By Munerabig. Andrés Bernal, CFO of Grupo Sura, Named Latin Trade CFO of the Year
The Latin Trade Group has selected Andres Bernal of Sura Asset Management as CFO of the Year Colombia. With this award, Andres Bernal joins the ranks of some of the most distinguished financial executives in Latin America.
In 2011 Andres Bernal, 41, led the largest M&A deal in Colombian history with the $3.7 billion acquisition of ING pension fund assets. This turned Sura into the largest pension savings manager in Latin America with 25 million clients, and assets under management of over $100 billion. To finance the operation, he led a $2 billion stock issuance, the largest to-date in Colombia. He also managed the issuance of international bonds, and found five co-investors to enter the deal.
In 2012, the pension fund operation was moved from Grupo Sura to Sura Asset Management (SAM), with Bernal at the head. Andres Bernal convinced SAM’s shareholders to keep the company’s debt on their own books, which left it with very low debt. This allowed SAM to launch a second wave of acquisitions.
Last year Bernal led the acquisition of the remaining 20 percent in the pension fund Integra, which rendered SAM the sole owner of the Peruvian fund. He also designed the sale of a 7.51 percent share of AFP Proteccion to Canadian Alberta Investment Management Corporation. He also headed the acquisition of a brokerage house in Chile, of an insurance company in Mexico, the creation of a private pension fund in Uruguay, and an insurance broker in El Salvador. But his most important move was the acquisition of a 50 percent stake in Horizonte, BBVA’s pension fund in Peru. The deal involved a highly innovative agreement with Scotiabank, a traditional competitor, which bought the remaining 50 percent of the company.
SAM’s assets under management grew 15.4 percent in 2012 to $107 billion, and obtained a 21.9 percent average market share in Mexico, Peru, Chile, Uruguay, and Colombia. SAM posted $1.1 billion revenues and a $409.9 million EBITDA in 2012.
Andres Bernal was appointed CFO of Sura Asset Management in January 2012. Prior to that, he served as CFO of Grupo de Inversiones Sura, the holding company of the largest business conglomerate in Colombia. Andres Bernal graduated from Eafit and Babson College and is director at public utility company EPM.
Foto cedidaSimon Brazier, Equity Manager United Kingdom at Threadneedle
. UK Equity, Increasingly in Portfolio Managers’ Radars
A process based on valuation, and long-term perspective, are the two principles that have earned Simon Brazier success at the helm of the UK equities strategy at Threadneedle. After nearly a decade as a specialist in British shares in the team at Schroders, he joined Threadneedle in 2010.
“All decisions are made based on the valuation of the companies, and whether the business model makes sense within the next three to five years. Our vision is long term. We use market volatility in the short term to take advantage of the opportunity of the valuation in the long term,” said the expert in an exclusive interview with Funds Society.
All decisions are made based on the valuation of the companies
A team of 14 people, including managers and analysts, closely follow the British market; visiting and understanding the business of each of the companies they invest in. “Last year we performed more than 1,000 company visits. Many times we have between 3 and 4 meetings a day.”
The analysis of each company is based on three fundamental levels going through the business model, the economic model and the management team. “We are focused on business models with sustainable cash flows and strong dividend yield,” he says. “On the other hand, we analyze that the management team is making the right decisions to allocate capital properly. In general, we focus on companies with a strategy that works for a period of the next 3-5 years.”
Another one of the strengths of strategy is the diversification of the portfolio, which they use as a tool to limit the downside risk. “We have about 70 securities in the portfolio. We diversify by security and by themes, i.e., sometimes we have several names for a particular idea. This allows us to limit the downside risk, both at company and at a sectoral level.”
The UK equity strategy already has almost 1.4 billion pounds (approx. 2.2 billion dollars) in assets under management, and it seems that this asset class is increasingly present in the radar of portfolio managers globally. “We have customers in Israel, Portugal, Kuwait or Chile. The world is increasingly looking at the UK.”
The world is increasingly looking at the UK
According to the expert, the interest in the UK market makes sense despite economic uncertainties; he himself acknowledges that in the longer term, he is more confident in the UK market than in the country’s underlying economy. “British companies are unique in that 75% of profits are not generated within the country. Examples are Diageo or Astra Zeneca. Besides, the equity market in the UK is not only very liquid, it is the third largest in the world after the U.S. and Japan, as big as Germany and France together,” he says.
Wikimedia CommonsSome of the members of the Special Committee of the Senate, last Monday. Chile Approves a Proposal to Create an Alternative Pension System
Amongst the agreements reached by the Special Committee formed by the Chilean Senate to study reforms to the Pension Funds system are: to generate a system in parallel to the existing system administered by the AFPs, to ensure tripartite contribution and to consider how to allocate the regional factor in the calculation.
