Following the European Commission’s publication of its Action Plan for a Capital Markets Union, EFAMA voices again its continued backing to the Commission’s plan to promote further the financing of the European economy through a well-functioning CMU.
EFAMA has always been a strong supporter of the EU Single Market and supports the Commission’s Action Plan. It is consistent with its aspirations for more single market, more capital market union, and less cross-border barriers, and includes a sensible step-by-step approach that travels in the right direction.
The recent European regulatory momentum has led to considerable improvements within the regulatory environment. The new rules take time and effort to be put in place, and it is crucial to first properly implement them, and then carefully evaluate their impact.
Alexander Schindler, President of EFAMA, commented: “We applaud the Commission’s plans to assess the impact of previous regulatory reforms. This should also serve the purpose of addressing, sooner rather than later, we hope, the current overlapping requirements that are either not fully consistent with each other, or which inadvertently create an unlevel playing field among financial sectors.”
Legal and other barriers still remain. Goldplating practices are one of them. Peter De Proft, Director General of EFAMA, said: “These practices go against the idea of developing further the European single market, and we welcome the Commission’s objective to tackle this issue with Member States”.
In line with developing the single market, EFAMA equally welcomes the Commission’s suggestion to improve the functioning and effectiveness of existing European fund passports. The European asset management industry supports this as an appropriate way to address remaining cross-border barriers, lower the regulatory costs of setting up funds and facilitate the cross-border distribution of investment funds.
EFAMA also supports the creation of a truly single market for personal pensions in the EU. The current market fragmentation makes economies of scale impossible to achieve and limits the choice of pension products and pension providers. A shift in focus is needed towards, yet again, more single market and long-term saving. The creation of a Pan-European Personal Pension Product (PEPP) would have the potential to boost the flow of retail savings into capital markets and therefore to provide long-term funding to the EU economy.
Inherent to more single and capital market is also more investor trust and protection. EFAMA wholeheartedly agrees with the Commission that regulatory consistency is a key element to enable investors to compare between different types of products and make informed investment decisions. The quest for a coherent and workable EU regulatory framework should seek to create a level playing field for investment products in the EU, more transparency, and consequently, increase investor confidence. EFAMA sees no reason for the coexistence of different levels of consumer protection in the current EU regulatory landscape (MiFID II, IDD, PRIIPs). Retail investors should be offered similar disclosure requirements that will allow them a fair and meaningful comparison of similar investment options. Alexander Schindler, President of EFAMA, commented: “We regret this is not the case at the moment, and believe the Commission’s planned assessment of European markets for retail investment products will shed light on how to re-evaluate and improve the current unlevelled situation”.
Equally, EFAMA reiterates its view that consistency is yet to be achieved between the broader objectives of building a CMU and pending EU legislation, most notably the proposed Financial Transaction Tax, whose approach is in full contradiction to that of the CMU. EFAMA urgently advises that the Commission address this issue.
EFAMA welcomes the priority given to ELTIFs as a key vehicle to support infrastructure investment. The EU label of ELTIFs as new products has the potential to unlock and shift important capital towards investments in longer term projects. However if ELTIFs are to become a market success, it will be necessary to align the interests and needs of those investors that ELTIFs seek to attract. The flexibility of the ELTIFs structure and the incentives offered to potential investors will be important factors of their take-up and market success.
For that reason, EFAMA welcomes the Commission’s steps in encouraging fiscal incentives at national level, and in proposing to re-calibrate the capital requirements for insurance companies in Solvency II with regards to the ELTIFs units and shares. Lower risk factor attributed to them can become an important incentive for insurers, which are natural providers of such funds.
Foto: Hiroyuki Takeda
. Los roboadvisors tendrán que crecer un 60% anual en los próximos seis años para subsistir
According to The Cerulli Edge – U.S. Edition released in September 2015 electronic registered investment advisors (eRIAs) in the United States will need to grow aggressively to compensate their investors after six years.
“eRIAs have gathered significant assets during the past several years,” states Frederick Pickering, research analyst at Cerulli. “Although the technology of the eRIA space has allowed them to scale at a much faster rate than existing traditional financial advisors, they will still need to reach end clients. Cerulli has constructed several scenarios that approximate the annual growth rate necessary for eRIAs to realize the multiples required for their venture capital and remain standalone direct-to-consumer businesses.”
