Foto: Cayambe . Legg Mason y Permal completan la compra de Fauchier Partners
Legg Mason and affiliate Permal have this wednesday completed the acquisition of Fauchier Partners, a leading European based manager of funds of hedge funds, from BNP Paribas Investment Partners. Fauchier Partners had estimated assets under management of $5.4 billion as of February 28, 2013.
Legg Mason is a global asset management firm with $661 billion in assets under management as of February 28, 2013. The Company provides active asset management in many major investment centers throughout the world. Legg Mason is headquartered in Baltimore, Maryland, and its common stock is listed on the New York Stock Exchange (symbol: LM).
Permal is a leading global alternative asset manager, offering investment solutions through established funds and customized portfolios. Established in 1973, the Group has four decades of experience in manager selection, asset allocation and risk management.
Beamonte Investments, private equity fund, announced that it has acquired a minority stake in Mexican Integra Arrenda, a company dedicated to provide financing and leasing of transportation equipment and particular public use. The acquisition has been completed, while the transaction value was not disclosed.
Integra Arrenda has more than 19 years in the auto financing industry in Mexico, offering financial services for cars, trucks and buses through leasing or credit. Jose Abascal, CEO of Integra Arrenda said: “We will benefit from Beamonte’s financial support as well as its strong network of business contacts throughout the Financial Industry, with Beamonte´s help, we will be able to double the size of our portfolio in the next 12 months and we will reach more SME’s in Mexico looking for Auto Financing solutions”.
Being the financial arm of Grupo Andrade, gives Integra multiple channels of distribution with access to the whole vehicle industry in Mexico. “We are looking forward to work with Jose and the Integra´s management team in the next stage of its growth and profitability. Auto Financing is one of the hottest asset class and we found in Integra a combination of a great product with and understanding management team. This combination serves up a potent work ethic and an outstanding performance record. This is a recipe for continued success”, said Raul Galvez, Senior Vice President of Beamonte Investments.
Grupo Financiero Banorte and IBM announced March 12th the signing of a 10-year strategic agreement that will allow the Mexican financial institution to create a new customer-centric banking model, while substantially improving its efficiencies to achieve levels close to 40% and return on equity above 20%.
The agreement – based on the solid growth of Grupo Financiero Banorte – seeks to create a scalable and sustainable platform to achieve world class efficiencies as well as high attention levels and segmentation, retention and contact schemes with its clients, through existing channels and others to be developed. This agreement establishes an unprecedented transformational relationship in the Latin America banking industry.
“At Banorte-Ixe we start today with a solid business foundation that has positioned us as the third Bank in the Mexican market. We know it is time to move to the next level and evolve totally focused on our clients. We are fully satisfied with the agreement reached with IBM as it joins the best talent, both from the ranks of IBM and Banorte, and is in line with our ongoing search for technological tools necessary to attract, retain and serve our customers in an individualized manner always with the best service and attention, keeping us at the forefront of innovation,”said Alejandro Valenzuela, CEO of Grupo Financiero Banorte.
“Banorte-Ixe is a forward- thinking organization, seeking to provide its customers with the best products and services,” said Salvador Martinez Vidal, IBM Mexico Country Manager . “By partnering with IBM, Banorte-Ixe will have access to the best scientists, engineers and industry experts in the world to help transform their business and become one of the most competitive banks in its market. This deal raises the bar for a new level of innovation in the Mexican market.”
The partnership considers the establishment of a very solid corporate governance model, which – according to the progress – will monitor the investment in new projects and the re-routing of existing spending.
Banorte–Ixe seeks to become the bank with the best customer experience and service not only in Mexico, but also around the world, leading its sector and setting an example of innovation through smarter use of advanced technologies.
Banorte-Ixe’s goal is to deeply understand its clients’ needs and offer a superior customer service to its more than 20 million users through business analytics solutions. Most importantly, the goal is to develop and offer personalized products and services better suited for each customer’s unique condition.
IBM will enable Banorte–Ixe to differentiate the company to better utilize Big Data, analytics, cloud computing and social business. The advantages of the deal extend beyond transformation of the company’s customer service model, as the joint work of both companies will help Banorte–Ixe improve organization-wide efficiencies and market share, as well as allow the rapid achievement of its strategic goals involving improved revenue and higher profitability, in a unique global partnership model.
Banorte-Ixe will experience an outstanding transformation in its operations and services innovation in the mid term. Transformational services will primarily focus on client interactions, getting a better knowledge of their needs and the adoption of better risk processes and technology. At the same time, operational services will be focused on improved processes, applications and technology adoption.
