Ana Patricia Botín. . Ana Botín toma las riendas del Banco Santander tras la muerte de su padre
The board of directors of Banco Santander unanimously agreed to appoint Ana Botín as its chair. The appointment was made at the proposal of the appointments and remuneration committee, which held a meeting this morning.
Fernando de Asúa, 1st vice chairman of Banco Santander and chairman of the appointments and remuneration committee, expressed “the deep sorrow for the loss of chairman” and said: “Emilio Botín was extremely important for the bank, leading its extraordinary transformation, turning it into the leading bank in the Euro zone and one of the most relevant in the world, and for Spain.” His words were supported by all of the board’s members.
The appointments and remuneration committee considered Ana Botín is “the most appropriate person, given her personal and professional qualities, experience, track record in the Group and her unanimous recognition both in Spain and internationally.”
After the board’s meeting, Ana Botín said: “In these difficult times for me and my family, I appreciate the trust of the board of directors and I am fully committed to my new responsibilities. I have been working at Grupo Santander in different countries and with different responsibilities for many years and I have experienced the professionalism and dedication of our teams. We’ll continue to dedicate all our efforts with total determination to keep building a better bank for our customers, employees and shareholders.”
Along with supervising and regulating financial markets, governments function as the world’s largest and most interconnected financial institutions. They play a critical role in the allocation of capital and risk in society, yet little research has focused on government financial institutions or on providing solutions to the challenges they face. And while private-sector financial institutions have benefited from decades of transformational innovations in financial theory and practice, public-sector financial thinking and education often have not kept pace.
To help bridge this knowledge gap, MIT is launching the new Center for Finance and Policy (CFP). Under the aegis of MIT Sloan’s finance group, the cross-disciplinary center will be a catalyst for innovative research and policy analysis, and an incubator for new educational initiatives. The aim is to provide support for current and future policymakers and practitioners that will ultimately lead to improved decision-making, greater transparency, and better financial policies.
“The CFP will be an excellent strategic partner for key institutions in both the public and private sectors. MIT has the substantial intellectual leadership in finance, economics, political science and engineering that is needed to address important policy issues that cut across disciplines,” says MIT Sloan Dean David Schmittlein.
MIT Sloan Prof. Andrew Lo notes, “The CFP is an exciting initiative that takes the MIT Sloan finance tradition into the policy realm, not to advocate for one policy or another, but to offer unbiased, nonpartisan, rigorous analysis of major policy issues using the most relevant financial models and methods. By informing policymakers, regulators and other stakeholders of the financial consequences of each policy option, we believe that better decisions will be made and with fewer unintended consequences.”
MIT Sloan Prof. Robert Merton, a Nobel laureate, adds, “The need for rigorous financial analysis of public policy has never been greater, and MIT is ideally positioned to take on this important task.”
CFP Director and MIT Sloan Prof. Deborah Lucas notes that the center seeks to encourage more top researchers and their students to focus on these critical issues. She adds, “People working in the public sector have traditionally faced barriers to obtaining high-level financial education due to the cost and lack of a developed curriculum. We’re planning to use MIT edX to develop and offer material that will reach a broad audience free of charge, as well as executive education programs and short courses targeted at public sector practitioners and policymakers.”
An inaugural conference will be held Sept. 12-13 to launch the CFP and highlight its main research areas. The conference will feature six paper sessions, three panel discussions, and a keynote address. Over 100 participants are expected to attend, including policymakers, practitioners, and academics. The event will be available afterwards online. For more information on the conference, please visit this link. In addition to conferences, the CFP plans to disseminate knowledge through its website, policy briefs, a visiting scholars program, and other initiatives.
“I believe that the CFP’s research and educational initiatives will significantly move the needle on how policymakers think about their role as financial decision-makers and regulators, and ultimately have transformative effects on the quality and conduct of financial policies,” says Lucas.
CC-BY-SA-2.0, FlickrDaniel Rubio, cofundador de Capital Strategies. Deuda de mercados frontera, micro-finanzas y retorno absoluto, activos en el radar de Capital Strategies
Back in 2000 in Madrid, Credit Suisse’s Daniel Rubio and Gregory Ratliff had an idea. At the peak of the financial services industry fortune, they decided to found a company that would act as a deal breaker on behalf of asset management companies who wanted to increase or build from scratch their presence in a new market.