Through their research, the company believes that eRIAs’ ability to remain a standalone enterprise will be threatened due to commoditization of the eRIA model from traditional firms entering the space and massive fee compression.
“We project eRIAs will need to grow approximately 50%-60% per year for the next six years and gather approximately $35 billion in AUM to remain a standalone direct channel for consumer business,” Pickering explains. “Given the threat of commoditization within the software-only eRIA business-to-consumers marketplace and the lack of an economic moat to charge a price premium, eRIAs should consider pivoting to a business-to-business model.”
“The eRIA channel has created a business model that undercuts traditional advisory firms, but may lack the financial resources to compete if the business model becomes commoditized,” Pickering continues. “New entrants from traditional advisory firms and start-ups threaten to commoditize the space, drive down fees, and eliminate any remaining premium in eRIA fee structures.”
Foto: Elliott Brown. El 80% de los inversores institucionales invierte al menos en una clase de alternativos
Research for Preqin’s latest “Investor Outlook” has found that four out of five institutional investors invest in at least one alternative asset class. Private equity, hedge funds and real estate are the most targeted alternative asset classes, with over half of investors having an allocation to each of them in their portfolios. Although the benefits vary significantly between asset classes, common reasons cited by investors for holding allocations to alternative assets include diversification, high returns, reliable income streams and inflation hedging characteristics.
Investment in almost all asset classes is likely to increase over the coming year. In particular, 42% of private equity investors, 38% of private debt investors, and 36% of infrastructure investors plan to invest more capital in the next 12 months than they have in the previous year. A third of hedge fund investors are looking to invest less capital over the coming year compared to the last 12 months, compared to 19% that are looking to invest more.
The vast majority of investors have a positive or neutral view of each asset class. For investors in private equity and real estate, this stands at 95% and 94% respectively. Twenty percent of investors in hedge funds have a negative perception of the asset class.
Growth in investment also looks set to continue in the longer term, as the largest proportion of investors plan to increase their allocations to each asset class. In particular, 51% of private equity investors, and 44% of infrastructure investors are aiming to allocate more capital to these asset classes.
Over 60% of investors in real estate, infrastructure and private debt target returns of at least 8% annually. Just under 60% of private equity investors seek returns of at least 14%. A significant 15% of private equity investors target annualized returns of 20% or more.
The majority of investors in all asset classes believe that their interests align with those of fund managers. Private debt and real estate have the highest level of investor satisfaction, with 83% and 80% of investors respectively stating that their interests are representedby fund managers.
The largest proportion of investors in all asset classes believes that fund terms are changing in their favour. Forty seven percent of hedge fund investors, and 44% of private equity investors, feel that terms are becoming more favourable for investors
“Institutional investors allocate to alternative assets to diversify their portfolios and to achieve a broad range of other objectives. The high absolute returns generated by private equity, hedge funds’ ability to reduce volatility, the reliable income generated by private debt and the inflation-hedging characteristics of real assets are just some of the attractions for sophisticated investors.
It is clear that the institutional community remains confident in the ability of alternative assets to help them meet their return objectives. The majority feel returns are meeting or exceeding expectations and, as a result, a much larger proportion of investors plan to increase their exposure to alternatives than plan to reduce it. There remains huge scope for the alternative assets industry to grow in future years, both as investors build up existing allocations, and as they also further diversify their portfolios to include a wider range of asset classes.” Mark O’Hare–CEO, Preqin- comments on the subject.
Private banks and trust companies’ assets are projected to reach $5.3 trillion by year-end 2019, according to the latest research from Cerulli Associates “Asset Management Opportunities in Banks 2015: Capitalizing on a Resurgent Focus on Wealth Management”.
“With growing competition, most banks can no longer consider asset allocation their core differentiator,” states Donnie Ethier, associate director at Cerulli. “Delivering comprehensive goals-based planning that includes the softer nonfinancial elements of wealth is more important than ever.”
The research focuses on investors, asset managers, and banks. Particular attention is given to best-practice banks that have centralized the investment decision-making process across all of their wealth management platforms, including broker/dealer, trust department, RIA, and family office.
