Wikimedia CommonsFoto: Wikimedia Commons. ¿Está cambiando la marea en Brasil?
Last year, the Brazilian government’s intervention in various sectors led to heightened uncertainty for corporations, resulting in the postponement of pro-growth investments that are vital if Brazil’s economic growth is to recover in 2013. In the utilities sector, the government made changes to concession terms aimed at reducing electricity prices, whilst in the banking sector, public banks were forced to lower loan rates, squeezing the profitability of the private banks. There was even pressure placed on the Brazilian central bank to extend the interest rate cutting cycle, despite worrisome inflation data. This government interference caused uncertainty for investors and a fall in private sector investment, culminating in sluggish gross domestic product growth of 0.9% last year. The forecast for 2013 is that private sector investment could be the ‘swing’ factor for the economy.
2013 has begun with some signs of positive change in Brazil. The government has recognised that investments by the private sector are needed in order to spur an economic rebound. The government has re-examined its policies with respect to privatisations and has increased the rates of return offered to private investors. This has prompted a marketing drive to attract investors ahead of infrastructure concession auctions due later in the year. Importantly, having offered paltry returns in the last round, the finance ministry has indicated that more attractive returns will be on offer this time. In addition, there has been recognition that rising inflation is a problem. To this end, April saw the central bank raise interest rates from the record low level reached last year. Given the scale of the cuts in the past, coupled with loose fiscal policy (the use of government revenue collection and expenditure to influence the economy), this should not be viewed as an impediment to a reacceleration of growth.
The long-term outlook for Brazil is compelling. The country is resource-rich and has favourable long-term demographic trends (e.g. rising disposable incomes). However, the government has often created problems that have held Brazil back from reaching its full potential. The tide may be turning as the incremental changes described above indicate that the government is becoming more open and conciliatory with the private sector in order to promote investment. The hosting of the next World Cup and Olympic Games provides imposing deadlines that ensure progress has to be made. These events and the recent appointment of a Brazilian to head the World Trade Organization show the country will be in the spotlight like never before in the coming years. It is up to the politicians to ensure that an improving economic picture is part of that display.
Wealth managers typically coordinate estate planning, legal and tax advice, and investment portfolios for high-net-worth individuals, while concierge companies are more likely to be involved in arranging support and advice from experts in more domestic affairs such as travel and education. However, Tutors International have remarked on a noticeable blurring of the lines between concierge and wealth management organisations, with wealth management often being provided as a branch of a client’s one-stop advisory service.
Tutors International, provider of full-time private tutors and travelling tutors, reported an increased number of enquiries for private tuition from wealth managers on behalf of their clients. The wealth managers extend their services beyond financial and investment management and into lifestyle and domestic affairs.
“Wealth Managers are often in a position to appreciate the non-work stresses of their clients, such as academically-failing children or those with learning difficulties, or stressful exam preparation, for example. Being able to recommend professionals of standing who have a track record of successful management of these things means that the client can spend less time worrying about them, safe in the knowledge that they have the best possible help”, said Adam Caller, founder and director of Tutors International.
“Not only does this help the client maintain and grow his or her wealth without so much distraction, but it shows that the wealth manager takes a sensible and helpful interest in the overall well-being of their client.”
Foto cedidaFoto: Peter van der Welle. Inflation not a threat
‘Inflation is hardly a hot topic at the moment’, says Peter van der Welle, strategist at Robeco. The eurozone is faced with deflationary pressures rather than anything else, and in both the US and emerging markets inflationary and deflationary pressures are more or less in balance.
Eurozone inflation continues to decline
Eurozone inflation, which amounted to 1.7% in March, has continued its gradual decline in recent months. It is now within the ECB’s medium-term target range of below but close to 2.0%. Core inflation has trended downwards to 1.3%. ‘All major components of the Inflation Monitor point to an easing of inflationary pressures’, notes Van der Welle.
So which forces are at work here? ‘Eurozone debt deleveraging and austerity, although some relaxation on the latter is notable, keep demand-pull inflation low’, explains Van der Welle. ‘Upside price pressures will remain moderate in the medium term as consumer and producer price expectations remain anchored to their historical averages’.
On the monetary side the decline in credit growth is accelerating, mainly due to declined lending to small and medium-sized enterprises. With a hampered monetary transmission mechanism, a more resilient euro after the ECB’s Outright Monetary Transactions and moderate commodity prices because of a disappointing global recovery, deflationary pressures will play a more dominant role in the near term.