The company was called Capital Strategies Partners and set two main objectives to itself: to represent asset management companies in new markets and to take care of fund distribution through private banks and intermediaries. In 2008, the company registered as an asset management company on the Comision Nacional del Mercado de Valores (CNMV) and was regulated according to the Mifid legislation.
At first, the aim of the company was to give exposure to the Iberian market to some small but valuable boutiques that didn’t have a presence there. Today, it has some €4bn AUM mainly in Southern Europe and Latin America and has spread its presence globally from Spain to Portugal, Italy, Germany, Switzerland, Peru’, Colombia, Brazil and Chile.
Riccardo Milan (pictured), one of the member of the management committee, who is currently in charge of the Lugano’s office, in an interview to InvestmentEurope describes the business as similar to that of a capital introducer in the UK. “However, I’d say what we do is not entirely the same. Our business model is a ‘warmer’ type compared to a ‘cooler’ approach in the UK, which suits southern countries better”.
“For this reason, we continue to work closely with investors once we have introduced them in the new market, therefore I’d say that we are more similar to a third party marketer,” he says.
To explain his job better, Milan says that he sees no substantial difference between what he does and what a salesman from any other asset management companies does internally, if not that he remains with the managers and that he is paid on the basis of business success. “It’s also worth highlighting that, unlike for a salesman from any other big fund house, asset turnover is detrimental to my job,” he adds.
As Milan also explains, Capital Strategies has several boutique each of them specialized in single asset classes, which get selected on the back of a screening analysis that tries to identify the ones that are most likely to deliver best returns in the following three to five years with lowest risk in terms of volatility and maximum drawdown.
Frontier fixed income on the radar
In the search for valuable asset classes, Capital Strategies aims at covering those niche ones that have not filled competitors’ portfolios yet. While the whole fixed income space, mainly meant as credit, is covered, Milan says that the next growth for CSP will be in frontier fixed income, asset class they actually cover through the Danish boutique Global Evolution.
Milan also explains that Capital Strategies Partners does not take any retain fees from the companies they are working with and they work exclusively on a success fee basis avoiding any conflict of interest.
Looking at the client basis, Capital Strategies has so far exclusively worked with institutional clients (both wholesale and pure institutional) and only in the last 12 to 18 months they have been looking to enter the retail distribution business predominantly in Iberia and Italy.
Of the whole institutional side, in Europe 25% of the clients are pure institutional and 75% in wholesale space. While Southern Europe is the most profitable area to date for the business, LatAm (headed by Nicolas Lasarte who joined as third partner in 2005) is an increasingly important region for the company, especially within the pension fund business. With an office in Lima, Capital Strategies focus in pure institutional markets in Peru, Chile, Colombia and Brazil.
Looking ahead to the future, Milan says that, apart from frontier fixed income, micro-finance and absolute return are on Capital Strategies’ top list. “Micro-finance is currently quite attractive to us, as in general we are on the hunt for very low correlation and stable interesting return,” he explains.
Besides that, Milan says that Capital Strategies is always open to evaluate new fund managers as long as they add value to its current offer. “We don’t want to be a fund supermarket,” he concludes.
This interview was published originally by InvestmentEurope, on September 2, 2014.
CC-BY-SA-2.0, FlickrRobert Manning y Michael Roberge, co-CEOs de MFS Investment Management. MFS promociona a Michael Roberge al puesto de Co-CEO
MFS Investment Management announced that Michael Roberge, MFS President and Chief Investment Officer, has been promoted to Co-CEO, effective January 1, 2015. Roberge will share management responsibilities with Robert Manning, MFS Chairman and Chief Executive Officer since 2004. Roberge will also continue to serve as Chief Investment Officer for MFS.
Appointing Co-Chief Executive Officers will allow MFS to build out its leadership team and give Manning the opportunity to focus on the firm’s overall strategic direction, working closely with MFS’ clients and intermediaries around the world.
