Thoma Bravo, a successful private equity firm focused on the software and technology-enabled services sectors with over $100B of AUM, is making its first foray into Latin America in the firm’s history. Orlando Bravo, founder and Managing Partner at Thoma Bravo, will be visiting Mexico City on April 28th and 29th to meet with local investors and share his vision on the software industry and its future.
Orlando Bravo told Funds Society: “Growing up in Puerto Rico, Latin America is near and dear to my heart. It’s a vibrant, dynamic market with an ever-expanding technology scene. We have been fortunate to have the confidence of several institutional and private investors in the region and are impressed by their investment programs. As the region grows, we are looking to create enduring partnerships with leading local investors which will allow us to further immerse ourselves into the region’s software and technology ecosystem. First on the list is Mexico City”.
Thoma Bravo has a more than 20-year track record of partnering with existing management teams of market leading, positive cash flowing and high margin software businesses. Leveraging the firm’s deep sector expertise and proven strategic and operational capabilities, Thoma Bravo helps to accelerate the company’s growth and innovation. The firm has acquired more than 375 software companies across a range of industries, including healthcare IT, security, financial technology, infrastructure and applications.
“The acceleration in digital transformation across all industries has underscored how essential software is for commerce and business continuity as well as its continued resilience,” said Jennifer James, Managing Director, Head of Investor Relations and Marketing at Thoma Bravo. “With our proven operational expertise, we see a tremendous opportunity to invest in profitable software companies with high revenue retention.”
Thoma Bravo is entering Latin America in partnership with Alpine Capital Advisors, a leading fundraising and advisory firm across the Americas with offices in New York, Santiago, Mexico City and Sao Paulo.
Venture Capital assets under management (AUM) have experienced double digit annual growth in the 20-30% range over the past four years and now stand at a record high of $2trillions, according Q1 2022 Venture Capital Report by Preqin.
As the venture capital market matures, 14% of institutional investors are planning to commit $600 millions or more over the next 12 months, up from 10% during the same period last year and the only category that recorded more than 1% year-on-year growth, the report said.
Confidence remains highest in the North American and European markets. There has been a noticeable uptick in the proportion of investors targeting these regions, increasing from 53% to 59%, and 52% to 60%, respectively.
Investor interest shifts and dry powder grows
Experts highlight that amid market uncertainties and elevated asset valuations, investor interest has shifted to seed, startup and early-stage focused funds in search of opportunities, with nearly half (48%) of investors aiming to place capital in the early-stage strategy in the next 12 months, up from 40% in Q1 2021.
Venture capital dry powder has grown by $43.1 billions during the first quarter of 2022 to $478.5 billions. Early-stage funds’ dry powder increased by 24% during the first quarter of 2022. Now, early-stage funds make up around a third, or $168.6 billions, of total Venture Capital dry powder, making this the most significant specialized strategy in the risk world. Expansion/late-stage funds’ dry powder level, however, fell by 6% between Q1 2022 and FY 2021.
Kebelyn Lee, Associate Vice President, Research Insights at Preqin, says: “In spite of the sell-off in some of the more speculative technology stocks in the public equity market so far this year, there does not appear to be any immediate impact on venture capital activity. Fundraising came in slightly lower year on year but is still at a strong level given a strong base of comparison from 2021. Deal volume in APAC has been notably strong compared to North America and Europe in the last few quarters.”
Larger funds pull ahead
Venture Capital fundraising continued at a strong pace in Q1 2022. $54billions was raised by global Venture Capital funds in the quarter, an 11.1% rise on Q4 2021, but an 8.8% decline on the same period last year. The year-on-year decline is not a bad result given the strength of activity in late 2020 and going into 2021.
Despite a strong fundraising record, VC investors’ concerns over asset valuations, competition for assets, and the Russia-Ukraine conflict remain relevant.
In Q1 2022, just 202 funds were raised—the lowest number of funds raised since 2017—implying that investors are putting their trust and capital in larger and more experienced VC managers.