Aren’t there any risks of higher inflation in the eurozone? ‘Not many, but the most likely candidate for an upward surprise in inflation is an oil price spike as a result of geopolitical tensions’, states Van der Welle.
In the US inflationary and deflationary forces are in balance
‘In the US, core inflation has been running close to the Fed’s objective of 2%, while headline inflation at 1.3% can hardly be seen as threatening from an inflation perspective’, says Van der Welle. ‘The US economy continues to recover, with rising house prices and an improving labor market. As the shale gas revolution takes momentum, commodity prices have a lower inflationary impact.’
The Fed has continued asset purchases at a rate of USD 85bn a month to sustain asset prices. However, inflation expectations remain firmly anchored. ‘The monitor has been showing a flat pattern over the last months, which does not suggest that inflationary pressures are building’, remarks Van der Welle. As unemployment is still is above its natural rate, wage pressures remain timid, except in the energy sector. A substantial improvement in the labor market outlook will cause the Fed to lower its quantitative easing, probably later this year. ‘For now, the monitor is neutral, signaling that inflationary and deflationary pressures are more or less in balance.’
In emerging markets inflation remains moderate as commodities prices decline
In emerging countries actual inflation has crept up over the past months. Consumer prices have risen slightly above the ten-year average in three of the four BRIC countries. Russia is the exception. ‘The Inflation Monitor shows that inflationary pressures remain subdued’, notes Van der Welle.
The most important contribution to inflation in China currently seems to come from monetary induced inflation, as Chinese growth still depends heavily on credit growth. China intends to restrain credit growth, but is at the same time intervening in the FX market to keep the renminbi weak. Economic data has been weak across the board due to weak global recovery. Monetary authorities have reacted to the slow recovery by cutting interest rates and continuing monetary expansion. ‘However, also in emerging market the risks of inflation are more or less balanced as the recent decline in commodity prices eases inflationary pressures’, Van der Welle concludes.
Robeco’s Inflation Monitor is designed to show whether inflation pressures are on the rise, thus indicating whether the risk of future inflation is increasing. The monitor’s forecasts come in the form of z-scores* that indicate how current inflation-linked data—on the economy, monetary developments, commodities and inflation expectations—should be regarded in the context of the latest business cycle.
Based on the assumption that the past ten years are a reliable proxy for a normal cycle, a stable z-score of zero would indicate that price pressures are currently in line with the average over the most recent business cycle.
*Z-score = (most recent observation – ten-year average) / average standard deviation of monthly data
Foto: Wolfgang Moroder. . Los multifamily offices registraron un sólido crecimiento en activos e ingresos en 2012
Multi-tiered service offerings, key hiring and social media helped fuel the return to growth at multifamily offices, according to findings of the 9th Annual MFO Study from The Family Wealth Alliance. Multifamily offices saw a 9.6% gain in assets under advisement and an 11.3% increase in revenues according to the study, which was conducted in late 2012.
“Multifamily offices have worked hard to overcome barriers to growth faced by the industry. They’ve hired business development officers, revisited pricing strategies, and added new service offerings aimed at less wealthy families than their traditional clients,” said Bob Casey, head of research for The Family Wealth Alliance. “The No. 1 business challenge cited by participants is the lack of marketplace differentiation for MFOs, their service model and the benefits they can offer to client families,” he added.
Among the 9th Annual MFO Study findings:
Smaller firms, under $500 million in assets, grew by an average 13.2%
Largest firms, with assets of more than $5 billion, grew by 10.4%
Mean MFO client relationship size is $40.9 million (as of 12/31/2011)
Firm assets under advisement $7.4 billion, on average
More MFOs are serving single-family offices, 69.6%, up from 57.5% in 2011 and 52.1% in 2009
Use of dedicated business development officers among study participants jumped by 22.9% in 2011, and is a common practice among larger MFOs but the exception among mid-size or smaller MFOs. More than one-third of participants have adopted a two-tier pricing and service model, offering a full MFO service menu at higher fees at asset minimums of $20 million to $30 million, and a more limited-service menu focusing on investments, with lower asset minimums and fees.
All 51 firms participating in the 9th Annual MFO Study are listed in the report. For a full list, please click here.
Alliance Research is supported by its partner firms. These organizations are: Babson Capital Management LLC, Efficient Capital Management, Inc., OppenheimerFunds, Inc., Pershing Advisor Solutions, State Street Global Advisors, State Street Wealth Manager Services, Summitas and World Gold Council.
