State Street Global Advisors (SSgA), the asset management arm of State Street Corporation, has announced five key appointments in the firm’s intermediary business, which provides products supporting wealth management professionals, including SPDR ETFsand State Street mutual funds, for wirehouses, Registered Investment Advisors (RIAs), private banks, family offices and regional/independent broker dealers. The appointments will bolster SSgA’s competency across its intermediary business, which was created in 2001 to better access the firm’s deep institutional experience and broad investment knowledge.
“These appointments enhance our capabilities and reflect our commitment to invest in ways that support advisors so they can achieve better outcomes for their clients,” said James Ross, executive vice president, global head of SPDR ETFs, and head of US intermediary distribution at SSgA. “We look forward to the teams’ contributions in providing advisors with solutions to meet the expectations of their clients by offering differentiated products and investment views that will help support their businesses.”
The recent appointments to the US intermediary business include:
Michael Arone, chief investment strategist for the US intermediary business. Mike was head of global and EMEA portfolio strategy at SSgA before this new role.
Ken Bossen, vice president and head of US intermediary portfolio strategy and due diligence. Ken joins SSgA from Morgan Stanley, where he managed the firm’s ETF model portfolio and country ETF focus list.
Robert Forsyth, vice president and head of strategic partnerships. Prior to this role, Robert was head of exchange traded products and derivatives at UBS Wealth Management.
Mario Gallotto, vice president of business intelligence. Mario joins SSgA from John Hancock Investments, where he was managing director of business intelligence.
Brie Williams, vice president and head of practice management. Brie joins SSgA from Putnam Investments where she was responsible for marketing communications in support of Putnam’s global brand and retail mutual fund product line.
Insight Investment, one of the UK’s leading institutional asset managers, has appointed Svein Floden as Head of Business Development for Liquid Alternatives in the Americas. Based in New York, he will report to Philip Anker, Global Head of Distribution at Insight. Floden will join Insight’s Business Development team and will be responsible for developing products and implementing a distribution plan for Insight’s liquid alternatives, total return and absolute return products across the Americas.
Floden joins Insight from Deutsche Bank Asset and Wealth Management where he has spent the past 14 years, most recently as Head of Hedge Fund Sales and Marketing for Wealth Management Americas and Director of Institutional Alternatives Distribution, Latin America. Prior to Deutsche Bank, Floden was a member of the Latin America group at Citigroup’s Private Bank in New York.
Philip Anker, Global Head of Distribution, Insight Investment, says: “I am delighted to welcome Svein to Insight. We have been developing our investment offering to meet the increasingly global demands of our institutional and wholesale clients. Svein’s wide-ranging experience in building and expanding hedge fund platforms and in distributing alternative investment products in this region will enable him to play a broad and strategic role in the development of Insight in the Americas.”
Floden says: “Insight has established an impressive reputation in the UK and Europe for delivering client- focused, outcome-oriented investment solutions. Our business is at the forefront of developing new ways of investing. Joining the team in New York as the firm builds on its franchise in the region and continues its evolution as a truly global investment business is an exciting prospect. I very much look forward to working with Philip and his team and to playing a part in the next chapter of the development of Insight.”
There was little doubt that the European Central Bank (ECB) would act at its June meeting – market consensus had expected some move on interest rates. The ECB duly delivered on rates but also unveiled a raft of additional measures.
For its part, the ECB had already indicated that it was concerned by the anaemic rate of economic growth in the eurozone, something not helped by a strong euro hampering exports and a low rate of inflation raising deflationary fears.
What we got was a credible package of measures that should nudge growth in the eurozone up a gear. The cut in the refinancing (repo) rate by 10 basis points to 0.15% is likely to have negligible effect, the cut to a negative deposit rate of -0.10% however is more convincing as it should encourage banks to lend more.
More interesting is the Targeted Longer-Term Refinancing Operation (TLTRO), which is being targeted at the real economy, i.e. businesses rather than housing or governments. Liquidity will also be boosted by the cancellation of the weekly securities market programme drain, which should inject approximately €165 billion into the system. Other measures include an extension of the fixed rate full allotment regime and progress towards buying asset backed securities.
This was an enterprise-friendly set of measures. However, the cut in rates may not go down too well with German households, which tend to hold a lot of money on deposit and will shortly be getting next to nothing in terms of interest. The sop to Germany is that a lower euro – which has fallen recently in expectation of the ECB announcements – should support Germany’s exporters. Germans will also take some comfort from Draghi stressing the need for structural reforms to continue given that progress has been uneven and is far from complete. Monetary policy alone cannot do all the heavy lifting in growing the economy.
