Foto: Thomas Rousing
. Pemex y First Reserve firman un memorándum de colaboración de 1.000 millones de dólares
Petroleos Mexicanos (“Pemex”) and First Reserve, the largest global private equity and infrastructure investment firmexclusively focused on energy, announced a US$1 billion agreement to mutually invest in energy infrastructure for Mexico.
The two organizations recently announced the first of such investments – the Los Ramones pipelines – which are expected to consist of 744 kilometers of natural gas pipelines, creating an essential energy connection for Mexico. Construction of the projects has already begun, with full commercial operations expected in mid-2016. Additional projects the two companies are pursuing include other large-scale essential infrastructure opportunities across the energy value chain.
The joint venture represents a significant milestone for both parties towards continuing to invest in energy infrastructure projects in Mexico and a statement of foreign confidence in the Mexican energy industry. With this landmark partnership established, Pemex and First Reserve plan to invest capital in energy infrastructure projects throughout Mexico, combining the financing, structuring and industrial and operational experience needed to bring these critical projects to fruition. These investments are expected to enhance the country’s energy profile, lowering electricity prices and supporting Mexican industry.
William Macaulay, Chairman and Co-CEO of First Reserve, commented, “As global investors, First Reserve is excited to be expanding our existing portfolio in Mexico, where we have believed there to be attractive investment opportunities for some time. Through formal collaboration with Pemex, we feel we have gained substantial access to a region with strong supportive macro dynamics alongside a motivated and accomplished partner. First Reserve looks forward to mutually exploring multiple investment opportunities throughout the country’s vast energy value chain on behalf of our investors and the country of Mexico.”
When liquidity in a market dries up, it can contribute to financial disruptions such as the Flash Crash of 2010, when the Dow Jones dropped almost 1,000 points in a matter of minutes.
Traditional thinking has been that natural market forces create enough liquidity to keep markets moving, but an interesting tactic some European companies use caught the attention of Dr. Hendrik Bessembinder, an A. Blaine Huntsman Chaired Presidential Professor in the David Eccles School of Business Finance Department at the University of Utah.
In some European countries, companies will hire what’s called a Designated Market Maker to improve liquidity. Bessembinder detailed his findings in the paper he co-wrote, “Market Making Contracts, Firm Value, and the IPO Decision,” which has been accepted for publication in the Journal of Finance.
“We sat down to do some mathematical modeling of the economics of these markets, and found that indeed there is reason to think that competitive market forces don’t provide as much liquidity as the markets actually need and could benefit from,” Bessembinder said. “In other words, a contract where somebody is hired to improve liquidity can make sense and improve a company’s value by more than what the designated market makers need to be paid.”
Congress is working to improve liquidity through a pilot program that will increase the tick size of certain small stocks from a penny to a nickel to see if that will increase liquidity. The goal of the pilot program is to encourage IPOs.
“Our model and our study actually lead us to be skeptical that this will be an effective mechanism for enhancing IPOs. In fact, our model says that a designated market contract which is intended to decrease the bid-ask spread can enhance IPOs by improving liquidity and encouraging investors to pay more for shares in an IPO,” Bessembinder said. “The U.S. Securities and Exchange Commission is going to implement the pilot program where they widen the bid-ask spread. So, it will be of great interest to see if this in fact improves the liquidity of the stocks.”
Bessembinder thinks DMMs could work in U.S. stock markets, but FINRA Rule 5250 expressly prohibits the use of DMMs.
“We actually think that the situation would be improved if the FINRA rule would be repealed to allow firms to have designated market makers in order to improve liquidity,” Bessembinder said.
Uncertainty about the timing of a U.S. Federal Reserve rate hike continues to intensify. But, warns a leading global analyst at one of the world’s largest financial advisory organizations, investors should start preparing now for when the inevitable rise comes – and there are three key approaches to consider.
The warning from Tom Elliott, International Investment Strategist at deVere Group, follows Minneapolis Fed PresidentNarayana Kocherlakotaon Tuesday setting out his case for waiting until the second half of 2016 to start raising interest rates. This is contrary to the opinion of most Fed Policymakers, including the Fed Chair Janet Yellen, who believes that rates will need to start rising this year.