Alliance Research will conduct in 2013 its 10th Annual MFO Study, the 3rd Annual 2013 External CIO Study, the 2nd Annual Security Study, which looks at acute, unforeseen and chronic security threats to private families and an Inaugural Alliance Reporting Study, which examines the current state of consolidated reporting for private families. For more, please go to.
All 51 firms participating in the 9th Annual MFO Study are:
Abbot Downing, a Wells Fargo Business
Acacia Wealth Advisors, LLC
Arlington Family Offices
Ascent Private Capital Management of U.S. Bank
Aspiriant
Athena Capital Advisors LLC
Atlantic Trust
Ballentine Partners, LLC
BBR Partners
Bessemer Trust
BNR Partners
Delegate Advisors, LLC
Envoi, LLC
Federal Street Advisors
Filament LLC
Financial Controllers, Inc
GenSpring Family Offices
Glenmede
Greenway Family Office
Halbert Hargrove
Harris myCFO
Hawthorn, PNC Family Wealth
Hillview Capital Advisors, LLC
Legacy Trust Family Wealth Office
Lowenhaupt Global Advisors, LLC
Manchester Capital Management LLC
Matter Family Office
Meristem, LLP
Mirador Family Wealth Advisors
Ohana Advisors LLC
Optivest, Inc.
Pathstone Family Office, LLC
Pepper International, LLC
Pitcairn
Plante Moran Financial Advisors
Rockefeller & Co.
Rothstein Kass Family Office Group
Savant Capital Management
Signature
Silver Bridge Advisors, LLC
Silvercrest Asset Management LLC
Threshold Group LLC
Tolleson Wealth Management
Truepoint Inc.
U.S. Trust Family Office
Vogel Consulting
Waldron Wealth Management
Waypoint Advisors
Whittier Trust Company
WMS Partners
Yolles, Toal & Post – Diversified Portfolios, Inc.
Wikimedia CommonsGustavo Lozano, director general de Pioneer Investments in Mexico. El mandato de Afore Sura abre nuevas oportunidades a Pioneer Investments en México
Q&A session with Gustavo Lozano, managing director of Pioneer Investments in Mexico, after Afore Sura announced its decision to give Pioneer Investments a mandate to manage an international equity portfolio.
What does Afore Sura mandate mean for the Pioneer Investments group of companies?
Being selected to manage an international equity investment portfolio for Sura is a direct result and materialization of efforts dating back a couple of years, when it was decided (for Pioneer Investments) to invest and expand into emerging markets as a keystrategy for the group. The increasing role of these countries, their expanding middle class, internal savings and economic stability have been determinant factors that underscore Pioneer Investments view.
Pioneer Investments recently opened an office in Mexico which is one of the key initiatives of its growth strategy, and this new and early opportunity with Sura speaks volumes in terms of the ability of the group to offer a viable, original and competitive strategy to Sura. Pioneer Investments’ track record in the industry, team approachand cohesion were very important factors that Sura valued. The group’s history and experience of over 85 years enables it to enrich the relationship with Sura through cooperation that will solidify and help in the local asset management industry development.
Will Pioneer Investments’ strategy and bet change in Mexico now?
No, quite the contrary. This event underscores that we are on the correct path into the solidification of our expansion into emerging markets and most particular throughout Latin America. Our aim would be to connect the capabilities in investment management Pioneer Investments has across a range of strategies with Mexican institutional clients who demand those products.
How do you think this mandate will affect? Will it change the setting of the different market players?
Every time there is a new asset class incorporated to any investment regime, it takes time to close and execute the first deals. We think this new deal will serve as a catalyst for others to join.
Speaking about institutional asset managers, the need to externalize investments that target other geographies is general. There’s no human capacity that can cover all investment regions and classes, but the need to diversify will grow.
Also we are going through very particular times in which liquidity is seeking options to recover income potential, causing the review of investment strategies. We believe that pensions will need to bring to their clients diversification options as a strategic part of their portfolio. This is particularly important in Mexico’s market as holdings are growing at a 16% YoY pace that markets can’t keep up with, so we will see a growing need to export savings just as it happened in other countries before.
With the mandate in the group’s hands, does the group intend to compete for others?
Certainly, our project in Mexico is a long term commitment. The group is looking forward to bringing its experience and strengths to Mexico’s institutional client base. We believe that we have an excellent investment process and high quality institutional strategies that are well suited for the market here. Having a local presence is proof of our resolve.
