During the first edition of Funds Society’s Investments & Rodeo Summit, which will take place on March 5, 2020 at the Intercontinental Houston Medical Center, Bradley George, Managing Director in the US Institutional team at Investec Asset Management will talk about quality investing, and seeking long-term outperformance from strong franchises.
“Investec Asset Management believes that investing in Quality companies can provide greater certainty in the uncertain markets we are currently faced with. Investec’s Quality approach is to look for companies which typically have high customer loyalty, strong brands and low debt. These companies have historically proved more resilient in times of economic uncertainty.” They mention.
During the presentation, George, will discuss Investec’s rigorous research process and how there are not many companies which meet Investec’s exacting requirements. Bradley will also provide an overview of the strategies’ global portfolios showing how they are currently positioned.
Bradley joined Investec Asset Management in 2006 as the Head of Commodities & Resources. He joined the firm after spending seven years at Goldman Sachs where he worked as an executive director in the Commodity Division. Prior to this, he worked in the Goldman Sachs Investment Banking Division on natural resources M&A transactions in both London and South Africa. Previously, he spent three years at KPMG in the Financial Services Division within the Treasury Advisory Group, offering clients consultancy advice on financial derivatives risk management. Bradley graduated from the University of Cape Town with an honours degree in Business Science in 1994. He completed his postgraduate diploma in Accounting (PGDA) from the University of Cape Town in 1995. In 1998 he was awarded the Chartered Accountant designation (SA).
Richard Garland, Managing Director, and Fernando Penaloza, Sales Director, will also be present at the event.
If you are involved in the management of fund portfolios, or the selection and analysis of funds, and want to participate in this event, reserve your place as soon as possible by writing to info@fundssociety.com.
Investec Asset Management, soon-to-be Ninety One, is a specialist investment manager, providing a premier range of products to institutional and individual investors. Employees are equity stakeholders in the firm. Established in 1991, the firm has been built from a small start-up into an international business managing US$ 148.9bn. They have grown from domestic roots in Southern Africa and the UK to a position where they proudly serve a growing international client base from the Americas, Europe, Asia, Australia, the Middle East and Africa. The firm seeks to create a profitable partnership between clients, shareholders and employees, and to exceed clients’ performance and service expectations. Investec Asset Management is a significant component and independently managed entity within the Investec Group, which is listed in London and Johannesburg.
Jenny Johnson, President and CEO at Franklin Templeton, courtesy photo. Jenny Johnson, President and CEO at Franklin Templeton
Franklin Resources, a global investment management organization operating as Franklin Templeton, announced on February 18th that it has entered into a definitive agreement to acquire Legg Mason, for $50.00 per share of common stock in an all-cash transaction. The Company will also assume approximately $2 billion of Legg Mason’s outstanding debt. The acquisition of Legg Mason and its multiple investment affiliates, which collectively manage over $806 billion in assets as of January 31, 2020, will establish Franklin Templeton as one of the world’s largest independent, specialized global investment managers with a combined $1.5 trillion in assets under management (AUM) across one of the broadest ranges of high-quality investment teams in the industry. The combined footprint of the organization will significantly deepen Franklin Templeton’s presence in key geographies and create an expansive investment platform that is well balanced between institutional and retail client AUM. In addition, the combined platform creates a strong separately managed account business.
“This is a landmark acquisition for our organization that unlocks substantial value and growth opportunities driven by greater scale, diversity and balance across investment strategies, distribution channels and geographies,” said Greg Johnson, executive chairman of the Board of Franklin Resources, Inc. “Our complementary strengths will enhance our strategic positioning and long-term growth potential, while also delivering on our goal of creating a more balanced and diversified organization that is competitively positioned to serve more clients in more places.”
Jenny Johnson, president and CEO of Franklin Templeton, said, “This acquisition will add differentiated capabilities to our existing investment strategies with modest overlap across multiple world-class affiliates, investment teams and distribution channels, bringing notable added leadership and strength in core fixed income, active equities and alternatives. We will also expand our multi-asset solutions, a key growth area for the firm amid increasing client demand for comprehensive, outcome-oriented investment solutions.”
