Northern Trust nombra vicepresidente de su Consejo a William L. Morrison

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Northern Trust Names William L. Morrison Vice Chairman
Foto: Kevin Dooley . Northern Trust nombra vicepresidente de su Consejo a William L. Morrison

Northern Trust Corporation ha anunciado esta semana el nombramiento del presidente William L. Morrison como nuevo vicepresidente del Consejo de Administración, efectivo el primero de octubre de este año. Desde su nuevo puesto, continuará reportando al presidente del consejo y CEO, Frederick H. Waddell, que asumirá el cargo de presidente.

Como vicepresidente del Consejo, Morrison continuará liderando la creación y desarrollo de relaciones clave con clientes y potenciales clientes, en el ámbito particular e institucional en todo el mundo. Además, prestará apoyo y/o liderará los esfuerzos de desarrollo relacionados con oportunidades estratégicas que puedan surgir.

“Bill es un líder con una tremenda experiencia y un juicio sobresaliente, y nos beneficiaremos de sus esfuerzos concretos por hacer crecer nuestro talento, relaciones con clientes y capacidades”, declara Waddell, con motivo del nombramiento.

Morrison es presidente desde 2011, cargo al que sumó –entre 2011 y 2014- el de director de operaciones. Ha ejercido de executive vice president y director financiero entre 2009 y 2011. Con anterioridad, ha ocupado diversos puestos de responsabilidad, incluyendo el de presidente de Wealth Management entre 2003 y 2009.

The Need For Portfolio Resilience

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At the end of 2015, investors were confronted by a world that appeared to be full of potential pitfalls. To preserve and grow the value of their assets, they needed robust portfolios that could outperform the market in challenging environments and deliver resilient returns in the face of unforeseen events.

The investment environment in 2016 has been no easier. A slowing Chinese economy, the Bank of Japan’s surprise move to introduce negative interest rates, political and economic uncertainty in the US and the UK’s momentous decision to leave the European Union have all played their part in increasing global financial instability and volatility.

Investec’s approach to building portfolios that are resilient in the face of such tumultuous events requires a strong understanding of investment risks, beyond estimates of volatility. For them, portfolio construction should balance the trade-offs between potential returns and individual assets’ contribution to overall risk exposure. But also they need to be diversified and to avoid those parts of the market that could be vulnerable to sudden liquidity squeezes. According to them, investors should also have strategies to cope with periods of market stress.

Diverging monetary policies
Six months ago, they believed the US dollar would reach new cyclical highs, as US monetary policy slowly normalized. Then, Europe had only just started to run down private-sector debt and seemed at least three years behind the US. Asia, and China in particular, were further behind Europe. These markets’ debt to gross domestic product ratio were still high, suggesting that monetary easing would need to continue for several years.

Since then, global economic headwinds and a weaker domestic backdrop has prompted a more dovish tone from the US Federal Reserve in the first quarter of 2016, which has slowed the pace of monetary policy normalization. “This means that the phenomenon of diverging monetary policy is less pronounced than it was at the beginning of the year.”

Selectivity needed in emerging markets
“Our belief that the emerging market universe is disparate, and offers a wide range of investment opportunities still holds true. We continue to favour economies that are natural extensions of developed markets, such as Hungary or Romania are for the European Union. Nevertheless, we believe we need to continue to be selective in emerging markets, partly due to different sensitivities to demand for Chinese commodities and the US dollar.” They note.

Finding bottom-up opportunities
“We continue to believe that a bottom-up approach to choosing investments can help penetrate the short-term macroeconomic noise. Emerging market equities and resource stocks led global stock markets higher from mid-January, at a time when Chinese data remained negative and many analysts were forecasting a US recession. However, we still acknowledge that the environment has, even if temporarily, become marginally less supportive for stock picking.”

ESG going mainstream
Investec’s experts believe that 2016 is when many investors will be focused on taking account of environmental, social and governance (ESG) issues. Integrating ESG assessment into investment processes is increasingly being seen as a way of driving long-term value creation. “German auto manufacturer Volkswagen could be seen as a game changer triggering increased attention on corporate behavior and practices. The Paris Agreement on Climate Change in December 2015 has also focused investors’ minds on the environmental challenges surrounding global warming.” They conclude
 

BTIG Nueva York ficha al brasileño Andre Suaid

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Andre Suaid Joins BTIG in New York
Andre Suaid / Linkedin. BTIG Nueva York ficha al brasileño Andre Suaid

BTIG, una firma global de servicios financieros, anunció que contrató a Andre Suaid para liderar a su grupo internacional de renta variable, Suaid trabajará desde las oficinas de Nueva York.

