Snowden Lane Partners has announced the launch of The Esses Group, a new wealth management team helmed by Tony Esses, who was Managing Director at Wells Fargo Advisors from 2014-2021. Overseeing more than 800 million dollars in client assets, they will be based in Snowden Lane’s Coral Gables office.
Esses, a top-ranked financial advisor with over 35 years of experience in the international wealth management business, specializes in working with individuals, business owners and families based in Argentina. He is joining Snowden Lane as a Senior Partner and Managing Director.
“Over the last three decades, Tony has established himself as a top-rated financial advisor and a true champion for his clients. He exemplifies everything we look for in a partner and colleague, and we have no doubt he and his new team will do great things for years to come”, said Greg Franks, President and COO of Snowden Lane Partner.
Meanwhile, Esses claimed to be “delighted” to be joining a firm “with such a client-first mindset and independent spirit”. In order to best serve clients, it “became clear” to him that he needed to operate within a firm that gave their advisors space and freedom without conflicts or pressure. “Snowden Lane’s built an environment that’s removed all obstacles to growth, and their fast rise within the RIA space is a reflection of the strong and unique culture they’ve established”, he commented.
Prior to Snowden Lane, he served as a Managing Director at Wells Fargo Advisors for seven years, and before that held senior roles at Barclays (2010-2014) and Republic National Bank of New York (later HSBC, 1985-2010). He’s been selected to the Financial Times Top 400 Advisors list several times and has been distinguished as a premier advisor at each of the institutions he’s worked for.
The firm has also revealed that several additional team recruits are expected to join soon.
Rob Mooney, Snowden Lane’s CEO, added that it’s been an exciting recruiting start so far this year and that they are “so pleased” with the pace and quality of individuals who’ve have joined them over the last few months. “We finished 2020 with great momentum and we’re heading into the second half of 2021 with wind in our sails. The strong response from the advisor community, particularly those who cater to international clients, has been nothing short of breathtaking and we’re looking forward to the future”, he concluded.
The firm has 116 total employees, 64 of whom are financial advisors, across 12 offices around the United States.
Pixabay CC0 Public Domain. BlackRock adquiere el modelo de escenarios de cambio climático de Baringa Partners
BlackRock and Baringa Partners have announced their entry into a definitive agreement for BlackRock to acquire and integrate Baringa’s industry-leading Climate Change Scenario Model into its Aladdin Climate technology. In a press release, both firms pointed out that this new long-term partnership is “a significant milestone” for them, as they collaborate to set the standard for modelling the impacts of climate change and the transition to a low carbon economy on financial assets for investors, banks and other clients.
Both companies believe that, while the reallocation of capital to sustainable investment strategies continues -with over 2.3 trillion dollars of assets under management in sustainability funds globally as of the first quarter of 2021- understanding the potential impacts of climate change and the transition to a low carbon economy on their portfolios remains a complex challenge for investors. With the number of governments and companies making commitments to achieve net-zero continuing to grow alongside increased regulatory requirements for climate-related disclosures, companies and investors alike are seeking solutions to help assess climate risk.
“Investors and companies are increasingly recognising that climate risk presents investment risk. Through this partnership with Baringa, we are raising the industry bar for climate analytics and risk management tools, so clients can build and customise more sustainable portfolios. The integration of Baringa’s models and the ongoing collaboration between our firms will enhance Aladdin Climate’s capabilities, helping our clients understand transition risks in more sectors and regions than ever before”, commented Sudhir Nair, Global Head of the Aladdin Business at BlackRock.
Meanwhile, Colin Preston, Global Head of Climate Solutions at Baringa said that climate change is “the number one challenge and opportunity of our generation”. Having developed the leading Climate Change Scenario Model, they are “excited to partner with BlackRock” to accelerate the adoption of this solution by organisations across the globe. “The integration of Baringa’s Climate Change Scenario Model into BlackRock’s Aladdin platform will inform the reallocation of capital across the global economy, accelerating the transition to net zero”, he concluded.