Joseph A. Sullivan, chairman and CEO of Legg Mason, said, “The incredibly strong fit between our two organizations gives me the utmost confidence that this transaction will create meaningful long-term benefits for our clients and provide our shareholders with a compelling valuation for their investment. By preserving the autonomy of each investment organization, the combination of Legg Mason and Franklin Templeton will quickly leverage our collective strengths, while minimizing the risk of disruption. Our clients will benefit from a shared vision, strong client-focused cultures, distinct investment capabilities and a broad distribution footprint in this powerful combination.”
Carol Anthony “John” Davidson, lead independent director of Legg Mason, said, “Today’s announcement marks the beginning of an exciting next chapter for Legg Mason, our investment affiliates and valued clients, who will benefit from a leading global asset manager with the scale to compete and win in today’s markets. I am honored to have had the opportunity to serve as the lead independent director of this dynamic board, and I am truly appreciative of the hard work and dedication of the entire Legg Mason team.”
Nelson Peltz, CEO and Founding Partner of Trian Fund Management, and a Legg Mason director said, “Given the dynamics of today’s rapidly evolving and increasingly competitive asset management sector, I believe this transaction is compelling. In our view, it offers an attractive valuation for Legg Mason’s shareholders. I believe it will also enable Legg Mason’s investment affiliates to remain at the forefront of an industry where scale is increasingly vital to success and to join Franklin Templeton, an organization that I have deep respect for and confidence in.”
Trian Fund Management, L.P. and funds managed by it, which collectively own approximately 4 million shares or 4.5% of the outstanding stock of Legg Mason, have entered into a voting agreement in support of the transaction.
Jenny Johnson added, “This transaction gives us significant scale, addresses strategic gaps and brings greater balance to our business, while positioning us for accelerated growth in the future. We have incredible respect and admiration for the success Legg Mason and its investment affiliates have achieved and we have structured the transaction to ensure that its affiliates have the right mix of independence and support to continue building on their strong track records. Legg Mason’s investment affiliates will be able to leverage Franklin Templeton’s global infrastructure and ongoing investment in technology and innovation, while clients can take comfort in the combined firm’s financial strength and aligned interests.”
Continued Autonomy for Investment Affiliates
Franklin Templeton has spent significant time with the affiliates and there is strong alignment among all parties in this transaction and shared excitement about the future of the company.
James W. Hirschmann, CEO of Western Asset, a Legg Mason affiliate, said, “Western Asset is excited to be joining the Franklin Templeton family, a firm with a long and storied history of proven financial performance and a leadership team and board with decades of asset management experience who value our investment independence and organizational autonomy. Like us, Franklin Templeton understands the importance of culture, teams and core values to achieving outstanding investment results for clients.”
Terrence J. Murphy, CEO of ClearBridge Investments, a Legg Mason affiliate, said, “As part of Franklin Templeton, we are confident that we will retain the strong culture that has defined our success as a recognized market leader in active equities. Their commitment to investment autonomy, augmented by the scale and reach that the combined organization will provide, will allow us to deliver for our existing clients and expand our ability to deliver our investment capabilities in new channels and regions. We are very pleased to join the team at Franklin Templeton and excited about what we can do together.”
Organizational Structure and Parent Company Integration
With this acquisition, Franklin Templeton will preserve the autonomy of Legg Mason’s affiliates, ensuring that their investment philosophies, processes and brands remain unchanged. As with any acquisition, the pending integration of Legg Mason’s parent company into Franklin Templeton’s, including the global distribution operations at the parent company level, will take time and only commence after careful and deliberate consideration.
Following the closing of the transaction, Jenny Johnson will continue to serve as president and CEO, and Greg Johnson will continue to serve as executive chairman of the Board of Franklin Resources, Inc. There will be no changes to the senior management teams of Legg Mason’s investment affiliates. Global headquarters will remain in San Mateo, CA and the combined firm will operate as Franklin Templeton.
