Alberto Carrasquilla, socio gerente de Konfigura Capital y ex ministro de Hacienda de Colombia. Guardian asiste a la colombiana Konfigura Capital en la venta de una cartera de créditos morosos
Guardian announced that it successfully assisted Konfigura Capital on its sale of an $860 million non-performing loan portfolio in Colombia. The transaction included the sale of residential mortgage loans, SME and corporate loans, unsecured retail credits, and unpaid utility bills. A consortium that included a large US-based debt buyer and a global multilateral credit agency acquired the assets. Specific terms of the transaction were not disclosed.
Paul Brenneke, CEO of Guardian, commented, “We are very pleased to announce this transaction as it clearly demonstrates our commitment to pursuing expansion of our advisory business into Latin America. This sale is one of the largest NPL deals in the region over the last few years, and marks a milestone for the Colombian financial market. We will continue to work with key players in Latin America, and look forward to future opportunities to advise on subsequent high-profile transactions.”
Alberto Carrasquilla, Managing Partner of Konfigura and former Minister of Finance of Colombia, commented, “This transaction is a very significant one for both Konfigura Capital and the Colombian NPL market. We believe the momentum generated by this deal will propel our expansion into other countries in both Latin America and the United States. We are excited to have Guardian as a strategic partner and feel we will benefit from their market knowledge, professionalism and perseverance as we pursue future deals.”
María Elena Lagomasino, CEO and one of the founders of WE Family Offices. UHNW Clients Opt for Investing in Real Assets, According to WE Family Offices
As explained by Maria Elena Lagomasino, CEO and a founder of WE Family Offices, during an interview with Funds Society, high net worth individuals prefer to direct their investment efforts to real assets rather than to other investment instruments. Companies and real estate capture the attention of such clients, a trend which occurs in the pursuit of a longer time horizon and the need to feel a real commitment to the Project.
“They want to enter into projects, which they don’t wish to manage themselves, but in which they would like to be involved,” she said.
Michael Zeuner, managing partner of WE, also agrees with Lagomasino in that this is the tendency which they see among their customers on a day to day basis. Both managers are clear that the client prefers to invest in companies and properties rather than in other investment vehicles, for example, funds, because they also feel that these were overloaded in the past.
“There is interest in entering companies, in becoming involved in businesses, in which they also come to agreements with other families.” Regarding the price and agreements of transactions of this nature, Lagomasino believes that when alignment is achieved, “the price automatically follows. That’s the key. “
Aside from its clients’ investment profiles, and on reviewing these first few months since the launching of WE family Offices, the executive explained that the U.S. business has performed better than expected in relation to business in Latin America, which is the company’s stronghold. This growth in the U.S. has even led them to meet many of the forecasts indicated on their business plan to five years.
In this regard, Zeuner explained that they already have a compliance service, which has been centralized through an external service which offers the clients complete support for their protection. “This is a tough business with complex rules,” so it is necessary to pay particular attention. “
Zeuner said they have also accomplished all their statutory and structural objectives, placing the client families within the context in order to be able to make any necessary changes and comply with new regulations.
A team for Family Governance and Education, headed by Elaine King, has also been created, and the WE office in New York opened in the Rockefeller Center a few weeks ago, with Zeuner himself at the helm of a team which has been completed with the addition of two new professionals.
Another project which is already underway and which will be released shortly is a web portal for clients, “with very horizontal porpietary technology.”
“We act as coordinators for our clients. The typical We Family Offices client deals with three financial institutions, three or four advisors, several insurance companies and more than a broker.” Lagomasino emphasized explaining their clients’ characteristics. The average WE client family generally has to deal with about 20 different people, hence the importance of a coordinating role.
According to Lagomasino, once all service providers have been reviewed and evaluated, the problem persists until everything is harmonized. The matter may not end there, because in many cases they face family dispersion, to mention just another issue which must be resolved in estate planning, particularly in terms of taxation.
For example, in the same family there may be members who reside in Latin America and other members living in the United States. In this respect, the executive highlights the importance of complying with regulations and harmonizing everything before changing the structure, which is the main problem which they usually find.
As for the forecasts and estimates for WE’s growth during the coming months, Lagomasino believes they are fine as they are and at the pace at which things are being achieved.“We prefer to continue along this line in managing a business in which customer support is top priority”.
This past July, just six months after its launch, WE Family Offices exceeded 2 billion dollars in assets under advisory, that figure is currently around $2.2 billion. The company, based in Miami, serves over 60 high net worth clients in the U.S. and other countries, mainly in Latin America.