As for BlackRock, it began developing Aladdin Climate to fill a void in climate risk analytics by creating technology to help clients better understand and mitigate the financial impacts associated with climate change on their portfolios. Aladdin Climate is offered through the Aladdin platform and is used by BlackRock’s Financial Markets Advisory (FMA) group to deliver sustainability advisory services to clients. It measures both the impacts of physical risks, like extreme weather events, and transition risks – such as policy changes, new technology, and energy supply – at the financial instrument and portfolio levels.
Foto cedidaJoanna Munro, consejera delegada de HSBC Alternatives.. HSBC AM integra todas sus capacidades alternativas en una única unidad de negocio
HSBC Asset Management has announced in a press release that it is bringing together all of its existing alternatives capabilities under a single business unit, HSBC Alternatives, with a 150-strong team and combined assets under management and advice of 53 billion dollars. Joanna Munro has been appointed CEO HSBC Alternatives to lead the new combined unit.
The firm’s alternatives assets have doubled over the past four years and they believe that the creation of a single business unit is the next step in its strategy “to reposition the business as a core solutions provider and specialist Asia, emerging markets and alternatives asset manager”.
HSBC Alternatives will comprise of HSBC Alternatives Investments (HAIL), which includes the multi-manager Hedge Fund and Private Market teams, as well as the firm’s Private Debt, Venture Capital and direct Real Estate teams, with existing capabilities in the UK, France, Germany, Switzerland, Hong Kong and the US.
Munro, currently Global CIO, will now report directly to Nicolas Moreau as a member of his Management Committee. She was appointed Global CIO in 2019 and has been with HSBC Asset Management since 2005, with responsibilities including CEO Multi-Manager and CEO Asia Pacific. She will continue to be based in London.
As CEO HSBC Alternatives, she will be responsible for enhancing and expanding the range of alternative investments available to the firm’s wealth and institutional clients, across indirect and direct alternatives including hedge funds, private markets and real estate. Under her leadership, the newly combined team will work closely with other parts of HSBC Asset Management to deliver on the firm’s strategic enablers of client centricity, investment excellence and sustainable investing.
“We have been very successful in delivering innovative capabilities to our institutional and wealth clients, with the recent success of our Infrastructure Debt teams, the rapid growth of our indirect private equity business, the launch of a direct lending investment capability with HSBC UK and the establishment of our Climatech venture capital team. With Joanna’s strong track record of building and transforming businesses, I am confident that we will take our alternatives business to the next leveland accelerate this important growth opportunity“, commented Moreau.
Meanwhile, Munro claimed to be looking forward to leading the growth of HSBC Alternatives and bringing the benefits of alternatives asset classes to new and existing clients. “Alongside sustainable and impact strategies, such as Climatech, we will also look to grow our capabilities in Asia“, she added.
A new Global CIO
After this change, Xavier Baraton, currently Global CIO for Fixed Income, Private Debt & Alternatives, will succeed Munro as Global CIO. Reporting to Moreau, he will join the Management Committee and continue to be based in Paris. He moves into the role with close to 20 years’ experience in investment management. He joined HSBC Asset Management as Global Head of Credit Research in 2002 and has been CIO for Fixed Income since June 2010.
“I am delighted to be appointing Xavier Baraton as Global CIO. Xavier’s outstanding investment track record, commitment to embedding sustainability across our fixed income asset class with innovations such as our real economy EM green bond strategy, REGIO, and more recently his leadership on diversity and inclusion across our investment platform make him ideally placed to lead our investment teams globally”, said Moreau.
The asset manager has revealed that Baraton’s successor will be announced “in due course”.
In 2020, HSBC Asset Management set out its strategy to re-position the business as a core solutions and specialist emerging markets, Asia and alternatives focused asset manager, with client centricity, investment excellence and sustainable investing as key enablers.
Pixabay CC0 Public DomainTodavía hay valor en renta fija emergente . Mapa de Asia
Local currency and hard currency emerging market government bonds have partly recovered since the lows of the COVID-19 crisis, but Colchester Global Investors believes there is still value to be found in these emerging market fixed income asset classes.