Wikimedia CommonsFoto: Léon Cornelissen. Robeco: investing in emerging markets as a protection to currency war
Talk of a currency war is in the air. A currency war occurs when two or more countries devalue their own currencies via fiscal or monetary policy to improve or to prevent deterioration in their export competitiveness.
“Increased exports and lower imports lead to higher production,” explains Léon Cornelissen, Robeco’s Chief Economist.
At first sight, then, a currency devaluation in order to boost growth looks attractive. But Cornelissen emphasizes that the policy has many drawbacks. A weaker currency often leads to inflation. This is especially the case when no domestic substitutes for imports are available. Desides, other countries, which also want to drive down their currencies, may implement similar measures. In the end, a competitive devaluation is a zero-sum game. The production gains of one country leads to production losses in another.
Cornelissen sees no end to the currency war. “In the end, most governments and/or central banks still try to bring down their currency and see this as a quick fix for their economic problems”, says Cornelissen.
But that can be a mistake—a big mistake. “Aiming for a lower currency is easier than implementing structural reforms,” he says. “But a currency war will not bring prosperity.”
So how should investors protect themselves against a currency war? Cornelissen suggests investing in emerging markets, with unhedged currency exposure. He cautions that the risks of investing in these markets are higher than in developed markets.
“Participating in a currency war can turn out to be the road to ruin”, Léon Cornelissen
What is the rationale for this? “When a round of competitive devaluations starts, the options of central banks in emerging markets to keep their currencies from rising are limited,” he says. “This is because they cannot easily lower interest rates.”
Lowering interest rates is the most powerful weapon a central bank has at its disposal to weaken its currency. “The problem in emerging markets is that lowering interest rates leads to a credit boom, and the subsequent surge in domestic consumption leads to higher inflation,” he explains.
There is another reason why emerging markets currencies offer investors the best protection: a prolonged currency war leads to demand for alternative reserve currencies outside developed markets.
Although emerging markets offer protection during a currency war, Cornelissen points to one final potential downside when investing in these markets: “A currency war can lead to the imposition of capital controls,” he says. “This can complicate things for investors.”
Foto: Balint Koch
. EFG International vende su 20,25% en EFG Financial Products por 74 millones de dólares
EFG International has agreed to sell to Notenstein Private Bank (a subsidiary of Raiffeisen Switzerland), subject to regulatory approvals, its remaining stake of 20.25% in EFG Financial Products for CHF 70.2 million (1,350,000 shares at CHF 52 per share, compared with the IPO price of CHF 45). The transaction is expected to complete during the first half of 2013, and is in keeping with EFG International’s desire to focus on its core business of private banking.
Upon closing, EFG Financial Products will be deconsolidated from EFG International. In addition, EFG International’s representatives on the board of EFG Financial Products will step down at closing (although Patrick de Figueiredo, Chief Risk Officer of EFG Group, will remain, but as a representative of the founders).
EFG International will continue to access EFG Financial Products’ structured investment products expertise as a white-labeling partner. In this context, while unsecured credit facilities will cease upon closing, it will continue to provide a secured credit line. It will also provide transitional support to EFG Financial Products until the end of 2013. EFG Financial Products will discontinue using EFG in its name by end-2013 at the latest.
This transaction is expected to result in an exceptional accounting gain of approximately CHF 37 million in EFG International’s 2013 financial statements. Taking this and the deconsolidation into account, EFG International’s pro forma Basel III fully phased in BIS Total Capital Ratio would have increased from 15.9% as of 31 December 2012 to 17.5% (CET1 12.8%).
Foto cedidaJohn Bennet. The myth of ailing pharmaceuticals
It has been some time since the pharmaceuticals sector was feted as the poster child for growth stock investors. If you turn on the news today, you are likely to hear all about the threats posed by Obamacare, European austerity, patent expiries as well as overblown fears that the well has run dry on new drug discovery. Misery loves company and people are prone to believe it if you beat the drum often enough, so that potential risks become accepted facts.
Following this prolonged period of bearish sentiment, we believe that investors should look again at this unloved sector in Europe. We have been saying for some time that the pharmaceuticals industry is far better than general perception would indicate. I would go further and say that pharmaceuticals may be the biggest example of positive mean reversion in the whole of Europe, and that we may be only part way into what may turn out to be a decade-long bull market.
We renewed our interest in European pharmaceuticals two to three years ago, when the major players had single-digit price/earnings ratios (having been as high as the 30s in the late 1990s). At that point, companies were starting to increase their contributions from sustainable franchises offering long-term revenue security: businesses such as animal health, nutritional foods and vaccines. Yet investors were still pricing in the possibility that companies would fail to come up with replacement drugs to generate future earnings.