Given the global average venture capital fund size in Q1 2022 jumped from $126.9 millions to $267.3 millions quarter-on-quarter, investors are clearly demonstrating a preference in larger funds.
This trend is especially obvious in North America and Europe, which saw a 190% and 48% increase in average fund size during Q1 2022. Globally, there has also been a drop in planned commitment below $50 millions.
Denise Casellas and Jennifer Romero have joined Morgan Stanley Investment Management as part of the Latin America and US Offshore Sales team.
They will be reporting into Carlos Andrade, Head of MSIM’s Latin America and US Offshore Sales.
Denise and Jennifer will be responsible for relationship management in Mexico and other markets, they will focus on institutional and intermediary channels.
Prior to joining the firm, Denise Casellas was a Business Development Executive for Vanguard in Latin America, servicing various clients including intermediary and institutional investors in Mexico and Brazil.
Previously, she was a Product Specialist at SURA Asset Management. Before SURA, she was at Santander Asset Management, serving as the link between Asset Management and the Private Bank. Denise has 14 years of industry experience.
Jennifer Romero was part of the Senior Equity Sales team at BBVA Mexico prior to joining MSIM. She was responsible for coverage of Pension Funds and other institutional clients.
Previously, she was an Equity Analyst for Qualitas Insurance Company. Jennifer has 6 years of industry experience.
Courtesy photo of ring the bell ceremony on April 19th, 2022. , foto cedida
On April 19th, 2022, abrdn, the leading global asset manager, announced the launch of two Brazilian Depository Receipts (BDRs) referencing existing North American exchange traded funds (ETFs) focused on precious metals.
The new BDR funds, initially offered to qualified investors and listed on B3, the Brazilian stock exchange located in Sao Paulo, will provide exposure to physical gold and silver, respectively.
The available BDRs will offer Brazilians easily accessible, liquid and cost-efficient exposure to both precious metals at a time when many investors are seeking to bulwark their portfolios with increased diversification and protection. Benefiting from investment, risk and operational knowledge drawn from abrdn’s existing stable of metals funds, the new instruments join a growing array of BDRs now listed on B3, numbering more than 100 overall.
“These new BDRs will immediately enhance the landscape of publicly-listed funds for investors, who have grown in number and sophistication but remain limited in their pathways to exposure to gold and silver,” said Menno de Vreeze, Head of Business Development, International Wealth Management at abrdn. “Today’s macroeconomic conditions demonstrate the imperative for fast, trusted access to these metals perhaps more than ever before, and we are extremely excited to bring these tools to a Brazilian market that is dynamic yet still broadly untapped. We were proud to work with B3 and our local partners on this timely and long-awaited launch, and will continue our work together to offer further exposure of this kind in Brazil in the future.”
“This is a big step in the Brazilian market, bringing an opportunity from of our shelf of passive vehicles in partnership with B3 via their BDR-of-ETF program to provide easy access to two of our flagship metals products. We believe this will also provide excellent foundation for future to provide exposure to our separate commodities suite, as well,” added Daniel Xavier, abrdn Business Development in Sao Paulo.
“B3 continues to support market participants to bring crucial and innovative BDRs to Latin America’s largest market, with providers today including abrdn and many of the world’s largest asset managers,” said Rogerio Santana, Director of Client Relations at B3. “Today’s new BDR offerings provide more confirmation of the Brazil’s market potential and steady maturity, meeting our investors’ requirement for local funds to help them properly diversify their portfolios and navigate volatility. We are excited to support these new BDRs going forward and congratulate abrdn on their first launch on our platform.”
Robeco appoints María Elena Isaza as Sales Director for US Offshore & Latam business, effective 18 April.
Isaza will co-lead Robeco’s Miami sales team together with Julieta Henke (Sales Director), and share responsibility for South Florida covering all channels in the biggest US Offshore hub.