Photo: Wolfgang Stuck. Luxemburgo autoriza UCITS en renminbi para inversores extranjeros cualificados
The Luxembourg regulator has approved a UCITS investing 100% of its net assets in China A-shares (i.e. shares in mainland China-based companies that are traded on a Chinese stock exchange). The UCITS can invest in these shares through the use of the RQFII quota granted to its manager by the competent Chinese authorities.
In order to authorize such an ‘RQFII UCITS’, the CSSF requirements relate to the following :
The fact that the fund must be open-ended;
The experience, competence and qualification of the manager;
The application of appropriate risk management procedures;
The correspondent bank of the depository and the segregation of assets at the level of the correspondent bank of the depository.
Requirements of the UCITS directive need to be fully complied with. Notably, since the latest expansion of the RQFII scheme in March 2013, daily liquidity in RQFII funds is required. These new rules correspond entirely to the UCITS regulation that also requires daily liquidity. The RQFII UCITS scheme is particularly interesting for foreign fund managers using Luxembourg as their platform to distribute UCITS on a cross-border basis. Luxembourg UCITS are a renowned investment scheme distributed in around 70 countries. Accordingly, Luxembourg is the ideal hub to domicile RQFII investment funds and to distribute them globally in order to boost the access to RMB denominated assets worldwide. The subsequent use of the RQFII quota is still subject to authorization of the China Securities Regulatory Commission (CSRC). The new development coincides with the release of the new figures underlining Luxembourg’s leading position as a European RMB centre. As of June 2013, 18 asset managers have established RMB funds in Luxembourg with a total of more than 220bn RMB of assets under management. Among these international RMB fund promoters, are the most prestigious names in the industry.
With 56bn RMB in deposits and over 67bn RMB in loans in Q3 2013, Luxembourg maintains its position as the financial centre with largest RMB business volumes in the Eurozone. Detailed facts & figures can be found here.
Wikimedia CommonsPortfolio Manager Jean-Daniel Malan. Lazard launches UCITS fund for the Global Hexagon strategy
Lazard Asset Management launched a UCITS fund for the Lazard Global Hexagon strategy.
The Lazard Global Hexagon Equity Fund is a long/short equity strategy that seeks to achieve long-term capital appreciation by investing in attractive opportunities around the world, including emerging markets. It utilizes bottom-up fundamental stock selection based on Lazard’s global research and adheres to an investment philosophy with risk management and capital preservation at its core.
Mike Wariebi, Head of Business Development for Alternative Investments in Europe and the Middle East, commented: “Since the inception of the strategy, in June 2010, we have employed an investment approach with a strong focus on capital preservation and an investment discipline which allows the quality of our ideas to be the real driver of returns. With this launch we are delighted to be able to now offer our clients this global long/short equity offering within a UCITS vehicle”.
The Fund is managed by a team led by Portfolio Manager Jean-Daniel Malan, who has over 15 years of industry experience. The investment team also draws upon the firm’s fundamental equity research capabilities through the global research platform.
Jean-Daniel Malan said: “We continuously screen globally for undervalued companies that have improving or high and sustainable financial productivity. Our aim is to give our clients exposure to differentiated and often under-researched investments that offer the best asymmetric risk/reward outcomes. Yet we also have to be attuned to exogenous developments and changes in market sentiment which often present as many opportunities as they do challenges.”
Jose Gurvich, La Creación, 1968, Témpera sobre papel, 35 x 53 cm, imagen cedida por el Museo Gurvich, Montevideo.. Arte en América Latina: demanda y perspectivas
In 2012, Latin American auction sales saw massive growth- increasing by 25% to $84.8 million. Although the latest round of auction sales (in May 2013) showed just a modest 2% increase (from November 2012 sales) auction sales continue to be robust and steadily grow in the Latin American market since the 2008 crisis.
There is broad consensus amongst art experts that the Latin American market will experience growth. ArtTactic, the leading art market analysis and research firm, published in its 2013 outlook that 67% of art buyers expect the Latin American art market to expand in 2013. Also significant is Latin America’s distinction as the regional market which art collectors and professionals have the most confidence in: 59% believe that the market will be positive- by far the most of any of region.
Latin American art is often characterized as undervalued, as there has not been an “explosion” in prices as there have been in other 20th century art categories. Alejandro Zaia, chairman of the London Latin American art fair PINTA, characterizes the market: “slowly, but steadily, prices are heading up,” and “you still have undervalued artists, you have opportunities, but it is not the same as 10 to 20 years ago.”
