New Survey Reflects Lack of Women and Minorities in Senior Investment Roles at Venture Capital Firms

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Although women comprise nearly one-half (45 percent) of the total venture capital workforce, few are in investment decision-making positions, according to a new report released today by the National Venture Capital Association (NVCA) and Deloitte.  Based on the findings of the first ever NVCA-Deloitte Human Capital Survey conducted by the Deloitte University Leadership Center for Inclusion, women represent 11 percent of investment partners or equivalent on venture investment teams.

Racial minorities are also significantly underrepresented across the VC industry, according to the survey. By race, the report found that non-white employees comprise 22 percent of the venture capital workforce, including Black employees at 3 percent and Hispanic or Latino employees at 4 percent.

In addition to assessing the demographic makeup of the venture industry, the NVCA-Deloitte Human Capital Survey gauges the adoption of talent management practices and diversity and inclusion programs at venture firms, as well as the extent to which those programs lead to more diverse teams.

“The survey results reinforce what we already know, which is that the venture industry is not representative of the overall population of the U.S. Transparency is a powerful force for change, and we now have a clear benchmark by which we can measure progress to create a more inclusive venture capital industry,” said Bobby Franklin, president and CEO of NVCA.

“For the first time, we have a comprehensive picture of the industry as well as a better understanding of existing programs to support diverse teams.  Research shows that diverse teams make better decisions and, with this baseline measurement in hand, we now turn to developing the tools and resources that will empower all venture firms to take action,” Franklin said.

Importantly, the survey findings also indicate that the presence of a human capital strategy, as well as talent programs, such as recruitment or mentorship, drives greater diversity on VC teams.  This data will help guide the future programs of NVCA.

“The fact that the NVCA is examining D&I through in-depth analytics gives them the opportunity to identify target areas they want to focus on rather than a more ‘peanut butter’ approach which we know is a failed strategy,” said Christie Smith, PhD managing principal, Deloitte University Leadership Center for Inclusion & Community Impact, Deloitte LLP.

“What’s key for the future success of venture firms is instilling a culture of inclusion and implementing human capital programs and policies that foster and enrich the composition of a diverse and inclusive talent model that encourages individuals to be their authentic selves in their careers,” said James Atwell, national managing partner, Technology & Emerging Growth Company practices, Deloitte & Touche LLP.  “Our survey indicates that firms that have a human capital strategy have a higher percentage of female and minority employees overall, and we know that having a diverse workforce can improve business performance.  Addressing diversity and inclusion in the workplace is a tremendous opportunity for venture capital firms.”  

Women in Venture Capital

While women comprise 45 percent of the venture capital industry, findings show significant differences by firm size, location and investment focus. In general, the smaller the firm, the smaller the percentage of women on teams. For firms with five team members or fewer, women comprise 29 percent. For firms with 6-20 team members, women represent 41 percent of the workforce. In firms with 21 or more team members, women comprise 47 percent of team members.

According to the survey findings, women are consistently overrepresented in administrative functions and underrepresented in investment functions. Women comprise 95 percent of administrative roles, 75 percent of investor relations, communications or marketing roles, yet only 15 percent of investment professional roles. Looking specifically at investment partners or equivalent on investment teams, women comprise only 11 percent.

Minorities in Venture Capital

Racial and ethnic minorities comprise a smaller proportion of the venture workforce than women overall. According to survey findings, non-white employees comprise only 22 percent of the venture industry. However, not all ethnicities have the same experience in venture capital.  Black employees comprise 3 percent of the venture workforce, Hispanic or Latino employees 4 percent, and Asian/Pacific Islander employees 14 percent.     

By role within their firms, Black team members comprise 2 percent of investment professionals; 3 percent of finance roles; 3 percent of investor relations, communications or marketing roles; 4 percent of administrative roles; and 5 percent of operations positions. Further, 2 percent of senior positions across all functions are filled by Black team members, compared to 4 percent of junior positions.

Looking specifically at investment partners or equivalent, survey results found no Black investment partners in the sample. However, it is important to note that while the firms in our sample did not report any Black partners, this does not equate to a zero number of Black investment partners working across the industry.

