Fibra Inn Buys 20 hotels from Group Intercontinental in Mexico

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Fibra Inn, tras la compra de 20 hoteles del Grupo Intercontinental en México
Wikimedia CommonsHotel Presidente Intercontinental in México City. Fibra Inn Buys 20 hotels from Group Intercontinental in Mexico

Deutsche Bank Mexico and Fibra Inn, a Mexican real estate investment trust specializing in the hotel industry serving the business traveler, are working on an agreement with InterContinental Hotels Group or “IHG” to establish the terms and conditions in which Fibra Inn will develop and / or acquire around 20 hotels in Mexico through franchise agreements to brand and operate hotels under the hotels systems:

  • Crowne Plaza
  • Hotel Indigo
  • Holiday Inn
  • Staybridge Suites
  • Candlewood Suites

IHG or InterContinental Hotels Group is a global hotel company operating nine hotel brands – InterContinental Hotels and Resorts, Hualuxe TM Hotels and Resorts, Crowne Plaza Hotels and Resorts, Hotel Indigo, EVEN TM Hotels, Holiday Inn Hotels and Resorts, Holiday Inn Express, Staybridge Suites and Candlewood Suites.

IHG has 79 hotels throughout Latin America and the Caribbean. In México it has 120 properties and over 18,917 rooms. 

 

 

KKR Lists Its First Closed-End Fund Raising Up To $352 Million

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KKR lanza fondos de Bienes Raíces y Renta Fija Alternativa
Wikimedia CommonsFoto:Coyau. KKR Lists Its First Closed-End Fund Raising Up To $352 Million

KKR has announced that its first listed closed-end fund, KKR Income Opportunities Fund, has successfully completed its initial public offering and began trading on the New York Stock Exchange on July 26 under the symbol “KIO.”

The Fund raised $305 million in its common share offering, excluding any exercise of the underwriters’ option to purchase additional shares. If the underwriters exercise that option in full, which may or may not occur, the Fund will have raised $352 million.

KKR Asset Management serves as the Fund’s investment adviser. Launched in 2004, KAM is a subsidiary of KKR and a manager of non-investment grade debt and public equities. The investment process for the Fund is substantially based on the investment process of KAM’s High Yield, Bank Loans and Special Situations strategies. The Fund will be managed by Chris Sheldon and Erik Falk, co-heads of Leveraged Credit, and Nat Zilkha and Jamie Weinstein, co-heads of Special Situations.

KKR Income Opportunities Fund will invest primarily in first- and second-lien secured loans, unsecured loans and high yield corporate debt instruments. It will employ a dynamic strategy of investing in a targeted portfolio of loans and fixed-income instruments of U.S. and non-U.S. issuers and implementing hedging strategies in order to seek to achieve attractive risk-adjusted returns. 

UBP Published an Increase in AUMs and Net Profit in the First Half

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Aumentan los activos bajo gestión y el beneficio neto de UBP en el primer semestre
Swiss Patrol. UBP Published an Increase in AUMs and Net Profit in the First Half

In the first half of 2013, UBP posted net earnings of CHF 77.2 million, which is a 10% rise compared to the previous half-year results (CHF 70 million). The end-of-June figure for assets under management is CHF 81.1 billion; this does not take into account assets from the acquisition, announced at the end of May 2013, of Lloyds Banking Group’s international private banking activities, which will be integrated when the deal is closed (on 31 October 2013).

Income came to CHF 349.4 million (USD 369.3 million) over the half-year, up from CHF 344.5 million a year before. The 11% rise in fees and commissions, to CHF 233.4 million (USD 246.7 million), offset the fall in interest margins. Operating expenses have been tightly controlled, and have dropped by 11% compared to the end of June 2012, to CHF 232.2 million (USD 245.5 million), bringing the Group’s consolidated cost/income ratio to 66% (down from 76% a year ago), despite the strong pressure currently weighing on margins in the banking industry.

