«Solo una cosa es segura a corto plazo: la incertidumbre está aquí para quedarse… hasta que los datos económicos arrojen luz sobre los fundamentales»

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"Only One Thing is Sure over The Short Term, Uncertainty Is Here to Stay... until Economic Data Shed Some Light on The Underlying Fundamentals"
CC-BY-SA-2.0, FlickrEmmanuel Bourdeix, director general de Seeyond y co director de inversiones de Natixis AM. Foto cedida. "Solo una cosa es segura a corto plazo: la incertidumbre está aquí para quedarse… hasta que los datos económicos arrojen luz sobre los fundamentales"

Emmanuel Bourdeix, director general de Seeyond y co director de inversiones de Natixis AM, explica en esta entrevista con Funds Society cuál es su visión para la volatilidad en los próximos meses y cómo un inversor puede sacar partido.

La volatilidad, ¿ha vuelto para quedarse? ¿Aumentará en los próximos meses?

A lo larto de 2014 y a finales de 2014, observamos un periodo de picos de volatilidad en aumento. Ahora que la Fed ha empezado a normalizar los tipos tras varios años de política monetaria acomodaticia, el comienzo de 2016 debería parecerse mucho al final de 2015, en el sentido de que los participantes del mercado seguirán de cerca los datos económicos para convencerse a sí mismos de que la decisión de la Fed ha sido la correcta… o no. Más en concreto, si se publican datos fuertes, los inversores podrían preguntarse si la Fed no va por detrás de la curva. Debido a esta psicología del mercado de “buenas y malas noticias”, podríamos ver picos de volatilidad en un escenario de fundamentales robustos y favorables. De hecho, los tipos de interés en EE.UU. más altos, así como un dólar más caro, podrían debilitar algunos segmentos del mercado, como a los emergentes y al high yield estadounidense, lo que sería una fuente de contagio y potencial incremento de la volatilidad.

Al contrario, si los datos son débiles en los próximos meses debido a un deterioro sostenido del sector manufacturero en Estados Unidos, significaría que la economía del país podría encontrarse al final de un ciclo económico con el riesgo de recesión y que la acción de la Fed fue inapropiada. En ese sentido, los picos de volatilidad se darían, con el riesgo de que fueran tan frecuentes que condujeran a medio plazo a un ajuste estructural de la volatilidad al alza. En pocas palabras, creemos que solo una cosa es segura a corto plazo: la incertidumbre está aquí para quedarse… hasta que los datos económicos arrojen algo de luz sobre los fundamentales.

¿Será la gestión de la volatilidad un tema clave de inversión en 2016?

Definitivamente, la volatilidad seguirá siendo un catalizador clave en 2016 en este escenario incierto. Seeyond, especialista en extraer valor del riesgo, ha desarrollado diferentes estrategias que pueden ganar más en periodos de baja visibilidad. Por ejemplo, la estrategia de mínima varianza (Minimum Variance) ofrece a los inversores una exposición completa a renta variable con una reducción del riesgo del 30%. Invirtiendo en acciones que no solo tienen bajas volatilidades sino también bajas correlaciones entre ellas, construimos carteras que reducen la volatilidad a su mínimo, y sin embargo no a expensas de rentabilidad a largo plazo: de hecho, los análisis académicos y las observaciones empíricas sugieren que las acciones de baja volatilidad tienden a batir a sus homólogos a largo plazo. Esta estrategia encaja en escenarios inciertos, como el que preveemos para los próximos meses.

Más allá, una vez se aclare el escenario económico, al alza o a la baja, la estrategia de multiactivos de crecimiento conservador de Seeyond puede adaptar su asignación de activos, evitando mercados que son impactados negativamente por el escenario económico. Invirtiendo en cada mercado de forma independiente, el proceso de inversión no tiene un sesgo estructural a ningún tipo de activo con el objetivo de proporcionar una estrategia robusta de retorno total. Combina métricas de volatilidad con indicadores de fundamentales y momentum, ajustando las visiones de mercado al riesgo subyacente. Así, las estrategias de mínima varianza y multiactivos de Seeyond son complementarias y esperamos que encajen bien en el escenario de los próximos años.