Colchester has been holding a number of conferences on Emerging Market sovereign debt to give investors a better understanding of the key differences between the main asset classes within this space, namely hard currency and local currency denominated debt. The response from investors has been heartening and we share with you some of the key questions investors have been deliberating over, and the thoughts of Colchester’s investment team below:
Yields are rising in the US, what does this mean for Emerging Markets?
Emerging market assets have weakened since the turn of the year with rising yields in the US weighing on local and hard currency bond prices and some depreciation of EM currencies against the US dollar. Rising yields do equate to a tightening of global financial conditions all else being equal, and a strengthening US dollar is often associated with a reversal of capital flows to EM as we observed with the “taper tantrum” in 2013. Nonetheless, we at Colchester believe the current period is not comparable to 2013, for a few reasons:
The rise in US yields can largely be attributed to the more positive outlook for the US and global economies, and an associated rise in inflation expectations;
Real yields in the US remain close to historical lows, and remain a “push factor” for capital to seek out the more attractive real yields of the Emerging Markets;
There is no indication of monetary policy being tightened in the US; and
The external balance sheets of emerging economies are generally stronger than in 2013, for example more robust current account positions in many cases and a lower reliance on portfolio inflows.
Real exchange rate valuations of many of the major Emerging Markets have improved relative to those prevailing in 2013, as exchange rates have weakened materially in nominal and real terms since then. With external vulnerabilities having significantly reduced since 2013, this puts many of the Emerging Markets in a much stronger position today to withstand tighter global financial conditions. We see opportunities to take advantage of undervalued currencies, combined with robust external balance sheets and credible policy frameworks.
EM currencies have weakened for many years, why don’t you think they will continue to depreciate?
The consistent undervaluation of EM currencies in recent years is indeed striking, but does not in itself shift our opinion that such undervaluation will eventually be corrected. In the short term, exchange rates can be volatile and deviate from fundamental “fair value” for significant periods of time. Emerging Markets have certainly been negatively impacted by a series of negative shocks in recent years also, which have contributed to their relative underperformance. We continue to believe however that the undervaluation of EM exchange rates, combined with a credible policy framework in most instances, will act as “pull factors” for global capital. Furthermore, the US dollar has been relatively strong for some time, even considering the declines seen in the second half of 2020. This overvaluation may ultimately lead to the beginning of a significant depreciation. Such an eventuality has historically been a good backdrop for Emerging Market assets, both local and hard currency denominated.
What is the impact of Covid-19 on Emerging Market currencies and bond markets?
Vulnerability to crises was previously a feature of many Emerging Market economies, but today that vulnerability is lower, at least for the major issuers of local currency emerging market government bonds. According to Colchester’s analysis, the market turmoil and economic contraction associated with the COVID-19 pandemic was met with a strong policy response from central banks in many major Emerging Markets.
Do you see a dollar weakening trend as being more beneficial to hard currency due to reduced interest payments or local through currency effect?
As shown in the chart below, historically there has been a relationship between movements in the US dollar and the relative performance of hard versus local currency EM government debt. Typically, although not always the case, we see local currency outperforming in an environment of US dollar weakness and vice versa.
Source: JP Morgan and Colchester Global Investors. Data is calendar year returns from Dec 2003 to Dec 2020. Hard Currency is the JP Morgan EMBI Global Diversified Index (EMBI GD index), and Local Currency is the JP Morgan GBI-EM Global Diversified Index in USD Unhedged terms.
The outperformance of the Local asset class from a weaker USD tends to be driven by an appreciation of EM currencies. When we look at USD hedged returns of EM Local bonds versus Hard Currency bonds, we see a general trend of Hard Currency outperforming EM Local bonds.
With regards to a weaker USD improving debt servicing for a sovereign’s Hard Currency debt, certainly an appreciating local currency will tend to make the conversion of domestic revenues into USD less costly, and thus somewhat ‘cheaper’. This is one reason why when assessing Hard Currency debt we incorporate the valuation of the country’s Real Exchange Rate. Colchester looks at several factors when assessing Hard Currency debt serviceability which focus on a country’s external liquidity, including the ratio of a country’s foreign currency uses relative to its foreign currency resources, and the Terms of Trade.