Developing new medicines is the lifeblood of this industry, but this is no different from any other industry. Peaks and troughs are part of the natural rhythm and it is the fallow period from 1998 to 2006 – when fewer new drugs were reaching the market – that wrongly shaped current opinions. In reality, research and development (R&D) pipelines were not ‘running out of science’. In fact, recent research in the UK has shown that the number of drugs introduced each year has actually increased on average since the 1970s.
What is true is that industry and market factors have forced pharmaceuticals to adapt, by reassessing and redesigning their business models and diversifying into new growth areas. Commitment to R&D remains strong, but it is much more focused, leaner and efficient than it used to be. More attention is being paid to managing the lifecycle of drugs to maximise returns. Major manufacturers are also entering into the market for generic drugs, or cutting the cost of their post-patent expiry products to slow the erosion of revenues.
We firmly believe that the story for European pharmaceuticals remains intact, with many companies well positioned to deliver long-term sustainable earnings and priced at attractive entry levels for investors. Given these factors, we continue to increase our exposure to pharmaceuticals and healthcare in general now makes up between 30% and 40% of our portfolios.
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Wikimedia CommonsEl cambista y su esposa, de Quentin Massys. BNP Paribas Securities Services firma con Euroclear un acuerdo de gestión de colateral
BNP Paribas Securities Services, and Euroclear Bank announced the launch of their joint tri-party collateral management arrangements via Euroclear’s Collateral Highway. The initiative enables mutual clients to access securities held at BNP Paribas Securities Services as collateral for tri-party operations conducted by Euroclear Bank.
BNP Paribas and Euroclear Bank entered into a collaboration agreement in 2012 and have since been working together to develop the joint initiative to support clients in sourcing securities to meet their growing collateral needs. High demand, stricter risk management practices and new regulation are increasing the need for collateral at a time when high-grade collateral is increasingly difficult to source easily.
“As the first agent bank live on our Collateral Highway, we applaud BNP Paribas’ foresight and drive to offer their clients a flexible and innovative option to ease collateral flows.”
Frederic Hannequart, Chairman of Euroclear Bank, said: “This partnership is particularly timely and important as demand for collateral continues to increase. By joining forces, we alleviate one of the challenges of collateral fragmentation by making the transfer of collateral to the right place at the right time as seamless and operationally simple as possible. As the first agent bank live on our Collateral Highway, we applaud BNP Paribas’ foresight and drive to offer their clients a flexible and innovative option to ease collateral flows. We are delighted to be partnering with them.”
The BNP Paribas/Euroclear Bank collateral transfer arrangement ensures that mutual clients of both institutions achieve greater risk protection and manage their available assets more efficiently. In this collaboration, securities held in local custody with BNP Paribas may be used as collateral in triparty collateral management deals managed by Euroclear Bank.
Alain Pochet, Head of Clearing, Settlement and Custody at BNP Paribas Securities Services, said: “This is a major achievement for both parties, and comes at a very appropriate timing for our clients who face significant regulatory changes. From today, they will be able to flawlessly finance their available securities, which will help them address the ever-increasing demand for collateral. The first trade completed through this partnership was executed in the Spanish market. It allowed our mutual client to use available securities held with BNP Paribas Securities Madrid as collateral for the tri-party transaction administered by Euroclear Bank.”
Both companies are co-operating to extend the scope of the arrangement to the main European and Asian markets.
Foto: Loz (L. B. Tettenborn) . Las firmas de private equity y capital riesgo generan inversiones récord en América Latina en 2012
Private equity and venture capital firms committed $7.9bn to investments in Latin America in 2012, representing a five-year high and a 21% increase over 2011, according to data released by the Latin American Private Equity and Venture Capital Association (LAVCA).
The $7.9bn total reflects 237 investments, a 37% increase in the number of deals from the previous year. Seven large firms that had raised over $11bn for pan-regional and Brazilian funds in 2010 and 2011 put that money to work in new deals across a range of markets and sectors.
Investments in consumer-related sectors dominated in 2012, capturing 40% of the $7.9bn total. Consumer retail represented $2.2b of investments, with the rest coming from deals in financial services, restaurants, education, fitness, healthcare and consumer goods. IT deals also posted strong growth in 2012, with both the number of IT deals and dollars invested in the sector more than doubling from 2011.
As in previous years, Brazil was the largest market for PE/VC investments in Latin America, accounting for 72% of the total invested and 62% of the total deals. In Mexico, the total number of deals was on par with 2011, but dollars committed increased by 50% over 2011. Activity in the Andean region was driven by an increasing number of cross border deals, with managers in Colombia, Peru in Chile investing across all three markets.
