American Express Travel recently surveyed a group of its experts – nearly 300 travel counselors – to get the scoop on what is trending with their customers for this upcoming summer season (travel between June 1 and August 31). When looking at where customers are heading to this summer, based on bookings made at amextravel.com and through its travel counselors, most travelers will continue to flock toward popular destinations. The top ten include London, Paris, Rome, Orlando, New York, Kahului (HI), San Francisco, Cancun, Los Angeles and Honolulu.
While cities like London and Orlando are longtime favorites, bookings at destinations with the greatest year-over-year growth indicate a more adventurous streak amongst this year’s travelers. From a top sporting destination to national parks to an island retreat, the top growing summer destinations for 2014 include Brazil (Manaus, Recife, Salvador, Rio de Janeiro, Sao Paulo); Santorini; Hilton Head, SC; Grand Junction, CO; Milan and Bucharest.
Nearly half (45%) said their summer travel bookings, relative to their bookings from last year, have increased. This is despite the fact that 67% percent said the cost of travel is up when compared to 2013.
Travel counselors cited rising costs in key travel categories – airfare and hotel stays – as main reasons for the increase in the cost of summer travel. However, 35% indicated costs are up because customers are choosing to spend more on amenities such as excursions and other activities. When further asked about what is most important to travelers when booking summer travel, the findings show customers are prioritizing perks over price:
33% said customers want added value such as upgrades
26% responded the destination is most important to customers
20% indicated budget as their customers’ top consideration
“After one of the coldest and snowiest winters on record, it’s no surprise people are itching to get away this summer,” says Laura Fink, vice president of American Express Travel. “That long, cold winter has fostered a demand for travel where customers are placing a premium on perks and amenities to upgrade their trip experiences despite rising costs.”
The survey also indicated the average duration of summer trips are 10 days. When asked what type of experience most customer are looking for, 43% responded relaxing experiences such as an all-inclusive beach vacation while another 34% said customers are looking to immerse themselves in the culture of the destination. Cruise vacations remain popular as well; nearly one third of the travel counselors surveyed said clients are booking cruises for the summer.
While the majority of travel counselors (81%) are planning vacations for clients and their immediate family, 35% report curating trips for multi-generational families and 29% are planning experiences for their clients traveling with friends or a significant other.
Foto: BertKaufmann, Flickr, Creative Commons. La gestora de la estadounidense Northern Trust registra en España su sicav irlandesa
Morningstar is hosting its 26th annual investment conference for financial advisors Wednesday, June 18 through Friday, June 20, at McCormick Place Convention Center in Chicago.
This year’s keynote speakers are Michael Hasenstab, executive vice president and chief investment officer for global bonds for Franklin Templeton Investments, who will open the conference on June 18; Bill Gross, founder, managing director, and co-chief investment officer of PIMCO, who will address attendees on June 19; and Cliff Asness, founder, managing principal, and chief investment officer of AQR Capital Management, who will speak on June 20. Michael Falk, partner, Focus Consulting Group, and chief strategist and partner for a global macro hedge fund, will speak at the closing general session on June 20.
“This year’s conference features an all-star lineup of managers and industry experts,” Scott Burns, director of global manager research for Morningstar, said. “We’ve selected many of the fund industry’s most prominent thinkers to share their views on navigating today’s market environment. The dialogue over these few days in June will cover superior stock selection, global investing, emerging markets, unconstrained fixed-income strategies, the latest thinking on ‘strategic’ or ‘smart’ beta, up-and-coming managers, dividend investing, and more. Advisors will come away equipped with new insights and resources to better serve their clients and help them meet their investing goals.”
General Sessions:
Panelists Will Danoff, portfolio manager, Fidelity Asset Management; Dennis Lynch, head of growth investing, Morgan Stanley Investment Management (and winner of Morningstar’s 2013 U.S. Domestic-Stock Fund Manager of the Year award); and Chris Davis, co-portfolio manager, Davis Large Cap portfolios, Davis Funds, will share their take on what contributes to a robust business model and how they uncover early signs of structural shifts to better pick stocks.