Strong financial foundations

The balance sheet totalled CHF 18.8 billion (USD 19.9 billion). Overall, the balance sheet has remained stable and highly liquid. By pursuing a conservative approach to risk management, UBP has been able to maintain a solid financial base and a sound and strong balance sheet. With its Tier 1 ratio exceeding 30%, UBP is one of the best-capitalised Swiss banks.

Strategic developments

In the first half of 2013, boosted by a rebound on the markets and its renewed product sales drive, UBP was able to strengthen its positioning with both private and institutional clients, not only in Switzerland, but also in emerging markets. UBP firmly believes that the Swiss financial market has the strengths and qualities as a centre for wealth management to keep providing its clients with top-quality services through these times of regulatory changes.

The US Market is Seen as an “Impenetrable Market” by European Fund Platforms

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The US Market is Seen as an "Impenetrable Market" by European Fund Platforms
Wikimedia CommonsFoto: Prayitno. EE.UU. se percibe como un “mercado impenetrable” por las plataformas de fondos europeas

The Fund Platform Group (FPG) commissioned “A Snapshot of European Platforms” to Cerulli and The Platforum. The survey was conducted over a four week period throughout October 2012 among some of the most influential platform groups, fund buyers and fund sellers across Europe. It sought the opinions of key players in the platform industry regarding future development opportunities, challenges and growth outlook.

The common theme was a story of a continued need for open architecture solutions. Having said that, concentration of funds is getting more pronounced with the majority of platforms predicting that 70% of assets would flow to just 10 fund managers by 2015.

There are a varying number of platform models in Europe, which have all evolved in response to the different distribution dynamics of each market. Italy is very bank-dominated and the platforms are correspondingly highly institutional. The UK’s IFAs have been historically very fragmented and so platforms have been much more retail focused. Looking to the future, each different European country has a slightly different focus. Switzerland, for example, is felt to offer great opportunity for those supporting the private banks. In continental Europe, insurance is felt to offer appealing growth potential.

As funds are sold in more countries, and as global agreements become more commonplace, the challenge for platforms is to deliver similar (or the same) underlying product in different jurisdictions with varying distribution channels at play.

Against the difficult backdrop of falling margins, fee pressure and the green shoots of increasing transparency, some believe that consolidation in the number of European platforms is inevitable. Scale continues to be a primary concern and platforms are looking to other European markets as well Asia for growth potential. Latin America would be the third option whereas the US market is felt as impenetrable, mainly due to regulatory issues.

Figure 1.  If you are a European platform, which other markets are you considering expanding to?

Source: FPG

42% of European platforms think that growth opportunities are presented by other European markets, with Asia the next most appealing option

The source of growth for European platforms is largely felt to come from other European markets, Allfunds Bank is an example of an international platform which has expanded its operations from original parent Santander’s Spanish roots to operate in other juristrictions, including the UK, Italy, Luxembourg, Chile and Dubai.

Outside of Europe, 38% of participants in the survey pointed to Asia as providing opportunities. Asia is a great seductress, promising tales of opportunity and expansion, but she is seen by some as a fickle mistress. Nevertheless, everyone believes that Asia is a great opportunity but participants pointed out that Asia is like Europe: it is a very fragmented market and so arguably doesn’t exist as a single concept.

Singapore is generally reported to be the most interesting opportunity because of the private bank market there – this is the core target market of many European platforms. Additionally, SICAVs are sold in Singapore so the product environment is arguably more familiar.

Latin America is regarded as a growth opportunity for 17% of respondents whereas US, the largest mutual fund market in the world, is attractive for only 4% of participants. The main cause is a complex regulatory environment, though the strong market share of no European platforms in this market might also be a concern. 

Eric Lindenbaum and Jack Deino named Co-Heads of Invesco Emerging Markets Debt Fund

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Eric Lindenbaum and Jack Deino named Co-Heads of Invesco Emerging Markets Debt Fund
Wikimedia CommonsFoto: Bob Jagendorf. Eric Lindenbaum y Jack Deino nuevos cogestores del Invesco Emerging Markets Debt Fund

Invesco Canada has promoted Eric Lindenbaum and Jack Deino to Co-Heads of Invesco’s emerging-markets debt business. The team will take over the lead portfolio manager role on Invesco Emerging Markets Debt Fund in Canada effective August 1, 2013.