“In his 18 years with the firm, Mike has proven himself to be an exceptional leader and a talented investor. As Co-Chief Executive Officer, Mike will play a critical role in both guiding our investment team and managing our ongoing global expansion,” said Manning.
MFS has experienced global growth in recent years. Assets domiciled outside of the US today account for more than one-third of MFS’ assets under management.
“At MFS, we take a long-term approach, in both our investment and business strategies,” said Roberge. “Our clients will always come first. We have to ensure that we can continue to meet their needs and expectations in every place we do business.”
Roberge joined MFS in 1996 in the fixed income department. During his career at MFS, he has served as a credit analyst, portfolio manager, research director, Chief of Fixed Income, and Chief US Investment Officer, before being promoted to President and CIO in January 2010.
In order to allow Roberge to focus on his new leadership role, MFS will transition some of his investment oversight responsibilities to two new group CIOs. Kevin Beatty, Director of Equity, North America, will be promoted to Chief Investment Officer, Global Equity, and William (Bill) Adams, MFS Director of Fixed Income will be promoted to Chief Investment Officer, Global Fixed Income. Both Beatty and Adams will report to Roberge.
“Kevin and Bill have played an integral role in our long-term investment success,” said Roberge. “They are highly respected by their peers on the investment team and I have every confidence that they will be tremendously successful in their new roles.”
Adams joined MFS in 1997 as a corporate credit analyst. He took on portfolio management responsibilities in 2000. In 2009, Adams was appointed Director of Corporate Credit Research before being promoted to Director of Fixed Income in 2011.
Beatty joined MFS in 2002 as an equity research analyst and was named portfolio manager in 2004. Prior to assuming the role of Director of Equity, North America, in 2011, he served as Director of US Research beginning in 2007.
Foto: Nguyen, Flickr, Creative Commons. El espejismo del “flash crash” de agosto
Lazard Asset Management (LAM) has announced the launch of two open-end equity funds domiciled in the U.S., expanding LAM’s international and global fund offerings. Both funds seek capital appreciation through distinct investment approaches.
The Lazard International Equity Concentrated Portfolio is a multi-capitalization, concentrated international equity portfolio. It invests in non-US companies judged by the investment team to have sustainably high or improving returns at attractive valuations.
“This portfolio seeks to leverage the richest insights of LAM’s International Equity analysts,” commented John Reinsberg, Deputy Chairman, International and Global Strategies. “It distills the intellectual capital of a $30 billion international equity platform into a twenty-to-thirty-stock portfolio.”
The investment team comprises portfolio manager/analysts Kevin Matthews, Michael Bennett, Michael Fry, and Michael Powers, as well as Mr. Reinsberg. On average, each team member has 26 years of industry experience, more than half of which has been with LAM.
LAM’s second new fund, Lazard Global Strategic Equity Portfolio, invests around the world and across the market capitalization spectrum. This portfolio is designed to participate in rising markets and its focus on valuations and financial productivity is intended to protect capital in declining markets. Like the Lazard International Equity Concentrated Portfolio, it focuses on stocks with attractive valuations and sustainably high or improving financial returns.
“This global unconstrained equity offering is an extension of our successful International Strategic Equity offering,” Mr. Reinsberg added.
The investment team consists of portfolio manager/analysts Robin Jones, Mark Little, and Barnaby Wilson, as well as Mr. Reinsberg. On average, each team member has 21 years of industry experience, with 15 of those years spent with LAM.
Santiago de Chile. Photo: aloboslife, Flickr, Creative Commons. Deutsche Bank Appoints Andrés de Goyeneche as Chief Country Officer of Chile
Deutsche Bank has announced that Andrés de Goyeneche has been appointed Chief Country Officer (CCO) of Deutsche Bank in Chile, effective immediately. De Goyeneche joined the Bank in 2000 and will continue to serve in his current roles as Chief Executive Officer, Deutsche Bank Chile S.A. and Head of Capital Markets and Treasury Solutions for Chile.
As CCO of Chile, De Goyeneche will lead Deutsche Bank in the country across all business divisions, and join the Latin America Regional Executive Committee. He will continue to be based in Santiago and report to Bernardo Parnes, Chief Executive Officer of Deutsche Bank Latin America, and Alberto Ardura, Head of Capital Markets and Treasury Solutions, Latin America.