Mr Elliott explains: “Currently, the situation regarding when the Fed might move away from its zero rates policy of the last six years, is as clear as mud. However, when, finally, the Fed does start to raise interest rates the impact on capital markets could be severe. Therefore, investors who are, understandably, uncertain, should start preparing for this. I would advise investors to consider three steps.”
He continues: “First,find a multi-asset benchmark that you trust will deliver solid risk-adjusted returns throughout the business cycle. It maybe a 60 per cent global equity, 40 per cent global fixed income portfolio or a variation of that. Having such a benchmark should be a part of your long-term investment strategy.”
“Second,refuse to take active positions in what looks like a difficult investment environment. Hog the benchmark. Sitting on the fence is better than being caught on the wrong side of a central bank decision. Rebalance quarterly, forcing yourself to cash in winners and to buy losers. This discipline will protect you from rash decision making during periods of market volatility.
“Third, wait until the Fed has begun tightening monetary policy before returning to active bets.”
Mr Elliott adds: “Finally, if the need to take active positions is too strong to resist, I do think that Europe, excluding the UK, and Japan will continue to outperform. Europe, because of improved economic growth and the weak euro; and Japan because of rapidly improving corporate governance that is resulting in dividend and return on equity growth. It could be worth considering balancing this position with an underweight in U.S. large cap and emerging equities.”
CC-BY-SA-2.0, FlickrFoto: Moyan Brenn. Amanda Augustine se incorpora al equipo de análisis de BBVA Compass
Amanda Augustine has joined the BBVA Compass economic research team, led by the chief economist Nathaniel Karp. The bank’s six-member research team analyzes the U.S.economy and Federal Reserve monetary policy. The economic research team also follows a variety of issues that affect the Sunbelt states where BBVA Compass operates.
Before joining the bank, Augustine worked as a project manager at consulting firm American World Services Corp. in Washington, D.C., focusing on the health care sector.
“We are pleased to have Amanda join us as her expertise on health care will add depth on a topic that’s so important to our economy,” said Nathaniel Karp, chief economist for BBVA Compass.
Augustine earned her MBA from the IESE Business School in Barcelona, Spain, and a bachelor’s degree in business administration and Spanish from American University in Washington, D.C.
Carlos Fuenmayor - Foto cedida. BancTrust abre mesa de trading en Reino Unido
BancTrust has annunced that its London-based subsidiary, BancTrust Securities (Europe), has received a Variation of Permissions notice from the Financial Conduct Authority to enable it to commence secondary trading. The firm will now be dealing as principal for Asset Managers and Financial Institutions mainly based in Europe and the Middle East interested in investing in Emerging Markets Fixed Income.
Carlos Fuenmayor, CEO of BancTrust & Co., stated: “I’m honored to say that our London office has now been granted permission to operate its trading desk and offer true market color as well as execution. Our specialists in Emerging Markets provide unequaled coverage as well as exceptional investment opportunities.”
Foto: Kevin Doyle. Mercer Appoints David Anderson President of Growth Markets
Mercer, a global consulting leader in advancing health, wealth and careers, and a wholly owned subsidiary of Marsh & McLennan Companies (NYSE:MMC), today announced the appointment of David Anderson to President, Growth Markets region including Latin America, Asia, Middle East and Africa. He will report to President and Chief Executive Officer, Julio A. Portalatin, and will relocate to New York. Previously Anderson was Managing Director and Market Leader for Mercer in the Pacific region based in Sydney, Australia.
“Our Growth Markets region is a strategic driver as increased global growth comes from these economically important countries,” said Mr. Portalatin. “Mercer’s capability to meet the needs of local, regional and multinational clients is a key element of our value. David brings proven expertise in leveraging marketplace shifts that impact our clients and their employees — such as increased individual accountability in investments, retirement and health care decisions – and that leadership helps us create sustainable business advantage.”
“This opportunity comes at a critical time when we can learn from the innovation in emerging markets across the globe,” said Mr. Anderson. “The ability to bring the depth of our local and regional insights to our powerful global reach allows us to create better health, wealth and careers for individuals as well as the organizations they power.”
