Wikimedia CommonsPhoto Luc Viatour. Leading Entrepreneurs from U.S., Latin America and Europe will meet at eMerge Americas’ 2015
eMerge Americas, a global technology conference focused on innovations transforming industries across the Americas, will host a world-class array of early and later-stage companies to highlight innovation and disruptive technology through its Startup Showcase to be held in May, 1st to 5th, in Miami Beach.
As part of the eMerge Americas 2015 program, the Startup Showcase takes place in front of hundreds of investors and industry innovators. The showcase will culminate with the top companies pitching on eMerge’s Center Stage for the chance to walk away with up to $150,000 in cash and prizes. The companies selected for the Startup Showcase will also gain valuable insight from mentors in the lead up to eMerge Americas through an innovative virtual boot camp followed by an live boot camp for entrepreneurs in Miami during the event.
Registration is currently open and until MArch 15th. Startups interested in participating can visit www.emergeamericas.org/startups/
Wikimedia CommonsPhoto: Coolcaesar. FATCA Deadlines for 2015
Even though FATCA officially went ‘live’ on July 1st last year, APEX Funds Services reminds us sthat many of the key implementation deadlines will take place in the following years. FATCA generally imposes registration, due diligence and reporting obligations on Foreign Financial Institutions (“FFIs”).
Last year, FFIs were required to implement new account opening procedures and register with the US Internal Revenue Service (“IRS”). There was a surge in registrations on the IRS portal in late December as Model 1 FFIs rushed to register and obtain their Global Intermediary Identification Number (“GIIN”) before the year end deadline. For FFIs that have failed or were unwilling to register and comply, then 2015 will bring a number of challenges e.g 30% withholding tax on certain US source payments, stiff penalties and/or enforcement action by their local tax authority along with reputational, legal and other operational headaches.
Acording to Karen Wallace, Global Head of Compiance at APEX Funds Services Holdings, for FFIs that have registered under FATCA then their focus for 2015 should be on the following upcoming deadlines:
March onwards: registering for an on-line account with the IRS or relevant local tax authorities in order to comply with the reporting obligations e.g registration required by the Cayman tax authority by 31 March 2015.
31 March 2015*: reporting deadline to the IRS for Model 2 IGA jurisdictions and FFIs in non-IGA jurisdictions.
31 May/30 June 2015: typical reporting deadlines for Model 1 IGA jurisdictions.
30 June 2015: review of pre-existing individual high value accounts as at 30 June 2014 must be completed
*The IRS has advised an automatic 90-day extension is granted to all filers (without the need to file any form or take any action) with respect to calendar year 2014 only.
For the above reporting dates, FFIs must report the name, address, U.S. TIN (date of birth for pre-existing accounts if no U.S. TIN), account number, name and identifying number of the reporting institution, and account balance or value for US reportable accounts for calendar year 2014. Reporting obligations will increase in 2016 and 2017 respectively. It is essential that FFIs have a comprehensive FATCA compliance programme in place to limit non-compliance risk and meet the obligations of the relevant IGAs and/or the IRS.
Photo: Jorge Royan . The Role of the Advisor as Master Builder of the Integrated Wealth Plan
Family Office Exchange (FOX), a global membership organization of private family enterprises and their key advisors, will celebrate the 2015 Wealth Advisor Forum at the Biltmore in Coral Gables, FL, April 27-29.
The event will show how the family’s key advisor serves as the architect and integrator for the advisor ecosystem, and how advisors can contribute meaningfully toward solutions for families by embracing the mindset of a master builder. Advisors that work in a mindful and complementary way with other advisors to create the integrated wealth plan serve their clients more effectively.
The Forum will reveal new FOX insights on what families say they want and need from their advisors and will document the critical factors for building an integrated wealth plan.
Speakers include NYU’s Ben Dattner and Yale lecturer Sarah Biggerstaff. They will be joined by FOX experts Alexandre Monnier, President, and Amy Hart Clyne, Executive Director of the Knowledge Center.
