regardless of market cycles. Our value-oriented stock selection process is based on the fundamental investment principles first articulated in 1934 by Graham and Dodd, the founders of modern security analysis, and further augmented by Mario Gabelli in 1977 with his introduction of the concepts of Private Market Value (PMV) with a Catalyst™ into equity analysis. PMV with a Catalyst™ is our unique research methodology that focuses on individual stock selection by identifying firms selling below intrinsic value with a reasonable probability of realizing their PMV’s which we define as the price a strategic or financial acquirer would be willing to pay for the entire enterprise.  The fundamental valuation factors utilized to evaluate securities prior to inclusion/exclusion into the portfolio, our research driven approach views fundamental analysis as a three pronged approach:  free cash flow (earnings before, interest, taxes, depreciation and amortization, or EBITDA, minus the capital expenditures necessary to grow/maintain the business); earnings per share trends; and private market value (PMV), which encompasses on and off balance sheet assets and liabilities. Our team arrives at a PMV valuation by a rigorous assessment of fundamentals from publicly available information and judgement gained from meeting management, covering all size companies globally and our comprehensive, accumulated knowledge of a variety of sectors. We then identify businesses for the portfolio possessing the proper margin of safety and research variables from our deep research universe.

Class I USD – LU1216601648
Class I EUR – LU1216601564
Class A USD – LU1216600913
Class A EUR – LU1216600673
Class R USD – LU1453359900
Class R EUR – LU1453360155

GAMCO CONVERTIBLE SECURITIES

GAMCO Convertible Securities’ objective is to seek to provide current income as well as long term capital appreciation through a total return strategy by investing in a diversified portfolio of global convertible securities.

The Fund leverages the firm’s history of investing in dedicated convertible security portfolios since 1979.

The fund invests in convertible securities, as well as other instruments that have economic characteristics similar to such securities, across global markets (but the fund will not invest in contingent convertible notes). The fund may invest in securities of any market capitalization or credit quality, including up to 100% in below investment grade or unrated securities, and may from time to time invest a significant amount of its assets in securities of smaller companies. Convertible securities may include any suitable convertible instruments such as convertible bonds, convertible notes or convertible preference shares.

By actively managing the fund and investing in convertible securities, the investment manager seeks the opportunity to participate in the capital appreciation of underlying stocks, while at the same time relying on the fixed income aspect of the convertible securities to provide current income and reduced price volatility, which can limit the risk of loss in a down equity market.

Class I USD          LU2264533006

Class I EUR          LU2264532966

Class A USD        LU2264532701

Class A EUR        LU2264532610

Class R USD         LU2264533345

Class R EUR         LU2264533261

Class F USD         LU2264533691

Class F EUR         LU2264533428 

Disclaimer:
The information and any opinions have been obtained from or are based on sources believed to be reliable but accuracy cannot be guaranteed. No responsibility can be accepted for any consequential loss arising from the use of this information. The information is expressed at its date and is issued only to and directed only at those individuals who are permitted to receive such information in accordance with the applicable statutes. In some countries the distribution of this publication may be restricted. It is your responsibility to find out what those restrictions are and observe them.

Some of the statements in this presentation may contain or be based on forward looking statements, forecasts, estimates, projections, targets, or prognosis (“forward looking statements”), which reflect the manager’s current view of future events, economic developments and financial performance. Such forward looking statements are typically indicated by the use of words which express an estimate, expectation, belief, target or forecast. Such forward looking statements are based on an assessment of historical economic data, on the experience and current plans of the investment manager and/or certain advisors of the manager, and on the indicated sources. These forward looking statements contain no representation or warranty of whatever kind that such future events will occur or that they will occur as described herein, or that such results will be achieved by the fund or the investments of the fund, as the occurrence of these events and the results of the fund are subject to various risks and uncertainties. The actual portfolio, and thus results, of the fund may differ substantially from those assumed in the forward looking statements. The manager and its affiliates will not undertake to update or review the forward looking statements contained in this presentation, whether as result of new information or any future event or otherwise.