¿Cuáles son las oportunidades de inversión en el actual escenario? ¿Es más eficiente buscar protección contra la volatilidad o tratar de aprovecharse de ella?

El arbitraje entre la búsqueda de protección y el hecho de explotar la volatilidad depende de las necesidades del cliente. Intiutivamente, el coste de tener protección, que es como hablar del coste de llevar volatilidad, tiende a ser caro en un escenario normalizado. Los inversores han de preguntarse a sí mismos si si no es mejor vender un activo sobrevalorado. Sin embargo, si se materializa una crisis de mercado, los inversores son compensados por tener volatilidad. Así, la volatilidad tiene el potencial de generar alfa más allá de los activos sin riesgo como la liquidez. Esta dualidad es la piedra angular de la filosofía de inversión de Seeyond alrededor de la volatilidad: buscando el coste efectivo del carry de la volatilidad en lugar de su nivel facial, nuestra estrategia consiste en construir posiciones largas en volatilidad durante una crisis sistémica, tratando de generar valor cuando los mercados de riesgo son favorables. Y estando cortos en volatilidad el resto del tiempo, proporcionando una fuente adicional de alfa para la cartera.

Parece que en 2016 estamos ante un escenario de creciente incertidumbre. En este contexto, nuestra firma cree que una asignación activa a la volatilidad tiene el potencial de ofrecer a los inversores la habilidad de adaptarse a un escenario favorable a la vez que mantener la capacidad de generar valor si llega una tormenta.

¿Cómo ayudan sus fondos a equilibrar la relación entre rentabilidad y riesgo en las carteras?

Dependiendo de las necesidades de los clientes, equilibrar los perfiles entre riesgo y rentabilidad de las carteras puede hacerse a varios niveles:

-Protección del riesgo de caídas a través de productos estructurados (de forma total o parcial): los inversores tienen una protección formal de su capital a la vez que pueden participar parcialmente en el potencial de los mercados;

-Reducción de la volatilidad de las acciones a través de estrategias de mínima varianza que ofrecen una exposición long-only al mercado y reducen la volatilidad de forma considerable;

-Optimización del riesgo/retorno a través de estrategias de retorno total que ofrecen una exposición multiactivo (renta variable, renta fija, divisas…) basada en una asignación ajustada al riesgo;

-Gestión activa de la volatilidad invirtiendo en volatilidad de la renta variable, un activo que genera retornos descorrelacionados de los mercados de renta variable y por ello, impulsa el perfil diversificador de una asignación de activos.

Es el quinto aniversario del fondo de mínima varianza. ¿Cuál es el balance?

Desde su lanzamiento y hasta finales de septiembre, Seeyond Europe Minvariance ha batido a su índice en más de un 15% y reducido la volatilidad en un 30% frente al MSCI Europe NR EUR en el periodo. A pesar de haber vivido distintas configuraciones de mercado y fuertes cambios debido a varios eventos (como la crisis de deuda de la eurozona, el tapering de la Fed, el QE en Europa, el lunes negro en China, etc), la estrategia ha tenido éxito a la hora de generar retornos consistentes y demostrado su capacidad de adptación a distintos escenarios a través de su asignación reactiva desde un punto de vista geográfico o por sectores.

¿Y el otro fondo que invierte en volatilidad, para qué tipo de inversores está indicado?

La estrategia de volatilidad en renta variable proporciona al inversor una herramienta de diversificación que puede ser utilizada como parte de su asignación de activos. Invierte en volatilidad de la renta variable de forma activa a través de instrumentos listados y líquidos, y busca ofrecer diversificación durante crisis estructurales. Durante entornos normalizados, busca cosechar la prima de riesgo de la volatilidad en acciones para generar un retorno total moderado. Aunque desde su lanzamiento en 2012 no ha tenido hasta ahora la oportunidad de experimentar un mercado bajista como el de 2008 o 2011 para demostrar su capacidad de generar alfa, no ha mostrado tampoco un coste de oportunidad frente a la inversión en liquidez. Por tanto, lo recomendaríamos para inversores que aún tienen gran parte de sus carteras en liquidez: podrían arbitrar parte de esa liquidez en la estrategia de volatilidad en acciones de Seeyond sin coste sustancial a la vez que integrar una fuente de diversificación activa, por si la renta variable entra en un mercado bajista no deseado.