Registration for the event is open to FOX members and non-members, but seating is limited. Attendees are also encouraged to join FOX for the Michael Brink Memorial Golf Outing on April 27 at the Biltmore Golf Course.
Global gross domestic product (GDP) growth should accelerate somewhat in 2015 and 2016 from the pace of the last three years because of much lower oil prices, the avoidance of special drags on the world economy, and continuing easy monetary policies from global central banks, according to BNY Mellon Chief Economist Richard Hoey. Hoey made the comments in his February outlook.
Among the drags on the economy in recent years that are unlikely to be repeated are the weather-impacted decline in U.S. GDP in the first quarter of 2014 and the Japanese recession in the middle two quarters of 2014 due to the rise in the value-added tax, Hoey said. Furthermore, he added that in recent weeks there have been monetary policy easing moves from the European Central Bank, the Swiss National Bank, the Bank of Canada, the National Bank of Denmark, Norway’s Norges Bank, the Central Bank of the Republic of Turkey, the Central Reserve Bank of Peru, the Reserve Bank of India, and the Central Bank of Egypt, among others.
“Recent currency trends should support global growth,” Hoey said. “There should be a boost to export competitiveness in such economically weak regions as Europe and Japan, due to sharp declines in their currencies. These currency declines have coincided with a sharp drop in oil prices. As a result, they are more likely to have cyclically-appropriate anti-deflationary effects than to generate excess inflation.”
Hoey noted the recovery in global growth has been more sluggish in this cycle than in past recoveries. Despite the aggressive use of credit to finance the leveraged purchase of existing assets, he said the appetite to use credit to finance increased current spending has been restrained until now in many countries.
While Hoey is seeing tailwinds to economic growth from inexpensive energy that is likely to last for some time and the accommodative monetary policies, he points to a number of factors that could moderate the expansion in global GDP.
These restraints include a downward shift to lower trend growth in China, according to the report. China engineered a domestic credit boom a half-decade ago to limit the impact of the global financial crisis and global recession on its economy, Hoey said. However, he said the hangover from that credit boom is now contributing to a slowdown in the growth rate of China.
Hoey said the slowdown is occurring just as there is a demographic inflection point to slower growth in the Chinese labor force. He added, “We believe that the outlook for the Chinese economy is a downward shift to slower trend growth rather than a hard landing.”
Another challenge to growth cited by Hoey is the decline in the global trade multiplier. Before the financial crisis, global trade grew faster than GDP, but that does not appear to be the case now.
“As emerging markets are now becoming more dependent on domestic demand growth, the global trade multiplier has shifted down, with global trade and the global economy both growing at about the same pace,” he said.
Photo: Andreas Lehner. The Time for Sitting Back and Relaxing is Over
In the last hundred years, from 1915 to 2014, the classic 60/40 portfolio (60% equities/40% bonds) has generated 8.4% per year. That return can be broken down into 10.3% on equities and 5.6% on bonds. A period of that length obviously has its ups and downs, but despite the myriad crises over the last few decades, the figures for the last 50 and even the last 25 years are better still.
The performance of this simple strategy is not just good; it has also been consistent over time. It is then tempting to conclude that the 60/40 portfolio is both time- and crisis-proof and that investors should stick with it. The recent turbulent period is also concrete evidence of this, with a robust return of 7.2% over the last ten years. Quite an achievement in a decade marred by the global financial crisis, the Great Recession, record unemployment in many countries and sluggish economic growth.
According to Research Affiliates, since 2004 the 60/40 portfolio has beaten 9 of the 16 major asset classes. This implicitly demonstrates that it’s not easy to improve the success formula by adding an extra performance-enhancing asset.
“60/40 shows that you do not always have to take drastic steps to achieve attractive returns,” admits Jeroen Blokland, Senior Portfolio Manager of Investment Solutions. “But many of those other assets do not have 100-year track records.” And there is one further observation, of course. “The performance says nothing about the risk-return profile. Adding some other assets to the 60/40 would probably have added little in terms of performance but may well have reduced the level of risk.”