El directivo se centrará en los clientes institucionales de América Latina y los Estados Unidos, con presencia por toda América Latina, en particular Brasil, Chile y México, uniéndose a un equipo global de profesionales distribuidos a lo largo de nueve oficinas de Estados Unidos, así como las filiales en Londres, Edimburgo, Hong Kong, Singapur y Sydney.

Hasta ahora, Suaid lideraba los equipos de renta variable internacional y de clientes institucionales de América Latina para Deutsche Bank Securities. Al principio de su carrera, pasó varios años en funciones similares en Credit Suisse, First Boston y FC Stone.

«Como especialista en mercados de América Latina a lo largo de su carrera de 25 años, Andre jugará un papel decisivo en la expansión de la oferta de la empresa para nuestros clientes que realizan negocios en la región», dijo Richard Jacklin, director general y director de Renta Variable Internacional en BTIG. «Su amplia red de relaciones cercanas, la comprensión de los matices de comercio regionales y orientación al cliente en primer lugar será importante ya que buscamos desbloquear valiosos bolsillos de liquidez para los clientes.»
 

Asset Managers Set Their Sights on UK Wealth Managers

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The UK retail advisory channel is increasingly divided between large multiservice advisor and wealth management companies and small, traditional independent advisors. Smaller players are more likely to have to outsource investment allocation, Cerulli Associates‘ Asset Management in the United Kingdom 2016: A Guide to Retail and Institutional Market Opportunities report finds. Cerulli conducted two surveys in partnership with Incisive Media, one targeting IFAs and the other targeting DFMs. This research found that nearly 65% of UK IFAs currently outsource investment assets to DFMs, which are also a growing target for asset managers.

In turn, nearly one-third of DFMs invest more than 80% of their assets in third-party funds; 24% invest 100% in third-party funds. Fewer than 10% invest in no third-party funds at all.

In addition, every DFM that responded to Cerulli’s 2016 survey reported at least some level of investment in passive strategies. Some 80% of DFMs reported some allocation to exchange-traded funds, 55% stated that they invest in index-tracking funds, and only 30% indicated that they invest in smart beta funds. «Although few DFMs expect their allocation to passive investments to decrease, the majority do not plan to increase allocations either,» says Laura D’Ippolito, lead author of the report. «This is good news for active managers targeting this segment, but asset managers can expect fee pressure from DFMs.»

DFMs are increasingly institutional in the way they approach fund selection, having increased their levels of due diligence on asset managers and funds. This is contributing to the continued fee pressure felt by asset managers, as is the use of passive strategies.

Whereas IFAs are reducing the number of funds on their buy lists because of increasingly rigorous due diligence oversight, Cerulli’s survey indicates that it is business as usual for UK DFMs. «The majority of DFMs reported having between 20 and 50 managers and funds on their buy lists,» says Cerulli senior analyst Tony Griffiths, another of the report’s authors. «Around 80% expect the number of managers and funds on their buy lists to stay the same over the next 12-24 months.»

Attaining a «best of breed» rating from DFMs is every manager’s goal. Cerulli’s research shows that Invesco Perpetual and Standard Life have not only achieved this-in alternatives and multi-asset respectively-but won topfive rankings across two asset classes.

«The key to success in a competitive and increasingly challenging investment environment is to have a well diversified model. This lesson has not been lost on a number of managers that relied too heavily on their success in just one asset class,» Griffiths adds.

Chinese Nominal GDP Rebounds, Money Signal Still Positive

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​Stronger Chinese monetary trends late last year suggested that economic growth would recover during the first half of 2016, contrary to consensus expectations of a further slowdown. Key indicators firmed through the spring but by less than had been expected here. Second-quarter GDP and June activity numbers released today were, on balance, more encouraging, while the monetary signal remains positive.

Annual growth of GDP in volume terms was unchanged at 6.7% last quarter but the more significant news was that nominal GDP expansion rose for a second successive quarter to 8.2%, the strongest since the third quarter of 2014. A rebound had been signalled by a pick-up in money growth from mid-2015. Annual increases in narrow and broad money (as measured by “true” M1 and M2 excluding financial sector deposits) were little changed in June, with recent growth the fastest since 2010 and 2013 respectively.

June activity numbers were mixed. Annual growth of industrial output and retail sales value rose to 6.2% and 10.6% respectively in June, beating consensus expectations. Fixed asset investment, however, slowed further, with an annual value rise of 7.3%, close to a September 2015 low of 6.8%.


Capex weakness reflects the private sector component, which stagnated in the year to June.

Prospects for private investment, however, are judged here to have improved. Industrial profits lead private capex and are rebounding on the back of stronger nominal GDP growth. A pick-up in growth of deposits of non-financial enterprises over the past year is a further positive signal.