After careful consideration, EnTrust Global, a Legg Mason affiliate that provides alternative investment solutions, and Franklin Templeton, jointly agreed that it was in their best interest that EnTrust repurchase its business, which will be acquired by its management at closing. EnTrust will maintain an ongoing relationship with Franklin Templeton. Jenny Johnson added, “EnTrust is an excellent business and we recognize and appreciate their desire to once again become a private company. We have appreciated their collaboration in our discussions and look forward to our ongoing relationship.”
Transaction Details
The all-cash consideration of $4.5 billion will be funded from the Company’s existing balance sheet cash. Franklin Templeton will also assume approximately $2 billion in Legg Mason’s outstanding debt. Upon closing of the transaction, Franklin Templeton expects to maintain a robust balance sheet and considerable financial flexibility with pro forma gross debt of approximately $2.7 billion with remaining cash and investments of approximately $5.3 billion. This transaction is designed to preserve the Company’s financial strength and stability with modest leverage, significant liquidity and strong cash flow to provide ongoing flexibility to invest in further growth and innovation.
This transaction is expected to generate upper twenties percentage GAAP EPS accretion in Fiscal 2021 (based on street consensus earnings estimates for each company), excluding one-time charges, non-recurring and acquisition related expenses.
While cost synergies have not been a strategic driver of the transaction, there are opportunities to realize efficiencies through parent company rationalization and global distribution optimization. These are expected to result in approximately $200 million in annual cost savings, net of significant growth investments Franklin Templeton expects to make in the combined business and in addition to Legg
Mason’s previously announced cost savings. The majority of these savings are expected to be realized within a year, following the close of the transaction, with the remaining synergies being realized over the next one to two years.
The transaction has been unanimously approved by the boards of Franklin Resources, Inc. and Legg Mason, Inc. This transaction is subject to customary closing conditions, including receipt of applicable regulatory approvals and approval by Legg Mason’s shareholders, and is expected to close no later than the third calendar quarter of 2020.
Broadhaven Capital Partners, LLC and Morgan Stanley & Co LLC served as financial advisors to Franklin Resources, Inc. Ardea Partners LP also provided advice. Willkie Farr & Gallagher LLP acted as external legal counsel. PJT Partners served as the lead financial advisor to Legg Mason. J.P. Morgan Securities LLC also served as financial advisor to Legg Mason. Weil, Gotshal & Manges LLP served as lead counsel to Legg Mason and Skadden, Arps, Slate, Meagher & Flom LLP served as special counsel to Legg Mason. Dechert LLP served as legal counsel to EnTrust Global.
Pixabay CC0 Public Domain. Jupiter Fund Manager compra Merian Global Investors por 469 millones de euros
Jupiter Fund Management is to acquire Merian Global Investors for £370 million ($476.5 million), in a deal that will boost its fixed-income and emerging markets capabilities.
A jointnews release said the deal, which is expected to complete July 1, will add £22.4 billion to Jupiter’s AUM, for a combined assets under management of £65.2 billion.
The 100% acquisition will be financed through the issue of new Jupiter shares to Merian shareholders. Following completion of the deal Merian’s largest shareholder, TA Associates Management, will own about 16% of the enlarged firm and key Merian management will own about 1%.
The deal is subject to Jupiter shareholder and regulatory approval. Once completed, the firm will operate as Jupiter.
Merian’s investment team will join Jupiter, according to the release.
“The addition of Merian is compelling for all stakeholders. With this acquisition, our business will benefit from an increased capacity to attract, develop and retain high quality talent, backed by further investment in our platform and technology. In turn, we will be able to offer a wider choice of strongly performing active investment strategies to our clients, while shareholders will benefit from a highly earnings accretive deal delivered through substantial cost synergies,” Andrew Formica, CEO of Jupiter, said in the news release.
Mark Gregory, CEO of Merian, added: “Jupiter is a great strategic and cultural fit with our business. It has a market leading brand with a clear focus on high conviction, active asset management which is entirely consistent with our own. I believe the enlarged business will be more strongly positioned to offer greater choice and investment performance to clients and continue to meet clients’ ever-evolving needs.”