David Herro, portfolio manager, The Oakmark Funds; Sarah Ketterer, chief executive officer and portfolio manager, Causeway Capital Management; and Rob Lovelace, president, Capital Research and Management Company, will discuss prospects and pitfalls in international investing.
Ben Inker, co-head of asset allocation, GMO, LLC, and Dennis Stattman, managing director and portfolio manager, Blackrock, will shed light on the most compelling investing opportunities amidst a global backdrop.
June 18 Research Roundtable
Morningstar’s Michael Holt, global head of equity and corporate credit research; Bob Johnson, director of economic analysis; Russ Kinnel, director of manager research and editor of Morningstar® FundInvestorSM; and Daniel Needham, global chief investment officer, Morningstar Investment Management, a unit of Morningstar, Inc., will hold a research roundtable, moderated by Burns.
June 19 Breakout Sessions
Masha Gordon, executive vice president, PIMCO; Justin Leverenz, portfolio manager, OppenheimerFunds; and David Rolley, vice president and portfolio manager, Loomis, Sayles & Company, will debate opportunities and pitfalls in emerging-markets assets.
Bill Eigen, managing director, J.P. Morgan Asset Management; Mark Egan, chief investment officer, managing director, and portfolio manager, Reams Asset Management; and Mohit Mittal, managing director and portfolio manager, PIMCO, will examine unconstrained bond strategies.
Rick Ferri, founder, Portfolio Solutions, and Chris Brightman, managing director and head of investment management, Research Affiliates, will explore the pros and cons of the proliferation of new indexes.
Kinnel will moderate a discussion with Morningstar analystsMichael Rawson, Katie Reichart, and Michelle Ward about Morningstar’s manager research process and some of their favorite funds.
Up-and-coming managersMarian Kessler, analyst and portfolio manager, Becker Capital Management; Jan Dehn, head of research, Ashmore Investment Management; and Bernard Horn, president and portfolio manager, Polaris Capital Management, LLC, will share their investment approaches.
John Rogers, founder, chairman, chief executive officer, and chief investment officer, Ariel Investments; Stephen Yacktman, senior vice president, chief investment officer, and portfolio manager, Yacktman Asset Management; and Staley Cates, president and chief investment officer, Southeastern Asset Management, Inc., will discuss how a focus on economic moats can benefit investment returns.
David Blanchett, head of retirement research, Morningstar Investment Management; Michael Kitces, partner and director of research, Pinnacle Advisory Group; and Allan Roth, founder, financial planner, and writer, Wealth Logic, LLC, will dive into the latest research on hot-button issues in retirement investing.
Brooks Friederich, director of fund strategist portfolios, Envestnet Asset Management, and Alicia Nisberg, advisory platform product manager, Commonwealth Financial Network, will cover best practices for selecting ETF managed portfolio strategies.
June 20 Breakout Sessions
Josh Peters, director of equity-income strategy, Morningstar; Thomas Huber, portfolio manager, T. Rowe Price; and Don Kilbride, portfolio manager, Wellington Management, will spotlight opportunities to invest in dividends with downside protection.
Joel Greenblatt, managing principal and co-chief investment officer, Gotham Asset Management, and Michael Aronstein, portfolio manager, Marketfield Asset Management, will discuss how to succeed in long-short fund management.
Robert Amodeo, head of municipals, Western Asset Management; Joe Deane, executive vice president and head of municipal-bond portfolio management, PIMCO; and John Miller, co-head of fixed income, Nuveen Asset Management, will delve into the closed-end municipal-bond fund landscape.
Michael Buchanan, head of credit, Western Asset Management Company; Scott Page, vice president, director, and portfolio manager, Eaton Vance Management; and Eric Mollenhauer, portfolio manager, Fidelity Asset Management, will explore opportunities and potential land mines among bank-loan funds.
Preconference Workshops
All registered attendees to the Morningstar Investment Conference may attend one of two complimentary preconference workshops—on alternative investments or asset allocation—at McCormick Place from 11 a.m. to 2 p.m. Central Time on June 18. Lunch is provided. Registered conference attendees will receive email instructions to sign up for the workshop of their choice.