“Banks have unique characteristics that most other channels cannot fully replicate,” Ethier continues. “Such as the ability to be an all-in-one provider for any household. Banks that are not promoting their full offering are doing their firm and their clients a disservice.”
“The channel’s most promising trends include: client-centric advisory models, integrating wealth management platforms, consolidating research teams and portfolio construction processes, and centralizing fee discounting decisions,” Ethier explains.
The work finds that asset allocation is no longer a main distinguisher, which is only being validated more by the increase in direct-to-consumer providers and the electronic registered advisors (eRIAs)/robo-advisors. Delivering holistic goals-based planning that can incorporate the softer nonfinancial aspects of wealth is more important than ever for banks to differentiate themselves from the low-cost investments provided by the eRIAs.
Asoka Wöhrmann es el Chief Investment Officer de Deutsche Asset & Wealth Management hasta que asuma sus nuevos roles el próximo 1 de diciembre.. El CIO de Deutsche AWM Asoka Wöhrmann y Stefan Bender, nuevos responsables de Banca Comercial y Privada en Deutsche Bank
As part of the realignment of retail and commercial banking operations in Germany, Asoka Wöhrmann (50) and Stefan Bender (46) will be the new heads of Deutsche Bank’s Private and Commercial Banking in Germany. They have been appointed to succeed Peter Schedl and Wilhelm von Haller, who resigned from their offices effective September 30, 2015. Stefan Bender will assume his new role over the course of October, and Asoka Wöhrmann as of December 1, 2015.
In their new functions, Wöhrmann and Bender will take on responsibility for Deutsche Bank’s more than eight million private, commercial and corporate clients in Germany.
Within the Private and Commercial Banking management team, Asoka Wöhrmann will be head of retail banking and Stefan Bender will be head of commercial banking. They will both report to Christian Sewing, member of the Management Board of Deutsche Bank and Head of its Private & Business Clients (PBC) Corporate Division.
Regarding the new appointments, Christian Sewing said: “In Asoka Wöhrmann and Stefan Bender, we have gained two renowned and successful managers from within our own Bank for the realignment of our domestic Private and Commercial Banking business. This realignment will involve significantly strengthening our advisory banking business with private clients, further expanding our business with small and medium-sized enterprises, Germany’s ‘Mittelstand’, and closely networking our branches with our rapidly growing digital banking service.”
Both of them have worked for Deutsche Bank for many years: Wöhrmann joined Deutsche Bank in 1998 and has most recently been Chief Investment Officer in Deutsche Asset & Wealth Management.
Stefan Bender has been with Deutsche Bank since 1997. Until he takes up his new functions, Bender is Head of Global Transaction Banking in Germany (GTB, Trade Finance and Payments) and Co- Head of Corporate Finance in Germany. In his new role, Bender will remain head of Global Transaction Banking in Germany and will continue building on GTB’s strong ties with commercial banking.
Maria Elena Lagomasino, CEO y MP de WE Family Offices, es ahora consejera independiente de The Walt Disney Company. Foto: We Family Offices. Maria Elena Lagomasino: elegida consejera independiente de The Walt Disney Company
The Walt Disney Company Board of Directors has elected Maria Elena Lagomasino, the CEO and Managing Partner of financial advisory firm WE Family Offices,as an independent director, effective Dec. 1.
“Ms. Lagomasino is a respected leader in the finance and investment field and also has a wealth of experience with, and keen understanding of, global consumer brands,” said Robert A. Iger, Disney’s chairman and chief executive officer. “I know the Company and its shareholders will benefit greatly from her Board service.”
“Disney is a brand that embodies the values I believe in, with its unwavering commitment to creating high-quality entertainment, exceeding consumer expectations, and delivering outstanding financial performance for its shareholders,” Ms. Lagomasino said. “I am honored to have the opportunity to serve on the Board of such an iconic and beloved company.”
Ms. Lagomasino will stand for election along with the company’s other directors at Disney’s annual meeting next March.
Before founding WE Family Offices, Ms. Lagomasino served as CEO of GenSpring Family Offices, a leading wealth management firm. Prior to that she served as chairman and chief executive officer of JP Morgan Private Bank. Her career began in 1977 at Citibank. She joined Chase Manhattan Private Bank in 1983 and was named head of Chase’s worldwide private banking business in 1997. Following the Chase-JP Morgan merger, she became chairman and CEO of JP Morgan Private Bank.
