Buenos Aires. Foto: Enelson Rojas, Flickr, Creative Commons. Argentina: un deterioro lento pero permanente de la situación cambiaria y monetaria
Newmark Grubb Knight Frank has added 50 senior-level advisors in Argentina, Brazil, Chile, Colombia and Peru, while augmenting its capabilities within the Americas as the global economic recovery takes hold, CEO Barry Gosin announced.
“The economies of these rapidly developing South American countries are seeing organic growth in energy, financial services, pharmaceuticals, manufacturing, mining and other burgeoning industries, and are attracting intensive investment from outside the region,” said Mr. Gosin. “As NGKF clients increasingly seek out strategic opportunities in Latin America, we continue to boost our presence with the premier real estate advisors in the major markets. These additional executives have amassed an impressive record of success in executing the highest caliber of service on the global stage, and will be the force behind growing NGKF’s platform in South America.”
Seasoned top-level executives heading the offices are: Domingo Speranza, president of Newmark Grubb BACRE in Argentina; Marina Cury, president of Newmark Grubb Brazil; Camilo Fonnegra, president of Newmark Grubb Fonnegra Gerlein in Colombia; and, Manuel Ahumada and Jorge Didyk, managing directors of Newmark Grubb Contempora Servicios Inmobiliarios in Santiago, Chile and Lima, Peru, respectively.
According to Milton Chacon, NGKF regional manager for Latin America, their extensive resume of global clients has included industry heavyweights such as ExxonMobil, IBM, Johnson & Johnson, Morgan Stanley, Unilever, Sony, Avon and Nokia, along with major landlords like Hines and Brookfield.
“We’ve added substantial resources across our global platform to advise clients every step of the way,” said Mr. Chacon. “From valuation, appraisal and acquisitions to consulting, site selection, project construction and property management, our broader LatAm coverage is strengthened by this deep bench of stellar professionals.”
“NGKF seeks out only the top producers for growth and collaboration, as we have done in carefully selecting these South American executives,” Mr. Gosin says. “Attracting the best people in the business yields creativity and superior client service, and our consistency in delivering those results, across property types and markets, is the chief reason we have grown to become one of the leading and most advanced of the global real estate firms.”
Lazard Asset Management has announced the launch of the Lazard Emerging Markets Income Portfolio.
The Lazard Emerging Markets Income Portfolio seeks to deliver capital appreciation and income from exposure to emerging-market currency and local debt markets, with a short duration bias. The Portfolio is designed to have low correlation to broad equity and debt indices, which can provide favorable diversification benefits for investors, while its limited duration and credit risk profile distinguish its sources of returns from traditional fixed income assets. The identification of idiosyncratic macro-economic factors, policy variables, and market inefficiencies form the crux of the team’s fundamentally-based approach. The Portfolio is based on an existing strategy that the team has managed since inception in 2011.
The Portfolio is co-managed by Ardra Belitz and Ganesh Ramachandran, Managing Directors and Portfolio Managers on Lazard’s Emerging Income team, which manages short duration emerging markets local currency and debt strategies. Ardra and Ganesh have over thirty years of combined experience in the asset class. We believe this experience provides a unique advantage in their ability to identify well-compensated opportunities from a highly diverse, lowly correlated local market universe and produce superior risk-adjusted results.
“The Emerging Markets Income Portfolio offers an attractive solution for investors seeking yield-based total return from non-traditional sources, while the strategy’s low volatility mitigates entry-point risk relative to other emerging market asset classes,” said Ardra Belitz.
“The Portfolio has the potential to benefit in a period of rising interest rates as global demand conditions improve, given the favorable implications for emerging market local currency valuations following sizeable depreciation in recent years,” added Ganesh Ramachandran.
The Emerging Income team leverages Lazard’s deep emerging market resources across multiple disciplines, including over 60 investment professionals dedicated to emerging markets. As of March 31, 2014, Lazard Asset Management manages over $60 billion in emerging markets equity and debt assets on behalf of clients globally.
Foto: Mostafazamani, Flickr, Creative Commons. Dentro o fuera de la Ley del Mercado de Valores: ¿qué conviene más a las EAFIs tras el RDL de MiFID II?"
Global investors have increased cash and scaled back risk-taking, amid fears of geopolitical instability and questions about the strength of the global economic recovery, according to the BofA Merrill Lynch Fund Manager Survey for May.
Investors are sitting on more cash and have reduced equity holdings compared to a month ago. Average cash levels have reached 5 percent of portfolios – the highest level since June 2012 and up from 4.8 percent in April. A net 22 percent are taking below normal levels of risk, up from 11 percent a month ago. The proportion of asset allocators overweight equities has fallen to a net 37 percent from a net 45 percent last month.