More information about the Morningstar Investment Conference, including the full agenda, hotel accommodations, attendee registration, and continuing-education credits, is available at this link. Conference updates are also available on Twitter at this link or through the conference hashtag: #MICUS.
Citi has been awarded a mandate from Norges Bank Investment Management (“NBIM”), the organization responsible for managing the Government Pension Fund Global, to provide global custody and securities lending services to support NBIM’s $850 billion investment portfolio globally. The mandate is believed to be one of the largest of its kind in the industry.
“It’s a great privilege to have been selected by Norges Bank Investment Management to provide these services,” said Okan Pekin, Global Head of Investor Services, Citi. ‘’By having a global presence combined with in-depth, local expertise, our offering is well positioned to support Norges Bank Investment Management’s mission and growth objectives. This appointment highlights our ability to serve the needs of a leading investment manager on a multi-jurisdictional basis and I would like to thank all of the Citi team members who worked diligently to bring this relationship to fruition.”
With investor service capabilities in 95 countries and the world’s largest proprietary custody network in over 60 markets, Citi leverages its global footprint and sophisticated fund services platform to offer consistent, scalable and flexible solutions enabling global fund managers to extend their reach and business.
”We have carried out a detailed evaluation. Citi has demonstrated a commitment to the custody business through their proprietary sub custodian network and investment in technology, enabling them to deliver custody services in an integrated, efficient and transparent manner,” said Age Bakker, Chief Operating Officer, Norges Bank Investment Management.
Citi Investor Services provides fund managers with access to an end-to-end set of flexible investment solutions with leading capabilities in four distinct areas: Prime Finance and Agency Securities Lending; Futures, OTC Clearing and Collateral Management; Global Custody Services and Global Fund Services.
The peak of the liquidity-driven market and the rebalancing of global growth will have different effects across developed and emerging markets.
At the close of 2013, investors were perhaps becoming a little complacent about the equity market. The seductive language of all-time highs, instant profits and long-term growth continued to drive flows even as the Federal Reserve (Fed) made it clear it was intent on turning off the taps.
While the crisis years were marked by a coordinated response from the major central banks to stem systemic risks, the journey back from that remarkable place is likely to be one that authorities increasingly take on their own. The Fed’s taper marks the peak of the liquidity-driven market environment and the start of a slow normalisation, but this will not be followed uniformly. Economies face their own unique blend of political, fiscal and monetary challenges which must be overcome to reach the next phase of the economic cycle.
Episodic volatility
Investors be warned: although economic confidence has helped tame volatility, the abundance of liquidity and a diminishing fear of systemic risks have also helped subdue market fluctuations. On the last few occasions when market volatility was this low, namely the mid-1990s and mid-2000s, equity bull markets were being driven by rapid growth and low inflation – we aren’t there yet.
As a result, episodic market flare-ups are to be expected as the return to fundamental-based investing occurs. The recent turbulence in emerging markets (EM) has been attributed to numerous causes, but has undoubtedly been complicated by the lid being lifted on the underlying fragilities of some individual EM countries.
Global growth broadens
The actions and communications from the major central banks will continue to determine how smooth the normalisation process is. Global growth is improving and broadening in the developed world, and we believe this will continue to be a major theme for 2014. For markets to progress, investors must be adequately convinced that policies are being correctly tailored to the strength of economic fundamentals. Each major economy is now at a different point on the curve and will have to act independently from its peers, adopting a certain degree of needful self-interest while not destabilising the delicate balance in global relationships.
Having pursued aggressive and early monetary expansion, the UK and US have seemingly reaped first-mover advantages from their consumption-led recoveries, but must now be careful to manage interest rate expectations. The unexpected vigour of the UK economy has taken many by surprise: the Bank of England (BoE) now anticipates growth of 3.4 per cent this year, the fastest pace in the developed world, and BoE Governor Mark Carney has been forced to row back from linking forward guidance specifically to the jobless rate. We believe it is a close-run call between the US and the UK as to which will tighten monetary policy first.