Ms. Lagomasino is a founder of the Institute for the Fiduciary Standard, and serves on the boards of The Coca-Cola Company, Avon Products, Inc., and the Americas Society. She is also a member of the Council on Foreign Relations.
In August 2015, Private AssetManagement named Ms. Lagomasino one of the 50 most influential women in Wealth Management. American Banker named her one of 2012’s Top 25 Women in Finance. Hispanic Business Magazine namedher “Woman of the Year” in 2007.
Ms. Lagomasino earned her B.A. at Manhattanville College, an M.S. at Columbia University and an M.B.A. at Fordham University.
In order to gain from a major technological and social shift that is still under-exploited by investors despite its strong value creation credentials, Edmond de Rothschild Asset Management, a pioneer in investment themes like healthcare – EdR Fund Global Healthcare has just celebrated its 30th birthday- is launching Edmond de Rothschild Fund Global Data.
The fund takes a stock-picking approach across all capitalization sizes and geographical zones, investing in growth stocks which have only limited exposure to global economic conditions.
Jacques-Aurélien Marcireau, the fund manager, has isolated several different but complementary stock profiles. Some companies (infrastructure) collect data and sell them to clients; others (analytics) develop software which analyses data while the third category concerns data users, or non-tech companies which have already integrated big data into their main business so as to achieve competitive edge.
The fund is a balanced blend of core holdings (51% minimum) in established big data players and companies which are capable of using big data to transform their business model. To mark the launch of EdR Fund Global Data, the international equity team has just been reinforced with the arrival of Nan Zhang, a junior fund manager and analyst.
A New Value-Creating Investment Opportunity
The arrival of big data is ushering in major social changes and forcing companies to adapt their strategy. The concept emerged at the beginning of the decade and covers two key areas: technological innovation to facilitate data storage but also, and perhaps more importantly, new developments tied to the rapid increase in connected objects which are bringing billions of people together.Huge sections of the economy are concerned by a development which seeks to turn data into a key decision-making tool, thereby creating value for companies.
Harnessing exponential flows of data (Volume) from different sources (Variety) which are most often cross-referenced in real time (Velocity) allows companies to better understand their markets, boost organisational efficiency and generate robust revenues. The financial gains from such large-scale analysis based on the 3V concept could run into billions of US dollars in coming years.Economic players will benefit from as yet largely untapped growth from digital data reckoned to hit 35,000 exabytes in 2020, or twenty times more than in 2010. According to the International Data Corporation (IDC), only 0.5 % of global data is currently being analysed.
Giants like IBM, Cisco and Microsoft as well as start-ups have big ambitions in data analysis which they see as a value-creating tool.A good number of sectors like insurance or autos are making huge efforts to collect as much data on customer behaviour as possible to optimise risk analysis and identify new markets. Growing use of big data should also radically transform the healthcare sector with the emergence of personalised medicine. Companies, governments and entire cities will see real benefits from this development. Estimates suggest that the smart city market, for example, will be worth USD 100 bn by 2030.
Catalonia is voting to renew its parliament this Sunday. Contrary to other regions, attention was not focused on emerging parties like Podemos and Ciudadanos but completely monopolized by the independence question. Debates have mostly opposed the pro-independence list “Together for Yes”, led by current President Artur Mas, to the rest of parties that defend the unity of Spain. “We expect the current uncertainty to ease in the medium term, in particular after the general elections of December, since the next central government should take note of the Catalan elections and start negotiations for additional political and fiscal autonomy”, explains Jean-Alexandre Vaglio, member of the Research team at AXA IM.
The Catalan political landscape is facing an almost unprecedented situation. The ruling Convergence and Union (CiU), that federated the Democratic Convergence of Catalonia (CDC) and the Democratic Union of Catalonia (UDC) since the first post-Franco elections, was dissolved due to diverging opinions regarding the Catalan independence process. Artur Mas, President of Catalonia and leader of the CDC, is now running the pro-independence joint list “Junts pel Si” (JS, Together for Yes) that gathers the centrist CDC and the Republican Left of Catalonia (ERC). In addition to this move, Mas directly called for a plebiscitary vote to turn this regional election into the referendum he wanted last year and that he had rebranded in a “participation process”, to abide by the Spanish Constitution.