This article should not be relied on as investment advice. Colchester Global Investors Limited is regulated by the UK Financial Conduct Authority, and only deals with professional clients. https://www.colchesterglobal.com for more information and disclaimers.
Foto cedidaBeatriz Barros, nueva responsable de distribución en el área de Américas de AXA IM.. AXA IM nombra a Beatriz Barros de Lis responsable de distribución en el área de Américas
AXA Investment Managers has announced in a press release the appointment of three senior executive leaders to support “the ongoing robust growth and performance” of the Americas Institutional, Wholesale, and Sub-Advisory businesses. Strengthening the sales and distribution team in the region,Beatriz Barros de Lis -previously Country Head for Spain and Portugal- has been named Head of Client Group Americas.
After 11 years at the helm of AXA IM Spain and Portugal, as part of her new role, Barros de Lis will lead the North America and Latin America Sales and Distribution team, both onshore and offshore, across Institutional, Wholesale, and Sub-Advisory. She will lead an experienced Sales and Client Service team, many of whom have significant tenure both at AXA IM and in the industry overall.
She was previously Country Head for Spain and Portugal, AXA IM, since 2010. Prior to that, she was managing director for the Spanish and Portuguese markets at Alliance Bernstein (AB). She is also currently a director at AXA Funds Management SA in Luxembourg. A graduate in Economics, she has worked in the asset management industry since 1994.
A single structure for Spain, Portugal and Italy
In addition, AXA IM has organized the sales areas to simplify and optimize its structure. As they have explained, the initiative stems from the decision taken last year to integrate the Client Group teams in Germany and Switzerland under what was called the DACH Group. The asset manager has pointed out that the success of this experience has driven this new regional approach for the sales teams.
Thus, the Western Europe area will combine France, Belgium and Luxembourg, while the Northern Europe hub will encompass the United Kingdom, the Nordic countries and the Netherlands. Within this new sales structure, the Southern Europe region will be created and will include Spain, Italy and Portugal, taking advantage of the synergies generated by the combination of skills and resources of the different team. It will be led by Pietro Martorella, until now Country Head of AXA IM Italy.
Other key appointments
Furthermore, Florian Bezaulthas been named Head of AXA IM Americas and Regional CFO Americas, after more than a decade of leadership roles within AXA Group. His primary responsibilities will focus on CFO leadership and strategy, and he will report to Godefroy de Colombe, Global Chief Operating Officer,and Jean-Christophe Menioux, General Secretary and CFO. Bezault assumes the responsibilities of his predecessor, Marcello Arona, who was recently appointed CEO AXA IM UK & AXA IM GS. Bezault has been with the AXA Group since 2008 and has held previous roles in Corporate Finance and Investor Relations at AXA’s Headquarters in Paris before joining AXA Mexico as Deputy Director of their Health Insurance Operations.
Meanwhile, José Manuel Fernández, Senior Sales Manager, joined AXA IM Mexico recently from Grupo Financiero Monex to support the firm’s continued commitment to clients in Mexico. In this role, he will report to Salvador Moreno, Head of Sales, AXA IM Mexico. Fernández brings over 20 years of industry sales experience, joining AXA IM from Grupo Financiero Monex where he was a Director of Sales in their asset management division focused on defined contribution and defined benefit plans.
AXA IM in the Americas is continuing to grow its third-party business across asset-classes and client segments throughout the region. “These new executive appointments support this business momentum throughout the U.S, Latin America and Mexico, with an emphasis on continued future growth and in support of new clients being on-boarded throughout the region”, has highlighted the asset manager. Its investment teams and strategy remain unchanged as a result of these announcements.
Pixabay CC0 Public DomainRotación cíclica. Rotación
U.S. equities were higher in May, as markets hovered around all-time highs. The pro-cyclical rotation continued as much of the outperformance for value stocks was driven by financials, industrials and materials. Rising inflationary fears as well as stretched valuations among growth stocks has investors evaluating what multiples they are willing to pay.
With over 40% of Americans fully vaccinated and COVID-19 cases down precipitously since the start of the year, government restrictions have eased to support the start of the economic reopening. People are longing for the in person connections and experiences that have been so lacking for the last year, and we can see the light at the end of the proverbial tunnel of COVID-19.