Risk of policy error
In contrast, Japan is a relative latecomer to quantitative easing (QE), and is only beginning to reap the payoffs from aggressive monetary stimulus – a weakening yen and inflation rising above one per cent for the first time since 2008. It has recently revamped two of its loan support programmes to boost corporate and household borrowing, and we suspect that stronger monetary stimulus is being kept in reserve for times of greater need.
Further afield, the European Central Bank has done an admirable job of damping the flames of contagion from Europe’s financial system, but its hand may be forced in deploying its own form of QE, if falling inflation threatens to derail its recovery.
Given the very different economic challenges that these central banks face, the risks of policy error are undoubtedly increasing. Authorities will need to employ all their skills in managing and communicating change to market participants, whether removing stimulus or choosing to add more liquidity. Thus far, the Fed has largely convinced investors to disassociate incremental tapering from interest rate rises, but if growth surprises to the upside investors could become fearful about policy tightening occurring earlier than 2015.
Diverging fortunes
While improving growth prospects for the developed markets are a key theme for 2014, this also plays into a second leitmotif for the year ahead: a divergence in the fortunes of the G10 versus EM. The growth gap has been falling since 2009 and is expected to narrow further this year. Structural EM expansion cannot continue indefinitely, and in contrast to developed market policymakers, their EM counterparts do not have significant options for regenerating growth.
The most fragile countries must contend with current account deficits that are both negative and widening. The implication for EM equities, which have witnessed extraordinary flows in the post-crisis grab for yield, is that investors may cast a heavy eye on fundamentals and take their money elsewhere. While some of the risks are arguably priced in, potential currency fluctuations must be factored into any investment decision.
Balancing the risks
The risk of volatility flare-ups, the fragmented approach of central bank policy responses, and potentially dormant systemic risks mean that the road back to ‘normality’ may be bumpy: we think it makes sense to keep some firepower in reserve in the form of cash. We remain vigilant to potentially higher market volatility providing opportunities for us to tactically add new positions or increase existing ones on favourable relative valuations.
On a broader view, equities remain our favoured asset class as improving economic prospects and, by implication, policy tightening lead to a slow but bearish re-pricing of government bonds. The caveat remains that equity valuations have risen, placing a greater requirement on an earnings recovery, so we can probably expect lower returns this year than 2013.
After five years of central bank policy experiments, the return to a more balanced outlook for global growth and a more ‘normal’ market environment is unlikely to be straightforward.
Paul O’Connor is Co-Head of Multi Asset within the Henderson Multi-Asset team.
Foto: Stephan Photos, Flickr, Creative Commons. Evolución del renminbi y de la balanza comercial china
Deutsche Asset & Wealth Management (DeAWM) announces the launch of the db X-trackers Harvest MSCI All China Equity Fund (NYSE ticker: CN), the first US-listed exchange-traded fund (ETF) to provide investors with broad exposure to onshore and offshore Chinese equities through a single ETF. CN will offer direct access to highly coveted China A-shares in addition to China B-shares, China H-shares, China Red Chips, China P-Chips, China ADRs, and securities of Chinese companies listed in the US and Singapore.
“Deutsche Bank’s strong relationships across Asia are key building blocks for our Americas business,” said Jerry W. Miller, Head of Asset & Wealth Management Americas. “We remain committed to offering our clients extensive access to previously untapped markets through a wide range of exchange-traded products.”
CN is DeAWM’s second ETF to provide US investors with access to Chinese securities. In November 2013, DeAWM collaborated with Harvest Global Investments Limited to launch db X-trackers Harvest CSI 300 China A-Shares Fund (NYSE ticker: ASHR), becoming the first US ETF issuer to bring investors direct access to A-Share securities—Chinese companies that trade in mainland China.
“The launch of CN now provides investors with the most comprehensive exposure to China by investing across the spectrum of Chinese securities. This innovative product showcases Deutsche Bank’s ability to build upon our recent successes while leveraging our unique global capabilities,” said Fiona Bassett, Head of Deutsche Asset & Wealth Management’s Passive business in the Americas.