In 2012, there was strong demand from regional buyers- which may be a consequence of positive economic conditions in markets such as Chile, Brazil and Colombia. According to the Fine Art Fund Group, there has also been a strong demand for modern art work outside of Mexico (which has played a dominant role). Now art works from Brazil, Chile, Venezuela, Colombia and Cuba are also facing strong demand, signaling “that new collectors related to these regions are playing an increasingly important role in the growth of the Latin American art market.” This newly expanded regional base is encouraging for Latin American art. But the expanded base doesn’t just apply to regional players- Latin American art is experiencing its own driving force of globalization, gaining international recognition and demand from buyers in Europe, the US and Middle East. Latin American art fairs have been a key infrastructure trend, and have started to attract attention from the international art world. A positive outlook in the market coupled with stronger regional and global demand are all positive forces for the Latin American art market and are encouraging signs for investors.
Conclusion
The art markets have strong forces driving demand: globalized buyers, the increasing ultra high net worth population and potential for increased allocation to art in investor portfolios. Experts see value in the Latin American art market, and BigSur is happy to act as a player in supporting the growing visibility of Latin American art and bringing it to the world stage. This year BigSur is sponsoring The Modern & Contemporary Latin American Art Show, PINTA, held in New York City on November 14th. In particular, we will be sponsoring a special exhibit on José Gurvich, a very important artist who among other things, embodies the diaspora phenomenon- born in Lithuania, raised in Uruguay, travelling and working extensively throughout Europe and Israel, and finally ending up in New York in 1970. All these diverse environments and experienced shaped his unique artistic talent.
Foto cedidaChris Palmer, manager of the Henderson Gartmore Latin American Fund . Argentina: Not For The Faint of Heart
The Argentine stock market has risen close to 50% in US dollar terms this year as stronger economic activity has combined with the hope of political change to entice investors back to this volatile frontier market. The attraction of Argentina is not dissimilar to other countries in Latin America, being resource-rich and having supportive demographic trends. However, the problems are also familiar, as populist and protectionist policies have been a hallmark of Argentine politics. This has become a major problem in recent years as Cristina Fernandez de Kirchner, who succeeded her late husband, Nestor Kirchner, as President in 2007, has resorted to price controls and nationalisations, as well as refusing to pay creditors. Much needed foreign investment in the country has consequently been scared away while the government’s fiscal situation has continued to deteriorate.
For observers of the finer details of Argentine economics, there is much confusion about both inflation and the currency. The official inflation rate is just over 10%, but the actual figures are estimated at more than double this – fines have been meted out to economists who publish ‘unofficial’ rates. Dwindling foreign currency reserves have also prompted restrictions on the purchasing of US dollars, causing much interest in the value of the black market “blue dollar”, where trading activity is high. Whilst the official exchange rate is around just shy of 6 pesos to the US dollar, the blue dollar is closer to 10, implying a huge devaluation.
Hopes of political change were raised recently when Kirchner’s ruling party saw its share of the national vote drop by close to 20 percentage points at the October mid-term elections. This essentially rules out the possibility of Kirchner changing the constitution to allow herself to run for a third term in the 2015 Presidential elections. The general consensus is that the alternatives to Kirchner will offer a more orthodox economic policy, paving the way for a more investor-friendly environment. However, the opposition is fragmented and potential Presidential candidates may resort to populist rhetoric to garner support.
This leaves investors in a quandary. Despite the recent rally in the market, the MSCI Argentina Index is still trading at less than half its 2008 peak, valuations in the stock market appear attractive, while political momentum has clearly shifted. Offsetting this is the risk of a significant devaluation of the currency and the painful process that the economy will have to go through before it comes out of the other side. The rewards from a recovery in Argentina are tempting, but they are not for the faint of heart.
In terms of activity, we have introduced Argentine oil and gas firm YPF to the strategy on the view that its shale oil and gas potential outweighs the macroeconomic risks. Argentina is believed to possess a significant amount of the world’s shale gas. Recently, the company reported a jump of 87% in net profit over the third quarter versus the same period in 2012 thanks to higher natural gas and gasoline prices.