Didier Saint-Georges, Member of the Strategic Investment Committee and Managing Director at Carmignac, will talk about their unconstrained approach in Fixed Income Markets during the first edition of Funds Society’s Investments & Rodeo Summit, which will take place on March 5, 2020 at the Intercontinental Houston Medical Center.
“Our Unconstrained range is defined by an active and global investment approach, that relies on great flexibility in managing exposures through a non-benchmarked philosophy. Thus, Unconstrained Fixed Income Funds may be suitable for investors seeking higher yields outside Europe, which is undergoing historical financial repression, since it aims to benefit from both rising and declining rates and to seize bottom-up opportunities through our disciplined risk management framework.” He mentions.
Didier joined Carmignac in 2007 and he is since 2018 a member of the Strategic Investment Committee. He started his career in 1983 in aircraft financing at Citibank, before moving to the securities business in 1987. He spent ten years with JP Morgan in London, Paris and New-York, where he set up and ran the international equity department. In 1997, he took on the role of Managing Director at Merrill Lynch, in charge of the Global equities and derivatives activities in Paris. Didier graduated from Ecole Supérieure de Commerce de Paris (ESCP) and holds a MBA degree from Georgia State University. He is also the author of two books – “Peut-on battre le marché?” and “Le libéralisme est une chose morale”.
Charlotte Samson, Head of US Offshore & Latam at Carmignac, and David O´Suilleabhain, its Business Development Manager, will also be present at the event.
If you are involved in the management of fund portfolios, or the selection and analysis of funds, and want to participate in this event, reserve your place as soon as possible by writing to info@fundssociety.com.
About Carmignac
The firm has had more than 30 years of independence and conviction
Founded in 1989 by Edouard Carmignac, Carmignac is one of the leading asset managers in Europe today. Carmignac is owned entirely by its managers and staff. In this way, the company’s long-term viability is ensured by a stable shareholding structure, reflecting its spirit of independence. This fundamental value ensures the freedom required for a successful and renowned portfolio management. Carmignac offers a focused range of global, specialized or diversified Funds.
Afores’ investments in international mutual funds are a reality. Prudently and seeking “that this global diversification is the best for the worker,” Afore SURA was the first Afore to put resources to work using this vehicle.
The Afore, which has a Silver Morningstar Analyst Classification for its solid investment team, decided to start with 1,46% of its assets, or about 500 million dollars, which it distributed to global strategies of Morgan Stanley AM and Investec, as Andrés Moreno Arias, Investment Director of Afore SURA said in an interview with Funds Society.
According to Moreno, “for SURA it is a strategic issue to have managers who can help us with our portfolios in the public and private market, we had to have access to these managers and once authorized [to use them], we almost immediately took the first step”. That is why SURA and other afores spent the last two years talking with the regulator and lobbying about the importance of access to specialists in active management in both public and private markets.
In Moreno’s opinion, “every time you expand the investment regime you are opening up to places where, for example in Asia we have less knowledge than someone who has been there a lifetime, so once the investment regime opens up, it is important that we are given access to tools that allow us access to experts, always keeping costs in check, so that it always represents a net benefit for the clients.”
The way in which they make their investment decisions is based on three stages: “the first stage involves the analysis of the world and the companies’ possibilities regaring profit generation in an overview that begins the allocation process as it defines where we are going to invest in. In a second stage the asset class is defined, in this case equity, then regions, themes… and a final stage involves deciding whether we to do it actively or passively.” As Moreno lets us know, as a result of this analysis, he expects that “in the regions where we will rely on specialized managers we plan to give between 30 and 40% of new investments to active managers.”
Within the active strategies, the manager – who has already closed some mandates, is still open to their use. “The decision between mandates and mutual funds has to do with the issue of costs and benefits for our clients. The mandates open an infrastructure within the managers to attend a particular account, and it becomes much more expensive, so in some cases we decided to close mandates and open funds, but that does not always have to be the case… If what is best suited to our investment strategy is to do it through mandates, we will do so.”
Currently Moreno and his team, which has almost doubled in recent years, likes technology themes and as a region, Asia.