Isaza and Henke previously spent a decade together at Merrill Lynch and now reunite as business partners at Robeco. Together with Jason Shidler (Sales Director) they report to Ana Claver, CFA, Managing Director, Head of Robeco Iberia & US Offshore & Latam. This addition to the team follows the recent senior appointment of Ignacio Alcantara as Head of Business Management.
María Elena Isaza started her career at Merrill Lynch where she held multiple roles, including loan officer, assistant sales manager to the Miami international office, and product specialist. She then joined Goldman Sachs Asset Management, where she led the efforts for third-party distribution of offshore mutual funds. She then when on to Schroders where she spent 9 years and was responsible for Southeast and Caribbean.
Ana Claver, CFA, Managing Director, Head of Robeco Iberia & US Offshore & Latam: “We’re delighted that María Elena is joining our team and takes on this strategic sales position together with Julieta Henke. I’m confident that her extensive sales experience in the region is a great asset that our entire sales team will benefit from. Our recent appointments of new talent reflect Robeco’s long-term commitment to the US Offshore & Latam business.”
María Elena Isaza, Director of Sales for US Offshore & Latam: “I’m very proud to be taking on this new sales position and I’m excited to be working again with Julieta Henke and with the entire sales team at Robeco US Offshore & Latam. I look forward to exceeding clients’ expectations and to continue to add value for them.”
Robeco is a pure-play international asset manager founded in 1929 with headquarters in Rotterdam, the Netherlands, and 16 offices worldwide. A global leader in sustainable investing since 1995, its integration of sustainable as well as fundamental and quantitative research enables the company to offer institutional and private investors an extensive selection of active investment strategies, for a broad range of asset classes. As at 31 December 2021, Robeco had EUR 201 billion in assets under management, of which EUR 195 billion is committed to ESG integration.
Sanctuary Wealth continues its rapid global expansion with the addition of independent advisor AZ Apice Capital Management to its network of partner firms on the Sanctuary Global platform. Headquartered in Sanctuary’s Miami office, the four-person team is led by Managing Partners Walter Alves and Bruno Gorgatti and advises on more than $400 million in client assets under management, primarily for clients domiciled in Brazil. The team was formerly affiliated with Insigneo.
“Sanctuary is enjoying phenomenal growth on all fronts, in number of partner firms and assets under management, both domestically and internationally,” said Jim Dickson, CEO and Founder of Sanctuary Wealth. “AZ Apice was already successful as an independent firm before joining Sanctuary, which shows that Sanctuary Global is filing a need in the marketplace and providing resources and services that haven’t otherwise been available to these firms.”
Bruno Gorgatti and Walter Alves both earned MBAs from Thunderbird School of Global Management at Arizona State University and have been business partners focusing on the Brazilian market for more than 20 years. They are fluent in English, Portuguese, and Spanish. They first joined forces at Lehman Brothers and then worked as a team within Morgan Stanley’s Private Wealth Management Division, where they were Executive Directors, before declaring their independence and launching AZ Apice in 2016.
“We have been following Sanctuary’s success for the past few years and were thrilled when they extended their offering to internationally focused teams. The choices for supported independence for international advisors had been extremely limited prior to Sanctuary,” said Walter Alves, Managing Partner, AZ Apice. “After conducting thorough due diligence, we knew that we wanted to be part of the Sanctuary network. Sanctuary provides a wide range of solutions for our clients, efficiencies that will enhance our business, and a culture of excellence.”
Joining Bruno Gorgatti and Walter Alves at AZ Apice will be Daniella Martins, Sales Supervisor, Compliance Associate, and an AZ Apice team member since 2020, and Pietra Coquieri, Sales Associate, who joined the team in 2022.
“Sanctuary Global is proud to welcome Walter, Bruno, and AZ Apice as our latest partners in our growing Miami office. They are outstanding advisors with a strong international clientele, and we look forward to helping grow both their client base and the assets they manage,” said Robert Walter, President of Sanctuary Wealth.