Chris Palmer, manager of the Henderson Gartmore Latin American Fund
Wikimedia CommonsPhoto: Tijs Zwinkels. AXA to acquire 51% of Colpatria’s Insurance Operations and Enter the Colombian Market
AXA has entered into an agreement with Grupo Mercantil Colpatria to acquire a 51% stake in its composite insurance operations in Colombia –Colpatria Seguros– for a total consideration of COP 672 billion (or Euro 259 million). AXA expects to consolidate the acquired operations within its Mediterranean & Latin American Region.
Colpatria Seguros is the number 4 insurance player in Colombia (7% market share), with operations in both Property & Casualty and Life & Savings. It is a leader in the segments of compulsory Motor Third Party Liability ( number 3 with 15% market share) and Workers Compensation ( number 4 with 14% market share). Its nationwide coverage and diversified distribution networks, with multi-tied agents representing approximately 40% of premiums, have supported its strong growth.
The transaction will allow AXA to enter the attractive Colombian market and benefit from its strong growth prospects through developed and profitable operations in a joint-venture with a well-established local partner. Colpatria Seguros will benefit from Axa’s strong know how to accelerate further its development and leverage its competitive advantages in the Colombian market.
“This acquisition gives AXA a unique opportunity to enter the fast-growing Colombian insurance market with well- established positions in all lines of business, while benefiting from the support of a solid and reputable local partner. Moreover, colpatria Seguros’ sustained historical growth and profitability, both above market average, provide AXA with a strong platform for further development. This operation strengthens Axa’s growth profile and marks another milestone in our strategy of accelerating in high growth markets, which is at the heart of our Ambition AXA plan” said Henri de Castries, Chairman and CEO of AXA.
“We are very much looking forward to working with Colpatria Seguro’s teams. By combining their extensive knowledge of the domestic market and Axa’s capabilities and expertise, we expect to provide individual and corporate customers with a wider product range and an innovative offer”, added Jean-Laurent Granier, CEO of AXA Mediterranean & Latin American Region.
Completion of the transaction is subject to customary closing conditions, including the receipt of regulatory approval, and is expected to take place in 2014.
About the Colombian Insurance Markets
The Colombian insurance market is the fifth largest in Latin America with ca. Euro 8 billion of revenues. Property & Casualty represent close to 50% of the market, followed by Life, Workers Compensation (Labour Risks) and Voluntary Health. The top 5 players represent ca. 50% of the volumes. Distribution is dominated by multi-tied agents (52%) and brokers (31%).
The Colombian insurance market has enjoyed robust growth over the past four years, at 12% per annum on average. It still presents further upside potential with a low penetration rate of 2.4% and assuming strong prospects for the Colombian economy. On top of increasing economic activity and a growing middle class, market growth has been boosted by the strong development of mandatory insurance coverage, such as Motor Third Party Liability, Workers Compensation and Health Insurance.
In 2012, there were 47.7 million inhabitants in Colombia and GDP was Euro 288 billion.
Earlier than expected the ECB decided to lower its official interest rate by 25 basis points to 0.25%. A more accommodative monetary policy is positive for global risk appetite. In this enviroment, ING Investment Management increased their overweight position in equities from +2 to +3.
The asset manager had expected this move, but not before December. Even after the cut, the ECB maintains an easing bias, saying it expects the level of interest rates to stay at the current or a lower level for an extended period of time. Hence, at this stage, the central bank does not close the door to further rate cuts.
Why the ECB has acted on 7 November
Broad support for risk appetite
Not only the ECB policy but also the policies of the other big central banks (US, Japan) are currently supportive for risk appetite. Last but not least the improving earnings, the relatively attractive equity valuations and the lack of event risks and a broad decline in uncertainty should be good for risk appetite.
What would be the biggest danger for risk appetite?
The biggest downside risk would come from a sharp rise in bond yields that is not sufficiently met with an improvement in economic data and the earnings outlook. With global monetary policy in maximum easing mode until March 2014 and better leading indicators, this is a risk scenario, but certainly not our base case scenario.
You can read the full report on the attached document.
Wikimedia CommonsPhoto: Brett Weinstein. Latin America is Home to 111 “Billionaires”, 5% of the World's Total Census
The number of Latin American billionaires reached 111, a population which has grown 2.8% during the last year representing 5,11% of the first census of “billionaires” elaborated by Wealth-X and UBS.
Latin American billionaires have a total net worth of almost $500 billion. Carlos Slim’s total net worth, amounts to almost 15% of the total net worth of the Latin American region.
The inaugural Wealth-X and UBS Billionaire Census 2013, reveals that the global billionaire population reached a record 2,170 individuals in 2013 and total billionaire wealth in Asia surged nearly 13 percent, making it the fastest-growing region. At current growth rates Asia will catch up with North America in five years.