Mr. Anderson has more than 25 years of experience working in the financial services and insurance industries in Australia, New Zealand, the South Pacific, Asia and Africa. He has advised multinational companies and governments on investment and retirement savings strategies and has been with Mercer since 1998. Mr. Anderson will continue to hold a directorship role with Alexander Forbes in South Africa, of which Mercer became a key strategic shareholder in 2014.
Ben Walsh will move into the Managing Director and Pacific Market Leader role for Mercer. Mr. Walsh currently leads Mercer’s financial services business in Australia and New Zealand and has more than 20 years of experience at Mercer/MMC providing superannuation investment, administration, insurance and member services to more than 1.2 million customers leading a team of nearly 1,400 colleagues.
Mr. Anderson succeeds Gaurav D. Garg who is pursuing other interests outside of Mercer. Mr. Walsh will remain in Melbourne and report to Simon O’Regan, President of Mercer’s EuroPac region which includes Europe, Australia and New Zealand. Both appointments are effective immediately.
Photo: Diego Torres Silvestre. Paulo Sampaio Named Head of Latin America Southern Cone for S&P DJI
In support of its role as a leading index provider in Latin America, S&P Dow Jones Indices has today announced that it has named Paulo Sampaio as head of Latin American Southern Cone. Mr. Sampaio will be based out of S&P DJI’s newly opened office in Sao Paulo, Brazil.
Over the past six months, S&P DJI has announced several landmark exchange relationships within the Southern Cone of Latin America – in particular with the BM&FBOVESPA – that have led to the development of a wide range of new and representative benchmarks, as well as greater index based investment solutions for investors inside and out of Latin America. Mr. Sampaio will primarily focus on advancing S&P DJI’s business in the region and strengthening its local, strategic relationships.
Mr. Sampaio has over 22 years of experience (15 as Managing Director) leading one of Brazil’s largest financial associations, ANDIMA (National Association of Financial Institutions). Here he focused on developing ANDIMA’s strategic direction within Brazil as well as its product development. Mr. Sampaio comes to S&P DJI with significant experience managing institutional relationships, particularly at the government level. He began his career as an Economic Research Manager in 1989, and has a B.A. in Economic Sciences from Catholic Pontifícil University of Rio de Janeiro.
“We are very excited to bring someone with such a high level of industry expertise and proven success to the S&P DJI Latin America team,” says Antonio De Azpiazu, Head of Latin America for S&P DJI. “Paulo comes to our organization with a myriad of skills, particularly at the institutional level, that will allow S&P DJI to not only further its existing strategic exchange relationships within the Southern Cone of Latin America, but allow it to bring its world-class indexing capabilities to more investors and markets within South America.”
Coupling the appointment of Mr. Sampaio as head of Latin America Southern Cone with last year’s selection of Mexico-based Manuel Gonzalez as head of Latin America North Cone, S&P DJI now has complete Latin America coverage. Both Messrs. Sampaio and Gonzalez report into Antonio De Azpiazu, Head of Latin America for S&P DJI.
The Dreyfus Corporation, the mutual fund arm of BNY Mellon Investment Management, and CenterSquare Investment Management have launched the Dreyfus Global Infrastructure Fund which provides individual investors with the opportunity to invest in the growth potential of infrastructure assets that connect people, resources, trade, goods and services and information around the world.
With developed nations looking to improve or replace aging infrastructure assets, and many emerging markets countries building out their infrastructure to grow their economies, the World Economic Forum estimates that $100 trillion will be invested in global infrastructure between 2010 and 2031. Traditionally, most infrastructure projects have been financed by the public sector. However, with public debt historically high versus GDP, more private capital will be required to fund future investment, giving investors increasing opportunities to benefit from an infrastructure allocation in their portfolios.
CenterSquare Investment Management, the sub-adviser for the fund, is a BNY Mellon Investment Management boutique specializing in real asset investing. CenterSquare cites a number of factors driving the need for infrastructure investment globally, including new sources of renewable energy, the discovery and utilization of new oil and gas deposits, and technological advances in communications, among others. Underpinning the demand for these assets is a growing and increasingly urban population and an expanding middle class, adding more consumers and increasing world trade.