Mr. Lindenbaum and Mr. Deino have been working together in close partnership at Invesco since 2006 and have strong complementary skills sets, specializing in sovereign debt and corporate debt, respectively.

Mr. Lindenbaum joined Invesco’s Emerging Market Debt team in 2004, with his most recent role being Senior Portfolio Manager. Inclusive of his tenure at Invesco, he has 18 years industry experience.

Mr. Deino, CFA joined Invesco’s Emerging Market Debt team in 2006, with his most recent role being Senior Portfolio Manager and Head of Emerging Market Corporate Credit Research with Invesco Fixed Income. He has 19 years of industry experience, entirely focused on emerging markets.

The Fund’s investment objectives, philosophy and process remain unchanged. Claudia Calich, who previously served as portfolio manager for the Fund, will be leaving Invesco.

Invesco Canada, operating under three distinct product brands (Trimark, Invesco and PowerShares), is one of Canada’s largest investment management companies.

Grosvenor Capital Management Acquires CFIG from Credit Suisse

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Grosvenor Capital Management adquiere CFIG de Credit Suisse
Wikimedia CommonsBy Kables . Grosvenor Capital Management Acquires CFIG from Credit Suisse

Grosvenor Capital Management, allocators to hedge funds, announced on Thursday an agreement to acquire the Customized Fund Investment Group (“CFIG”), a leading global private equity, infrastructure and real estate investment management company, from Credit Suisse Group AG . 

CFIG is one of the largest providers of customized private equity solutions globally with approximately $18 billion of assets under management and 11 offices around the world.  Following the completion of the transaction, CFIG will be renamed the GCM Customized Fund Investment Group. Terms of the transaction were not disclosed. 

“This transaction makes each firm a more valuable partner for existing clients,” said Michael Sacks, chief executive officer of Grosvenor.  “It creates a strong and diversified multi-asset alternatives platform that can support institutional investors across a range of alternative investments. The CFIG team is made up of highly talented and experienced investors who share our core values including an intense focus on investment performance, their clients and on customized solutions.  We are looking forward to joining forces with them.”  

The combined firm will have over $40 billion in assets under management and 400 professionals across the globe.  CFIG’s management team is committed to making this transaction a success – all senior members of management will join the combined firm and have signed long-term commitments to remain with the combined firm.  CFIG will operate as a subsidiary of Grosvenor and maintain its New York headquarters.

The sale is part of Credit Suisse’s strategic divestment plans announced on July 18, 2012.

 

 

Is Brazil’s Economy Operating Below its Potential?

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¿Está Brasil creciendo por debajo de su potencial?
By Agência Brasil (Department of Press and Media). Is Brazil’s Economy Operating Below its Potential?

The Brazilian stock market, as measured by the MSCI Brazil Total Return Index, is down just under 25% in US dollar terms year-to-date (10 July 2013), with about 10% of that loss being due to weakness in the exchange rate of the Brazilian real versus the dollar. Losses at two large companies in Brazil; energy company Petrobras, and mining company Vale have also contributed significantly. We believe that much of Brazil’s current economic problems stem from domestic economic mis-management and an urgent need for increased incentives for private capital investment. We do not believe that one factor alone, such as lower Chinese growth, falling commodity prices, or changes in Federal Reserve policies are the main sources of blame; after all, Indonesia and Australia also export to China and are exposed to the same global forces, yet their economies and stock markets are generally perceived to be in better shape.

Arguably Brazil’s investment unpopularity stems largely from local and foreign investor mistrust of the Dilma administration and its economic policies.