Respondents to the global survey are confident that both the world economy and corporate performance are improving, but question the rate of growth. A net 66 percent of the panel expects the economy to strengthen in the coming 12 months, up from a net 62 percent in April. A net 49 percent say that corporate profits will rise in the coming year, up five percentage points month-on-month. But nearly three-quarters (72 percent) predict “below trend” growth for the global economy, and a net 20 percent say it’s unlikely corporate profits will grow by 10 percent or more in the year ahead.
Investors also see two major risks to market stability. One-third of the global panel believes that the risk of Chinese debt defaults poses the biggest tail risk. And 36 percent say a geopolitical crisis is the greatest threat. “Investors are showing belief in the economy but with two big question marks: Are we on the brink of a disruptive event? And why, at this point in the cycle, isn’t this recovery stronger?” said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research.
“Specifically, within Europe, investors are all aboard the periphery train, and there’s now simply no margin for error. Spanish and Italian equities are preferred over those in the U.K. and Switzerland, while eurozone periphery debt is seen as the most crowded trade globally,” said Obe Ejikeme, European equity and quantitative strategist.
Momentum builds behind Europe
European equities have bucked the broader monthly trend of seeing allocations scaled back, and investors have indicated the positive flows should continue. A net 36 percent of global asset allocators say they are overweight eurozone equities, up from a net 30 percent in April. Allocations to other developed markets, namely the U.S. and Japan, fell month-on-month.
Europe is also the region most in favor looking ahead. A net 28 percent say that it’s the region they most want to overweight in the coming 12 months, up from a net 23 percent a month ago. A net 14 percent say that European equities are undervalued. The U.S. is the least-favored region with a net 18 percent saying it’s the region they most want to underweight, up from a net 9 percent in April. Forward-looking sentiment for emerging markets has improved slightly over the past month and a net 3 percent say it’s the region the most want to overweight.
Nonetheless, the panel has sounded two warnings about European assets. First is that significantly more investors say that being long EU periphery debt is the most crowded trade – 35 percent of the panel take that view this month, up from 19 percent in April. Investors also continue to see the euro as the most overvalued currency, with 58 percent of the panel taking that view ahead of ECB governor Mario Draghi hinting towards policies that could lead to weakness in the euro.
European investors’ view of their region reflects the global perspective. They forecast economic growth, but a net 30 percent predict less than 10 percent corporate profit growth in the region. Average cash balances have risen to 4.8 percent, from 3.8 percent in April.
Global sector switches reflect risk-off stance
Changes in global sectoral equity allocations from April to May reinforced the sense of investors scaling back risk. The biggest positive swings were towards Utilities and Energy, with a net 15 percent of investors increasing their allocations to these more defensive sectors. A net 14 percent of investors scaled back positions in Banks, and a net 8 percent reduced holdings in Technology.
Chicken and egg question over putting cash to work
While investors have increased their cash levels close to two-year highs, they remain keen to see companies put their cash to work. A net 66 percent of the global panel says that corporates are under-investing, up two percentage points on April’s figure. And 60 percent say that “increasing capital spending” is the best use of cash flow, up from 58 percent last month.
Andrea Favaloro es responsable de las actividades comerciales de la empresa en todo el mundo. Andrea Favaloro dirigirá las actividades comerciales de Generali Investments Europe
Andrea Favaloro is the new Head of Sales and Marketing at Generali Investments Europe, the Generali Group’s asset management arm with over €340 bn of assets under management. He will be responsible for the company’s global sales activities targeted at institutional and retail customers.
Santo Borsellino, CEO of Generali Investments Europe, said: “Having decided to widen the scope of this role to achieve a truly global orientation, we identified Andrea Favaloro as our top choice. Therefore, I am very pleased to welcome him to GIE. He brings a unique set of skills and extensive experience in distribution and asset management. I am sure he will give further boost to our third-party business, which we are strongly committed to.”
Andrea Favaloro joins Generali Investments Europe from BNP Paribas Investment Partners, where he became Global Head of External Distribution in 2011. Before that, he held senior management positions in Milan and London. Andrea Favaloro holds a B.A. in Business Studies from Brunel University London (UK).
Also, Generali Investments Europe has announced that, with effect from May 15th, Antonio Cavarero will strengthen the company’s Fixed Income team as the new Head of Fixed Income Italy. He will be responsible for a team of 12 portfolio managers managing approximately €160 bn of Italian domiciled fixed income assets. Fixed Income remains Generali Investments Europe’s key area of expertise, accounting for more than 80% of the company’s total assets under management.
Antonio Cavarero has extensive experience in the Fixed Income industry gained within top-tier global investment banking companies and, most recently, he held the position as Senior Inflation Trader at Deutsche Bank in London. Antonio Cavarero holds a Master in Business Administration from the Business School of the University of Torino, and a Degree in Economics and Commerce from the University of Pavia.