Nor is 100 years of history any guarantee for the future. The period between 1965 and 1974 was a difficult one for the 60/40 strategy, which generated a nominal annual return of 2.3%. And after adjusting for inflation the return was actually negative. That poor return was related to the high equity valuations and low bond yields at the beginning of the period. And now, in 2015, equity valuations are even higher and bond yields are even lower than they were in 1965. This could lead to an new era of low returns and Research Affiliates have given a figure for this. According to their models, the expected return for the 60/40 portfolio over the next ten years is a meager 1.2% per year.
More active – or smarter
The decision for investors now is whether to accept this or to actively adjust their portfolios. ‘Actively’ in this context does not just mean searching for ‘the new Apple’, emphasizes Blokland. “At asset-allocation level, you can shift to a larger weight in equities and less in bonds or to actively managed allocation funds. But within the parameters of the 60/40 strategy you can also search for strategies that have historically outperformed the broader market, without actually departing from the 60/40 split.”
According to Blokland, this brings you to factor plays – such as low volatility, value and momentum – that have a track record of generating extra returns and can be applied to both equities and bonds. “Not that this will suddenly turn the 1.2% return into 8%, but it may well help you generate an extra percent without increasing your portfolio’s level of risk.”
It is clear that investors who have been able to rely on the good old 60/40 strategy for years will now have to do something to ensure that their capital increases. The era of sitting back, relaxing and generating returns of 8% is coming to an end. Action is required – action in the form of active management.
The United States held steady in its ranking among the top 20 countries in the world for retirement security, according to the 2015 Natixis Global Retirement Index, published this week by Natixis Global Asset Management. For the third consecutive year, the U.S. placed 19th among 150 nations, as benefits of the U.S. economic recovery offset growing demand on government finances.
“As our analysis shows, the security of retirees’ savings is influenced by a range of factors largely out of their control,” said John Hailer, president and chief executive officer for Natixis Global Asset Management in the Americas and Asia. “We’re seeing that individuals will have to shoulder more of the financial burden by saving and investing more effectively to ensure financial security in retirement.”
Now in its third year, the Natixis Global Retirement Index is based on an analysis of 20 key trends across four broad categories: health, material well-being, finances and quality of life. Together, these trends provide a measure of the life conditions and well-being expected by retirees and near-retirees.
While the U.S. got strong grades for its finances, largely due to low inflation and interest rates, and enjoyed higher Gross Domestic Product growth, its position in the rankings may be fragile. The U.S. benefits from high per-capita income and spends more per capita on healthcare than any other nation. However, those resources don’t reach all Americans. The U.S. has a relatively large gap in income equality, and Americans have access to fewer doctors and hospital beds than citizens in other developed nations.
Further, the U.S. population is aging and living longer. The proportion of the U.S. population over the age of 65 is expected to rise from 13% in 2010 to 21% in 2050. As a result, there will be fewer workers to pay for programs, such as Medicare and Social Security, that serve older Americans.
Europe leads in quality of retirement
Top-ranked countries in 2015 benefited from well-developed and growing industrialized economies with strong financial systems and regulations, broad access to healthcare, and substantial public investment in infrastructure and technology. Despite relatively heavy tax burdens, these countries rank high in per-capita income levels and low in income inequality.
“These countries currently lead the way, but could face headwinds as the citizens live longer in retirement and the cost of funding various programs continues to increase,” said Hailer.
The index showed:
Stability at the top: Switzerland retained its No. 1 ranking because of its high per-capita income, strong financial institutions and environment. Switzerland has a mandatory occupational pension system and a well-funded universal health system. Norway held the second spot on the strength of its widely shared wealth.
Big leaps: Iceland jumped seven slots, to No. 4, because of structural changes in the nation’s financial system after its banking crisis. The Netherlands rose to No. 5 from No. 13 on strengthened finances, while Japan’s fiscal reforms and healthcare improvements helped it vault to No. 17 from No. 27.
Down under policies working: Australia (No. 3) and New Zealand (No. 10) are two non-European countries in the top 10 due in large part to mandatory retirement savings programs.