Legg Mason in Talks to Buy Clarion Partners

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Global asset manager Legg Mason Inc is in exclusive talks to buy a majority stake in real estate investment manager Clarion Partners LLC in a deal valuing the company at about US$ 850 million, according to Bloomberg. Clarion, which is based in New York and invests in office and retail related real estate, has about US$ 38 billion in assets under management, according to its website.

Under the terms being discussed, the asset manager would buy 80% of the firm from Lightyear Capital, while New York-based Clarion’s current management, headed by Chairman and Chief Executive Officer Stephen Furnary, will retain 20%.  Back in November, Reuters reported in that private equity firm Lightyear Capital was looking to sell its majority stake in Clarion Partners LLC for around US$ 800 million. A deal could be announced as early as this month.

Lightyear helped Clarion’s management buy the firm from its previous partner, Dutch financial services company ING Groep NV in 2011. When that deal was struck, the price and ownership structure were not disclosed. Neither Legg Mason, Lightyear or Clarion have made any comments on this matter.

Bob Doll’s 2016 Ten Predictions: Investors See Glimmers of Hope Along a Rocky Path

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On his weekly commentary, Bob Doll, chief equity strategist and senior portfolio manager at Nuveen Investments, expressed his thoughts on what happened in the markets during 2015, and shared his predictions for 2016.

For investors, this past year was difficult, but not disastrous. A weather-induced U.S. economic slowdown kicked off 2015, and headlines declared a possible messy exit by Greece from the Eurozone. During the summer, a decelerating Chinese economy led to the surprising devaluation of the yuan. In August, this helped trigger a massive drop in U.S. equity markets. As the fall began, investors grew uneasy over the prospects of Federal Reserve tightening. A late-year meltdown in commodities hurt resource-based industries and economies around the world. Geopolitical crises, terrorism and a bizarre U.S. political backdrop all helped boost uncertainty.

The chief headwind for equities was weak corporate earnings. Not surprisingly, the rising U.S. dollar and falling oil prices hurt the energy, materials and industrials sectors. However, these same factors failed to lift consumer-oriented and other «energy-using» sectors. The key to determining the direction of equities next year may well be the direction of corporate earnings.

Despite the negativity and uncertainty, the investing world saw several bright spots in 2015. The U.S. economy grew modestly and unemployment declined significantly. The housing and banking sectors improved. Consumer spending remained strong. The federal deficit fell sharply. And equity markets proved to be resilient, despite downward pressure. Will next year be dominated by the negatives? Will the positives win? Or will confusion and uncertainty continue? With this backdrop, Rob Doll offers his predictions for 2016:

  1. U.S. real GDP remains below 3% and nominal GDP below 5% for an unprecedented tenth year in a row.
  2. U.S. Treasury rates rise for a second year, but high yield spreads fall.
  3. S&P 500 earnings make limited headway as consumer spending advances are partially offset by oil, the dollar and wage rates.
  4. For the first time in almost 40 years, U.S. equities experience a single-digit percentage change for the second year in a row.
  5. Stocks outperform bonds for the fifth consecutive year.
  6. Non-U.S. equities outperform domestic equities, while non-U.S. fixed income outperforms domestic fixed income.
  7. Information technology, financials and telecommunication services outperform energy, materials and utilities.
  8. Geopolitics, terrorism and cyberattacks continue to haunt investors but have little market impact.
  9. The federal budget deficit rises in dollars and as a percentage of GDP for the first time in seven years.
  10. Republicans retain the House and the Senate and capture the White House.