An investment revival coupled with continued solid consumer spending expansion and an export pick-up driven partly by recent exchange rate depreciation may result in stronger volume as well as value growth of GDP during the second half, despite some reduction in fiscal stimulus.

*”True” M1 includes household demand deposits, which are excluded from the official M1 measure. Financial sector deposits are excluded from M2 because they are volatile and less relevant for assessing spending prospects.

Column by Henderson’s Simon Ward. Past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

The information in this article does not qualify as an investment recommendation.
 

 

Manny Roman will Join PIMCO as its New CEO

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PIMCO, a leading global investment management firm, announced on Wednesday that the firm’s Managing Directors have appointed Emmanuel (Manny) Roman as PIMCO’s next Chief Executive Officer. PIMCO’s current CEO Douglas Hodge will assume a new role as Managing Director and Senior Advisor when Roman joins PIMCO November 1st.

The announcement of Roman as PIMCO’s CEO is the culmination of a process undertaken by the firm to hire a senior executive who would add leadership and strategic insights combined with a deep appreciation of PIMCO’s diversified global businesses, investment process and focus on superior investment performance and client-service. Roman’s appointment has the full support of the firm’s leadership including Hodge, PIMCO’s President Jay Jacobs, the firm’s Executive Committee and its Managing Directors.

Roman has nearly 30 years of experience in the investment industry, with expertise in fixed income and proven executive leadership, most recently as CEO of Man Group, one of the world’s largest publicly-traded alternative asset managers and leader in liquid, high-alpha investment strategies. Roman worked for more than 18 years at Goldman Sachs, where he was Co-Head of Worldwide Global Securities and Co-Head of the European Services Division. He became Co-Chief Executive Officer at GLG Partners in 2005 and Chief Operating Officer of Man Group in 2010 following the firm’s acquisition of GLG. He was named Man Group’s CEO in 2013. He will help drive PIMCO’s continued evolution as a provider of investment solutions built on the firm’s active management expertise in areas such as core bonds, non-traditional strategies, private credit, distressed debt, equities and real estate, among others. Roman will be based in PIMCO’s headquarters in Newport Beach, California.

“Manny’s deep understanding of global markets, unique skills in investment management and appreciation of PIMCO’s macro-based investment process make him the ideal executive to position the firm for long-term success,” said Daniel Ivascyn, Managing Director and PIMCO’s Group Chief Investment Officer. “Manny’s skills and experience include all of the attributes that are key to delivering value to PIMCO’s clients – investment acumen, intellectual capacity and thought leadership, broad industry experience, executive leadership and an excellent fit with PIMCO’s cultural values.”

Roman said: “It is an honor to be chosen as CEO of PIMCO, a firm which embodies the finest principles of asset management – innovative investment strategies, excellent client service and a deep bench of global talent – which have consistently delivered value to clients over the long-term. I look forward to working with the firm’s talented team to continue to build on PIMCO’s success in what is a rapidly changing industry.”

In his new role as Senior Advisor, Hodge will work with Roman to ensure a smooth transition of executive responsibilities providing continuity for PIMCO’s clients, employees and parent company Allianz SE.

Ivascyn said: “Doug has made a significant contribution to PIMCO with his leadership and professionalism. We are pleased he will remain with PIMCO to provide counsel to the firm and the Managing Directors, leverage his global relationships with our clients and ensure continuity throughout the transition of executive leadership to Manny.”

Hodge said: “PIMCO has become the global leader in active management of fixed income by seeking to provide investors with innovative solutions as the global markets change. As the asset management industry continues to evolve, Manny will bring new perspectives to PIMCO’s leadership team and add his unique talents to our already successful firm and I look forward to working with him.”

The Bond Segment Still Offers Opportunities that Combine Capital Protection, Return and Reduced Volatility

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Jean-Philippe Donge, manager of the BL-Bond Emerging Markets Euro fund talks about the opportunities in bond investments.

Jean-Philippe, do bonds still offer investment opportunities, even at these low interest rates?
Jean-Philippe Donge (JPD): Certainly, although that depends above all on each investor’s specific expectations. Investors looking for quality and wanting to protect themselves against deflationary trends will find protection in paper issued by the most creditworthy borrowers such as Germany and the United States. Investors looking for a better return, and therefore willing to accept higher risk, should look at other markets. Many emerging countries have made enormous progress in terms of growth in recent decades, as is confirmed by various indicators such as rising per capita income and a decline in poverty. That is the case for example of South Korea, where per capita GDP has risen from less than USD 1,000 in 1960 to almost USD 25,000 today, and also Mexico and Indonesia. Much depends therefore on the investor’s particular profile. The fact remains that the bond segment still offers opportunities that combine capital protection, return and reduced volatility.