Amid concerns about ramping inflation, the Fed hinted that it may soon be time to begin a discussion on tapering the $120 billion/month asset-purchase plan, with indications that the debate could begin as soon as the June FOMC meeting.
The M&A market highlighted the scarcity value of companies with strong market positions. Accommodative capital markets and the easing of COVID-related restrictions are also providing support for would-be acquirers contemplating their strategic direction. Performance was bolstered by overbids and deals that made significant progress towards regulatory approval. M&A Activity remained vibrant with more than $490 billion announced deals globally, bringing year-to-date deal volume to $2.1 trillion, an increase of 90% over 2020 activity.
Recent trends in convertible issuance continued in May. We saw improved pricing with investors pushing back on aggressive terms. Even with better terms for investors, the global convertible market is a fast and inexpensive way for companies to raise capital. We anticipate the current pace of issuance to continue which would make 2021 another year of global convertible market expansion and diversification. Global convertibles were down a bit for the month, driven by the rotation from growth to value and continued underperformance of some of the more aggressively priced issues from January and February.
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.
Foto cedidaVirtual Investment Summit con Thornburg. VIS
At a time when interest rates are at historic lows while stock markets are trading at record highs, there are many questions creeping into investors’ minds: Are there still interesting opportunities to invest in fixed income, or should investors start to consider rotating their portfolios? What assets should they choose in order to maintain a good risk diversification? Thornburg IM asset managers Miguel Oleaga and Lon Erickson participated in the Funds Society’s Virtual Investment Summit series with the Bull vs Bear Summit panel, to offer insights into their investment philosophy and evaluate where they are currently finding investment opportunities.
Should I reduce my fixed income exposure and add more risk to my portfolio?
The poor performance of fixed income assets against a backdrop of a persistent search for yield is raising many questions for investors about how to position their portfolio in the coming months to address risks such as inflation, but also to benefit from the post-Covid economic recovery. Lon Erickson acknowledges that this is a complex context given that rates remain very low, but he urges investors to never lose sight of what the role of fixed income in a portfolio should be, “given that it is basically an asset class in which you invest looking for hedging against other riskier assets, such as equities.”
The asset manager points out that fixed income may not be providing returns given the current IRR and spread compression, but it is still a source of income generation and helps to diversify risks: “We will continue to see an environment of continued volatility in which fixed income can cushion the swings.”
The asset manager believes that at present, there are still opportunities in the fixed-income universe, but we need to analyze them on a case-by-case basis. “It’s not just about adding things to the portfolio, you need to have the will and the skills to dive into the asset class and be able to select bonds on an individual basis,” he says.
One of the segments in which Erickson is currently finding the most value is in leveraged loans, an asset he sees as “a high yield product that trades at a floating rate rather than offering a fixed interest rate.” He is also finding ideas in investment themed around consumption, particularly the U.S. consumer, where he invests through ABS and in certain parts of the non-agency-backed mortgage market: “Consumers have been very prudent about taking on debt and also have been paying off the loans they already had, so it’s a sector that is well covered, backed by fiscal stimulus and the Fed and we’re now seeing jobs recovery.”
The manager insists that his and his team’s current stance at Thornburg IM is conservative, because they believe that risk is not being well rewarded, especially in high yield: “We are investing in the whole capital structure, but we prefer to stay in the higher quality, senior tranches. We have the flexibility to invest in subordinated debt and other residual parts of the market, whenever we deem it necessary, if we see that we can get double-digit returns, but always with an investment thesis to back it up,” he insists.
In EM, the manager has a preference for those countries that have strong export-based economies versus those based on domestic demand, which have been hit harder by the delayed reopening after the pandemic. “There are some countries with very high rates, such as Egypt, which offers very interesting real rates on its local bonds.”
Where are the opportunities in equities?
Miguel Oleaga is “very bullish” on equities, stating that “there are still attractive and compelling valuations”, especially if companies are analyzed over a long time horizon, although he warns that valuations have rallied a lot over the last 18 months, especially in the U.S. and specifically in the technology segment. “If we wanted to reduce exposure to the US we would probably find software companies in other regions that are the darling of the markets, such as names linked to the services sector or the Internet, which still enjoy market favor despite the correction we have seen this year in this name class.”