Impact of Talent Strategies

Survey findings show a strong correlation between the existence of human capital strategies at venture firms and representation of women and minorities at those firms.  Firms that have a human capital strategy have an average of 54 percent female and non-white employees overall, while firms without a human capital strategy have an average of only 41 percent female and non-white employees.

Moreover, findings suggest that the existence of a human capital strategy translates to better representation of women in senior positions across all functions. Firms with a human capital strategy have 4 percentage points more women in leadership than those without a strategy, firms with a diversity strategy have 10 percentage points more women in leadership than those without a strategy and firms with an inclusion strategy have 7 percentage points more women in leadership than those without a strategy. Similarly, firms with a human capital strategy have 13 percentage points more minority employees than those without, firms with a diversity strategy have 12 percentage points more minority employees than those without and firms with an inclusion strategy have 14 percentage points more minorities than those without.

Examinations of relationships between formal mentorship and recruitment programs and the representation of women in senior leadership positions at venture firms revealed that firms with formal mentorship programs have 16 percentage points greater representation of women in leadership and firms with formal recruitment programs have 9 percentage points greater representation of women in leadership.

Read the full report here.

Climbing the Wall of Worry – A Look Ahead to 2017

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In the latest edition of Global Outlook Standard Life Investments look ahead to 2017, and how its ‘House View’ is positioned in the light of a supportive monetary and fiscal landscape.

Neil Matheson, Market Strategist, highlights that 2016 has been typified by uncertainty in areas such as politics, US interest rates, China and European banking which has spurred many investors to build up high levels of cash.  However, despite commentary being dominated by these downside risks, risk assets have been quietly moving higher. 

Standard Life Investments believes this rally, which has been seen across credit, equities and global real estate, has been driven by an improvement in the global cycle and a move towards ‘pro-growth’ policies across many of the major economies.  As we head into 2017 global monetary conditions are supportive of growth, and there is now active discussion about fiscal easing globally.

Neil commented: “Against this more supportive backdrop in 2017, we anticipate only moderate returns from government bonds, and find better value in credit, particularly higher yielding credit. We also see opportunities in hard currency emerging market debt, as long as there is not a significant rise in US-led protectionism. In equities, although valuations appear high if considered in isolation, they still look cheap if viewed on a yield basis relative to government and corporate bonds. Across equity markets, the US looks the most dependable but it also commands the highest valuation. When it comes to emerging markets it will be important for Chinese policy to remain supportive, the Fed to ‘go slow’ and the Trump administration not to deliver any trade shocks. Meanwhile, in Europe and Japan, we are expecting support from stable-to-slightly weaker exchange rates. At long last authorities appear to ‘get it’ that continued, sustained expansion is required to get the world out of the stop-and-go cycle it has been stuck in since the Great Recession. Markets have only begun to anticipate these developments – assuming of course that political tail risks do not cause undue levels of market volatility.”

“As long as the US President-elect avoids a disruptive increase in trade protectionism, this should reinforce the improvement in global growth, inflation and corporate earnings trends that were already underway before the US election, and was supporting the rotation towards a heavier equity and lighter government bond exposure in the House View.” He concluded.

For the full December Global Outlook research follow this link.

 

BNY Mellon IM Unveils Global Leaders Fund

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BNY Mellon Investment Management has launched the BNY Mellon Global Leaders Fund, investing in global companies with dominant business models, enduring growth potential and strong cash flow generation.

The fund is managed by global equity manager Walter Scott & Partners, fully owned by BNY Mellon, and aims to achieve long term capital growth through a bottom up, fundamental, investment approach.

It will consist of a portfolio of 25 to 30 of the world’s most innovative and market leading global companies. The strategy will be biased towards large cap companies ensuring sufficient liquidity.

The fund is registered in all standard BNY Mellon Global Funds European jurisdictions including Denmark, France, Germany, Italy, Switzerland, the Netherlands and Spain.

Minimum investment is €5000, $5000 or £5,000 depending on the share class.

“Walter Scott has an outstanding long term track record and is renowned for its rigorous and proven approach to global equity investing. In an environment which is likely to become more challenging, Walter Scott believes markets will become more discerning and quality will be rewarded,” said Matt Oomen, head of International Distribution at BNY Mellon Investment Management. “We are delighted to offer investors a concentrated, benchmark agnostic, outcome driven portfolio which aims to harness the power and stability of the biggest and best run global businesses.”

