Foto: Daniel Wehner
. Los alternativos crecieron hasta marcar un récord en 7,4 billones en 2015
The Preqin´s 2016 Global Alternatives Reports find that alternative assets fund managers hold a record $7.4tn in combined assets under management (AUM) in 2015, up from $6.9tn a year before. The private capital industry in particular has grown over the past year, as almost every constituent asset class saw its AUM increase. The industry as a whole added $193bn in AUM through H1 2015, more than the $149bn growth seen in the whole of 2014. The aggregate value of the portfolios of assets held by private capital fund managers is continuing to rise as GPs put more capital to work.
Hedge funds saw a challenging year in 2015, but combined assets under management grew from $3.0tn to $3.2tn despite performance concerns. Total hedge fund AUM grew by 13.3% over 2014 as funds added $355bn in total assets; this rate of growth halved in 2015 with just $178bn worth of assets added, an increase of 5.9%.
“The private capital industry has continued to show healthy growth over the past year, and is now worth over four trillion dollars. This has been fuelled by a rise in dry powder levels, following another strong year for fundraising, and an increase in the unrealized value of portfolio assets. This is not without its concerns, though; the fundraising market is more competitive than ever and dry powder levels continue to increase and put pressure on finding attractive investment opportunities.” Says Mark O´Hare, chief executive, Preqin.
“The hedge fund industry has not enjoyed the same gains made in 2013 and 2014, although it has nevertheless grown to well over three trillion dollars. While the prolonged period of weak returns has taken its toll, returns are also difficult to find in other asset classes. 2016 looks set to be a challenging year, but the industry still has the potential for significant further growth.” Concludes O´Hare.
CC-BY-SA-2.0, FlickrPhoto: Julia Rubinic
. FinCEN Takes Aim at Real Estate Secrecy in Manhattan and Miami
The Financial Crimes Enforcement Network (FinCEN) today issued Geographic Targeting Orders (GTO) that will temporarily require certain U.S. title insurance companies to identify the natural persons behind companies used to pay “all cash”for high-end residential real estate in the Borough of Manhattan in New York City and Miami- Dade County. FinCEN is concerned that all-cash purchases – i.e., those without bank financing – may be conducted by individuals attempting to hide their assets and identity by purchasing residential properties through limited liability companies or other opaque structures. To enhance availability of information pertinent to mitigating this potential money laundering vulnerability, FinCEN will require certain title insurance companiesto identify and report the true “beneficial owner” behind a legal entity involved in certain high-end residential real estate transactions in Manhattan and Miami-Dade County.
With these GTOs, FinCEN is proceeding with its risk-based approach to combating money laundering in the real estate sector. Having prioritized anti-money laundering protections on real estate transactions involving lending, FinCEN’s remaining concern is with the money laundering vulnerabilities associated with all-cash real estate transactions. This includes transactions in which individuals use shell companies to purchase high-value residential real estate, primarily in certain large U.S. cities.
“We are seeking to understand the risk that corrupt foreign officials, or transnational criminals, may be using premium U.S. real estate to secretly invest millions in dirty money,” said FinCEN Director Jennifer Shasky Calvery. “Over the years, our rules have evolved to make the standard mortgage market more transparent and less hospitable to fraud and money laundering. But cash purchases present a more complex gap that we seek to address. These GTOs will produce valuable data that will assist law enforcement and inform our broader efforts to combat money laundering in the real estate sector.”
Under specific circumstances, the GTOs will require certain title insurance companies to record and report to FinCEN the beneficial ownership information of legal entities purchasing certain high-value residential real estate without external financing. They will report this information to FinCEN where it will be made available to law enforcement investigators as part of FinCEN’s database.
The information gathered from the GTOs will advance law enforcement’s ability to identify the natural persons involved in transactions vulnerable to abuse for money laundering. This would mitigate the key vulnerability associated with these transactions – the ability for individuals to disguise their involvement in the purchase.
FinCEN is covering certain title insurance companies because title insurance is a common feature in the vast majority of real estate transactions. Title insurance companies thus play a central role that can provide FinCEN with valuable information about real estate transactions of concern. The GTOs do not imply any derogatory finding by FinCEN with respect to the covered companies. To the contrary, FinCEN appreciates the assistance and cooperation of the title insurance companies and the American Land Title Association in protecting the real estate markets from abuse by illicit actors.
The GTOs will be in effect for 180 days beginning on March 1, 2016. They will expire on August 27, 2016.
Courtesy photo. BNY Mellon Announces Lisa Dolly as the Next Chief Executive Officer of Pershing
Pershing announced that Lisa Dolly has been named as the company’s new chief executive officer, effective February 16, 2016.
Dolly, currently the firm’s chief operating officer, succeeds Ron DeCicco, who after a long and distinguished 45-year career with Pershing, has decided to retire from his role as chief executive officer of Pershing. As part of the leadership transition, he will serve as an executive advisor over the next year working closely with Dolly, Pershing’s executive committee and key clients.
“We’ve selected a very capable and committed leader at a time when Pershing is in a strong position,” said Brian Shea, BNY Mellon vice chairman and CEO of Investment Services. “For the past three years, Lisa has been an exemplary chief operating officer and in her new role as Pershing’s CEO, I am confident that she will lead the company to continued success.”