As yet, polls suggest that JS will not be able to get the absolute majority, even though it is leading polls and that the Catalan system favours more than proportionally the party that ends up with the most votes. The Popular Unity Candidacy (CUP), an emerging extreme-left party, chose not to ally with JS but might support it just for the sake of the unilateral independence declaration, such that latest polls found JS-CUP might get a short absolute majority (set at 68 seats). Parties opposed to independence, Popular’s Party (PP), Spanish Socialist Workers’ Party (PSOE) and Ciudadanos gather roughly the same votes than three years ago, though the breakdown is different, to the advantage of Ciudadanos and mostly at the expense of PSOE. Lastly, Podemos joined ecologists to form Catalunya Si que es Pot (“Catalonia Yes we can”), with a moderate stance as regards independence, not supporting it but letting voters decide through a referendum. However, to the contrary of what happened in Barcelona, Podemos does not seem to get much traction, since this joint list currently polls at 13-14%, while its allies already got 10% in the 2012 elections.
“Overall, such reshuffle of parties casts some shadow on the final output of these elections which look like a very close call, in a very fragmented context.
As for last year’s “participation process”, debates have experienced a significant escalation, with strong stances adopted by opposing parties in the run-up to elections. Hence, if the situation is to remain volatile in the short term, it may ease and stabilize in the medium term once negotiations are engaged with the central government, probably about additional political and fiscal autonomy. The stability of the forthcoming government will also be questioned as electoral themes outside independence were neglected while they can differ very significantly between the parties that have similar positions on independence, in particular for JS and CUP, which would find very difficult to coordinate and rule Catalonia together”.
Old Mutual Global Investors announced that the Old Mutual Absolute Return Government Bond Fund, which is a UCITs fund, and the Old Mutual Liquid Macro Fund, which is a Qualifying Investor Alternative Investment Fund (QIAIF), will be launched on 7 October 2015, with US$ 150 million of seed capital from Old Mutual plc.
The funds will be managed by Russ Oxley and his team, who joined Old Mutual Global Investors from Ignis Asset Management earlier this year. Russ Oxley, the lead manager, and co-managers Adam Purzitsky and Paul Shanta, will be supported in their portfolio management and trading by Huw Davies and Jin Wong, and in systems development by Josh Heming.
“This is a very exciting development for our company as a lot of work has been undertaken to prepare for the launch of this range. We have had a lot of interest from investors as Russ and his team are highly respected, having one of the best track records of managing absolute return government bond funds in our industry. We are therefore confident that demand will be strong from our global client base”, said Warren Tonkinson, managing director of Old Mutual Global Inverstors.
The objective of the funds is to seek to deliver positive total returns on a rolling 12-month basis with stable levels of volatility uncorrelated to bond and equity market conditions. The Old Mutual Absolute Return Government Bond Fund will be managed to a volatility target of 4%-6%, with expected annualized returns of cash plus 5%. The Old Mutual Liquid Macro Fund, which will also offer investors daily liquidity, will be managed to a volatility target of 7%-9%, with expected annualized returns of cash plus 8%. The funds aim to be diversified from global fixed income markets by employing a highly distinctive investment strategy focused on expressing views on macro themes through exposure to forward interest rates, inflation expectations and foreign exchange.
The low correlation with global bond markets is likely to be appealing at a time when the traditional safe-haven role of government bond markets is increasingly questionable. Due to the distinctive process and avoidance of credit and credit-like assets, and of emerging market debt the Fund is also expected to exhibit low correlation with other absolute return investment strategies (including global macro hedge funds, fixed income, equity and multi-asset based strategies), making it a potentially attractive addition to a portfolio. The portfolio managers will place a strong emphasis on investing in highly liquid assets, in which the market has historically remained liquid, even in the most extreme periods, including for example the global financial crisis.