As of 30 September 2016, BNY Mellon IM had $1.7trn (€1.57trn) in AUM.

BlackRock to Invest in iCapital Network

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 BlackRock will lead iCapital’s next funding round. Frank Porcelli, Chairman of BlackRock’s US Wealth Advisory business, will join iCapital’s Board of Directors and will work closely with the organization as a strategic advisor.

Individual investors remain significantly under-allocated to alternative investments relative to institutional investors, but are increasingly exploring the critical role alternatives can play in state-of-the-art portfolio construction. iCapital’s online platform facilitates access to private investment opportunities through an independent origination and due diligence process that prioritizes quality offerings from an array of top managers, and provides an end-to-end technology solution automating the unique subscription, administration and reporting processes of alternative investments.

“We are building the largest independent digital alternative investments platform in the industry. In BlackRock, we have an investor who understands the importance of technology’s role in the wealth management ecosystem,” said Lawrence Calcano, Chief Executive Officer of iCapital Network. “BlackRock’s decision to lead our next round of funding validates the steps we’ve taken thus far and gives us a springboard to scale the platform for future growth.”

iCapital recently announced that it has surpassed $2 billion in subscriptions from approximately 3,000 investors across more than 40 private offerings since the public launch of its platform two years ago. Its member network has expanded to include more than 1,300 users from RIA firms, private banks, independent broker-dealers, family offices and other sophisticated advisory organizations that collectively oversee more than $1.7 trillion in investable client assets.

“Based on our experience, as well as dialogue with our distribution partners, iCapital Network’s open-architecture alternatives platform solves a critical problem for high-net-worth investors and their advisors,” said Frank Porcelli, Chairman of BlackRock’s US Wealth Advisory business. “iCapital’s combination of due diligence capabilities, technology and relationships with alternative asset managers seamlessly facilitates investments in hedge funds and private equity funds, including BlackRock Alternative Investors.”

Terms of the transaction were not disclosed.

 

Fixed Income European ETF Flows Saw a Trend Reversal

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Una corrección, no un probable punto de inflexión
Pixabay CC0 Public DomainFoto: Lifeofbreath. Una corrección, no un probable punto de inflexión

According to Marlène Hassine-Konqui Head of ETF Research and their Barometer, European ETF Market flows increased in November 2016. Net New Assets (NNA) during this month amounted to EUR4.3bn, above the year to date average of EUR3.7bn. Total Assets under Management are up 10% vs. the end of 2015, reaching EUR497bn, and including a limited market impact (+2.2%). ETF flows experienced a great rotation from fixed income to equities and from emerging to developed equities. The pick up in developed equities was mainly focused on US and European underlyings, following Trump’s election.

Equity  ETFs  saw  11-month  record  high  inflows  at  EUR7.6bn.  US  equity  ETF  flows  accelerated at EUR3.6bn, mainly during the days following the US election.  European ETFs  saw a significant trend reversal at EUR 2.5bn, though they still haven’t made up for the huge  outflows observed earlier in the year. Global developed equities also benefited from increased investor confidence with EUR1.7bn of inflows. The confirmation from the Fed of the next interest rate increase triggered some outflows from emerging markets at EUR1.3bn, mainly on broad and Asian ETFs. Within Smart Beta, the value style continued to see high interest with EUR621M of inflows together with some flows on the low vol factor, while Minimum Volatility ETFs continued to see outflows in this more risk-on environment. Overall, Smart Beta flows reached EUR614M this month.

Fixed income flows saw a trend reversal with outflows of EUR3.3bn following 16 months  of inflows. These outflows mainly concerned government bonds from both developed and emerging countries at -EUR1.3bn and -EUR1.9bn respectively, having been negatively impacted by changes in interest rate expectations following the US election. Flows on investment grade corporate bonds also saw a halt with EUR319M of outflows following 9 months of positive flows, and a one year average of EUR1.2bn, likely reflecting investor doubts on a QE extension. On the other hand, due to increased inflation fears in the market after the US election, inflation-linked ETFs continued to see inflows at EUR284M, mainly on US TIPS. Inverse strategy ETFs which benefit from interest rate increases (double short bund or UST) also saw significant interest with inflows of EUR248M, a one year record high as both US and European interest rates rebounded on expectations of a rate hike by the Fed and a change in US fiscal policy.