“Chile is an important component of our Latin America strategy and we will continue to expand our client offerings in the country,” said Parnes. “Andrés has been instrumental in the growth of our business in Chile and we believe his tenure at the bank and deep knowledge of the local market will continue to serve us well.”
“Andrés’ deep experience and insight into the Chilean market have always been highly valued by our clients,” said Ardura. “We are confident that he will thrive in his expanded role.”
Deutsche Bank has had a presence in Chile since 1954.
Foto: "Railing May 2014-1" by Alvesgaspar - Own work. ¿Es la baja duración sinónimo de bajo riesgo? No necesariamente
To protect their portfolios from rising interest rates and volatility, many high-yield investors have headed for short-duration strategies. We think some of the more popular approaches may expose investors to bigger hazards than they realize.
It’s no secret that overall yields on high-yield bonds—and their yield advantage over government bonds—are near historic lows. That means investors receive below-average compensation for the risk they’re taking. And with the US Federal Reserve almost certain to start boosting official interest rates in 2015, the potential for those spreads to widen—and prices to fall—is high.
Still, even at today’s rich valuations, high-yield bonds offer more income than most fixed-income assets, making many bond investors reluctant to pull out of the sector altogether. Often, they choose short-duration funds. Short-duration bond prices are less sensitive to changes in interest rates than longer-duration bonds. Over time, short-duration high-yield bonds have generated returns close to those of the broader high-yield market with less volatility.
Shortening Duration: Easier Said Than Done
The most straightforward way to shorten—or reduce—duration is to buy bonds with shorter maturity dates. The problem is that there aren’t many actual short-maturity assets available out there. The typical high-yield bond is issued with a 10-year maturity, although many issuers can “call” the bonds much earlier by taking it back and paying the investor a specified price.
To get around this short-maturity shortage, one popular strategy has been to build exposure: buy high-yield bonds of any maturity and combine them with short positions in government bond futures contracts or interest-rate swaps, hedging much of the interest-rate risk. Contrary to popular belief, we think this approach can reduce returns and increase risk, particularly if there’s a broad sell-off in credit assets.
According to Barclays data, the US high-yield market has returned an annualized 7.5% since 1997 with 9.4% annualized volatility. Using interest-rate hedges on a similar portfolio over that period would have cut returns to just 1.8% while boosting volatility to 11.1% (Display).
To be fair, this strategy underperformed largely because interest rates fell, and that lengthy period of low rates may well be ending. Many economists and market strategists expect US rates to climb in the years ahead. If that happens, those hedges would indeed enhance total returns.
Watch Out for the Double-Edged Sword
But here’s one thing that’s worth keeping in mind. Rates are likely to rise, but they may not rise quickly. And the potential for higher volatility could increase the risk of losses. That’s particularly true if the high-yield market were to hit a rough patch, prompting yield spreads to widen.
If there’s a credit selloff, investors tend to rush out of high yield and into government bonds and other higher-quality assets. This would cause government bond yields to fall, and investors could see both sides of their portfolios take a hit: the high-yield bonds would suffer and the interest-rate hedges would lose value as Treasury yields fell.
We think there’s a better approach to build a low-volatilityhigh-yield allocation: buy individual bonds that do have short-term maturities and bonds that are likely to be called in the near future. This effectively shortens duration and provides the attractive return profile we described. We think it’s also important to avoid the riskiest credits. In a credit-sell-off, a short-duration portfolio that sidesteps these potential pitfalls is more likely to outperform the market.
Of course, this approach isn’t risk free. Once rates start to rise, an issuer may decide not to call its bonds when expected. In that scenario, investors would see the duration on their bonds grow at the worst possible time—we call this extension risk. One possible way to reduce this risk is to target bonds trading at prices well above their call prices. It would take a dramatic rate increase to keep the issuer from calling the bond—and we don’t think that’s likely.
Other strategies to reduce extension risk include using credit derivatives to replicate high-yield bonds, as these come without the call option built into most high-yield bonds. All of these approaches require careful security selection. But we think they’re likely to offer more effective protection against rising rates, higher volatility and the possibility of future credit market duress.