CN will seek to track the MSCI All China Index, which captures large- and mid-cap Chinese securities listed in China and Hong Kong, as well as in the US and Singapore, and which currently has 612 constituents.
“We are proud to be further expanding our relationship with MSCI, the leading provider of benchmark indices in the international equity space,” said Martin Kremenstein, US Head of ETPs for Deutsche Asset and Wealth Management.
Deutsche Asset & Wealth Management’s US exchange-traded products (ETP) platform has approximately $11 billion in assets under management as of December 31, 2013. The firm’s global ETP platform, launched in 2006, has grown to become the world’s fifth largest, with approximately $63 billion in assets under management as of December 31, 2013.
Fidelity Institutional, the division of Fidelity Investmentsthat provides clearing, custody and investment management products to registered investment advisors (RIAs), banks, broker-dealers and family offices in the United States, has announced the opening of the Office of the Future on its Smithfield, Rhode Island campus. In collaboration with the Fidelity Center for Applied Technology (FCAT), Fidelity Institutional developed the Office of the Future as a physical space as well as an online interactive experience for financial advisors to experiment with some of the latest technologies poised to transform the financial advice industry.
Fidelity’s Office of the Future features frequently used work spaces for the “anywhere advisor,” including conference and collaborative office spaces, an airport lounge and a home environment. While the specific form factors will change over time as new technology emerges, the space currently focuses on technology that addresses seven trends most impactful for advisors today: mobile, pervasive video, evolving interfaces, cloud computing, social media, big data and gamification. Advisors can visit to experiment with the technology or take a virtual tour of the space with interactive elements that display details on the Office’s technologies.
Fidelity’s new technology research from its Insights on Advice series found that while almost eight in 10 (77 percent) financial advisors surveyed are making an effort to increase their use of technology in their practices, nearly all (95 percent) see challenges in integrating or utilizing it. This disconnect is mostly attributed to: 1) lack of knowledge on what technology is best for them and 2) how to set it up and integrate it with their existing technology. Financial advisors continue to face mounting pressure to adopt technology and meet investor demand. In fact, one-third (34 percent) of investors surveyed said they would switch their advisors if they were not using technology to enhance their services.
“Investors today expect technology woven into everything they do, and that includes their financial advice,” said Ed O’Brien, senior vice president and head of platform technology, Fidelity Institutional. “For advisors, using technology is not about abandoning what they do so well, which is providing financial advice. It’s about finding that sweet spot that brings together human touch with technology. With Fidelity’s Office of the Future, we can show advisors how to do that.”
According to the survey, 75 percent of advisors felt that they needed to use the latest technology to grow assets among younger clients — investors whose assets are forecasted to be $41 trillion by 2023 and who expect a different relationship than previous generations. Gen X/Y investors noted three core benefits of technology in their advisor relationships: communication, collaboration and accessibility.
1. Communication: Supplement Face-to-Face with Virtual Conversation
Financial advisors can use technology to their advantage to create the feel of an in-person meeting with more flexibility, particularly with younger investors who are comfortable with these mediums. The study found:
Video conferencing is on the rise and many advisors are interested in pursuing it.
While very few advisors use social media to communicate with their Boomer clients, many are using social media with their Gen X/Y clients.
Advisors are leveraging text messaging to engage Gen X/Y investors.
2. Collaboration: Investors Want to Validate, Not Delegate
Sixty-three percent of advisors said that recent technology developments have helped make their relationships with clients more collaborative. This shift will be important as Gen X/Y investors embrace the “validator” model, looking to make some of their own investment decisions, while turning to their advisors for second opinions. According to the study:
Financial advisors are using media tablets with Gen X/Y clients to view portfolios and reports, creating a more meaningful, interactive dialogue.
Advisors are making it easier for investors to “visit their money” and participate in the decision-making process with their advisors.