Robo-Advisors May Now Include Active Funds in their Offering

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Ifund y fundinfo lanzan una herramienta para la selección de fondos
Pixabay CC0 Public DomainPhoto: NASTER. Robo-Advisors May Now Include Active Funds in their Offering

ifund and fundinfo have launched Digital-Advisor, a cloud-based, expert system for fund selection.

The tool scores active and passive funds based on scientific criteria derived from up-do-date and in-depth research on a wide range of success factors. It analyses data about fund houses, fund managers, and their investment processes, then combines the results with an investor’s preferences and convictions to instantly generate a list of recommended mutual funds and ETFs.

Fund analysts can use Digital-Advisor to obtain a short-list of attractive funds which they can evaluate in greater detail with fund managers. Banks can use the plug-in within their advisory services to rapidly identify funds that best reflect the CIO’s current view and customer specific requirements. Robo-Advisors may now for the first time include active funds in their offering.

Jan Giller, Head of Marketing and Sales at ifund and fundinfo said, “Digital-Advisor is the first expert system that evaluates both active and passive funds based on many years of research and scientific evidence, then combines the results with individual investor preferences and emotional convictions. Thanks to this unique technology, funds can be selected far better than with the usual past performance-related data.”

Digital-Advisor takes advantage of years of due-diligence performed on an ongoing basis by fund experts at ifund based in Switzerland. Thousands of active and passive funds have been analysed in a highly structured manner so that their information may be systematically evaluated and scored by Digital-Advisor. By constantly monitoring the legally relevant aspects of each fund such as business scope of the fund house, ownership, legal terms, guidelines for the fund, employment of derivatives and leverage, etc., the tool also ensures that customers and advisors fulfill the regulatory requirements at all times.With Digital-Advisor, investors can invest in funds that meet specific criteria such as fund house profile, investment style, sustainability, and manager experience; the tool takes investor’s personal preferences and convictions into account. Digital-Advisor may be used as a stand-alone tool, or embedded into existing investment advisory solutions via APIs.
 

John Campbell and Jeff Klepacki Join Aberdeen

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mundodestokpicpixabay
Pixabay CC0 Public Domain. mundo

Aberdeen Asset Management has made a number of appointments to strengthen its global distribution platform.

John Campbell will join Aberdeen in early January as Global Head of Strategic Clients reporting to Campbell Fleming, Global Head of Distribution. His role will be focussed on how Aberdeen works even more closely with its largest clients to help them achieve their financial goals. Aberdeen has a specific programme for its largest clients and John will look to build on this strong base.

John is a well-respected financial services leader, having led the Scottish financial community through the 2008 crisis as Chairman of Scottish Financial Enterprise. He has spent the last 16 years at State Street, most recently as Business Head of Global Services UK, Middle East and Africa. John was awarded an OBE in 2008 for services to the financial services industry.

Jeff Klepacki will also join early in the New Year as Head of Distribution – Americas reporting to Bev Hendry and Campbell Fleming. The U.S. is home to half of the world’s wealth and is of strategic importance to Aberdeen. John will provide vital leadership for Aberdeen’s distribution efforts in the Americas where the Group already manages around $65 billion.

Jeff brings with him a proven 23-year track record of leadership in financial services with world class organisations including Capital Group, Delaware Investments and Allianz Global Investors.

Separately Antony John, former chief executive BNP Paribas Investment Partners/FundQuest, and Richard Pursglove, who has held senior distribution roles at a number of companies, will join on a consultancy basis to work with senior management on driving forward Aberdeen’s distribution strategy.

Campbell Fleming, Global Head of Distribution at Aberdeen Asset Management, comments: “I am delighted that Aberdeen will be able to draw on the experience and expertise of John, Jeff, Antony and Richard. It says a lot about Aberdeen that we are able to attract individuals of such high calibre. Aberdeen is one of the few global asset managers to offer such a comprehensive range of investment capabilities from equities and fixed income through to property, alternatives and multi-asset portfolios. We’ve got to map these to the specific needs of our clients. The whole team globally is going to be focussed on doing this and these new appointments will really help those efforts.”