Asia also saw the highest percentage rise in billionaire population (3.7% from 2012) and total wealth (13%) in 2013, suggesting that it is driving the tectonic shifts in wealth globally. The report also shows that 810 individuals became billionaires since the 2009 global financial crisis. The billionaire population’s combined net worth more than doubled from US$3.1 trillion in 2009 to US$6.5 trillion in 2013 – enough to fund the United States budget deficit until 2024, and greater than the GDP of every country except the United States and China. The report – which looks at the global billionaire population from July 2012 to June 2013 – examines this tier of the ultra affluent population by region, country, gender and the sources of their wealth.
Below are other key findings from the inaugural report:
The global billionaire population rose by 0.5 percent and their total wealth increased by 5.3 percent in the past year.
Europe is home to the most billionaires (766 individuals). However, North America has the most billionaire wealth (US$2,158 billion).
Asia contributed the largest number of new billionaires (18) this year, followed by North America (11).
Latin America is the slowest growing region in terms of billionaire wealth, increasing by just 2.3 percent in the past year.
As of 2013, the average net worth of the world’s billionaires is US$3 billion.
Globally, there are 111 individuals who each have a net worth that exceeds US$10 billion. Their combined net worth is over US$1.9 trillion, greater than the GDP of Canada.
Despite popular notions of billionaires being jet-setting, cosmopolitan individuals, most billionaires are still based in the same locations where they were raised.
60 percent of billionaires are self-made, while 40 percent inherited their wealth or grew their fortunes from inheritance.
Only 17 percent of female billionaires are self-made, while 71 percent gained their fortunes through inheritance.
“UBS has had the privilege of serving the world’s most successful families for more than 150 years, and we are delighted to partner with Wealth-X in presenting the first Wealth-X and UBS Billionaire Census,” said Chi-Won Yoon, CEO of UBS Asia Pacific. “In Asia, most billionaires are entrepreneurs who remain heavily involved in their family businesses. UBS is uniquely positioned to meet the demands of this highly sophisticated clientele by offering world-class capabilities seamlessly integrated across our wealth management, investment bank and global asset management businesses.”
For the report’s microsite and additional video commentaries by Wealth-X and UBS executives, visit www.billionairecensus.com.
Hedge funds that invest in people management register higher average investment returns than their peers, according to a new survey from Citi Prime Finance. This concept of “people alpha” is the latest potential differentiator for managers in an industry that is becoming increasingly competitive and institutionalized.
The survey corroborates numerous other academic studies that have shown the connection between superior performance and an investment in an organization’s people.
“Just as hedge funds once claimed ‘operational alpha’ as a differentiator, we believe that ‘people alpha’ will separate some firms from the pack and will soon become an industry norm,” said Sandy Kaul, Global Head of Business Advisory Services at Citi Prime Finance.
To conduct the study Citi interviewed a diverse group of 24 hedge funds, each with at least $500 million in assets under management, and evaluated each firm’s practices by focusing on four key pillars – Talent Acquisition, Talent Retention, Learning & Development and Performance Management. For each of these categories, Citi developed a list of standard and market leading criteria and ranked firms using a 10 point scale, cumulating in a single ‘people score.’
According to the survey, the number of people working at the firm is the determining factor in their focus on people-related matters. Larger firms (+150 people) consistently outscored and outperformed medium and smaller sized firms. When there were similar sized firms such as those between 50 and 150 employees, those that fell in the bottom half of the study’s people score underperformed similarly sized firms in the top half by nearly 600 basis points between 2009 and 2012.
Other key findings:
The greatest difference between top and bottom performing firms was in their approach to talent retention. This included developing an interactive culture and offering an extended benefits package, flexible workplace arrangements and workplace perks.
Firms that scored well in talent retention also tended to have stronger approaches towards talent acquisition. These firms used techniques such as implementing internship programs and actively recruiting a diverse workforce.
Firms that displayed strong growth also emphasized learning and development. This included leadership training, formal mentorship programs and ongoing coaching for the management and investment teams.
Another indicator of current and future success is the presence of a robust review process that includes peer reviews, separate performance and compensation discussions and the inclusion of qualitative as well as quantitative factors.
“As the industry continues to mature, sophisticated investors will assess hedge funds’ adherence to people management as a standard part of industry due diligence,” added Kaul.
The full report, along with other industry analysis and reporting can be viewed at this link.