The real risk, in my view, is that growth will remain low due to demographics and general caution. This will lead to tax receipts recovering but not enough to start repaying significant amounts of loans outstanding. However, the cost of financing that debt is now considerably lower in all countries and the cut in rates should help anchor bond yields and financing costs at low levels.
The measures taken by the ECB are helpful but as the saying goes: “you can lead a horse to water, but you can’t make it drink.” It remains to be seen whether this carrot and stick approach by the ECB can encourage lending and lift the pace of recovery within the eurozone. What is clear is that the president of the ECB, Mario Draghi, is more than willing to engage in further action if necessary, stating that they “are not finished here” if the eurozone economy fails to respond to this latest package.
By Tim Stevenson, manager of the Henderson Horizon Pan European Fund
Since the beginning of the year, in anticipation of the impending Warburg Pincus investment, Source has implemented an accelerated growth plan, increasing headcount by 20%, adding depth and expertise to key areas including investment content, regional coverage, legal and marketing. Already in 2014, through a combination of successful new product launches and growth in existing funds, Source’s assets under management have increased by 20%, twice the rate of growth seen in the European ETP market. As a result, Source has 35 ETPs with more than US$100 million in assets and 5 with more than US$1 billion in assets. With total AUM in excess of US$18 billion, as at 1 June 2014, Source is currently the fifth-largest European ETP provider by assets.
Further, Source is delighted that Lee Kranefuss is joining the company as Executive Chairman and will work alongside CEO Ted Hood and the management team to continue developing the business. Mr Kranefuss remains an Executive-in-Residence at Warburg Pincus. Preceding this, he was the architect and Global CEO of iShares, which under his leadership became the largest provider of exchange-traded funds in the world.
“The European ETP industry is nearing an inflexion point,” highlights Lee Kranefuss, “where there will be opportunities for both consolidation and expansion. Growth has been strong but from a low base and, similar to the US market, should accelerate as investors become more familiar with the investments. Source’s business model is built on innovation and delivering performance. This combined with a range of world-class partnerships makes Source uniquely placed for the years ahead.”
“This seems a perfect fit for all parties,” Ted Hood explains, “not only for Source and Warburg Pincus but also, and more importantly, for our investors. Our success has been underpinned by our commitment to finding innovative solutions to meet the ever-evolving needs of investors. The conclusion of this deal marks the beginning of a new chapter for Source, but our story remains very much unchanged. What this news brings is an assurance that we will be able to remain at the cutting edge of the industry and continue delivering on this award-winning strategy well into the future.”
Investment consulting and advisory firm Meketa Investment Group has opened a London office.
An independent, employee-owned firm, Meketa Investment Group provides general investment consulting and advisory services as well as specialized private markets consulting and advisory services to institutional investors including public, corporate and union employee benefit plans, university endowments, charitable organizations, insurance companies, and family offices on a discretionary and non-discretionary basis. Founded in the Boston area in 1978, the firm expanded to the San Diego area in 2003 and to Miami in 2011. Today, Meketa Investment Group employs more than 100 professionals and consults on more than $270 billion in assets for over 90 clients whose total aggregate assets exceed $600 billion.
Meketa Investment Group’s London office will provide research support to Meketa Investment Group’s U.S. offices on public market, private market and risk management strategies across Europe, the Middle East and Africa (EMEA). The office will formally open June 12th and will be staffed with three full-time investment professionals.
“London provides a platform to deepen our existing research coverage outside the Americas,” said Stephen McCourt, Managing Principal, Meketa Investment Group, who will open the London office. “Meketa Investment Group is well known for the depth and experience of its investment staff. We are pleased to establish a presence in Europe.”
“As a leading advisory firm with an ever more geographically diverse client base, establishing a presence in Europe is an appropriate and timely step in our evolution,” said James Meketa, Founder and CEO, Meketa Investment Group. “While continuing to grow our firm we remain committed to providing the highest level of client service. In serving the EMEA markets we will employ the same client-centered, research-focused approach that has served us so well since our founding.”
CC-BY-SA-2.0, FlickrCondoleezza Rice at INSITE 2014.. Condoleezza Rice Reviews Current Issues to Over 1,000 Professionals at Pershing’s INSITE 2014
On Wednesday, Condoleezza Rice, former U.S. Secretary of State and former National Security Advisor, shared her experiences and stories from her time in the Bush Administration with a captive audience at Pershing’s INSITE 2014, where she served as keynote speaker.
Speaking to an audience of over 1,000 professionals, in Hollywood, a city north of Miami (Florida), Rice pointed out that in recent years there have been three events that have marked the world: the 9/11 terrorist attacks, the 2008 crisis, and the Arab Spring. During the first two she was Secretary of State and then National Security Advisor to President George W. Bush, while she experienced the last of these events from the sidelines.