In the last meeting, which was held on Monday, Senators Eugenio Tuma, Alejandro Navarro, Pedro Muñoz Aburto, Jose GarciaRuminot and Carlos Kuschel analyzed the first five points of the document prepared by this body, which was released in early July. This text will be presented to the Executive in order for them to consign the Commission’s proposals, when reforming the current system, the Chilean Senate reported.
Within the issues approved at the meeting, Senator Tuma, president of this parliamentary group, highlighted the fact that the changes make it compulsory for the employer, whether public or private, to contribute for the total remuneration. “No more non-taxable allowances. This irregular situation has been partly responsible for the current damage to social security contributions,” he explained.
According to the parliamentarian, another issue which will be highly important in a future reform is related to the regulation of fees charged. He commented on the urgency of establishing transparency for these costs, ensuring that while the AFP claim to be applying 2% for this concept, in practice the figure rises to approximately 20%.
In turn, Senator Navarro elaborated on the voting of the points that were addressed. He said there is a marked difference between the government and opposition senators, since the former are committed to improve the existing system, while the second are committed to its elimination altogether.
The congressman said that the next government should consider these proposals, calling on all current presidential candidates from different sectors to pronounce themselves on this issue. In his opinion, the candidate Michelle Bachelet will be responsible for eliminating profiteering in the area of pensions.
Text Adopted:
To provide Chile with a public and supportive universal pension system, which enshrines the right of workers to withdraw from the current fund managers, choose the management system they wish to use for their pension funds, end the compulsory contribution to AFP and establish a system of nonprofit pension fund managers with the creation of a supporting fund differnet than individual contribution pension savings.
Restore the principle of Social Security as a right according to international standards of the ILO in Chile.
Incorporate the employers’ share to the social security contribution and gradually increase the contribution dues, achieving a tripartite contribution to the pension system with the participation of workers, employers and the State.
Encourage collective pension savings plans established during the legislation. For these plans, create incentives, such as the possibility of withdrawal of these funds in times of illness, education and purchase of the first home.
Fees should be in line with the results. To adjust the fee amount, the taxable income should be taken into account.
Other items approved by the Commission, the drafting of which remained pending were:
Design a pension system which takes regional factors into consideration.
Ensure that all types of payments made by all types of employers are taxable.
Consider working conditions, positively discriminating when taking heavy work into consideration.
The committee will continue reviewing twenty points in a forthcoming meeting. The debate will begin by resolving the role of workers in managing their pension funds and damaged pension records.
On July 8th, the 22 points that the Senators of this parliamentary body agreed on after nine months of work, were announced. During that time, the body received the various players related with this matter, and even held a seminar on the same issues.
Wikimedia CommonsBy Pete Souza . Dos tercios de los líderes mundiales emplean Twitter como herramienta diplomática
Burson-Marsteller released “Twiplomacy” an annual global study of world leaders on Twitter. The study shows that more than three-quarters (77.7%) of world leaders have a Twitter account and two-thirds (68%) have made mutual connections with their peers.
“Twiplomacy” is the leading research of its kind, aimed at identifying to what extent world leaders use Twitter. In early July 2013 Burson-Marsteller analyzed 505 government accounts in 153 countries.
The findings indicate that US President @BarackObama is still the most followed world leader on Twitter with more than 33 million followers. However, while almost a third (148) of all world leaders and governments are following Barack Obama he is not the best connected leader. @BarackObama only mutually follows two other world leaders – Norway’s Jens Stoltenberg and Russia’s Dmitry Medvedev.
The Pope (@Pontifex) has become the second most followed world leader with more than 7 million followers on his nine different accounts. Although Pope Francis does not engage with other Twitter users, especially his Spanish tweets are retweeted on average more than 11,000 times, making him the most influential world leader on Twitter. In comparison @BarackObama’s tweets are only retweeted on average 2,309 times despite his massive following.
Swedish Foreign Minister @CarlBildt is the best connected world leader mutually following 44 peers.
“This study illustrates how Twitter and social media in general have become part and parcel of any integrated government communications”, said Jeremy Galbraith, CEO of Burson-Marsteller Europe, Middle East and Africa. “While Twitter is certainly not the only channel of communication and will not replace face-to-face meetings, it allows for direct peer-to-peer interaction. I expect we will see an increasing number of corporations and CEOs also embracing the new tools that are connecting our world leaders”, he said.
On the other hand Ugandan Prime Minister @AmamaMbabazi is the most conversational world leader with 96% of his tweets being @replies to other Twitter users.