Investment needs call for diversification. We see growing savings creation in the country. We are sure more clients, not necessarily from the pension management side but also others in the asset management arena, will open their architectures and will bring to their clients the best of their administration along with the best of the international managersworld.
We believe that Pioneer Investments will be a solid front runner competitor.
Wikimedia CommonsGabriel Politzer, nuevo jefe de Gestión de Activos y director de Estrategia. BigSur contrata a Gabriel Politzer como jefe de Gestión de Activos y director de Estrategia
Gabriel Politzer will be joining the BigSur Team in Miami as Head of Asset Management and Chief Strategy Officer. He has over 30 years of expertise at leading financial institutions, including JPMorgan, UBS and ING. Politzer has extensive experience in trading and investing in several asset classes, and has also served as an advisor to several senior government officials, including ministers of finance and Central Bank governors. He served as Chief Strategy Officer of Patagon, an equity brokerage and online banking firm in the U.S., Europe and Latin America, which was sold to Grupo Santander for $750mm in 2001, reported the firm to Funds Society.
Over the past five years, Big Sur main focus has been on building the best internal platform for their client families and creating a dynamic team which fully represents their values. While they will continue to put forth effort on the improvement of their platform- they are ready to start focusing on growing their business. Gabriel will help with both the improvement of the platform and growing of BigSur’s business. He will help enhance the risk control and efficiency of their investment process, further strengthening their investment platform. Gabriel will be a key player in BigSur’s Strategic Plan for growth, focusing on implementing strategy as well as creating initiatives which would bring extra capacity (allow for scalability) or bring new/incremental sources of revenue.
BigSur is enriching the intellectual capital of their platform and team by bringing someone of Gabriel’s profile and experience. As they aim to be a leading global multi family office, they believe in hiring talented and dedicated professionals such as Gabriel to help build a better BigSur.
Wikimedia CommonsFoto: Andreas Tusche. One Thousand & One Voices invierte 300 millones de dólares en crear riqueza en mercados emergentes
One Thousand & One Voices (1K1V), a movement of influential families investing relational, intellectual and patient financial capital to profitably accelerate prosperity in developing markets, today announced its formation. The announcement is being made in Cape Town in conjunction with the World Economic Forum on Africa.
Influential families conceived of 1K1V to help increase economic opportunity for families in developing markets. Each family’s capital is three-dimensional: relational capital leverages member family connections and reputation, intellectual capital leverages their business and industry knowledge, and patient financial capital provides the funding that developing-market businesses need to grow.
“One Thousand & One Voices was established with the belief that the pathway to economic freedom — real prosperity for millions living in poverty — is through values-based private investment grounded in the time-tested principles of free enterprise,” said Dr. John Coors, chief executive officer of technical ceramics company CoorsTek and one of the movement’s initial family members.
1K1V intends to deploy $300 million in sub-Saharan Africa and similar or larger amounts in other geographies. Although 1KIV’s initial focus is sub-Saharan Africa – a region now experiencing robust economic growth but one that carries a substantial legacy of poverty, inefficiency, and undercapitalization – the movement is expected thereafter to focus on Latin America, Southeast Asia and Eastern Europe. 1K1V expects to use leading edge, proprietary tools to predict, measure and report impact.
1K1V’s model was designed to provide financial capital that is sufficiently patient to accelerate prosperity in developing markets, addressing a major shortcoming of traditional private equity and many impact investment funds operating today. 1K1V does not impose arbitrary limits on the duration of its investments, making it possible to provide capital that is as patient as may be required, which reduces the risk of impaired returns due to forced exits.
Foto: Akarsh Simha. Sumitomo Mitsui Financial Group, autorizado para operar como holding financiero en EE.UU.
Sumitomo Mitsui Financial Group (SMFG, presidente Koichi Miyata) and Sumitomo Misui Banking Corporation (president: Takeshi Kunibe) have received notification from the Board of Governors of the Federal Reserve System that our elections to become Financial Holding Companies (FHC) under the U.S. Bank Holding Company Act are effective as of May 7, 2013, said the firm in a statement.
SMFG has to date, engaged in intestment banking and securities business in the U.S., such as M&A advisory and brokerage services, through a U.S. subsidary. By obtaining FHC status, SMFG can significantly expand the scope of services we provide in the U.S. including the underwriting and trading of securities and other investment banking services.