“Bold public policies and a commitment to innovation are making the greatest contribution to the security of retirees in the top-ranked countries,” Hailer said. “They offer valuable lessons for countries trying to improve their retirement systems and prepare citizens for financial security in retirement. In the U.S., we need to open access to work-based retirement programs so more Americans can put money away for their future needs.”
Some progress is being made at the federal level, and the states are beginning to take action as well. Illinois, for example, recently introduced an automatic retirement savings program for workers in the state that don’t already have a retirement plan at work, a first for the nation.
Photo: New logo of NNIP. ING IM Changes Its Name to NN Investment Partners
As part of the EC Restructuring agreement, ING Group agreed to divest its Insurance and Investment Management activities.
From April 2015 we’ll be known as NN Investment Partners, a stand-alone business of NN Group. As part of NN Group N.V. since last July 2nd 2014, a publicly traded corporation, the new name, with a new logo, is the final step in the journey that NN Group and NN Investment Partners are making to an independent future.
Jaime Rodríguez Pato, Managing Director ING Investment Management Iberia & Latam: “We may be changing our name. We won’t be changing who we’ve always been. Our customer commitment remains the same. Proprietary research and analysis, global resources and risk management are still fundamental in a wide variety of strategies, investment vehicles and advisory services that we offer in all major asset classes and investment style.”
History and background
NN Investment Partners is the asset manager of NN Group N.V., a publicly traded corporation. Our investment management products and services are offered globally through regional centres in several countries across Europe, the United States, the Middle East and Asia, with the Netherlands as its main investment hub. We manage in aggregate approximately EUR 180 bln (USD 227 bln) in assets for institutions and individual investors worldwide. We employ over 1,100 staff and are active in 18 countries across Europe, Middle East, Asia and U.S.
The successful history of client-focused asset management extends back to 1845 and reflects our roots as a Dutch insurer and bank. Clients draw upon our more than 40 years’ experience in managing pension fund assets in the Netherlands, one of the world’s most sophisticated pension markets. This rich heritage enables us to deliver exceptional long-term, risk-adjusted performance across asset classes, complemented by best-in-class service.
It feels like 2015 has been a long year already! Clearly markets have had much to contend with, but the dominant feature has been the continued collapse in core bond yields. Global economic activity remains muted, and the deflationary forces lowering inflation and impacting nominal growth are many and varied. Politics and geopolitics continue to grab headlines, and in the case of the Greek election, have the potential to affect markets significantly due to Greece’s conflicting ambitions of retaining the euro whilst also seeking forgiveness on its debt.
The oil price remains weak, and whilst its impact on inflation is clear, the follow-through in terms of consumer spending is less clear cut. On the policy front, the ECB recently announced full-blown sovereign bond quantitative easing (QE), with an intention to purchase €60bn a month in bonds until its target level of 2% inflation is reached.
Against this backdrop, yielding assets have had a strong start to the year. Credit, particularly investment-grade credit, has performed well, and similarly equities have enjoyed positive returns in a number of markets. Our equity strategy has been to favour the US, which has enjoyed a relatively stronger economy, the UK, which has valuation support, and Japan, where corporate profits are being boosted by ‘Abenomics’. Although the UK equity market has been held back by its exposure to energy and materials, both Japanese and US equities have performed well since we moved to favour them in our asset allocation model.
However, the US equity market’s valuation now looks relatively stretched given both its outperformance and, more worryingly, the impact of a stronger dollar on US corporate profits. Europe, on the other hand, benefits from a number of decent tailwinds: a weaker euro, lower oil prices, and a boost from the ECB’s QE programme. It is quite possible that we will see upward revisions to European GDP growth this year, a first for many years. European corporate profits will be supported by improved competitiveness as a result of the weaker currency, and valuations are relatively attractive. Interestingly, European earnings revisions have just turned positive (albeit in a very small way).
Elsewhere, in Asia Pacific excluding Japan, and also following a long period of underperformance, valuations look increasingly attractive. Whilst there a number of obvious losers in the region as a result of the oil price fall, there are many winners, and we are finding a wider range of interesting investment opportunities. Consequently we have moved overweight the region for the first time in a while. Similarly, we have moved overweight in European equities, funding both of these moves by downgrading US equities to neutral from overweight. We have also used these recent asset allocation changes as an opportunity to reduce the magnitude of our overweight in equities, but we continue to prefer equities over bonds.