A cautious investor might nevertheless argue that many countries are facing significant problems and political crises, in spite of relatively interesting returns. How are these countries supposed to manage?
JPD: It is true that some of them are in a precarious position, but these countries have learnt from the crises of recent decades. Take for example the depreciation of the Thai baht and Argentina’s sovereign default. In the wake of these events, the two countries involved reviewed their economic policies and in particular the exchange rate system applied to their economies.

The global financial system has been extremely fragile since the collapse of Lehman Brothers. In this context, international central banks have been set the challenge of saving their respective economies. The resulting measures, at times unconventional, have shored up all asset classes, including emerging market bonds. Some of these countries – more than others – have adopted rescue measures: unpegging their currencies, stockpiling currency reserves and setting inflation targets to name just a few. However, others have opted for the opposite direction, for example Brazil whose interest rate rises are struggling to deal with the fiscal slippage and curb inflationary pressures. As a result, the countries that took these sometimes brave and unpopular decisions are those that have best withstood the shocks.

What does your fund’s investment method involve?
JPD: In the past, managing bond investments was primarily a matter of managing duration, but this approach is less relevant today. Our methodology is determined by a variety of both macroeconomic and geopolitical factors. My principal challenge as a fund manager consists in identifying top quality issuers, as well as the instruments and bond issues available for each of them. As a result we now base our investment decisions on three criteria, namely duration, the currency and the interest rate differential which reflects credit quality. Our analyses are based on the information sent to us by our external analysts, which include ratings agencies and international research organisations. We compare this information with our own convictions and the current situation. We do not track any indices.

BLI’s fund managers always talk of «high quality stocks». What sort of companies are these exactly? Which sectors do you favour?
JPD: The BL-Bond Emerging Markets Euro fund does not use a benchmark. It tends to adopt an opportunistic approach and tries to fulfil our clients’ expectations. Our preference is for government bonds, followed by corporate bonds. The political environment and the economic context affect our investment choices. We therefore tend to underweight countries such as Brazil and avoid the likes of Venezuela, preferring Romania, Vietnam and Namibia, for example. The countries chosen must meet our expectations and offer a positive outlook.

Has your investment method changed?
JPD: As previously mentioned, our investment management approach has changed to look beyond duration alone and more actively incorporate two new criteria: credit risk and exchange rates. Until about 15 years ago, very little distinction was made between issuers belonging to the same sector or “type”. For example, Greece was on an equal economic footing with Germany, because both countries belonged to the same monetary zone. Although, I admit that may be a bit of an exaggeration. The same was also true for Argentina and Mexico, because we treated emerging countries as a bloc, making no other distinction between them. However, 2001 and 2008 changed things. In 2001, we witnessed the biggest default until that time, namely that of Argentina. A distinction was made within the asset class for the first time and contagion remained limited. In 2008, one more event linked to another player deemed “too big to fail” took place: the Lehman Brothers collapse. Around these two events and over the course of time, significant differences emerged within both the sovereign and corporate bond segments. For example, post-Lehman crisis, the markets understood that General Motors and Ford were not one and the same. The former was declared bankrupt and then nationalised in 2009. Our investment method has incorporated this reality by pursuing further discernment between the various issuers, whatever the sector or economic region under consideration.

You just mentioned corporate debt. Tell us more about this segment and its contribution to your investment management.
JPD: Nowadays the differences are more marked than in the past. Regardless of the quality of the companies identified, it is equally important to focus on issuers that are capable of swimming against the tide during economic cycles when these are in a downturn. I have in mind in particular the telecommunications sector, where certain companies in emerging countries have succeeded in joining the ranks of multinationals. That is the case for example of Hutchison Whampoa in Hong Kong, Singapore Telecommunications in Singapore, Bharti Airtel in India and América Móvil in Mexico. These companies are generally better placed to offer a higher return than the average of their developed country counterparts, which are in some cases highly leveraged. However, I wouldn’t rule out any sector from the outset. In other words, because we include more credit risk, it is fair to say that our investment approach is flexible, opportunistic and responsive.

Do you also invest in currencies other than the portfolio’s reference currency?
JPD: Yes, we do. We have been investing in debt securities denominated in local currencies for over ten years. The local debt market generates better returns than those of most eurozone countries. The challenge lies in identifying markets and currencies that offer a degree of stability over an indefinite period, in addition to a higher return. This approach is obviously opportunistic, even when our decisions are based on firm convictions. That was true for the Brazilian real in the 2000s, and is true today for the Indian rupee. We have suffered a few disappointments, though, especially with the Mexican peso. In all cases our decisions are based on in-depth analysis of the economic and political environment.