The study found that Twitter has become a formidable broadcasting tool for world leaders. Although not being conversational, the @Pontifex account has seen phenomenal Twitter growth over the past six months as have the accounts of Indonesian President Susilo Bambang Yudhoyono @SBYudhoyono and Venezuela’s President @NicolasMaduro who both signed up to Twitter in March 2013 and now rank among the top 20 most followed world leaders.
There are 227 personal accounts and 76 world leaders tweet personally albeit many only occasionally. Seven of the G8 leaders have a personal Twitter account and all but one of the G20 governments have an official Twitter presence.
By Brocken Inaglory. How to Catch an Investment ‘Wave’? Get in the Water!
At the beginning of the summer, I always start singing (or humming) some Beach Boys song as my own personal soundtrack to this glorious and seemingly carefree season. The song “Catch a Wave” has particular significance – not because I’m a surfer, but because one of my investing mentors once used surfing as analogy for me.
As he liked to explain, surfing requires a good measure of patience, perseverance, skill and luck. It also requires action – you can’t decide which wave to catch while you’re standing on the beach, holding your board. By the time you make your choice and race into the water, that wave will have either crashed down upon you or passed on to shore. In order to catch a wave, you have to pursue it. You must already be in the water, paddling, watching for opportunities. You might miss a couple before you catch the perfect wave to find yourself “sitting on top of the world,” as the Beach Boys ditty goes.
Investing also Requires Action
Like surfing, investing is a dynamic activity. If you try to time your entry from the sidelines, you run the risk of either missing the wave, chasing it endlessly or perhaps worse – being crushed by it.
Allow Me Some Latitude with this Analogy . . .
Your board is your ballast, the investment ‘core’ or foundation that you hold onto while you await a good wave. It should contain a diversified mix of instruments that are in line with your risk parameters to help generate, grow and sustain income over time.* A professional financial advisor can help you make those choices.
Your buoyancy is assisted by the mild paddling you do to float atop the water. This represents the monies you either add or reinvest as part of your ongoing investing activity.
The waves are the outside forces that drive the valuations of these instruments – and your ‘core’ – higher and lower, depending on the moods of the economy and the markets.
Oceans, like investing markets, have changing moods and tides. As the saying goes, ‘a rising tide lifts all boats.’ The same has been said about good financial markets. But if you are in the water long enough with the proper ‘board’ (diversified ballast), you have the opportunity to catch a wave!
So, remember to take action. Take yourself – your “Little Deuce Coupe” – to the beach and try to “Catch a Wave!”
The BMW Group debuted the series version of its innovative electric vehicle, the BMW i3, simultaneously in New York, London and Beijing on Monday. “Innovation drives change. The i3 is more than just a car. It’s a revolutionary step towards sustainable mobility. It is purpose-built around an electric power train to serve the needs of our megacity customers,” said Chairman of the Board of Management of BMW AG, Norbert Reithofer, at the world premiere in New York on Monday.
The BMW i3 – the BMW Group’s first pure electric series-produced model – has the same sporting genes as every BMW and is characterised by sheer driving pleasure. Sustainability is a priority throughout the entire BMW i3 value chain: “The BMW i3 sets a new benchmark for sustainable mobility in all stages of development and production, as well as aftersales,” said Friedrich Eichiner, Member of the Board of Management of BMW AG, Finance, at the unveiling of the BMW i3 in Beijing.
Range of 130 to 160 kilometres generally quite sufficient
Low running costs and strong global interest
BMW i3 sets a new benchmark in lightweight construction
Sustainability throughout the value chain
Global market for electric vehicles likely to exceed 150,000 vehicles in 2013
The BMW Group is the manufacturer of automobiles and motorcycles in the world with its BMW, MINI and Rolls-Royce brands. As a global company, the BMW Group operates 28 production and assembly facilities in 13 countries and has a global sales network in more than 140 countries.
By Laitche. Most Institutions are Abreast of Changes and Ready to Comply with FATCA
The wealth management industry has experienced many changes in recent years, especially in new rules and regulations, something which Steven L. Cantor, Managing Partner of Cantor & Webb, knows quite well, as he has been legally representing and advising high net worth families for 35 years; he has guided and directed those families in the process of complying with multiple tax and regulatory obligations, as well as providing advice on wealth planning.
For Cantor, changes in regulatory matters that are occurring now are causing the business to become increasingly transparent, in clear reference to the FATCA law, a rule orchestrated by the U.S. government which seeks to combat international tax evasion, which is estimated at USD 40,000 million annually.