“We are delighted that Old Mutual will be supporting the strategy with US$ 150 million of seed capital at launch. This demonstrates the belief we have in the strategy and our commitment, to both these Funds, and to the development of the Alternatives business within Old Mutual Global Investors. We have successfully delivered uncorrelated returns in our highly liquid Global Equity Market Neutral strategy, which now has over US$ 4.5 billion in client assets under management, and we hope for similar investor support for this highly liquid, uncorrelated, strategy”, commented Donald Pepper, managing director of Alternatives.
“Our investment philosophy hinges on the belief that, through a detailed understanding of forward interest rates, it is possible to express views on global macro trends in a very precise way. Through our approach to investing, we are able to target specific risks and opportunities, without “inadvertently” taking economic exposures to those risks we would rather avoid. At the core of our approach is the understanding that forward rates are influenced by very different factors depending on their location on the curve. We believe we have the potential to deliver positive returns for investors within clearly defined volatility parameters irrespective of the direction of interest rates. Our investment track record of successfully managing these strategies is clear evidence that our process if very effective”, commented Adam Purzitsky, co-manager of the fund.
Paul Shanta, co-manager of the fund, also added: “We have developed a unique investment strategy over a period of many years and a product that we think plays a valuable role in our clients’ wider portfolio. Joining Old Mutual Global Investors has given us the opportunity to further enhance our processes and technology and to prepare a bespoke platform for the launch of our new funds. We are excited about being part of an organization that shares our ambition and now look forward to working with investors.”
Foto: Giuseppe Milo
. Morningstar 2015 ETF Conference: soluciones estratégicas, tácticas o de gestor, a discusión
Morningstar has announced the speakers and agenda for its sixth annual ETF Conference, Sept. 29-Oct. 1 at the Sheraton Chicago Hotel and Towers. The conference features experts from across the exchange-traded fund (ETF) industry including Morningstar analysts, who will provide in-depth knowledge and perspective for financial advisors.
“With more than $2 trillion in assets under management in the growing U.S. ETF industry, investors and their advisors face myriad options when it comes to ETF investing,” Ben Johnson, CFA, Morningstar’s director of global ETF research, said. “Our sixth annual ETF Conference will gather industry experts to discuss and debate three key areas of ETF investing—strategy, tactics, and managed-portfolio solutions—to help investors achieve better outcomes.”
Joe Davis, Vanguard principal and chief economist, will deliver the keynote opening address on Tuesday, Sept. 29. Charles Ellis, founder of Greenwich Associates and author of Winning the Loser’s Game and Falling Short: The Coming Retirement Crisis and What to Do about It, will give the keynote luncheon address on Wednesday, Sept. 30.
General session speakers on Wednesday, Sept. 30, are Andrea Frazzini, Ph.D., AQR; Jason Hsu, Research Affiliates; and Mark Kiesel, PIMCO. Jim Crowley, Pershing; and Jon Stein, Betterment, will address attendees on Thursday, Oct. 1.
The popular “Meet the Pundits” panel will close the conference on Oct. 1. Morningstar’s Johnson, ETF.com’s Matt Hougan, and ETF Trends’ Tom Lydon will engage in a no-holds-barred discussion of the latest trends in the ETF industry, moderated by author and journalist John Wasik.
The conference offers 15 breakout sessions focusing on strategic, tactical, and managed-portfolio solutions. Speakers from BlackRock/iShares, Eaton Vance, Envestnet, Fidelity, Invesco PowerShares, J.P. Morgan, MSCI, Windham, and WisdomTree, among other firms, will cover an array of timely topics, including:
Strategic beta abroad;
Currency-hedged ETFs;
The active/passive debate and the future of active ETFs;
Tactical asset allocation;
Accessing alternative strategies and niche markets through ETFs; and
Managing interest-rate risk and the role of fixed income.
Morningstar will offer two preconference workshops from 1-4 p.m. on Sept. 29. Attendees will be able to choose one of two workshop tracks. The first workshop, “The ABCs of ETFs,” will cover the evolution of ETFs as an investment vehicle and provide a practical review of ETFs by asset class, along with their benefits and limitations. The other workshop, “An Overview of the Trends Shaping the ETF Market,” will offer Morningstar analysts’ insights on key topics including strategic beta, active ETFs, and the opening up of onshore Chinese stock markets.
To register for the conference, please follow this link