Todd Briddell, chief executive officer and chief investment officer for CenterSquare, said, “We expect that there will be tremendous global demand for infrastructure assets over the next few decades. Companies that build and operate infrastructure assets are likely to see a significant benefit from the economic and secular trends to rehabilitate aging infrastructure and create new infrastructure to meet growing demand. As a result, listed infrastructure companies will increasingly take on a more significant role in the development and ownership of these assets.”
Briddell added, “Our investment focus will be on companies managing real assets with strong cash flow visibility, low direct commodity exposure, long duration contracts, and a steady long-term demand outlook. The Dreyfus Global Infrastructure Fund will give investors exposure to this dynamic and expanding sector, while seeking to provide a growth alternative which may complement other equity asset classes.”
Managing an infrastructure strategy is a natural extension of CenterSquare’s expertise in listed real estate and real assets, said Briddell, who added, “As in listed real estate, the return and risk characteristics of global infrastructure securities are based on the underlying real assets.”
The launch of the Dreyfus Global Infrastructure Fund follows the December 2014 launch of CenterSquare’s infrastructure strategy for institutional investors.
The primary portfolio managers for the fund are Maneesh Chhabria, who was instrumental in the development of CenterSquare’s global real estate investment trust (REIT) platform in 2006, and Joshua B. Kohn, a real assets investment specialist with more than 13 years of investment experience.
Photo: Ricardo Mogrovejo. Ricardo Mogrovejo Is the New Head of Alternative Investments at HMC ITAJUBA
Following his departure from AFP Capital, the pension fund management firm from Grupo SURA in Chile a few months ago, economist and MBA Ricardo Mogrovejo has now joined HMC ITAJUBA, a Latin America financial services and advisory firm born in a partnership between HMC and Itajuba.
Mogrovejo, as CIO of AFP Capital, led the team responsible for the pension funds with 37 Billion USD of assets under management.
Partner Ricardo Morales told that the choice of Mogrovejo has to do with his knowledge and experience on fund management and portfolio construction. “The key to success is selecting the best managers but also those that are willing to commit time and resources to the region. We have a regional approach and we have learn that to have a leadership position we need to attract the best talent, we need to understand that each country is constantly developing new trends and developments and that each client segment requires different type of information. HMC ITAJUBA has developed long term relations with the institutional market on the region, and we reinforce this commitment by the recruitment of Mogrovejo, who will help us to bring the best alternative products to our clients and to develop a business strategy for them adapted to each country.”
Partner Leonardo Camozzato adds “Mogrovejo will add significant experience to our platform and we are proud to attract the second former CIO of a large Pension Fund in the region in the last 24 months. The first one was Daniel Dancourt, previously CIO of Integra in Peru. Together, they managed approximately USD 50 bn of AUM, roughly 50% in Latam assets and 50% in international instruments, including alternative investments”.
Ricardo Mogrovejo will start in April, 2015 and be based at HMC ITAJUBA office in Santiago, Chile.
Foto: daliphoto
. Mercado inmobiliario español: explosión, suelo y futuro
Under the title Spanish Real Estate: Burst, Bottom and Future, a session on Spanish Real Estate has been organized by Arcano USA at Columbia University (NY) on April 14th, 2015 at 7 p.m.
The panelist include: Sonny Kalsi, Founder and Partner at GreenOak Real Estate; José María de Arcas, Managing Partner at Alpha Moonlight; Ignacio Iturriaga, Founding Partner at IREA and Guillermo Fernández, Real Estate Director at AXIARE. Mónica Vidal, Managing Director at Arcano Group will moderate the round table.
If there has been one market that has captured real estate investors’ imagination more than any other in 2014 it has been Spain. As big capital continues to pour into the country, the session wants to help investors to find the value opportunities in 2015.
The Master of Science in Real Estate Development at Columbia University in the City of New York will hold this monographic session on Spanish Real Estate Investment. The event will go into how Spain got to a real estate collapse like the one lived in 2008, why it bottomed and where it is now. The panelists will discuss about their experiences investing and advising on recent transactions with the new institutional stakeholders: SAREB, SOCIMIs and foreign private equity funds.