SMFG plans to implement numerous iniciatives in the near future, including the underwriting of bonds by its subsidiaries, to futher enhance the services offered to clients in the U.S., the world´s leading financial market.
Pedro A. Jiménez, Partner-in-Charge. Jones Day opens in Miami as part of Latin America practice expansion
The global law firm Jones Day announced today that it will open an office in Miami, the firm’s first office in Florida, 16th in the US, and 40th in the world. Pedro A. Jimenez, a Miami native and partner in Jones Day’s Business Restructuring & Reorganization practice, will serve as Partner-in-Charge. Enrique (Rick) Martin, who recently joined Jones Day as a partner in the Mergers & Acquisitions practice, will serve as the Office’s Administrative Partner in Miami.
“The Mexican market is maturing and internationalizing at a rapid very pace, and as it has, our Mexico City office has continued to grow and expand its reach.”
The firm’s expansion to Miami reflects its continuing commitment to the rapidly growing Latin America market. The firm established offices in Mexico City in 2009 and São Paulo in 2011, but its clients’ needs in the remaining 18 countries in the region also can be met most effectively from Miami. The office will focus on capital markets, mergers and acquisitions, lending, project finance, and restructuring in Latin America. It will, in addition, have a significant focus on dispute resolution, including litigation, arbitration, issues and appeals, labor and employment, intellectual property, executive compensation, and health care.
“In years past, the Latin American practices of many major law firms, including Jones Day, were centered in New York City, primarily to access the debt and equity markets,” said Steve Brogan, Managing Partner of Jones Day. “Today, corporate and business leaders in Latin America have increasingly made Miami their point of contact in the U.S. Along with our substantial capabilities in Mexico and Brazil, a presence in Miami allows us to establish a deep bench of gifted lawyers who can effectively guide our clients seeking to do business in the region. An equally important reason for opening in Miami is to handle the growing litigation docket coming out of that state. Over the last half decade, Jones Day lawyers have tried more significant civil cases to verdict in Florida than any other leading law firm in the country. Our office in Miami will be staffed by lawyers who have the experience and ability to try cases throughout Florida.”
“The Mexican market is maturing and internationalizing at a rapid very pace, and as it has, our Mexico City office has continued to grow and expand its reach,” said Fernando de Ovando, Partner-in-Charge of Jones Day’s Mexico City office. “Our office in Miami will be an ideal location to assist clients in outbound and inbound transactions and disputes, and efficiently serve clients in a wide range of matters throughout Latin America.”
Wikimedia CommonsFoto: Mewiki. El mercado laboral de la City recupera el pulso tras la crisis de Chipre
City of London employers have recovered their nerve following the Cyprus crisis, with the number of new jobs rising 19% in the last month says Astbury Marsden, a financial services recruitment firm. Just over 2,600 new roles were created during April 2013, following a sharp dip in March when the number of new roles plunged by 15% compared to the previous month.
The number of new City roles created per month now stands at its highest since October 2012, with month on month increases also recorded in January (213%) and February (3%). Mark Cameron, Chief Operating Officer at Astbury Marsden, says: “After a reasonably optimistic start to the year, recruitment at many City firms slowed in March as the market waited to see how bad the Cyprus crisis was going to get.”
Astbury Marsden points out that City staff also seem to be cautious about switching employer. In April, candidate numbers were up just 1% on March with a pool of 4,560 potential candidates during April, down by 24% on the same time last year. There are now 1.75 qualified candidates per new role, down from the 12 month average of 2. Mark Cameron adds: “Spring is traditionally peak hiring season in the City as candidates look for new roles after their bonus has been paid. However, we are not seeing quite the same amount of interest from prospective candidates as had been the case in previous years.”
Mark Cameron adds: “Spring is traditionally peak hiring season in the City as candidates look for new roles after their bonus has been paid. However, we are not seeing quite the same amount of interest from prospective candidates as had been the case in previous years.”
Astbury Marsden explain that regulation is still driving recruitment in the City, as banks focus on trimming their businesses back to their most profitable areas in order to manage new capital requirements. Says Mark Cameron: “the banks have a lot of work to do on realigning their businesses back to the most profitable core areas, so we are still seeing a lot of interest in strategists and for skills associated with managing organisational change.”
“A natural consequence of the high-level planning that is going on is that a lot of the other hiring activity is ‘maintenance’ work – finding replacements or acquiring individual high flyers. We don’t expect to see more aggressive hiring resume until banks have clear plans as to which areas they are going to target for growth.”