Antonio Cavarero will be supported by Fabio Cleva, who has been appointed Deputy Head of Fixed Income Italy. He joined Generali Group in 2003 as Fixed Income manager, and holds a Degree in Economics from the University of Udine.
Foto: Stumayhew, Flickr, Creative Commons.. La distribución de fondos de terceros crece en Europa
Cerulli Associates data suggests that third-party distribution in Europe has grown by 2% in the past year, and it accounts for 33.9% of the total. In other words, one in three euros in the European mutual fund industry has come from intermediaries that are not affiliated with the fund manufacturer.
Since 2013, retail investors have made a comeback in the industry. Inflows have increased markedly-even in the most surprising places, such as the South. Spain and Italy have been driving inflows. An increasing proportion of the new money that finds its way into the industry is directed to third-party products.
And the main winners from this trend are the large, established cross-border managers. They roll out their expertise in more markets and are capturing increasingly higher marketshare in Europe. More often than not these are American companies, which put their best foot forward in Europe and have a lot of cash to spend on marketing and brand building.
The gradual change in mentality of distributors and institutions in continental Europe is partly why third-party distribution is on the rise. They recognize the weaknesses of their in-house asset management arms and instead use external managers.
“Some managers on the Continent cannot believe how much they struggle to sell products to their proprietary distribution channels. To them it would have been unheard of two or three years ago,” said Angelos Gousios, a senior analyst with Cerulli in London, and one of the main authors of Cerulli Associates‘ recent report entitled European Distribution Dynamics 2014: Responding to Change.
Northern Trust announced that it has been selected to provide OCIO (Outsourced Chief Investment Officer) services for Feeding America, the nation’s leading hunger relief organization.
“We feel privileged and proud to serve Feeding America,” said Darius A. Gill, Managing Director – Central Region, Northern Trust Foundation and Institutional Advisors. “We look forward to helping manage the assets of, and being a resource to, the Foundation for years to come.”
Foundation & Institutional Advisors is a dedicated practice within Northern Trust that serves nonprofit organizations through sophisticated investment management solutions, strategic insights and world-class resources.
Feeding America’s mission is to feed America’s hungry through a nationwide network of member food banks and to engage the country in the fight to end hunger. This is done by collective partnerships between Feeding America’s national office and local food banks with the goal of increasing efficiencies and maximizing impact.
As an OCIO, Northern Trust provides investment advice, asset servicing and other related services to help nonprofit organizations achieve their financial and philanthropic goals cost-effectively. Northern Trust collaborates with board and investment committee members to assist them with their investment oversight.
PrudentialKenosha. PREI Hires Lee Menifee to Lead Americas Investment Research
Prudential Real Estate Investors has named Lee Menifee a managing director and head of Americas investment research, the company announced last week. PREI®, among the world’s largest real estate investment management and advisory businesses, is a business of Prudential Financial, Inc.
Menifee, whose appointment is effective immediately, will lead PREI’s research efforts in the U.S. and Latin America and will join the U.S. and Latin American investment committees. He is based in PREI’s global headquarters in Madison and reports to Peter Hayes, global head of investment research.
“Lee brings tremendous depth of knowledge and insight into trends driving the real estate landscape in the Americas as we continue to build a global research capability that delivers innovative, market-leading intelligence to our investment teams and clients,” Hayes said.
Before joining Prudential, Menifee led research for American Realty Advisors, where he supported portfolio, asset management, acquisitions and marketing. Earlier, he was the managing editor of global real estate strategy for BCA Research, where he was responsible for product development. He also spent 14 years in various research roles within CBRE Investors, including senior director of global strategy.
Menifee earned a bachelor’s degree in environmental studies and planning from the University of California Santa Barbara and a master’s degree in urban planning from the University of Southern California.
AllianceBernstein has announced that Robert Hostetter has joined the firm as Global Head of Product Strategy.
In this role, Hostetter will work closely with the firm’s regional product teams to assess market demand for new services, optimize new product development, and prioritize local and global product innovation opportunities throughout the firm. He will also partner with client and investment groups globally to enhance the firm’s new and existing product capabilities across asset classes and channels. He will report to Robert Keith, Head of the Global Client Group at AllianceBernstein.
“Over the past several years, we have been committed to bringing better balance to our product set and providing clients with services that can perform well across market cycles. We have brought Robert on to ensure we remain focused on providing our clients with the right solutions,” said Keith. “With his deep industry experience and impressive track record, we are confident Robert will further elevate our strategy and ability to innovate.”
Hostetter joins AllianceBernstein from William Blair Investment Management, where he led all aspects of product development and distribution strategy for the institutional, retail and private wealth markets. He was responsible for redesigning the firm’s retail distribution strategy, building the alternatives and multi-asset platforms, and extending the firm’s equity and fixed income investment service offerings.