Nils Bolmstrand: New Head of Nordea Asset Management

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Nils Bolmstrand: nuevo responsable de Nordea Asset Management
Pixabay CC0 Public DomainCourtesy photo. Nils Bolmstrand: New Head of Nordea Asset Management

Nordea has appointed Nils Bolmstrand new Head of Nordea Asset Management, the largest asset manager in the Nordics.

“Nils Bolmstrand is the right person to maintain the very strong momentum and development of Nordea Asset Management. He has the competencies and experience within the asset management business, and he has strong leadership and personal skills,” Snorre Storset, head of Nordea Wealth Management says.

Nils Bolmstrand, 44, comes from a position heading Nordea Life & Pensions, and he has previously held managerial positions within Nordea Asset Management and the asset management-division of Skandia and Old Mutual. He starts in his new position on January 1st, 2017.

Nordea Asset Management is year-to-date number 1 in Europe in attracting new assets and has during the last 4 consecutive years been among top 10 in Europe of best-selling asset managers. Since 2011 60 % of Nordea Asset Management-sales have been to clients outside Nordea. Nordea Asset Management has total Assets under Management at EURO 215 billion end of third quarter 2016.

Johan Nystedt has been appointed acting Head of Nordea Life & Pensions, he will retain his position as Head of the Swedish Life & Pensions-organisation during the period as acting Head.

Burkhard Varnholt New Chief Investment Officer Switzerland of Credit Suisse

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Burkhard Varnholt is to become Chief Investment Officer Switzerland of Credit Suisse with effect from January 1, 2017. He will assume this role in addition to his responsibilities as Deputy Global CIO and Vice-Chairman of the Investment Committee of Credit Suisse.

As announced by the bank today, Burkhard Varnholt is to become the new Chief Investment Officer (CIO) Switzerland of Credit Suisse with effect from January 1, 2017. He will assume this role from Anja Hochberg in addition to his responsibilities as Deputy Global CIO and Vice-Chairman of the Investment Committee. In his new role, Varnholt will report both to Michael Strobaek, Global CIO and Head of Investment Solutions & Products, and Thomas Gottstein, CEO of Credit Suisse (Switzerland) Ltd. Anja Hochberg will continue in her role as Head of Investment Services and will remain a member of the Investment Committee.

The 48-year-old Varnholt rejoined Credit Suisse in November 2016, having worked for the bank from 1996 to 2006 as Global Head of Financial Products & Investment Advisory in Private Banking. From 2006 until 2014, he was Chief Investment Officer at Bank J. Safra Sarasin. Thereafter, he was Chief Investment Officer and Head of Investment Solutions Group at Julius Bär for almost two years. Varnholt holds a Master’s Degree and a Ph.D. in economics from the University of St. Gallen.
 

Erste AM Appoints Head of Multi Asset Management

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Erste AM reorganiza la gestión de multiactivos y nombra nuevos responsables
Pixabay CC0 Public DomainPhoto: miniqueaustralia. Erste AM Appoints Head of Multi Asset Management

Erste Asset Management (Erste AM) has reorganised the Multi Asset Management department. Discretionary Portfolio Management was set up as self-contained department at the beginning of December. Mixed fund solutions for retail and institutional investors remain with Multi Asset Management. This step was decided on within the context of appointing a Head of Multi Asset Management.

Alexander Lechner, previously fund manager with Erste AM, will take over as Head of Multi Asset Management. In his new position, he will focus on umbrella fund strategies in the retail and institutional segment, and he will develop the investment processes in cooperation with Gerold Permoser. Senior fund manager Jürgen Wurzer will also join the Erste AM team, having previously worked for Macquarie Investment Management.

Thomas Bobek has been Head of Discretionary Portfolio Management (DPM) since the beginning of December. He had previously held a managerial position in asset management with Credit Suisse in Vienna, and knows ERSTE-SPARINVEST very well from his former function as Head of Equity with the institute (2003-2011). He will be in charge of the entire range of DPM solutions across borders, and he will ensure the implementation of the investment processes in all markets.

Gerold Permoser, Chief Investment Officer (CIO) of Erste AM: “By reorganising Multi Asset Management and Discretionary Portfolio Management and appointing Alexander Lechner and Thomas Bobek as department heads, we are well-positioned for the future and can develop our range of products and services in a consistent fashion.”