Likewise, she went over several current issues and the role of the Obama Administration in each of those; a role which, according to Rice, should be much more forceful and firm in some cases, such as the Ukrainian crisis, in which she believes Washington should strengthen its presence in the Baltic region, sending out a clear message to Russian President Vladimir Putin, whom she labeled as a “mental maniac” among other things, but not suicidal, so that if the United States strengthens its military presence in the Baltic states it would help to reduce tensions in the area.
President Obama, who is traveling through Europe this week, announced his plans, before landing in Warsaw, to increase military presence in the region as well as a package of 1,000 million dollars to boost troop deployments and exercises throughout Europe, a change after two decades in which the U.S. trend was to reduce its military presence in Europe.
As for her views on the current situation in Venezuela, Rice said that the late Hugo Chavez’s successor is very similar “but without the charisma, and not as funny as his predecessor.” She believes that Nicolas Maduro cannot retain power for much longer and also finds a stronger stance from the White House lacking in dealing with the situation which Venezuela has been suffering for quite a while now, and which has worsened since the opposition decided to take to the streets in February.
According to Rice, President Maduro, who has been in office for just over a year now, may not last much longer if the protests continue in the streets and the social unrest continues to spread. “Maduro cannot withstand an environment in which all of Venezuela’s Latin American neighbors are democratic; unfortunately, he will destroy the country in the meantime, making it much harder to progress,” she added.
Regarding her period as Secretary of State, she acknowledged that 9/11 was one of the hardest moments. She said that a Secretary of State must be firm and therefore cannot always display a cooperative nature; the role also requires maintaining a certain amount of optimism so as not to weary citizens with exposure to so much bad news.
Bahamas Government House. Biscayne Capital Launches Wealth Management Office in the Bahamas with Stephen Coakley Wells
Biscayne Capital, one of the fastest growing private banking firms in Latin America and the Caribbean, has opened an office in Nassau and has named financial services veteran Stephen Coakley Wells as Managing Director of its Bahamas operations.
As well as delivering investment management and advisory services for individual investors, the Bahamas office will offer- a variety of services for international businesses, including incorporation, registered office, agent and administration services, in addition to corporate officer and director nominee services.
Based in Montevideo, Uruguay, Biscayne Capital was founded in 2005 and established its Zurich office in 2012. The firm currently has over $1 billion of assets under management and a team of 41 financial advisors worldwide.
Mr. Coakley Wells, a citizen of the Bahamas, has been in the financial services industry since 1995. Before he joined Biscayne Capital, he was an International Financial Advisor at Merrill Lynch, providing financial solutions for high and ultra-high net worth clients in Latin America and the Caribbean region.
“Stephen brings a wealth of experience and great new dimension to our team,” said Roberto Cortes, co-founder and Director of Biscayne Capital. “His commitment to a personalized and strategic approach to help clients make informed decisions about managing, conserving and enhancing their wealth makes him a perfect fit at Biscayne Capital.”
Prior to joining Merrill Lynch, Mr. Coakley Wells was a Senior Wealth Advisor for Latin America and the Caribbean at a global top tier financial institution based in Switzerland. His experience is complemented by a comprehensive knowledge of Latin American tax and legal regulations.
Mr. Coakley Wells has earned advanced degrees in Law and Latin American and Caribbean Studies, concentrating on Economic Law. He speaks English and Portuguese fluently and is conversant in Spanish and French. He is also a proud alumnus of the United World Colleges movement.
“We have launched these new factor indexes not only in response to the increasing demand for indexes to serve as the basis for index-based investment products in Latin America, but also because of the global trend toward factor investing,” said Diana Tidd, Managing Director and Head of the MSCI Index Business in the Americas.
“This is the first full suite of factor indexes covering the Latin America market and is part of our ongoing commitment to provide our clients in the region with the tools they need to support their investment processes.”
Equity factor investing was pioneered in the 1970s based on research, data and analytics created by Barra – today an MSCI company. In recent years, MSCI has developed a range of indexes that provide institutional investors with a basis for implementing a transparent and efficient passive approach to seeking the excess returns historically obtained over long time horizons through active factor investing. In 2008, MSCI introduced the industry’s first Minimum Volatility Index. More than USD 90 billion in assets are benchmarked to MSCI Factor Indexes1.
1As of March 31, 2013 according to eVestment, Lipper and Bloomberg
CC-BY-SA-2.0, FlickrFoto: Maria Jose Bustamante. Chile, nubarrones a la vista
Chile is one of Latin America’s great long-term success stories, with fiscal rectitude and the strong savings culture, fostered by its pension fund industry, often cited as the roots of its success. In recent years though, it has underperformed most emerging markets including Brazil; its currency has proven vulnerable, and the stock of private sector debt has mounted. However, the country is undergoing some profound changes under the leadership of newly elected president Michelle Bachelet.