3. Access and Engagement: Quality, Not Quantity
As mobile and cloud technology becomes more pervasive, the concept of the “anywhere advisor” has gone from a possibility to a reality. In order to meet the demands on their availability, advisors are embracing technology for a more mobile lifestyle. The study found:
Not only are advisors using cloud-based applications, many are interested in using it to make their desktop accessible anywhere.
By leveraging e-signature, advisors can spend less time on paperwork, freeing up time for deeper client engagements.
Advisors are starting to see how webinars or webcasts can help them engage with clients and share their current insights.
To “walk” through the virtual tour of Fidelity’s Office of the Future, go to this link and to visit the Office of the Future in-person, please contact your relationship manager.
Relatively low equity returns year-to-date, ongoing concerns over an escalation of tensions between Russia and Ukraine and the growth slowdown in China; investors might be tempted to give in to the “Sell in May” adage. According to ING IM, there are not enough reasons to do so and stay the course with their risk-on allocation stance.
With investor positioning now less concentrated and investor sentiment less euphoric, it seems likely that fundamentals will become more important drivers for markets again.
With only a few days left in April, the temptation among investors might start to rise to give in to the “Sell in May” adage. Since most of the market evolution this year has been dominated by the behavioural side of investing (geopolitical fear factors and position squaring) it is not difficult to imagine that the old market mantra on cautiousness during summer might start to resonate over the coming weeks.
Positioning shake-out at an advanced stage
Before jumping to conclusions, however, it might be wise to consider what has changed and what has actually not changed since the beginning of the year. To start with the former, it seems fair to say by now that the needed positioning shake-out has progressed a long way. Especially in the performance of equity markets this has been visible, as global equities have lagged other risky assets like real estate, credit and commodities year-to-date. Also within equity markets the performance of sectors and regions has seen a clear pattern of outperformance by the most unloved segments at the start of the year (like defensive sectors) and underperformance of the most popular ones (like Japan).
On top of this, it is clear that investor sentiment has normalized. At the start of the year it stood at a 3-year high and not too far off the record-highs of the late ‘1990s. Since then, investor confidence has fallen back substantially and now hovers somewhat below its long-term average.
Fundamental picture is improving
At the same time, the fundamental undercurrent of support for risky assets still seems to be in place. Actually, the visibility on the evolution of the global business and earnings cycles has only increased. The weather distortions in developed market data releases is gradually fading, while the leading role and upward path of the “old economy” pack has only gotten more confirmation. In March, a “leading” index of business surveys from the US, Germany, Japan and European peripheral countries reached its highest level since September 2007.
To view the complete story, please click on the attached document.
The European Fund and Asset Management Association (EFAMA), in collaboration with SWIFT, has published a new report on the evolution of the automation and standardisation rates of fund orders received by transfer agents (TAs) in the cross-border fund centres of Luxembourg and Ireland in 2013. This report, entitled “Fund Processing Standardization”, underscores the industry’s commitment to move away from manual processes towards more efficient automation and standardization practices.
The report is part of an ongoing campaign by EFAMA and SWIFT to highlight the progress and importance of automation and standardisation rates of cross-border funds orders. 31 TAs in Ireland and Luxembourg participated in the survey, cumulatively representing more than 80 percent of the total incoming third-party investment fund order volumes in both markets.
The report highlights are as follows:
* Total order volumesincreased by 21% in 2013, bringing the total volume processed by the 31 survey participants to 29.5 million orders last year.
* Total automation rates reached78.7% at the end of 2013, compared to 77.7% a year earlier. This trend was driven by an increase in the use of ISO messaging standards (+1.5 percentage points in 2013 to 45.3%), and a fall in the use of manual order processing and proprietary File Transfer Protocol (FTP) formats, which totalled 21.3% and 33.4% in Q4 2013, respectively.
* The total automation rate in Luxembourg increased to75.3% in Q4 2013 (+1.6 percentage points compared to Q4 2012), mainly reflecting a rise in the use of ISO standards, which gained +1.2 percentage points to stand at 57.7%.
* The total automation rate in Ireland rose to 85.6% in Q4 2013 (+0.3 percentage point compared to Q4 2012), thanks to a rise in the use of ISO standards (+1.6 percentage point to 20.9%).