Therefore, Cantor stresses that private bankers, in their advisory roles, are more aware than ever that clients must be current and meet their respective jurisdictions.
Most institutions are ready
Regarding FATCA, Cantor believes that most of the institutions are ready, as long they know what lies ahead and how to act in order to stay abreast of changes. He says that in the current context what will change is the transparency. “The world changes, just as the rules and regulations that apply change, and in the case of this particular sector is a major breakthrough because it will provide great transparency.”
Steven’s advice to wealth advisors is to keep abreast of regulatory changes and new regulations, but above all, to provide the client with the possibility of putting themselves in the hands of a professional who specializes in the area of tax planning and who may legally advise the client, which eventually avoids many problems.
Regarding the type of client company, Cantor says the typical customer is Latin, “the matriarch or patriarch of a family, with one foot in America and another in Latin America and who is looking to plan their wealth from both a legal and a taxation point of view; structuring their assets to comply in all respects with the tax offices of both the USA as well as that of their respective country.”
Another very common situation is the client who comes from Latin America to reside in the United States, and who was born in the United States but has never before lived in the United States and either did not feel the need, or did not know, that as an American citizen they had the obligation to comply with the U.S. treasury. “When they come here and settle is when the problem begins. They are dual nationality citizens, and they require complex advice”.
FIBA Private Banking Conference in Miami in September
Steven L. Cantor, Managing Partner at Cantor & Webb, who is also a partner of FIBA, talks about the upcoming private banking appointment that FIBA will hold in Miami on the 16 th and 17 th of September, a meeting which will have a large audience, and which will be represented by over 75 financial institutions and professionals from Latin America, Europe …
“As a member of FIBA, I am very pleased to see how FIBA assumes a very active role in understanding, educating, and providing ideas and opportunities for the industry in a very interesting format of working panels which allow to make the most of these conferences.”
In September, Cantor will act as moderator in the panel: “How has asset management and wealth planning evolved in an era of greater fiscal transparency?” The speakers will be Arturo Giacosa, head of Fiduciary and Hispanic Market Wealth Planning, Itau International Private Banking, Stephen Liss, director of Wealth and Investment Management at Barclays Americas and Klemens Zeller, wealth advisor at JP. Morgan.
Wikimedia CommonsBy Arend Vermazeren. China Property: A Tough "Bubble" to Pop
I recently came across an old newspaper article from February 1989 that described Beijing’s residential property “bubble,” with average selling prices then of about US$430 to US$510 per square meter. The article went on to say that, given that the average college-educated worker typically saved less than approximately US$13 per month, at those prices, it would take a century or so to be able to buy a two-bedroom apartment. The writer concluded that a housing bubble was underway.
These days, the official average Beijing home price has reached a new high of approximately US$3,800 per square meter (or about US$246,000 for a small one-bedroom apartment) despite strict home purchase restrictions. In terms of affordability, consider that last year, China’s average annual take home pay per person for urban households was approximately US$3,900. China’s property bubble has been a hot topic probably ever since the beginning of the country’s commodity housing development. But despite some compelling arguments and striking examples that a bubble does exist, China’s property market has generally remained robust. So, is its property market really in a bubble? If so, why has the bubble lasted so long?
Real estate in the country’s urban areas is expensive by traditional metrics. But the average income has also more than tripled over the past decade. While true wages may not continue to grow at double-digit rates, by the same token, it may be too soon to jump to the conclusion that there is a real estate bubble while incomes continue to shift upward.
No doubt that China has some poorly planned large-scale projects developed. Like the U.S., China is a vast country filled with many contradicting examples. Observers could reach opposing conclusions about the U.S. property market by narrowing in on areas such as San Francisco or Detroit. To generalize about China’s market can be equally misleading.
In previous commentaries on China’s housing market, we have noted that the typical down payment requirement for first time home buyers is a hefty 30%, and usually 60% for a second home. Unlike in the U.S., mortgage loans in China are recourse loans. As a result, a homeowner cannot expect that any remaining debt can be forgiven should he or she not be able to continue payments. So the systemic risks are very different than those the U.S. faced in recent years.
So what factors have underpinned the property bull market over the years? The main driving force for the development of property market has been actual demand for urbanization and home upgrades. Some investors are really concerned over the rate at which people in China may be buying multiple properties for investment. Chinese are famous for having high savings rate—as high as about 50%. However, the country’s investment alternatives are currently limited, and low bank rates have meant that keeping money in the bank has been a sure way to lose purchasing power. China’s domestic equity markets are also notoriously volatile. In addition, given the steady appreciation of China’s currency, the renminbi (RMB), over the past decade, the incentive for investing in RMB assets has become more appealing. Buying real estate, therefore, has been one of the few alternatives available for people to preserve wealth and purchasing power, especially in light of the typically low costs incurred for housing investments, or carrying costs. In China, so far only two cities, Shanghai and Chongqing, have implemented experimental property tax programs. The low carrying costs also help explain why some flats sit vacant—the need to find rental income is much less pressing than it might be in the U.S. where you have to cover higher mortgage costs and property taxes.