Cerulli projects that $72.6 trillion in wealth will be passed on to heirs and younger generations through 2045. But, only 42% of advisor practices offer intergenerational planning, according to the latest Cerulli Edge—U.S. Advisor Edition.
Advisors hoping to capture and retain beneficiary assets must not only incorporate intergenerational planning into their business model, but also evaluate their existing technology infrastructure to remain attractive to young investors. Asset managers are working to develop new products and restructure current offerings to meet the demands of younger investors.
Evolving service and business models to meet the needs of the next generation is no small task. According to the research, over one-quarter of advisors (26%) identify building multigenerational relationships as one of their greatest practice challenges.
“Advisors are frequently so focused on the daily operational aspects and pressing investment or advice needs, they are unable to properly develop strategy related to developing relationships with the next generation,” says Andrew Blake, senior analyst.
Preparing for this shift could be an opportunity for asset managers to add value to advisors. “Asset managers can play a role in educating advisors on how to best service investors through thought leadership and value-add tools,” Blake adds.
The ability to manage and upgrade technology capabilities stands to play an influential role in determining whether an advisor is effective in appealing to younger investors. Across industries, clients are seeking to work with companies that make it easier for them to navigate accounts, access interactive digital content, and receive customer service through readily available artificial intelligence interactions. Firms with lagging digital client experiences may face substantial roadblocks trying to catch up to more technologically savvy competitors.
Cerulli believes that wealth managers focused on capturing next-generation wealth will leverage technology that promotes the client experience, making it easier and faster for this cohort of investors to transact.
Ultimately, both asset and wealth managers need to adjust their service models to safely transition intergenerational assets. “A comprehensive, cohesive digital strategy beyond a collection of software or online content is needed from both,” says Blake.
“Integrating digital offerings to help drive investor outcomes will help asset managers and advisors win assets from a younger and more technology-focused generation of investors,” he conclude.
Foto cedidaDavid Solomon, presidente y Consejero Delegado de Goldman Sachs.. Goldman Sachs completa la adquisición de NN Investment Partners
The Goldman Sachs Group announced the completion of the acquisition of NN Investment Partners from NN Group N.V. for €1.7 billion ($1.84 billion).
NN Investment Partners will be integrated into Goldman Sachs Asset Management with the company’s more than 900 employees joining the Goldman Sachs family and the Netherlands becoming an important location in Goldman Sachs’ European business and a center of excellence for sustainability in public markets investing.
The acquisition brings Goldman Sachs’ assets under supervision to approximately $2.8 trillionand affirms its position as a top five active asset manager globally with leading franchises in fixed income, liquidity, equities, alternatives and insurance asset management. It also brings assets under supervision in Europe to over $600 billion, aligning with the firm’s strategic objectives to scale its European business and extend its global reach.
The combination further strengthens our platform and provides an expanded product range and dedicated service to clients globally, bringing together the best of both organizations to deliver investment solutions at scale, across all asset classes.
NN Investment Partners is highly complementary to Goldman Sachs Asset Management’s existing European footprint, adding new capabilities and accelerating growth in products such as European equity and investment grade credit, sustainable and impact equity, and green bonds.
NN Investment Partners has been successful in incorporating Environmental, Social and Governance (ESG) factors across its product range, with ESG criteria integrated into approximately 90% of assets under supervision. Over time, Goldman Sachs Asset Management intends to leverage the expertise of NN Investment Partners to complement its existing investment processes, helping the firm to deepen ESG integration across its product range and deliver on clients’ sustainable investing priorities.
David Solomon, Chairman and Chief Executive Officer of Goldman Sachs, said: “This acquisition advances our commitment to put sustainability at the heart of our investment platform. It adds scale to our European client franchise and extends our leadership in insurance asset management. We are excited to welcome the talented team at NN Investment Partners, a center of excellence in sustainable investing, to Goldman Sachs and together we will focus on delivering long-term value to our clients and shareholders.”