Peter De Proft, Director General of EFAMA, noted: “Five years ago, at the time of the release of the first EFAMA–SWIFT report, we set an 80% target for the automation rate of orders of cross-border funds. The Transfer Agent communities of Luxembourg and Ireland have never been so close to reaching this goal. The achievement, and the regular monitoring of the progress made in this area, highlights the fund industry’s commitment to become more efficient to the benefit of its clients.”
Fabian Vandenreydt, Head of Markets Management, Innotribe and SWIFT Institute, added: “We applaud the continuous progress towards ISO adoption along with the substantial increase in funds order volumes. Together with EFAMA, we are making great strides to alleviate the high costs and inefficiencies associated with manual processing by supporting programmes that foster automation and standardisation for the funds industry. And it is clearly moving forward in the right direction, which is very encouraging.”
AllianceBernstein has established a new private credit investing platform that will focus on direct lending to middle market companies. The new platform – AllianceBernstein Private Credit Investors – will be led by the former senior leadership group of Barclays Private Credit Partners LLC, which was previously the registered investment advisor for Barclays Private Credit Partners Fund L.P.
This platform, established as part of AllianceBernstein’s broader efforts to build out a diversified offering of alternative investment products, specifically responds to increasing demand from clients seeking exposure to direct lending strategies. AllianceBernstein will leverage the past success and longstanding investment strategy of its new investment team by targeting primary-issue middle market credit opportunities that are directly sourced and privately negotiated. The team will emphasize secured lending by focusing on first lien, unitranche and second lien loans, while selectively considering mezzanine, structured preferred stock and non-control equity co-investment opportunities. This flexible mandate will enable AllianceBernstein to optimize the relative risk adjusted return profile for its clients while also offering creative and highly customized solutions for borrowers. AllianceBernstein’s initial focus will be on direct lending in the US marketplace, with a longer term objective of becoming a leading global provider of private corporate credit solutions.
Brent Humphries, previously President of Barclays Private Credit Partners LLC, will lead the new group at AllianceBernstein along with four former Barclays colleagues, Jay Ramakrishnan, Patrick Fear, Shishir Agrawal and Wesley Raper. At Barclays Private Credit Partners LLC, Mr. Humphries and his colleagues were responsible for building a leading private credit business that oversaw approximately $1.5 billion of commitments across 48 discrete transactions. Barclays Private Credit Partners Fund L.P. was sold in December 2013.
“By offering direct lending capabilities, we will be better able to meet our clients’ needs for strong sources of income that also dampen volatility,” said Matthew Bass, COO of Alternatives. “Brent and his team collectively have deep investment expertise and an established presence in the market that will help us take advantage of the strong long-term return potential.”
Brent Humphriesadded: “Direct lending to middle market companies is an attractive space due to its enduring fundamentals and strong secular growth trends. By joining AllianceBernstein and tapping into its leading fixed income franchise and strong distribution capabilities, my colleagues and I can continue to execute our disciplined investment philosophy and relationship approach to lending.”
AllianceBernstein Continues to Build Out Alternatives Platform with New Team
In the past few years, AllianceBernstein has significantly expanded its alternatives platform and currently manages $16 billion spanning a variety of asset classes and liquidity profiles. The firm’s alternative offerings include multi-manager strategies, proprietary hedge funds, real-estate, direct lending and a suite of liquid alternative funds. The firm has also previously acquired proven outside managers to develop alternatives offerings such as a Select US Long/Short strategy managed by Kurt Feuerman and Hedge Fund of Funds managed by Marc Gamsin.
“We are committed to continuing to grow our alternatives platform and direct lending is a natural extension of our existing liquid credit and private placement capabilities,” said Bass. “Being on the cusp of rising rates and regulatory changes makes private credit strategies particularly attractive. We think the favorable supply and demand dynamics driven by bank disintermediation, the attractive relative value compared to large cap liquid credit, and the better risk controls available through direct origination, makes this a very appealing asset class.”