Prior to that, Hostetter worked as a consultant with McKinsey & Company where he advised asset management clients on a variety of investment, distribution and operational initiatives. Hostetter holds a bachelor’s degree from Duke University and a Master’s of Business Administration in Finance from Northwestern University’s Kellogg School of Management. He is a CFA Charterholder.
AllianceBernstein is a global investment management firm that offers high-quality research and diversified investment services to institutional investors, individuals and private clients in major world markets. At March 31, 2014, AllianceBernstein Holding L.P. owned approximately 35.8% of the issued and outstanding AllianceBernstein Units and AXA, one of the largest global financial services organizations, owned an approximate 63.6% economic interest in AllianceBernstein.
Photo: Mattbuck. Generali Enters into Negotiations with BTG Pactual for the Sale of BSI
The Italian group Generali has granted exclusivity to Banco BTG Pactual, a leading LatAm investment bank, global asset and wealth manager with a USD13 bn market capitalisation and over CHF100 bn Assets under Management, to conduct negotiations relating to the potential acquisition of the entire share capital of BSI.
BSI is a leading Swiss private bank with a global presence and CHF90 bn (€73.6 billion) of Assets under Management. The Sao Paolo-based group Banco BTG Pactual is a leading Latin American global asset and wealth manager, with $85 billion (€62 billion) in assets under management.
The Italian group is selling its Swiss private banking unit as part of a plan to focus its efforts on the company’s asset management arm, Generali Investments Europe.
Generali will update the market on the outcome of these negotiations when required upon further developments.
Passive investing ranks among the most successful innovations of modern finance. We do not deny that is an appealing concept. In fact, we fully acknowledge that:
a passive manager is likely to outperform an active manager chosen at random, assuming the latter involves higher fees and costs
passive investing is highly transparent, as performance can be evaluated against an index that is independently calculated by a third party
a passive approach can be applied on a large scale because of its high liquidity
passive investing may be considered a safe choice, because by pretty much guaranteeing a return close to the index it eliminates the risk of having to explain a large underperformance sooner or later
However, we also have some serious concerns with regard to passive investing. We argue that if these concerns are also taken into account, the case for passive investing is not so clear-cut anymore.
Concern #1: passive investors are free-riders
Lorie and Hamilton (1973) already noted that the market can only be efficient if a large number of investors actually believe it to be inefficient, the so-called efficient markets paradox. In other words, the existence of a large number of active investors is a necessary requirement for efficiently functioning capital markets. Active investors continuously trade on perceived mispricings, thereby ensuring that the price of each security always reflects the market’s best assessment of its (unobservable) true value, and that the market is highly liquid. As such, active investors play a vital role in financial markets. Passive investors, on the other hand, are basically free-riders, as they do not make any attempt to assess the fair value of a security. Instead, they assume that active investors have done their homework properly, which enables them to simply accept and mechanically follow the observed security weights in the capitalization-weighted market portfolio.
Active investing: a moral responsibility?
A famous quote from Benjamin Graham is that the market can be compared to a voting machine. This is a useful analogy, because, similarly to passive investing, voting in a parliamentary democracy involves a big free-riding problem: voting is basically futile so long as millions of others vote. Free-riding appears to be a rational alternative: instead of going out to vote, spend the time on a more useful activity, such as family or a hobby. Interestingly, however, most people are well aware of this logic but still choose to put time and effort into voting, arguably because they see this as a moral responsibility in a parliamentary democracy. In the same spirit, active investing may be seen as a moral responsibility that comes along with a market economy. An efficient and liquid market benefits everyone, but because this can only arise as a result of large-scale active investing, perhaps every investor should feel obliged to contribute.
Concern #2: passive investing goes against proven factors
Our second concern with passive investing is that it goes against proven factors. The literature provides extensive evidence that securities with certain factor characteristics tend to exhibit a very poor performance, while other characteristics appear to be rewarded with better returns. Because passive investors simply buy the capitalization-weighted market portfolio, which contains all securities, they basically choose to ignore such evidence. In other words, a passive approach involves intentionally investing large parts of one’s portfolio in segments of the market that are known to be associated with disappointing historical performance characteristics.
If you believe in factor premiums, passive investing does not make sense
The logical implication of factor premiums is not to adopt passive investing and thereby intentionally invest large parts of one’s portfolio in segments of the market that are known to be associated with very poor historical performance characteristics, such as growth, past-loser and high-volatility stocks. In fact, it makes more sense to actively avoid unattractive segments of the market and seek more exposure to attractive segments.
David Blitz, PhD, isHead Quantitative Equities Research at Robeco.