For example, Brazilian exports to China actually rose to a historic high in May 2013, reaching US$5.6 billion, a 5.6% increase versus the same period last year and up over five times since 2007 (according to Bloomberg). Brazil’s economic relationship with China is actually one of the bright spots in the economy, as China has broadened its mix of goods that it buys from Brazil. 
Arguably Brazil’s investment unpopularity stems largely from local and foreign investor mistrust of the Dilma administration and its economic policies. The banking, utilities, mining, transport, beverages and energy industries have witnessed increasing government intervention in pricing and taxation, often through manipulation by huge state-owned companies, which have harmed the interests of private stock exchange listed companies. Some industries, such as construction, with close ties to the government have done well, but they are not listed and often rely on large loans from state banks. 

The recent street protests in Brazil were a largely middle class expression of much of what local and foreign stock market investors already knew

Corruption has also become more evident in the relationship between the government and key industries. It is unclear whether the present Brazilian government has the will or the discipline to repair the damage it has created – this is the biggest source of potential surprise, both positive and negative, that the Brazilian investment climate faces in the near term.

The recent street protests in Brazil were a largely middle class expression of much of what local and foreign stock market investors already knew; that the government was failing to invest its new-found commodity wealth wisely, corruption in Dilma’s previously clean Workers Party was rising quickly, and that big projects, such as World Cup stadiums or Petrobras, did little to address shortages in education and healthcare. Many Brazilians are painfully aware that the government’s huge unproven gamble on Petrobras is directing vast sums of money away from much-needed social investment.

Such a discount can be justified considering the immediate headwinds facing Brazil but offers longer-tem investors a good opportunity to invest in an economy operating well below its potential.

However, over the past decade, investing in Brazil has made sense. The stock market has done very well (MSCI Brazil Total Return Index +538.4% versus MSCI World Total Return Index +112.4% in US dollar terms, between 30 June 2003 and 30 June 2013), Brazilians are much better off, and the country has opened itself up to foreign trade. However, the recent weakness has also pointed out that in emerging markets government policy, good or bad, still has an enormous impact on the economy. Trade is a bright spot for Brazil going into 2014 as exports to the US, Europe, and Japan could accelerate. There are further developments, which could help the Brazilian financial markets in the coming months; first, the decision to raise interest rates should help with inflation expectations and reduce wage inflation in 2014; second, the weaker currency has improved Brazil’s trade competitiveness; third, the government has promised to review its fiscal position and there is some evidence that excessive or wasteful vanity projects will be cut; fourth, the street protests provided a vital wake-up call to a government, which had wrongly believed that President Dilma was universally popular; finally, we believe that Petrobras will begin showing some qualified success in its deep water oil fields – perhaps not as much oil or soon enough for many critics, but enough to ease investors’ deeper concerns.

At present levels the Brazilian stock market is trading at a price-to-earnings ratio of 14x, a price-to-book ratio of 1.3x and offers earning growth of about 14% over the next twelve months – however, currency volatility and the outlook for commodity prices often lead to wide ranges in estimates. In historical terms the price-to-earnings ratio in 2008 was about 8.5x and the price-to-book ratio was about 1.6x. Our conclusion is that the market offers relative value on a historical basis but that earnings are at depressed levels. Such a discount can be justified considering the immediate headwinds facing Brazil but offers longer-tem investors a good opportunity to invest in an economy operating well below its potential.

Opinion column by Christopher Palmer, Director of Global Emerging Markets at Henderson Global Investors.

 

Zero Duration to Protect Against Rising Yields

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¿Cómo pueden protegerse los inversores ante subidas en las tasas de interés?
Wikimedia Commons. Zero Duration to Protect Against Rising Yields

Yields on US and European government bonds rose after reports that the Fed could begin tapering back its bond purchases later this year if the US economy keeps improving. Figure 1 shows the 5-year German Government Bonds and US Treasury yields (in %).

Currently, the Fed is buying USD 85 billion each month in treasury paper and mortgage-backed securities to stimulate economic and jobs growth. Bond investors expect this to be the starting point of a Fed policy that is less accommodating to the bond market. They fear that the Fed might raise short-term interest rates after 2015 in order to fight inflation.