Bolton Global Capital is pleased to announce that Bernardo Villanueva has joined the firm. Villanueva was formerly an advisor with UBS Financial Services where he managed $225 million in client assets. He will be working with Copernico Capital, a Bolton affiliate.
Villanueva began his career at Morgan Stanley Smith Barney in 2011 in New York City and in 2012 moved to UBS Financial Services. He will be affiliating with his brother Carlos Villanueva, who joined Bolton and founded Copernico Capital in 2014 after leaving Deutsche Bank Securities. Copernico manages $140 million in client assets on the Bolton platform.
Bernardo holds an MBA degree from the Wharton School at the University of Pennsylvania and lives with his wife and 2 children in Key Biscayne, Florida.
Since opening offices in Miami and New York City, Bolton has recruited more than two dozen international teams from the major US banks and wirehouses. The firm offers turnkey office space and a full suite of global wealth management capabilities to allow teams to easily transition to the independent business model where they can achieve higher compensation and greater ownership of their business. This model is the fastest growing segment of the US wealth management industry and Bolton has sustained a 20 percent annual growth rate over the last 5 years by focusing on teams at the major banks and wirehouses that specialize in international business.
After a decade expanding its coverage with international Asset Managers in Chile, Peru and Colombia,Capital Strategies Partners will hit Uruguay and Argentina adding Agustin Mariatti as a local business partner.
Agustin will report to Jorge Benguría, partner and responsible for LATAM and Daniel Rubio, CEO of the firm.
The Spain-based group will bring almost 10 asset managers firms to the Uruguayan and Argentinian offshore market.
The company will look to sign new distribution agreements in the next few months in order to be able to develop its product through the huge network of independent advisors.
Mariatti previously worked for Spinnaker Capital Group in Montevideo and Sao Paulo. Prior to Spinnaker he worked at Merrill Lynch as a wire room operator and senior client associate. Agustin is a CFA level 3 candidate.
“We are happy with the incorporation of Agustin and we are sure that with him we will get a good development to provide our customers the best solutions with independence and commitment” the entity said in a statement.
Capital Strategies Partners has 20 years of experience in global markets and more than a decade operating in Latin America:“Our goal is to identify and select global investment ideas of high added value to facilitate the investments decisions of financial institutions with their local needs. The managers that CSP represents have specialized approaches in different asset classes managing in aggregate more than 700,000 Million USD (700 Bn). This allows us to find the alternative that properly helps to achieve the different objectives of each investor” announced the firm.
During the first edition of Funds Society’s Investments & Rodeo Summit, which will take place on March 5, 2020 at the Intercontinental Houston Medical Center, Felipe Villaroel, portfolio manager at TwentyFour Asset Management, a boutique of Vontobel Asset Management, will talk about its TwentyFour Strategic Income strategy, a multi-sector bond strategy, that aims to provide an attractive level of income along with an opportunity for capital growth throughout the economic cycle.
“It is genuinely unconstrained and un-leveraged long only bond strategy, managed independent of the market indices, combining the best sources of fixed income from around the globe, highly focused on relative value and liquidity.” He mentions.
Felipe joined TwentyFour in 2011 and is a Portfolio Manager in the Multi-Sector Bond team. His main responsibility is managing funds within the Strategic Income Strategy. He is also a member of the Investment Committee. Prior to joining TwentyFour, Felipe worked as an Asset Allocation and Strategy Analyst at Celfin Capital in Chile, now part of the BTG Pactual Group. There, Felipe took an active role in developing the team’s strategic view of the global macro economy and asset classes.
Felipe graduated from Pontificia Universidad Catolica de Chile with a Bachelor’s degree in Economics and Business Administration before obtaining a Masters in Finance from London Business School. Felipe is also a CFA Charterholder.
Michael Kearns, Head of US Offshore Distribution for Unicorn Strategic Partners, will also be present at the event, representing Vontobel.
If you are involved in the management of fund portfolios, or the selection and analysis of funds, and want to participate in this event, reserve your place as soon as possible by writing to info@fundssociety.com.