The BL-Bond Emerging Markets Euro fund has been in existence for just over two years and has delivered a performance of over 11% since its inception. How do you see its future development?
JPD: The BL-Bond Emerging Markets Euro fund does not represent the 20 best European economies. What it does is exploit the potential offered by over a hundred economies worldwide. As these economies and their political systems have nothing in common, we are talking about a diverse universe that throws up numerous opportunities. Our principal challenge consists in juggling endogenous and exogenous factors, including regional influences.

Are you not concerned that the fund could be hit by a new emerging market crisis? How can you protect the fund from this?
JPD: Not all countries are going to go bankrupt or declare war. Likewise, they are not all oil exporters and often have very different levels of debt and currency reserves. I have therefore set myself the task of relentlessly seeking out any investment opportunities that may come up. What sets us apart from the competition is our consistent interpretation and processing of information relating to each individual country, and the convictions and opinions that we forge for the management of our fund. I believe that this characteristic enables the BL-Bond Emerging Markets Euro fund to stand out in any circumstances.

What is the outlook and how do you expect the fund to develop?
JPD: I am optimistic going forward. There will always be corrections, and no sector is immune. That is why the fund is intended in particular for investors with a medium to long-term investment horizon. Peru, Chile, Vietnam and Senegal are countries that didn’t even appear on the radar of our clients 15 years ago. But they are an integral part of the portfolio now, because they all boast positive growth indices, falling poverty levels and improving education systems, among other indicators. I therefore believe that the BL-Bond Emerging Markets Euro fund, like its twin the BL-Bond Emerging Markets Dollar fund, successfully covers this broad spectrum and is the best adapted to this type of investment. There are nevertheless certain differences between these two portfolios. The first invests in both euro-denominated and local currency issues, whereas the second, launched six months ago, targets a broader basket of sovereign issuers while limiting itself almost exclusively to dollar-denominated debt.
 

Beamonte Investments anuncia el primer cierre del Venture Academy Fund

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Beamonte Investments' Venture Academy Fund has its First Closing
Luis Treviño. Beamonte Investments anuncia el primer cierre del Venture Academy Fund

Beamonte Investments, firma de inversión privada en Boston, anuncia el primer cierre de su fondo venture, el Venture Academy Fund ( «VAF») con cerca a 6 millones de dólares en compromisos de capital totales. El fondo está tratando de recaudar una cantidad similar de LPs internacionales con el objetivo de mantener un segundo cierre para diciembre de 2016 y un cierre adicional a finales de febrero de 2017. La base de inversores actual incluye family offices en Estados Unidos y Latam.

El mexicano Luis Treviño, director de Beamonte comentó a Funds Society que están «entusiasmados de la buena respuesta que ha tenido en fondo con inversionistas, VAF le da la oportunidad a inversionistas a acceder al mercado de Startups en Mexico y Colombia, que ha sido uno de los sectores mas se ha desarrollado en los últimos años».​

VAF se centrará en startups de alto crecimiento e impacto, que aprovechan las oportunidades de mercado a través de plataformas en línea, apps, tecnología y otros. «El fondo se centrará en las inversiones de la Serie A, ya que la competencia es menor en esta sección del mercado de capital riesgo. El mercado de capital riesgo está en una etapa de crecimiento, donde VAF puede entrar y aprovechar el ecosistema emprendedor favorable en México y Colombia para generar rentabilidad para los inversores».
 

La promesa rota de Puerto Rico

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Puerto Rico's Broken Promise
Foto: Christopher Edwards. La promesa rota de Puerto Rico

Según Philip Villaluz, responsable del análisis de crédito municipal en la gestora Schroders, el reciente impago de Puerto Rico no supone un mayor riesgo de contagio para el mercado municipal de bonos, pero marca el principio de un largo proceso para reparar la economía del país.

Puerto Rico incurrió en el impago de 900 millones de dólares en principal e intereses que vencieron el pasado 1 de julio, la mayoría era deuda de obligaciones generales y deuda garantizada por el Estado Libre Asociado.

A pesar de que haya sido un default histórico, es el primer estado o territorio asociado a Estados Unidos que incurre en impago desde que el estado de Arkansas lo hiciera en 1933, el mercado municipal de bonos lo ha tomado con calma. De hecho, los precios de los bonos puertorriqueños no se han alterado excepcionalmente (incrementando en un 3,4% desde la introducción de la legislación de la Cámara de Estados Unidos, disminuyendo un 2,8% tras el impago).

A pesar de que el default se anticipaba en el mercado desde hace algún tiempo y la prima de riesgo se había incorporado al precio, Schroders cree que este evento marca solo el principio de un largo proceso de reestructuración de la deuda y reparación de la economía de Puerto Rico.  