The changes reflect the nearly universal desire in Latin America to deal with the long-term issues of low public investment in infrastructure, sub-par education, and lack of social mobility. While dealing with these issues could help Chile break free from its ‘stuck in the middle’ status, it seems that few companies are prepared for the changes this will entail, and far fewer still, are able or willing to embrace the president’s vision.
Chile’s economy is slowing down rapidly as the spectre of tax and regulatory reforms from the new, more populist, Bachelet government have spooked corporations, both big and small. Chilean companies pay little tax on corporate profits provided they invest in practically anything; be it foreign acquisitions, company cars, groceries for employees or new plants — eventually it all counts as capital investment. This has led to widespread abuse and severe distortions in the economy, and a severe shortfall in tax revenue for the government. Reform means Chile could grow as little as 2.5% in 2014, which is well below its historic growth rate of 5‑6%. We feel this is a very similar situation to the impact that tax changes have had in Mexico but with perhaps more intense social repercussions.
The slowing economy should drive Chile’s interest rates lower; the central bank cut the policy rate from 4.5% to 4.0% in the first quarter. However, the differential in policy rates between Chile and Brazil has contributed to the peso’s 7.0% underperformance versus the Brazilian real in the last 12 months. Chile’s currency could be vulnerable as more rate cuts look likely in 2014.
Many companies are experiencing headwinds from areas as diverse as environmental protection, data protection, insurance/financial sales practices, and labour relations. Chile’s traditionally pro-business regulatory bodies are being transformed rapidly into much more progressive, proactive bodies. There is an unreal sense of denial amongst Chilean executives.
Meanwhile commodity markets are not particularly helpful for Chile. According to Deutsche Bank, the demand‑led commodity markets of 2002-08 have given way to the supply‑led markets of today. Only where supply is likely to be disrupted — as in the cases of nickel, coffee or platinum — is there likely to be much strength. Producers have excess capacity otherwise to provide rapid supply responses. Chile’s key commodity exports, copper and pulp, have been trendless but it is worth noting that Chile’s producers are generally right at the bottom of the cost curve.
To summarise, the new Bachelet government intends to use higher corporate taxation, stronger environmental protection, vigilance in consumer protection, and vastly higher spending on secondary and higher education to rebalance Chile’s unequal society. Few Chilean companies will see any immediate benefits — it will be particularly important to figure out which companies are getting ‘on side’. For example our research indicates that in Brazil companies such as Cielo and Smiles help the tax authorities with data collection, while Kroton is a beneficiary of big spending on education.
Opinion column by Chris Palmer, Director of Global Emerging Markets at Henderson Global Investors
CC-BY-SA-2.0, FlickrFrancisco Gonzalez preside el banco español BBVA. Francisco González recibe la Medalla de Oro de Americas Society
BBVA Chairman Francisco Gonzalez has been awarded the Americas Society Gold Medal in recognition for his important contribution to the growth and development of the Americas. He received the award on Wednesday night at a formal dinner in New York.
At the ceremony, Mr. Gonzalez expressed his gratitude for the award, adding that “in the Americas, BBVA has been guided by principles.” He affirmed that “our presence in the U.S., Mexico and South America gives us a clear perspective on the important interplay between the developed and emerging worlds. In many ways, our bank can be seen as a bridge between these worlds, working for a better future for people.”
The Americas Society Gold Medal is the organization’s highest award for people who have made significant contributions to economic development and social and environmental responsibility, and have promoted cultural, social and educational projects in the Americas.
“With a strong vision and an unwavering commitment to innovation and corporate social responsibility, Francisco Gonzalez has transformed BBVA into a truly international institution,” said Americas Society/Council of the Americas President and CEO Susan Segal. “The Americas Society is honored to be able to recognize him for his contributions to the financial sector and the communities in which BBVA operates.”
Since he was appointed Chairman in 2000, he has turned BBVA into a global financial group with a presence in 30 countries. It is now the top bank in Mexico and has leading franchises in South America and the Sunbelt region in the U.S.
BBVA’s current plans include a $6 billion investment in Latin America for 2013-2016. In Mexico, it plans to invest $3.5 billion in technology upgrades, branch office renovations and on the completion of its new headquarters. In South America, it intends to invest $2.5 billion to boost innovation and make BBVA the top digital bank in that region.
BBVA is also engaged in important social work. By the end of 2013, more than 1.5 million people had obtained financing from the BBVA Microfinance Foundation for entrepreneurial initiatives in Latin America. And since 2007, the bank granted 450,000 scholarships to people in the United States and Latin America.