Although China’s property market certainly exhibits some bubble symptoms on the surface, the root cause seems deeply embedded in China’s economic growth and financial system. The government has proposed different measures over the years to tackle property inflation, but the efforts have been largely unsuccessful as they only temporarily suppress the symptoms. With continued wage growth and urbanization, China’s property market may be a tough “bubble” to pop.
Henry Zhang, Portfolio Manager at Matthews Asia
The views and information discussed represent opinion and an assessment of market conditions at a specific point in time that are subject to change. It should not be relied upon as a recommendation to buy and sell particular securities or markets in general. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Matthews International Capital Management, LLC does not accept any liability for losses either direct or consequential caused by the use of this information. Investing in international and emerging markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. In addition, single-country funds may be subject to a higher degree of market risk than diversified funds because of concentration in a specific geographic location. Investing in small- and mid-size companies is more risky than investing in large companies, as they may be more volatile and less liquid than large companies. This document has not been reviewed or approved by any regulatory body.
Wikimedia CommonsBy Micah MacAllen. María Jesús Hume Hurtado, New CEO of MBA Lazard In Peru
MBA Lazard, a leading Latin American investment bank, announced that María Jesús Hume Hurtado has been appointed CEO of MBA Lazard in Peru, effective immediately.
Alejandro F. Reynal, Chairman of the Board of Directors of MBA Lazard Holdings said that “María Jesús (Mayu) will bring major benefits to our clients in Peru and across the region. Her wealth of corporate expertise and knowledge of international business will offer our clients in Peru a unique approach and will complement the strong team that we have built in the region.”
Ms. Hume said: “I have great respect for MBA Lazard and I am drawn to its talented professionals, strong presence in Latin America and its ethos of independence. We are in the midst of a pivotal moment in the Peruvian economy. It is an attractive country in which to invest and conduct business, and I believe that MBA Lazard is in a unique position to support our clients in making the most of opportunities and confronting the challenges facing the global economy head on.”
Mayu Hume has more than 30 years’ experience in leadership roles within the public and governmental sectors and is currently serving on various boards of directors at top-ranking firms and non-profit organizations. Ms. Hume is Chairwoman of the Board of Directors at AFP Integra, one of the main pension fund administrators in Peru. Previously, she was the Managing Director and Business Manager at the ING Group in Peru and Colombia, and for 2 years, was the Deputy-Minister for Trade at the Ministry of Economy, Finance and Trade. Ms. Hume studied industrial engineering and economics at the Pontifical Catholic University in Peru.
Since the opening of its Lima office in 2008, MBA Lazard has enjoyed strong growth and a high degree of success for its clients. The past 12 months have seen MBA Lazard participating in the main local and cross-border mergers and acquisitions involving Peruvian-based firms. This includes providing advice to: Alicorp in the acquisition of Industrias Teal; Grupo Breca in the sale of Soldex to Colfax Corporation; Banco de Crédito del Perú in the acquisition of Correval Sociedad Comisionista de Bolsa in Colombia, and San Martín Contratistas Generales in its sale to Empresas ICA, to name but a few.
AllianceBernstein, announced that Nina Tannenbaum has joined the firm as Managing Director of Alternatives sales and client services. Tannenbaum will work with AllianceBernstein’s growing alternatives team to further build out its diverse product offerings as well as service the complex needs of clients to integrate alternatives into their current investment portfolios and risk profiles. Tannenbaum will report to Joel R. Stevens II, Senior Managing Director and head of Institutional Investments.
“With so many firms today competing to build a presence in alternatives, our ability to continue to attract top talent demonstrates that our services are resonating with the industry,” said Stevens. “Nina brings a diverse alternatives background to the group and will be an integral part of our efforts to continue to meet the growing demand among clients for alternatives products and risk aware solutions.”
Tannenbaum joins AllianceBernstein from Napier Park Value Fund, where she was Director of Marketing and Product Management. Prior to this role, Nina held positions at The Blackstone Group’s Alternative Asset Management division, J.P. Morgan & Company and the National Basketball Association. She holds a bachelor’s degree from Columbia University and a master’s degree from the MIT Sloan School of Management.