The event consisted of a cocktail and a typical Scottish dinner in which there was no shortage of whiskey tasting, hosted by the whiskey tasting expert Nick Pollachi, Whisky Master and owner of The Whisky Dog. The evening was enlivened by Canadian piper Robert Ritchie and musical threesome Avalon.
“Our headquarters are still in the city of Aberdeen, in northeast Scotland, and our roots date back to 1875,” explained Hendry. “Our Scottish heritage is an essential part of the identity of Aberdeen AM, and we hope our customers enjoy aspects of our tradition, such as those we celebrate tonight,” added Hendry.
Aberdeen AM celebrates its traditional Burns Supper in cities around the world around the 25th January, to coincide with the birth, in 1759, of Robert Burns, poet, and author of more than 600 poems amongst them some as famous as “Auld Lang Syne”, used each year throughout the English-speaking world to bid farewell to the old year and welcome the new. This year, Aberdeen has celebrated its Burns Supper in 4 cities across North America: Toronto, Los Angeles, Dallas, and Miami. It is the fourth consecutive year in which Aberdeen AM celebrates this event in Miami.
Aberdeen Asset Management is present in over 25 countries in Europe, Asia, and America. As of September 30th 2014, it had US$525.9bn in assets under management. In Miami, Maria Eugenia Cordova, deals with the offshore business which has its epicenter in this city. Maria Eugenia reports to Menno de Vreeze, Head of the US offshore business, whose team is completed by Damian Zamudio and Andrea Ajila, all three based in New York. Linda Cartusciello, who is also based in Miami, is at the helm of all the institutional business in Latin America.
Photo: robinhood.org. BlackRock Appoints Deborah Winshel to Lead Impact Investing Platform
BlackRock announces the appointment of Deborah Winshel as a Managing Director and global head of impact investing. In her role, Ms. Winshel will help BlackRock unify its approach to impact investing through the launch of BlackRock Impact, a dedicated platform catering to investors with social or environmental objectives worldwide. Ms. Winshel will also be responsible for overseeing BlackRock’s Global Corporate Philanthropy program.
BlackRock Impact will work closely with the firm’s global investment teams and leverage its data and analytic capabilities to develop scalable, innovative investment solutions that also meet clients’ desired societal outcomes. BlackRock currently manages over $225 billion in strategies designed to align clients’ portfolios with their objectives and values, which will now be integrated under BlackRock Impact. Ms. Winshel joins the firm with a distinguished career in non-profit management and venture philanthropy, during which she took an active role in shaping charitable giving programs while defining and measuring successes based on the programs’ lasting effects.
“Today, many clients are looking for investment opportunities that advance social and financial goals at the same time. While the roots of this movement can be traced back many years, the frequency and complexity of these mandates are increasing. More and more, clients are looking to measure the returns on their investments both by the societal and financial outcomes they can help to create. With her experience at Robin Hood, and its focus on programs with measurable impacts, Deborah is the ideal choice to help BlackRock develop scalable impact investing offerings through both public and private markets,” said Laurence D. Fink, Chairman and CEO of BlackRock.
Currently BlackRock offers a number of investment strategies which incorporate environmental or social considerations, including:
Values Based –Utilizes screens to exclude securities, aligning investors’ portfolios with their values. BlackRock currently manages more than $214 billion in Values Based mandates.
ESG Consideration – Focuses on investing in companies that display strong track records in the governance, social or environmental areas. The firm recently launched the iShares MSCI ACWI Low Carbon Target ETF.
Impact Investing – Pursues measurable societal or environmental outcomes alongside financial goals. To date we have participated in over $1 billion in client mandates for investing in Green Bonds. With over $1.5 billion of commitments and AUM, BlackRock’s renewable power investment platform is one of the largest in the world, offering clients compelling opportunities to meet their investment needs.