Enlarge

Una situación de deterioro ha propiciado un cambio en la base de inversores 

Puerto Rico arrastra una recesión desde 2006, los niveles actuales de desempleo son cercanos al 20%, cerca de un 50% de la población vive en la pobreza y cientos de miles de personas que disponen de medios han dejado la isla. 

El fondo de pensiones del Estado Libre Asociado se sitúa en una tasa de cobertura de menos del 1%, con miles de jubilados que dependen de los pagos de pensiones para llegar a fin de mes.

Debido a una década de problemas económicos y fiscales, Puerto Rico acumuló una deuda de 70.000 millones de dólares, que fue comprada por los isleños y los inversores de bonos municipales de Estados Unidos que se benefician de la triple exención de impuestos (el ingreso está exento de ingresos federales, estatales y locales).

Debido a que a deuda de Puerto Rico tenía calificación especulativa en los últimos años, la mayoría de los fondos mutuos vendieron sus posiciones en bonos puertorriqueños, tan sólo 125 fondos mutuos siguen manteniendo estos bonos, y siete de ellos tienen más del 50% de la posición total, según reporta Morningstar. En la actualidad, los mayores inversores en deuda de Puerto Rico son hedge funds oportunistas

La decisión de romper la promesa

Con la liquidez prácticamente agotada, el gobernador de Puerto Rico Alejandro García Padilla anunció la intención del Estado Libre Asociado de incurrir en el impago de sus obligaciones. Padilla presionó con éxito a través de la legislación a principios del año para permitir que el gobierno pudiera decidir sobre los pagos de su deuda, en concreto sobre las obligaciones generales que tienen garantía, con el fin de preservar el efectivo. Puerto Rico en sí, al contrario que el resto de los estados de EE.UU., no dispone de autoridad para declarar bancarrota.    

La actuación del Congreso

El 30 de junio, la legislación federal PROMESA fue aprobada, creando un consejo supervisor que consistía en siete oficiales designados, con el “control exclusivo” para promulgar y aplicar planes fiscales, mediante los cuales la isla alcanza la solvencia fiscal y el acceso a los mercados de capitales. El consejo tendría el control último sobre todas las cuestiones económicas y fiscales del gobierno, además de la autoridad para reestructurar sus deudas. También dispondría de autoridad para prevenir la ejecución de actos legislativos, decretos, reglamentos, normas y contratos que socaven las iniciativas de crecimiento económico o violen la ley, además de otros poderes.

Los siete miembros del consejo, nombrados por el presidente con recomendaciones de los líderes de la Cámara y el Senado, es probable que consistan en cuatro republicanos y tres demócratas con experiencia en el mercado municipal de bonos, finanzas u operaciones del gobierno que no hayan sido o sean candidatos para un cargo o funcionarios electos, entre otras restricciones. 

Bajo la legislación federal PROMESA, cualquier reestructuración de la deuda debe respetar las prioridades relativas legales o los vínculos legales, como deben ser aplicables de acuerdo con la constitución, otras leyes, o acuerdos de un territorio cubierto o instrumentalidad cubierta en efecto antes de la fecha de promulgación de la Ley. 

Para imponer un acuerdo de reestructuración en conjunto de acreedores (por ejemplo, tenedores de bonos de obligaciones generales o de COFINA, ect.), una votación de dos tercios de al menos el 50% del conjunto de acreedores es necesaria (basada en el monto de la deuda pendiente). Esto permitiría de una forma efectiva que un tercio de los tenedores de la deuda a obligar al resto del grupo. Sin embargo, si no hay acuerdo posible, el consejo de supervisión puede presentar entonces una petición al tribunal para obligar a una reestructuración involuntaria. 

También establece una barrera entre los acreedores y las pensiones durante el desarrollo de una planificación fiscal. El consejo de supervisión será cesado cuando el gobierno de Puerto Rico: (i) tenga un acceso adecuado al mercado de corto y largo plazo a unas tasas razonables, (ii) tenga cuatro años consecutivos de presupuestos de acuerdo con las normas contables modificadas de devengo; y (iii) el presupuesto en equilibrio.

Ayuda para incurrir en impago

Según Schroders, la aprobación de PROMESA ha podido facilitar el impago de la deuda de obligaciones generales, al iniciar una instancia de litigios contra el Estado Libre Asociado hasta el 15 de febrero de 2017.  Por lo tanto, PROMESA no excusa el impago, pero proporciona un respaldo a Puerto Rico.