The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AllianceBernstein portfolio-management teams.
Ivan Rudolph-Shabinsky is a Portfolio Manager of Credit at AllianceBernstein
Morningstar has published its latest Consumer Observer research report, this time exploring the growth potential of consumer staples companies with exposure to emerging markets. In its report, “Investing in the Emerging Market Consumer—Why Companies with Moats are Poised for Outsized Returns,” Morningstar equity analysts found that companies with economic moats, or sustainable competitive advantages—more specifically, companies with brand portfolios across multiple pricing tiers and expansive distribution networks—are best positioned to monetize consumer demand in emerging markets.
Morningstar analysts identified the following consumer staples companies as poised to benefit from positive growth trends in emerging markets: Ambev, Coca-Cola, Diageo, ITC, Philip Morris International, Unilever, United Breweries, Wuliangye Yibin, and Yum Brands.
“Population growth, private investment, and urbanization are all conducive to creating wealth in emerging markets. Disposable income gradually increases over time as consumers shift from rural to urban settings and trade agricultural jobs for positions in the manufacturing, service, and technology industries. Companies with recognizable brands available at multiple price points will have the most success reaching a larger pool of customers,” R.J. Hottovy, Morningstar’s consumer equity strategist, said.
“Expanding the consumer base will also require significant infrastructure upgrades in emerging markets. Regulatory and geopolitical considerations will play a large role in foreign direct investment as each country looks to strike a balance between protecting local companies and encouraging foreign investment. We think larger multinational corporations have the balance sheets and access to capital to absorb the effect of new legislation.”
In the report, Morningstar equity analysts evaluated five emerging-markets regions: China, India, Latin America, Central and Eastern Europe, and Africa. Analysts reviewed demographic trends, including population growth; driving factors of wealth creation, such as urbanization and private investment; the structure of local consumer industries; and regulatory and geopolitical concerns. Morningstar also analyzed the infrastructure needs of each emerging-markets region, as well as the strategies that consumer staples companies deploy when looking to enter or expand in a given region.
Key takeaways of the report include:
Favorable demographic and urbanization trends will be fundamental longer-term consumption drivers in China. Additional catalysts include the growth of China’s middle class, expanded Internet and broadband adoption, and government policy changes.
India is poised to see continued population growth of approximately 1 percent annually as the working-age populace also grows as a percentage of the total population, while regulatory issues and foreign direct investment restrictions remain headwinds to the success of some global consumer staples companies.
The Latin American market is attractive for consumer staples companies, as population, per capita incomes, and urbanization rates are all expected to grow. Meanwhile, inflationary pressures and relatively poor infrastructure continue to present disadvantages to consumer staples companies looking to enter the market.
Some countries in Central and Eastern Europe are the most mature of the emerging-market regions evaluated in the report, because of the region’s transition to free markets, highly educated workforce, and relative economic stability. However, an aging population and lacking infrastructure will hamper opportunities for consumer staples companies.
Africa will become an increasingly strategic region for consumer staples companies over the next several years, driven by its large, young, and rapidly growing population; increasingly favorable regulatory reform; and urbanization and the resulting wealth creation among consumers in Africa. Angola, Ethiopia, Kenya, and Nigeria are key burgeoning Africa markets, in addition to South Africa.
CC-BY-SA-2.0, FlickrSergio Alvarez Mena III. FIBA´s Courtesy . ¿Qué está cambiando la industria de wealth management?
The convergence of top-down forces (increased regulation) and bottom-up forces (changes in consumer behavior) is driving dramatic and rapid changes within the wealth management industry.
According to Sergio Alvarez Mena III, member of the Florida International Bankers Association (FIBA)’s Wealth Management Forum Advisory Committee and Director at Credit Suisse Securities (USA): “The speed and depth of transformation has created unique challenges for the industry. In order to navigate these developments, we must remain cognizant of the impacts in order to manage the changes for our clients.”
Alvarez-Mena points to the regulatory environment as having the most significant “top-down” impact on wealth management. “Largely as a result of the financial crisis of 2007/2008, we are experiencing not just increased enforcement of existing regulations, but new regulations,” he says.