Overall, Rob Doll expects that 2016 will present difficulties for investors, but he still believes there are reasons for optimism. If global economic growth broadens and improves, that could allow corporate revenues and earnings to strengthen. Such a backdrop, combined with still-low inflation and still-easy monetary policy, should allow equities to improve further. Rob Doll encourages investors to maintain overweight positions in equities, and expects 2016 will be another year in which selectivity is paramount to investors’ success.

Americans Torn Between Saving for Retirement & Helping Their Kids Through College

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Despite a general consensus in the financial advice community that saving for retirement should trump paying for a child’s college education, nearly half of Americans disagree. According to a recent poll from RBC Wealth Management-U.S. conducted by Ipsos, 49 percent of Americans place greater importance on helping their children pay for their education than they do on saving for their own retirement.

“As the cost of a college education in the U.S. continues to rise, parents will naturally want to help their kids get through school without accumulating a mountain of debt,” said John Taft, CEO of RBC Wealth Management in the U.S. “But with the gap between how much Americans have saved and what they will need to retire comfortably widening, we advise that people make funding their own retirement a priority. There are no grants, scholarships, or federally guaranteed loans to support them when they leave the workforce.”

Millennials (ages 18 to 34) are the most likely to prioritize financing their children’s education ahead of their own retirement. In fact, 60 percent of Americans in that age group said saving for their kids’ education was more important to them, compared with 43 percent of GenXers (ages 35 to 54) and only 28 percent of Baby Boomers (ages 55 and older).

“These results likely also reflect both philosophical and practical differences between generations,” said Malia Haskins of the Wealth Strategies Group at RBC Wealth Management-U.S. “For Millennials, retirement is much farther away than the more immediate challenge of putting kids through college, so it makes sense that they would put retirement on the back burner. Baby Boomers tend to believe that children should be self-motivated and should have some skin in the game when paying for college. GenXers, meanwhile, are somewhere in the middle. They want to pay for most if not all of college costs for their children, but they also may be nearing retirement and wanting to balance the two goals.”

While saving for retirement should be the priority, by planning and setting realistic goals it is possible for many families to meet both objectives, Haskins says. Planning is especially critical for families with lower household incomes. According to the RBC Wealth Management survey, Americans with household incomes under $50,000 were the most likely (57 percent) to place saving for a child’s education ahead of their own retirement needs.

“Sometimes families find they can fund their retirement and still contribute to a child’s education,” Haskins said. “By looking ahead a little bit, it’s easier to get an overall sense of whether their goals are realistic.”

These are some of the findings of an Ipsos poll conducted on behalf of RBC from October 6 to October 9, 2015. For the survey, a sample of n=2009 Americans was interviewed online via Ipsos’s American online panel, of which 569 are parents with children in the household. The precision of Ipsos online surveys is measured using a Bayesian credibility interval. In this case, with a sample of this size, the results are considered accurate to within ± 4.7 percentage points percentage points, 19 times out of 20, of what they would have been had all American parents been polled.

 

ETF Assets in the US Will Exceed $6 Trillion by 2020

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Research from global analytics firm Cerulli Associates finds that exchange-traded fund (ETF) assets in the United States will grow to more than $6 trillion by 2020, and this number can potentially increase if more asset managers enter the space. Cerulli believes the slow erosion of mutual fund assets by exchange-traded products will prompt a growing number of asset managers to enter the ETF market.

«While many sponsor firms believe the ETF market will continue to grow organically, growth will largely be a result of more investors using the low-cost vehicle,» explains Jennifer Muzerall, senior analyst at Cerulli. «As new investor segments continue to acclimate to ETFs in their portfolios and sponsors develop new products, ETF assets are expected to climb as the industry enters its second decade.»

Cerulli’s report, Exchange-Traded Fund Markets 2015: Opportunities in the Face of Changing Dynamics, analyzes asset managers that manufacture and distribute ETFs in the U.S. The report focuses on the distribution and trends in the ETF market, including active ETFs and strategic beta ETFs, institutional distribution, marketing, and staffing.