As part of the transaction, Goldman Sachs Asset Management has entered into a long-term strategic partnership agreement with NN Group to manage an approximately $180 billion portfolio of assets, reflecting the strength of the business’ global insurance asset management capabilities and alternatives franchise.
The partnership also strengthens Goldman Sachs Asset Management’s position as one of the largest non-affiliated insurance asset managers globally, with over $550 billion in assets under supervision, and the acquisition will provide a foundation for further growth in the firm’s European fiduciary management business, building on the success of its platform in the United States and United Kingdom.
A special poll conducted by The Conference Board, the March Consumer Confidence Survey, focused on the perceived impact of the war in Ukraine on overall inflation in the US, as well as its impact on a wide swath of expectations ranging from energy and food prices to economic growth and international travel.
Consumers expect the overall impact of the war in Ukraine to be negative, as well as wide reaching. The most pronounced impacts are expected to be felt in energy prices. In fact, more than half of consumers said that prices at the pump would likely be the hardest hit. With gas prices hovering well above $4 a gallon, energy prices are likely to remain a top concern among consumers.
Notably, 6 out of 10 consumers believe the conflict will cause prices to rise significantly over the next several months, while about another 3 out of 10 consumers feel the impact on prices would likely be moderate.
Consumers expect the overall impact of the war in Ukraine to be negative, as well as wide reaching. The most pronounced impacts are expected to be felt in energy prices. In fact, more than half of consumers said that prices at the pump would likely be the hardest hit. With gas prices hovering well above $4 a gallon, energy prices are likely to remain a top concern among consumers.
Meanwhile, consumers expect the impact on food prices to be somewhat more subdued. However, this may be partially due to increases in this sector that will take a bit longer to filter through the supply chain before consumers see visible changes on store shelves.
Less than a quarter expect the US economy to be very negatively impacted, but nonetheless expectations are that growth will slow in the near future.
Overall, consumer confidence continues to be supported by strong employment growth and thus has been holding up remarkably well despite surging geopolitical conflict. However, expectations for inflation over the next 12 months reached 7.9 percent in March—an all-time high—and are likely to rise further in the coming months.
The impact of rising prices, especially for less affluent consumers, is likely to curb spending in 2022. These consumers will have fewer discretionary dollars to spend on dining out, entertainment outside of the home, travel, and vacations. Thus, in-person services industries trying to bounce back from the pandemic may remain challenged, though to a lesser degree than during the worst of the COVID-19 crisis.
We expect headwinds from higher inflation and the war in Ukraine to persist in the short term, and these may well dampen confidence and cool spending and economic growth in the months ahead.
The Board of Directors of CI Financial Corp. announced CI’s intention to sell up to 20% of its U.S. wealth management business via a U.S. initial public offering.
The company plans to submit a Form S-1 to the SEC this year.
Since entering the U.S. wealth sector in early 2020, CI has become the country’s fastest-growing wealth platform and the U.S. wealth management business has grown to become CI’s largest business unit by assets. Once all outstanding acquisitions are completed, CI’s U.S. wealth management assets will reach approximately US$133 billion.
“The growth in our U.S. wealth management business is incredible; however, in our opinion, the value we have created isn’t reflected in our share price today,” said Kurt MacAlpine, CI Chief Executive Officer.
“After a thorough evaluation of our strategic options, we are confident that a U.S.-listed subsidiary IPO is the best route to shareholder value creation. The U.S. wealth management business now has sufficient scale to stand alone as a public company, creating an attractive, long-term destination for clients and advisors. We believe this is the best path to realizing our vision of becoming the leading ultra-high-net-worth and high-net-worth business in the U.S,” he adds.
CI intends to use the net proceeds from the IPO to pay down debt.
CI will remain the majority shareholder of the U.S. wealth management business and currently has no intention of spinning out or otherwise divesting its remaining ownership interest.
A final decision on the IPO size, conditions and timing is pending and will be subject to market conditions.