The asset manager explains that at Thornburg, “we go further and look at other parts of the U.S. economy, especially the more cyclically exposed parts, which tend to look more attractive even despite the bullishness they have already experienced in the first five months of this year.” Oleaga highlights the positive impact of the monetary and fiscal stimuli applied in the country, because “they are helping a large part of the economy to recover better and more efficiently than before the crisis.”
Meanwhile, the manager talks about the opportunity represented by the reopening of economies globally, given that not all countries are doing so at the same speed, which is generating inefficiencies that can be exploited in their fund: “There are many economies that are still suffering greatly from Covid, and this is reflected in the fact that the prices of the leading companies in these markets are not being representative of their true value”, such as India, for example. These opportunities are encouraging the asset manager to reduce their exposure to the U.S. in favor of these markets.
Miguel Oleaga warns against buying stocks simply because they are trading cheaply, rather than carrying out a detailed fundamental analysis to determine the intrinsic value of companies: “When we take a step back and look at how the market has evolved over the last decade, some of the companies that have proved to be a bargain did not look cheap, as has happened with some US technology names. But if you had the resources to delve deeper and understand the fundamentals of the business and its growth drivers and why it was better positioned than others, then you could see that it was a bargain with respect to its intrinsic value,” something that is now being repeated, as many technology companies have corrected on the stock market, but this slump does not represent a good time to buy across the board for the sector.
Is now a good time to start investing in equities?
Miguel Oleaga’s answer to this question is a resounding yes: “For an investor who is willing to accept higher volatility and the higher risk associated with investing in equities in exchange for a source of income, now is a relatively attractive time”.
The expert draws attention to a third element of yield generation, the dividend situation: “Right now there are a number of companies that are well positioned in terms of cash flow generation and their ability to pay dividends. In a sign of conservatism, many of these companies reduced or cut their dividends last year to make sure they had enough cash flow and maintained a very strong balance sheet at a very uncertain time. As a result, there are a number of names that have restarted their dividend policy. One of the catalysts we can spot is to find these names that can afford to pay dividends and bring them back up to historic levels,” he concluded.
Pixabay CC0 Public Domain. BlackRock amplía su alianza con iCapital Network para mejorar el acceso de los gestores de patrimonio a los mercados no cotizados
Following PIMCO, PGIM and Allfunds, BlackRock is the latest firm to extend its strategic agreement with iCapital Network, in this case to increase accessibility to private market investments for wealth managers. The partnership will focus on the distribution of global private market funds.
In a press release, the asset manager has highlighted that the combination of its private market investment products and iCapital’s proven technology and solutions “will streamline the operational and administrative complexities faced by wealth managers seeking to distribute private market investments to their clients”.
BlackRock’s product offerings will include private equity, private debt, and real assets, across geographies, including a broadening array of ESG-integrated strategies. The investment products will be available to wealth managers across EMEA, Asia-Pacific and LATAM. The new offering will leverage iCapital’s AIFMD-compliant feeder fund structures and innovative technology platform to digitalize every aspect of the subscription and investor servicing process including capital calls, distributions, transfers and performance reporting for wealth advisors and their clients. iCapital’s technology will sit seamlessly alongside that of eFront, enabling BlackRock to fully service the operational and administrative needs of both wealth and institutional clients.
This latest collaboration addressing the international wealth management industry expands an existing commercial relationship between the two companies. BlackRock is a long-standing strategic investor in iCapital and currently employs its technology to streamline access for BlackRock’s North American private market offerings to the wealth management community
“We are delighted to be expanding our trusted partnership with iCapital Network. This collaboration will allow us to deliver on our strategic priorities of broadening access to BlackRock’s alternative investment strategies, accelerating the distribution of our private market strategies internationally, and enabling our wealth management partners to scale their own distribution efforts,” said David Lomas, Global Head of BlackRock Alternatives Specialists.