«With more asset managers developing an ETF strategy, product proliferation will continue to increase, and firms will need to think strategically about the types of products they develop, attempting to fill any white space that remains untouched,» Muzerall explains. «As investor sentiment is evolving toward solutions-oriented outcomes, sponsors need to think of ETFs no longer solely as a product, but as a tool for investors to achieve their investment objectives.»

Ainsley Borel Joins Aegon Asset Management

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Aegon Asset Management created the role of Director of U.S. Consultant Relations, in the middle of December. Fulfilling the new position is Ainsley Borel, who is responsible for distribution of the institutional investment strategies and services offered by Aegon Asset Management’s U.S. member companies to insurers, pension plans, and other benefit plans.

Aegon Asset Management is the global, active investment management arm of Aegon N.V., with centers of investment expertise in Europe and the United States and distribution across the Americas, Europe and Asia. The Aegon Asset Management U.S. member companies include Aegon USA Investment Management, LLC, a SEC-registered investment adviser and manager of fixed income and asset-allocation investment strategies, and Aegon USA Realty Associates, LLC, a real estate asset manager.

«Building strong relationships with institutional consultants is an important element of Aegon Asset Management’s growth strategy in the United States,» said Tom Neukranz, Head of Distribution for Aegon Asset Management U.S. «We are very pleased to have a veteran of Ainsley’s caliber and experience join us in expanding and enhancing relations with the consultant community.»

During 22 years in the investment industry, Borel has managed the distribution of both off-the-shelf investment products and customized investment solutions. Most recently, Borel was a senior vice president and senior consultant relationship manager at Northern Trust Asset Management, responsible for relationships with major domestic and global investment consulting firms.

«Aegon Asset Management U.S. offers what consultants and their clients are looking for in a quality asset manager – a well-defined investment process, strong product line, and experienced investment teams,» said Borel.  «I am eager to begin sharing the Aegon Asset Management story with them.»

Aumenta el apetito por el riesgo entre las aseguradoras europeas

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Risk Appetite Rises Amongst European Insurers
CC-BY-SA-2.0, FlickrStephen Acheson, director ejecutivo en Standard Life Investments. Foto cedida. Aumenta el apetito por el riesgo entre las aseguradoras europeas

De acuerdo con una encuesta realizada por Standard Life Investments, las aseguradoras europeas se sienten con pocas probabilidades de generar suficientes rendimientos para todos sus asegurados; además coinciden en que los cambios regulatorios hacen difícil que los modelos de negocio tradicionales puedan fortalecer sus fuentes de ingresos y les permitan hacer los cambios estratégicos necesarios en la asignación de activos.

La encuesta destaca cinco áreas:

  1. Cada vez más, las aseguradoras europeas tendrán más retos a la hora de generar rendimientos suficientes para cumplir con las tasas garantizadas a los asegurados. El rendimiento esperado del 2,4% (de acuerdo con la exposición actual) es inferior al 2,7% que en promedio se necesita para cumplir con las obligaciones.
  2. En respuesta, muchas aseguradoras europeas están considerando emprender importantes cambios estratégicos en su asignación de activos para mejorar el rendimiento.
    • Entre esos cambios, el apetito por el riesgo parece estar aumentando. La mitad de las aseguradoras esperan reducir su exposición a renta fija soberana, mientras que más del 60% espera aumentar sus asignaciones a bienes raíces y/o alternativos.
    • Sin embargo, la encuesta pone de manifiesto una brecha «norte/sur» en la asignación de activos, con los países del sur de Europa con mayor confianza en las estrategias de inversión existentes, debido en parte al comportamiento de su renta fija soberana.
  3. Solvencia II afecta la libertad de inversión de las aseguradoras.
    • El 73% de las aseguradoras indicaron que la próxima Directiva de la UE está afectando a la forma de diseñar las carteras de inversión.
  4. Cada vez se hace más atractivo el utilizar mandatos de inversión.
    • El 44% de las aseguradoras europeas buscan externalizar la gestión de una o más clases de activos.
  5. El modelo de negocio y la rentabilidad del sector asegurador están bajo presión por un cambio estructural.
    • El 43% de las aseguradoras declaró no poder fijar un precio competitivo para nuevos productos de inversión garantizados.