In the euro zone, the situation is different: the ECB has pledged that interest rates will remain at record lows far into the future. The euro-zone economy is still weak.

Figure 1: 5-year German Government Bonds and US Treasury yields (in %)

Source: Bloomberg

Zero-duration stragtegy – how does it work?

Robeco offers a Zero-duration variant that protects regular bond strategies against a rise in the long-term interest rates, while investors can still try to take advantage of higher credit spreads.

The Zero-duration strategy invests in the existing portfolio and includes an interest-rate hedge. This hedge lowers interest-rate sensitivity by swapping the 5-year interest rate for the money-market rate (Libor 3 months). This means that Robeco pays the fixed interest rate while receiving the floating interest rate. The result is a lower sensitivity to interest rates. The investor can still benefit from potential credit-spread tightening. The expected returns on high-yield bonds are twofold: the credit spread and the interest rate. The swap makes the interest-rate component variable. When government bond yields rise, the Zero-duration strategy is expected to outperform the regular bond strategy.

Implementing this hedge lowers the yield of the portfolio. This difference currently amounts to about 1.5%. As the current duration of the Robeco High Yield fund is around 4.4 years, the interest rates only have to rise by about 35bps in order to break-even between both share classes (duration x rate increase) and to compensate for this yield give-up. In a scenario of stronger rate increases, the Zero-duration strategy is expected to deliver higher total returns than the regular share class.

Robeco offers Zero-duration variants for High Yield Bonds, Investment Grade Corporate Bonds and Financial Institutions Bonds

Alan Van der Kamp, client portfolio manager at Robeco, goes into further detail about the zero duration strategy in this 3 minute video.

You may also access the complete whitepaper by Robeco about Zero Duration strategies through this link.

Stanford University Ranks No. 1 Measuring Student Satisfaction and Post-Graduate Success

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Stanford University Ranks No. 1 Measuring Student Satisfaction and Post-Graduate Success
Wikimedia CommonsFoto: Jawed . Stanford arrebata a Princeton el primer puesto como mejor universidad de EE.UU

Stanford University tops Forbes’ 2013 rankings of America’s Top Colleges.The 6thannual rankings, calculated exclusively for Forbes by the Center for College Affordability & Productivity (CCAP), are featured in the August 12, 2013 issue of Forbes magazine, and online.

Stanford edged Princeton out of first place into the No. 3 spot on this year’s rankings, which focus on Student Satisfaction (22.5%), Post-Graduate Success (37.5%), Student Debt (17.5%), Graduation Rate (11.25%) and Nationally Competitive Awards (11.25%). Pomona College moved up to No. 2 from ninth place last year, followed by Princeton University (No. 3), Yale University (No. 4) and Columbia University at No. 5.

“Picking a college is one of the most important decisions you will make in your lifetime,” says Forbes Executive Editor Michael Noer. “Our college rankings were created to inform consumers about the quality of the educational experience and our brand new financial health grades give insight into which schools will be around for the long-haul.”

The Top 10 Colleges are:

MFS Shares its Market View in Montevideo

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Jennifer Lippin Rexinis, Director of Investment Products at MFS Investment Management, will share her view on the markets on a breakfast with investors on August 14th at the World Trade Center in Montevideo. Jennifer will also discuss MFS’ Prudent Wealth strategy.

Jennifer joined MFS in 2006. Prior to serving in her current position, she was with Financial Research Corporation, where she served as director of the subadvisory services research group. During her career she has been responsible for communicating portfolio positioning and strategy to both institutional and retail clients and prospects, researching market trends in the industry and performing equity analysis. She began her financial services career in 1995.

Jennifer earned a bachelor’s degree from Brown University and a Master of Business Administration degree from Northeastern University. She holds Series 6 and 63 licenses from the Financial Industry Regulatory Authority (FINRA).

Where:, World Trade Center, Avda. Luis Alberto de Herrera 1248, Montevideo

Date: Wednesday August 14, 2013

Time : 9:00 AM Breakfast, 9:30 Presentation



RSVP:lmedrano@mfs.com