Some industry reshaping has already occurred as a result of the escalating costs of complying with new laws such as FATCA and BASEL III. “The general notion of de-risking, inherent in these new regulations, is causing segmentation of the marketplace,” states Mena. “There are significant implications that the industry has to clarify.”
“Miami is a classic example, with a lot of consolidating and shifting of core business models by the players here. The industry we see today is changing so radically that in five to ten years, it will look very different.” Alvarez-Mena will be a speaker at the upcoming FIBA Wealth Management Forum 2014 of which he said“This is a rare opportunity to hear what industry leaders are doing and thinking in a non-promotional setting.”
In addition to increased regulation, today’s wealth managers are also confronted with “bottom-up” changes, most importantly the proliferation of huge amounts of data, and variations in how clients deal with their money.
The upcoming FIBA Wealth Management Forum 2014, presents an important platform for gaining industry –expert knowledge and sharing industry best practices. Alvarez-Mena, who also serves on FIBA’s Board of Directors, views FIBA as the premier Latin American cross- border financial services industry organization, “nowhere is there the amount of talent conducting global business on the highest level than the broader FIBA constituency.”
“Our clients are aware of the new trends, but rely on us as wealth management professionals to advise on the changes. Platforms such as the FIBA conferences ensure we stay updated on what is most dynamic about our industry,” says Alvarez-Mena.
The Florida International Bankers Association (FIBA) Wealth Management Forum 2014 at Miami’s JW Marriott Marquis Hotel on September 15-16 will give industry professionals the competitive edge needed to navigate transition and fundamental change.
One of the world’s largest independent financial advisory organizations is opening its first office on the U.S. west coast. deVere Group’s base in San Francisco is an integral part of the company’s ambitious expansion plans for the North American market. The San Francisco operation, which is located in the city’s prestigious Market Street, will be headed by Adrian Flambard.
The organization, which has 70 offices globally, more than 80,000 clients and $10bn under advice, launched its U.S. hub office in New York in June 2012. It also has a presence in Miami’s Brickell financial district.
Nigel Green, the deVere Group founder and CEO, comments: “We’re delighted to announce the opening of the San Francisco office, which is an integral part of deVere Group’s strategic push further into the North American market.
“We are committed to developing our already established presence in the U.S. and expanding into Canada over the next two years in order to meet the ongoing demand for our financial services from U.S. and Canadian citizens, international investors and expatriates.
“This soaring demand is being fuelled by a growing financial awareness and savviness in America since 2008 – people know more than ever that they need professional advice to maximise and safeguard their wealth – and because an ‘advice gap’ has been created in recent years due to many advisory firms exiting the market. We believe that our American offices have the potential to be the organisation’s most successful. He adds: “What happens in the U.S. marketplace is often a good indicator of where the wider financial services industry is headed in terms of trends, regulation and business practices. As such, we will continue to carefully analyse our expansion process here to see how our business models in other markets in which we operate might evolve.”
Senior Area Manager of deVere USA Inc, Benjamin Alderson, says: “deVere USA, which is regulated by the Securities and Exchange Commission, already has a significant number of San Francisco-based clients, and due to its major financial hub status, and its high population of high net worth U.S citizens, globally-minded investors and expatriates, San Francisco was a natural choice for the next stage of our North American growth strategy.
The team
The San Francisco operation, which is located in the city’s prestigious Market Street, will be headed by Adrian Flambard, who has relocated from deVere Group’s New York City office.
Mr Flambard, who started his career as a chartered tax advisor with PriceWaterhouseCoopers and is a well-known, experienced advisor in the international advisory sector, says: “This is a fantastic opportunity to be further involved with a robust global expansion within a dynamic, sophisticated market in which there is an obvious need for our services. These are exciting times for deVere Group.
“We are looking to extend the enviable reputation that deVere has in other regions of the world for delivering a world-class, results-driven service to its clients. We’re looking forward to becoming the San Francisco area’s most trusted advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.”
There is currently a team of five in the San Francisco office with the number of advisors expected to reach 15 within six months.