Los tenedores de la deuda asegurada están protegidos

Los inversores que tienen posiciones en bonos asegurados de Puerto Rico recibirán el principal que les corresponde en su totalidad, con las pólizas de seguros complementando la caída en valor. Desde Schroders, siguen confiando en que las dos principales aseguradoras de bonos con la mayor concentración de asegurados en Puerto Rico, Assured Guaranty y MBIA (a través de la Hacienda Pública Nacional), continuarán realizando los pagos.

Esto no es el final

PROMESA es más el principio que el final del proceso que determinará el resultado para los acreedores. El proceso de reestructuración es polémico y consume una gran cantidad de tiempo. Además, fuerza a las cortes a emitir una opinión sobre la Constitución de Puerto Rico y la definición de recursos del gobierno a la hora de determinar la prioridad de prelación de créditos entre los diferentes tenedores de bonos (entre obligaciones generales y COFINA), a través de una estructura de deuda muy compleja. Los acreedores también pueden impugnar la constitucionalidad de PROMESA, lo que podría retrasar aún más el proceso.

A modo de comparación, el mercado municipal ha sido testigo recientemente de otras reestructuraciones, aunque a escalas mucho menores. Por ejemplo, la reestructuración de la deuda de Detroit, tardó casi un año y medio en finalizarse, el Condado de Jefferson en Alabama, tardó más de dos años; y San Bernadino, en California, sigue en el proceso después de cuatro años.  

Philip Villaluz cree que la situación sigue siendo inestable y que todavía se desconoce el alcance y la repercusión de las medidas tomadas, particularmente con respecto a las negociaciones privadas y formación de la junta de supervisión, por lo que considera que es pronto para hacer predicciones seguras o tomar una visión más constructiva de los bonos de Puerto Rico. Sin embargo, destaca su posicionamiento en que la crisis de Puerto Rico no representa un riesgo de contagio del mercado municipal de bonos. 

Brexit’s Impact on Financial Services

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Financial services are possibly the policy area where Brexit will have the strongest impact. The City of London is the largest financial centre in Europe; many financial firms offer their services from their London base, making use of “passporting” rights granted through European legislation, which are now clearly at risk.

As a result of being the financial heart of Europe, the UK has historically been deeply involved in shaping financial markets policies and pushing further financial markets integration, due to their great interest, expertise and resources devoted to this particular area. This is the case in terms of the European legislative work, where the responsible European Commissioner for financial services was the British Commissioner Lord Hill.

The strong British influence is also felt at the regulatory level. The European Supervisory Authorities (European Securities and Markets Authority, European Banking Authority, European Insurance and Occupational Pensions Authority) define the finer details of financial legislation and have grown in relevance since their inception in 2010. The UK plays a strong role in these authorities in terms of their technical input, physical resources and market expertise. Decreasing UK influence in the ESAs as a result of Brexit could have significant effects on the final content of legislation as well as on the way European supervisors agree to apply the rules.

I. Institutional impact

a) Lord Hill resignation: The most immediate institutional impact of Brexit was the resignation of Lord Hill as Commissioner for Financial Services, along with his Cabinet (political advisers), who will be replaced by Vice-President Valdis Dombrovskis, the former Latvian Prime Minister, Finance Minister and MEP.

b) European Supervisory Authorities:

Funding:

The three European Supervisory Authorities (ESAs) are funded through the EU budget and contributions from Member States, in accordance with their size. The UK leaving the EU means that a significant contribution to the budgets of the ESAs will disappear.

This could accelerate ongoing discussions on ESA funding in the context of the ESA review. The UK was one of the fiercest opponents of increasing the proportion of funding from the EU budget (as it would lead to a greater grip of the European Commission (EC) on the activities of the ESAs). Without UK opposition, this shift towards greater EC influence could become areality.

Negotiations:

Within the ESAs, Member State authorities negotiate policy and draft implementing legislation just like Member States do in the EU Council. Although the UK will remain a full member of the ESAs for at least the next two years, the UK NCAs could refrain from active participation which will mean that ESA outcomes will inevitably change as although all Member States have equal voting in the ESAs, members with larger financial markets are far more active and influential.

European Banking Authority (EBA):

The EBA, currently based in London, will need to be relocated to another Member State. Italy, Germany, Netherlands and Poland have already expressed interest in hosting the EBA and other Member States might follow.

Of more importance than the physical location of EBA is that Brexit could reduce the EBA’s influence. The EBA’s current role as a bridge between Eurozone and non-Eurozone banks risks being significantly diminished when the UK leaves. The European Central Bank (ECB) is the single supervisor for the Eurozone banks. The main counterweight to the ECB is the Bank of England.

With the UK exiting the EU, the ECB will progressively become more important for the entire banking sector and the EBA’s role in adopting technical standards for the single rulebook will be reduced.