Stephen Acheson, director ejecutivo en Standard Life Investments, dijo: “Las estrategias de negocio de las aseguradoras europeas y de los modelos de negocio tradicionales están siendo desafiados fundamentalmente debido a un entorno de bajos retornos, Solvencia II y la continua necesidad de cumplir con las garantías prometidas». En su opinión, la encuesta deja clara la tendencia de las aseguradoras hacia una externalización de la gestión en la industria de gestión de activos.

Sin embargo, también destaca la creencia entre las aseguradoras de que el número de posibles mandatarios está disminuyendo. «Es importante recordar que Solvencia II fue concebido y desarrollado en un entorno económico muy diferente… En el Reino Unido el PRA ha señalado recientemente que, como consecuencia de las bajas tasas de interés, el margen de riesgo está dando lugar a mayores requerimientos de capital, así como volatilidad”.  Acheson considera que, tomando esto en cuenta, las cuestiones relativas al desarrollo e implementación de Solvencia II en las que la industria europea ha estado trabajando en los últimos años seguramente continuarán más allá del 1 de enero de 2016.

 

East Capital: “The Relative Growth Ratio between Emerging and Developed Markets is set to Start a Five-Year Re-Acceleration in 2016”

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The emerging markets’ tide is turning

Looking at emerging market equities, there is reason to believe the tide is about to turn for the better. It is, however, likely to be a divergent and volatile process but 2016 should be a good opportunity to selectively start to build up exposure to emerging markets again, especially as the downside risks have fallen.

There are four main reasons behind our careful optimism.

First, emerging markets have not wasted the crisis. Most major emerging markets’ currencies have adjusted more than the EUR, which has dropped 20% against the USD over the past five years. Similarly, the current account adjustment has been significant and especially important in economies like Turkey, Poland and India that use to run large deficits.

Second, emerging markets offer the best value, growth and yield combination. There is a big spread in absolute and relative valuations across the emerging universe, but most emerging markets are expected to trade lower than their respective five-year valuation average in 2016 with emerging markets at a 15% compared to 5% for developed markets. Emerging markets are not only cheaper in absolute and relative terms than developed markets, they are also expected to have higher earnings growth and dividend yields.

Third, the EM/DM growth ratio will re-accelerate. The relative growth ratio between emerging and developed markets seems to be correlated with the relative stock market performance. IMF expects emerging markets’ growth to gradually accelerate from 4% this year to 5.3% in 2020 while developed markets’ growth will stay flat around 2% over the same period. This means that the DM/EM growth ratio, which has fallen during the past five years, is set to start a five-year re-acceleration in 2016.

Finally, US rate hikes tend to be supportive for emerging market equities. Perhaps contrary to popular perception, emerging market assets tend to outperform the year after a US rate hike. The reasons are very basic but nevertheless fundamental; economies adjust and markets discount the rate move ahead of time, and the reason for hikes – that the US economy is doing rather well – is supportive for emerging economies.

2016 Will Have Attractive Valuations Across The Global Bond And Currency Markets

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According to Michael Hasenstab, Chief Investment Officer at Templeton Global Macro, “at the start of 2016, we are encouraged by the vast set of fundamentally attractive valuations across the global bond and currency markets. We expect continued depreciation of the euro and yen, rising US Treasury yields, and currency appreciation in select emerging markets.”

During the next year, the investment professional expects a dichotomy of Monetary Policies, with rising interest rates from the US Federal Reserve and Quantitative Easing from the BOJ and ECB. Hasenstab also mentions that “fears of global deflation are unwarranted” and that him and his team  “do not anticipate a global recession.”  Their growth projections for 2016 are 2%–3% for the United States, above 1% for the eurozone, around 1% for Japan and between 6% and 7% for China. In regards to the Asian giant, Hasenstab believes that newer sectors such as the service one, will fuel wage growth and help support consumption.