Vontobel Group is an active asset manager with global reach and a multi-boutique approach. Each of their boutiques draws on specialized investment talent, a strong performance culture and robust risk management. The firm has a total of $ 118 billion in assets as of June, 2019.
TwentyFour Asset Management is a specialized fixed income firm, headquartered in London and boutique of Vontobel Group. We are specialists in fixed income, headquartered in London and a boutique of the Swiss based Vontobel Group. Since its inception in 2008, they have built an enviable reputation for performance, expertise and innovation in their chosen sector.
Oliver Röder, courtesy photo. Erste AM nombra a Oliver Röder nuevo director de Ventas Institucionales
Erste Asset Management has appointed Oliver Röder as head of institutional sales, since the beginning of February 2020.
He is now responsible for all institutional sales activities across Erste Asset Management.
This appointment brings the Institutional Sales team of Austria, Germany, and International under his direction. He is also in charge of managing and coordinating the according activities in the Central and East European countries. In this position, he reports to Wolfgang Traindl, member of the Board of Directors of Erste Asset Management.
Heinz Bednar, CEO: “Oliver Röder has convinced us with his strategic ideas about ways of expanding the institutional business of Erste AM further. His international track record and his years of experience are crucial elements of success for this business segment, which is very important to us.”
Oliver Röder (47) has been Director of Erste AM in Germany since 2016 – a position which he will maintain. Previously, he worked for other international houses in International Sales. He holds a degree in Bank Management and earned an MBA from Ashridge Management College. He is member of Deutsche Vereinigung für Finanzanalyse und Asset Management e.V. (DVFA; German Association for Financial Analysis and Asset Management) and Certified Investment Analyst (CIIA).
The coronavirus has infected more than 20.000 people and killed more than 400 people in China alone. China’s death toll now exceeds the number of people who died in the country from SARS, a respiratory virus that killed nearly 350 people in the country in the early 2000s – as well as hundreds more beyond.
This has put pressure on China’s equity markets, however, and according toMatthews Asia CIO Robert Horrocks, PhD, and Investment Strategist Andy Rothman, both of which lived in Shanghai during the SARS (severe acute respiratory syndrome) outbreak that was responsible over 8,000 people contracting the virus and causing 774 deaths worldwide: “All of that plays to headlines and the impact on share prices is consequently exaggerated… While we do not underestimate the potential severity of the outbreak, and it is possible that the numbers of cases increase in the near term, we are encouraged by the response and transparency shown by the Chinese authorities.”
Horrocks believes that in number of cases, is probably likely to peak in March or April. “As I understand it, the more virulent the virus, the quicker it burns out. That is why the comparatively less aggressive common influenza causes much more damage.” To put those numbers in context, the CDC estimates that so far during the 2019-2020 influenza season, there have been at least 15 million flu illnesses, 140,000 hospitalizations and 8,200 deaths from flu.
As he points out, some workers will be out sick days and some will succumb to the disease. “However, as was the case with SARS, beyond the effect on a quarter or two of earnings for some businesses, the overall effects will be hard, if not impossible, to spot in the data… I can only say that my experience, when I lived through SARS first hand, tells me to eat well, stay active, and importantly, stay calm.” in his opinion, the impact of SARS on China’s GDP is hard to find. If you look for the impact on the stock markets, it was brief.”
Rothman believes that “After the initial stumble, the central government has taken strong measures, including quarantining several major cities, in an effort to reduce disease transmission and demonstrate resolve… It is also worth noting that past epidemics, as well as the consequences of a major earthquake, led the Chinese government to boost spending on public health infrastructure, which should make it easier to manage the Wuhan outbreak.”
Matthews Asia’s specialists looked back at the economic impact of the 2002/03 SARS outbreak and the 2005/06 bird flu epidemic, and found that while there was significant short-term economic impact, that impact faded quickly. There also wasn’t much impact on the Shanghai stock market.
“If the Wuhan Coronavirus can be brought under control in a similar timeframe as SARS was tamed, I expect the negative economic impact will be modest over the course of the full year.” Rothman concludes.