Fundraising for private equity and venture capital in Latin America in 2012 was dominated by smaller funds, with $5.6bn committed to 42 closings. The 2012 fundraising figure represents an important shift from 2010 and 2011, which saw record totals of $8.1bn and $10.3bn respectively, as managers targeted fund sizes under $500m. A total of 40 managers reported 42 partial or final closings in 2012, versus 35 partial or final closings from 28 firms in 2011.
Rather than representing a change in the appetite of international investors to commit capital to Latin America, the decrease shows a fundamental shift in the size of the funds being marketed.
“It was another dynamic year for private equity and venture capital in the region,” said Cate Ambrose, President of LAVCA. “We continue to see international firms moving into Latin America, at the same time that new funds are being formed across Brazil, Mexico, Peru, Colombia, Chile and other smaller markets. Fundraising was much less concentrated, with more firms in the market, as compared to previous years. That, and the record level of deals, point to a deepening and maturing of the investment ecosystem.”
One notable development in 2012 was the continued expansion of venture capital investment in technology companies in Brazil and other markets, with both international and Latin American VC firms raising new funds and backing new start ups. Exit activity in 2012 returned to 2010 levels, following an extraordinary year in 2011 when two to three firms generated over $6bn from strategic sales and two large IPOs. A total of $3.8bn was generated in 44 exits in 2012, driven by a vibrant M&A market across Latin America.
Wikimedia CommonsFoto: Sanfranman59
. Hines e Invesco se unen en la compra del Rialto Building de San Francisco
Hines, the international real estate firm, andInvesco Real Estate, announced hat they have jointly acquired the Rialto Building located at 116 New Montgomery Street in San Francisco’s South Financial District, from Africa Israel USA (AFI USA). Financials on the transaction were not disclosed. Hines will oversee management and leasing of the property on behalf of the partnership.
Originally built in 1902, the H-shaped Renaissance-style building was designed by Meyer & O’Brien Architects. The nine-story building contains 135,486 square feet of office and retail space. After the great earthquake of 1906, the building’s interiors were completely rebuilt, leaving the steel, brick and concrete exterior structure intact. AFI USA acquired the building in 2007, and soon after, undertook a capital investment program to restore the property to its original grandeur. Restoration work focused on original architectural components in the main lobby, including the bronze staircase, ornate metal elevator doors, the painted panel ceiling and the marble flooring.
Hines Senior Managing Director, Cameron Falconer, commented, “The Rialto Building is one of San Francisco’s true architectural icons, and we are pleased to add it to our portfolio. Going forward, Hines and Invesco will continue to invest in the building to complete its transition to a ‘creative core’ asset that caters to San Francisco’s burgeoning technology and multimedia industry tenants.”
The Rialto Building is currently 85 percent leased to strong tenant roster including office tenants Trulia, Nelson\Nygaard and LaunchSquad, and retail tenants Walgreens and Chipotle.
“This sale proves that San Francisco is still unmatched as the nation’s top-performing office market,” said Tamir Kazaz, CEO of AFI USA. “The combination of historic architecture, creative layouts and central location make this a highly attractive property, one that will ensure long-term value and stable cash flows.”
Wikimedia CommonsDavid Samuels se incorpora a Promontory Financial Group como director general. Foto cedida. David Samuels se incorpora a Promontory Financial Group como director general
Promontory Financial Group, a premier strategy, risk-management, regulatory, and compliance consulting firm for financial services firms worldwide, announced that David Samuels, former Global Head of Risk Solutions and Analytics for S&P Capital IQ, has joined the firm as a Managing Director. Samuels, who is based in New York, but will continue to spend extensive time in Europe, the Middle East, Africa, and the Asia-Pacific region, will drive the development of a stress-testing solutions business and expanded analytical solutions, benchmarks and models, on a global basis.
“The financial crisis highlighted the critical importance of effective risk management. Today, institutions must handle heightened regulatory oversight as well as new and changing expectations,” said Promontory Chief Executive Officer and Founder Eugene A. Ludwig. “David brings the right mix of analytic and senior managerial strengths to this initiative and has developed a strong reputation for helping financial institutions proactively monitor their individual and enterprise-wide risks in an evolving environment.”
Samuels has spent more than 25 years developing and providing risk-management solutions across industry, asset, and geographic lines. During six years at S&P IQ in his role as Global Head of Risk Solutions and Analytics, he oversaw the development of an innovative suite of risk-management solutions, including analytics, services, and data sets. From 2004 to 2007 he was Chief Operating Officer and Global Head of SunGard ERisk, where he oversaw quantitative modelers, programmers, and consultants in developing customized risk solutions for clients. Before that, he was President and Chief Executive Officer of Zoologic Inc., a provider of flexible learning tools for the financial services industry.
Mr. Samuels holds a Bachelor of Science in Finance and Management Information Systems from the State University of New York at Albany.