In this sense, the asset manager has pointed out that, while the global market for alternative investments stands at over 10.7 trillion dollars, with growth of 9.8% forecast by 2025, individual investor allocations have historically lagged those of institutional investors. However, they expect that, over the next several years, individual investor appetite will increase driven by a persistently low interest rate environment, diminished return expectations in public markets, and demand for greater diversification in portfolios to counterbalance higher market volatility.
Lawrence Calcano, Chairman and CEO of iCapital Network, claimed to be “honored” to partner with BlackRock on this initiative, which builds on years of collaboration between their firms and supports the expansion of its leading-edge private market offerings across EMEA, APAC and LATAM. “We are committed to optimizing the alternative investing experience across the industry so advisors can better serve their clients”, he added.
The collaboration will also create a suite of education tools to help wealth advisors and their clients understand and evaluate the role of private market strategies as part of their total portfolio.
Lastly, Marco Bizzozero, Head of International at iCapital Network, commented that their mission is to solve the fundamental challenges of investing in private markets for individual investors. “iCapital’s solutions support asset and wealth managers in broadening client access to the growth and diversification opportunities of private markets. BlackRock is a global leader, and we are delighted to support their ambition in alternative investing by facilitating access and emphasizing education”, he concluded.
Over the past years, JP Morgan Asset Management has focused on enhancing the efficiency of its U.S. Offshore business to best position the firm to continue delivering first-class service to their clients.
With this in mind, the firm has announced that John Oestreicher, Client Advisor for the U.S. Offshore business, is taking on additional responsibility to serve as National Sales Manager for U.S. Offshore, reporting to Giuliano De Marchi, Head of JP Morgan Asset Management in Latin America.
In this role, John will oversee the U.S. Offshore business, while continuing to lead field coverage with wirehouse clients in the Florida region. “John has been a fundamental part of the U.S. Offshore business buildout and success and we are thrilled the business will continue to benefit from his leadership. He will be partnering closely with the broader J.P. Morgan Asset Management team to bring innovative solutions to the region”, says Giuliano De Marchi.
Also during this transition, the company is making additional changes to better align its U.S. offshore efforts: Estefania Chuecos, Client Advisor for the U.S. Offshore business, will expand her coverage of the Florida region, working closely with John with the wirehouses and all independent clients.
Carlos Brussa, Client Advisor for the U.S. Offshore business, will expand his coverage to include Northern California, in addition to his Texas and western U.S. territories. “The U.S. Offshore market represents a significant opportunity and our U.S. Offshore business is coming off a record year in 2020. We are very well positioned to serve our investors with a focus on expanding our client base and deepening existing relationships”, reinforces De Marchi.
Foto cedidaYves Perrier, consejero delegado de Amundi.. Amundi firma con Société Générale el acuerdo marco para la compra de Lyxor
There has been a slight change of plans in one of the most prominent deals of the second quarter of the year: the acquisition of Lyxor by Amundi. According to a statement released last week, both fund managers have already signed the framework agreement for this purchase.
This announcement comes earlier than expected. Initially, it was estimated that the transaction would be completed by February 2022, but Amundi has now announced that it is expected to be completed by the end of 2021. However, it is still subject to prior approval from the competent regulatory and competition authorities.
“Great news: the Lyxor – Amundi deal is signed. This key milestone is achieved much ahead of the planned schedule. We will now be seeking the various regulatory approvals which are the final prerequisite to closing the transaction. No doubt Lyxor and Amundi teams will continue to move forward with the same great spirit and at the same great pace”, commented Lionel Paquin, CEO of Lyxor AM, in his LinkedIn account.
The transaction, which was announced last April and will amount to 825 million euros (around 1 billion dollars), would enable Amundi to accelerate the development of its ETF business and complement its offering of actively managed funds, in particular investment solutions in liquid alternative assets and advisory services.
Meanwhile, certain activities of Lyxor have been excluded from the scope of the transaction and will be retained by Société Générale. In particular, the structured asset management solutions business targeting Societe Generale’s global clients and the asset management activities dedicated to savings solutions and carried out for Société Générale (branch networks and private banking), such as the structuring of savings solutions, fund selection and the supervision of the Group’s asset management companies.