Looking at Emerging markets, the Franklin Templeton expert believes that Solvency will not be a mayor issue in the area. “Emerging markets were often regarded as being in near-crisis condition during the second half of 2015. We believe concerns of a systemic crisis have been exaggerated” says Hasenstab, adding that commodity exporters, and emerging markets with poor macro fundamentals, remain vulnerable. Therefore, “investors should not view the emerging-markets asset class as a whole but should instead selectively distinguish between individual economies.” Hasenstab highlights Mexico and Malaysia as countries with strong fundamentals and solid domestic sources of financing, which will allow them to raise interest rates either in conjunction with US interest-rate hikes or shortly thereafter, while countries like Turkey or South Africa will most likely be negatively impacted by US interest-rate hikes.

Still, he believes that “an unconstrained global strategy is the most effective way to position for a rising-rate environment because it provides access to the full global opportunity set.”
For 2016 he remains optimist, “we are encouraged by the vast set of fundamentally attractive valuations across the global bond and currency markets.” And favors currencies “in countries where inflation is picking up and growth remains healthy, yet the local currency remains fundamentally undervalued. Looking ahead, we expect continued depreciation of the euro and yen, rising US Treasury yields, and currency appreciation in select emerging markets,” he concludes.
 

European Private Equity Market Hits 8-Year High

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The value of European private equity deals through 2015 has hit its highest level since 2007, according to data published by the Centre for Management Buyout Research.

So far the total value of all deals stands at €80.9bn, the highest yearly total since 2007, when the value hit €172.9bn. This is also the fourth highest year recorded by CMBOR, behind 2007, 2006 and 2005 respectively.

Currently, the total exit value in Europe is estimated at €153.2bn, which is a new record according to the methodology; IPOs and trade sales set records at €48.7bn and €63.8bn respectively.

CMBOR’s latest annual report suggests there were many bigger deals helping to drive the private equity market on this past year. Some 19 deals worth more than €1bn were recorded, against 13 the previous year. These bigger deals account for about half the total value of the European buyout market. Such deals were also geographically spread “with Switzerland (1), Denmark (1), France (3), Germany (4), Sweden (1), Austria (1), Spain (1) and the UK (7) all seeing deals of €1bn and over during the course of the year.”

“The spread of large deals across Europe, suggests a resurgence in the private equity market across the continent. For instance, Belgium has had a particularly strong year with total value of deals at €3.2bn, just below the 2007 record value, while Denmark has had its strongest year since 2006 (€4.8bn). Switzerland and Austria also had impressive years with the total value of deals in 2015 standing at €3.7bn and €2.6bn respectively, which in both cases are record values,” CMBR said.

And while the UK retains its position as the strongest European deal market, with value totalling €26.8bn, France has seen a rebound putting it on par with Germany.

Other findings in the data point to strong deal flows in manufacturing and retail, but less so in technology, media and telecommunication. The value of deals in the support services sector remained fairly constant, at around €9bn compared to €9.3bn in 2014.

Christian Marriott, Investor Relations partner at Equistone Partners Europe Limited, which sponsored CMBOR’s research, said: “2015 has been a very strong year for European private equity deal activity, with the UK still leading the way. However, all the core European markets have performed well, which reflects the trend of a consistent increase in total European buyout value of about €10bn since 2013. Boosted by the Verallia buyout, France has been strong in 2015 and made up previously lost ground on Germany, which in recent years has firmly established itself as Europe’s second biggest deal market behind the UK.”

“The European private equity exit market also had an outstanding 2015, achieving a record total value. While volatility in European markets stifled the IPO activity in the previous two quarters, a flurry of big IPOs at the end year, including Worldpay and Scout24, helped the boost the value to a record number. However, it has not all been about IPOs, as there have been more exits via trade sales than flotations amongst the year’s top 10 largest deals.”

“2015 clearly shows that big deals are back, as shown by the highest average deal value and number of billion plus deals since 2007. With the final quarter proving strong for both deals and exits, the European private equity market will start 2016 with positive momentum.”