A further post-Brexit supervisory effect is likely to impact those banks of EU Member States not in the Eurozone, and therefore not supervised by the ECB. These will face greater scrutiny as international investors might consider their supervision less strong and therefore the banks less stable. Brexit could lead to non-Eurozone member states opting in to the Banking Union at a faster pace than previously expected.

European Securities and Markets Authority (ESMA):

The UK has been a driving force in ESMA, which has been active in implementing legislation and coordination of supervision for capital markets and the UK expertise is undeniable. Staff at the UK’s Financial Conduct Authority (FCA) have been seconded to ESMA, and task forces and standing committees have regularly been chaired by FCA personnel. This has contributed greatly to the reputation of ESMA as a knowledgeable and credible supervisor at international level. Without UK membership, ESMA could lose considerable expertise.

ESMA’s powers might well increase; the UK, supported by Germany, was a fierce opponent of more direct supervisory powers for ESMA. For example, CCPs are now still supervised by colleges of national competent authorities instead of by ESMA directly; this might change. In the context of Capital Markets Union, the European Commission did not go as far as to propose a European supervisory mandate for the capital markets for ESMA.This, too, might change.

European Insurance and Occupational PensionsAuthority (EIOPA):

EIOPA is currently leading the joint committee of the ESAs, which devotes much attention to consumer protection and product governance standards. In this area, the UK is clearly ahead of the curve in Europe. This has meant the UK has been very much involved in developing European standards from within EIOPA.

Without the UK, it is very possible that this work stream will slow down within the joint committee.

c) EU in international Bodies(FSB, IOSCO, BIS)

The position of the EU in international supervisory bodies has been strengthened by the UK’s contribution to EU policy. Although there was not always full alignment, European cooperation has smoothed over the major differences, strengthening the overall European position. With the UK exiting the EU, the chances increase that the Bank of England (in Basel) and FCA (in IOSCO) will no longer discuss their respective positions ahead of international negotiations, making for increased differences of views within these fora. This will enhance the relative weight of non-European supervisors meaning that European interests could suffer. The UK has stressed the importance of sticking to international agreements, whereas some Member States feel less pressure to apply Basel agreements unaltered. Post Brexit, and without such pressure by the UK, it is more likely that the European Commission could consider deviating from the Basel Committee outcomes to the advantage of European banks.

II. Ongoing financial services policy discussions

The general assumption is that the Capital Markets Union project will suffer due to the departure of two of the powerful drivers of the project, the UK and Commissioner Hill. However, there is a broad consensus amongst Member States on the benefits of CMU.

Perceptions that CMU was purely beneficial to the UK may have hindered progress to date; without the UK, other Member States might feel more inclined to support the project.

There were even concerns that CMU would not go far enough, especially as the EU did not propose creating a Pan-European supervisor for financial markets. Without the UK, this idea to centralize supervision of European financial markets might well return.

III. UK industry and political motivations

A state of inertia between businesses and politics is occurring with both perspectives looking to see what issues the other will prioritize first. Fortune will favor businesses and industries that are able to do their thinking quickly and put it to the UK government and the EU as a priority negotiation position. While financial services may be headquartered in the UK, they are global by nature and therefore have a stake in other European markets. UK policy makers are cognizant of this and will look for businesses to make the case to other European capitals to explain why the UK’s negotiating position for financial services is mutually beneficial for EU Member States.

Financial services will be a priority for the UK negotiation team due to its political status, tax revenue and global interconnectivity. During the negotiation period, UK representatives will try to find a balance between:

1) giving their EU counterparts some appeasement wins (likely to be status orientated);

2) retaining the eminent position in real terms (as opposed to physical locality) of London as the location in Europe for ‘hubbing’ financial transactions;

3) ensuring there is parity of regulation so that transactions can occur seamlessly with Europe, but also;

4) ensuring the UK is able to competitively differentiate itself outside of the EU.

These are important criteria for financial services businesses to consider during Brexit negotiations. Access to the Digital Single Market and CMU will be prioritised by UK policy makers and the financial industry, and the bulk of existing financial services legislation is likely to be grandfathered. However, UK policy makers are looking for financial services to decide, firstly, which of the ongoing EU legislative briefs are a priority and, secondly, which existing legislation can be disregarded. This should be the starting point of any financial services industry dealing with the Brexit hangover. Throughout this process the role of trade bodies will be essential and we are likely to see a renewed interest by UK and EU policy makers in their significance – especially those such as the BBA, ABI, AFME and IMA. During the period of negotiation, trade bodies will be viewed by UK and EU policy makers as providing an element of much needed consensus and it would be wise for financial services industries to stick close to their peers.