“I also want to recognize and thank Ron for being an outstanding leader, consistently putting the good of our clients, the company, the industry and the well-being of employees as his highest priorities”, said Shea. “Ron has been a strong, highly effective and responsible leader and we have been extremely fortunate to have had him as CEO and now as an executive advisor.”
Dolly is a member of Pershing’s executive committee and BNY Mellon’s Operating Committee. Over her 25-year career at Pershing, she has held numerous leadership roles prior to becoming Pershing’s COO. She was responsible for the firm’s Managed Investment business and Lockwood Advisors, Inc., managed global operations, and served as chief administrative officer overseeing a number of internal and operational functions. Dolly has served as chairperson of the Securities Industry and Financial Markets Association (SIFMA) Operations and Technology Steering Committee and has served on cross-industry committees with DTCC. In addition, she volunteers her time with the 30% Club mentoring aspiring professional women.
An announcement of Dolly’s successor as chief operating officer of Pershing is expected in the coming weeks.
CC-BY-SA-2.0, FlickrPhoto: Janus Capital. Bill Gross: “Don’t Go Near High Risk Markets, Stay Safe and Plain Vanilla”
The BoJ’s surprise move to take interest rates into negative territory this month helps Bill Gross continue its case against ultra-low interest rates policies. “How’s it workin’ for ya?” He writes in reference to central bankers.
The US Federal Reserve, the European Central Bank and the Bank of Japan, “they all seem to believe that there is an interest rate SO LOW that resultant financial market wealth will ultimately spill over into the real economy. I have long argued against that logic and won’t reiterate the negative aspects of low yields and financial repression in this Outlook. What I will commonsensically ask is ‘How successful have they been so far?’… The fact is that global markets and individual economies are increasingly ‘addled’ and distorted,” says the former Bond King at PIMCO and now part of Janus Capital Group.
In its February’s outlook, Gross lists the main distortions of recent monetary policy:
Venezuela – bankruptcy just around the corner due to low oil prices and policy mismanagement. Current oil prices are (in significant part) a function of low interest rate central bank policies over the past 7 years.
Puerto Rico – default underway due to overspending, the overpromising of retirement benefits, and the inability to earn adequate investment returns due to ultra-low global interest rates.
Brazil – in deep recession due to commodity prices, government scandal and in this case, exorbitantly high real interest rates to combat the effect of low global interest rates, and currency depreciation of the REAL. No country over time can issue debt at 6-7% real interest rates with negative growth. It is a death sentence. In the interim, the monetary authorities deceptively issue, then roll over more than a $100 billion of “currency swaps” instead of selling dollar reserves in an effort to hoodwink the world that there are $300 billion of reserves to back up their sinking credit. This maneuver effectively costs the government 2% of GDP per year, leading to the current 9% fiscal deficit.
Japan – 260% government debt/GDP and climbing sort of says it all, but there’s a twist. Since the fiscal (Abe) and the monetary (Kuroda) authorities are basically one and the same, in some future year the debt will likely be “forgiven” via conversion to 0% 50-year bonds that effectively never come due. Japan will not technically default but neither will private investors be incented to make a bet on the world’s largest aging demographic petri dish. I’m tempted to say that “Where Japan goes – so go we all”, but I won’t – it’s too depressing.
Euroland – “Whatever it takes”, “no limit”, what new catchphrases can Draghi come up with next time? It’s not that there’s a sufficient recession ahead, it’s just that the German yield curve is in negative territory all the way out to 7 years, and the shaky peripherals are not far behind. Who will invest in these markets once the ECB hits an effective negative limit that might be marked by the withdrawal of 0% yielding cash from the banking system?
China – Ah, the dragon’s mysteries are slowly surfacing. Total debt/GDP as high as 300%; under the table capital controls; the loss of $1 trillion in reserves to support an overvalued currency; a distorted economic model relying on empty airports, Potemkin village housing, and investment to GDP of 50%, which somehow never seems to transition to a consumer led future. Increasingly, increasingly addled.
U.S. – Well now, the U.S. is impervious to all this, is it not? An 85% internally generated growth model that relies on consumption which in turn, relies on job growth and higher wages, all of which seems to keep on keepin’ on. Somehow, though, even the Fed seems to have doubts, as in last week’s summary statement, where for the first time in 15 years they were unable to assess the “balance of risks”. “We need some time here to understand what is going on”, says Kaplan from the Dallas Fed. Shades of 2007. The household sector has delevered, but the corporate sector never did, and with Investment Grade and High Yield yields 200-1000 basis points higher now, what does that say about future rollover, corporate profits and solvency in many commodity-sensitive areas?
“Our finance-based global economy is transitioning due to the impotence of monetary policy which has always, and is now increasingly focused on the elixir of low/negative interest rates. Don’t go near any modern day Delos Romans; don’t go near high risk markets, stay safe and plain vanilla. It’s not predetermined or guaranteed, but a more prosperous outcome should be somewhere around the corner if you do.” He concludes.
CC-BY-SA-2.0, FlickrPhoto: Tambako The Jaguar. Lyxor Named “The Leading UCITS Hedge Fund Platform”
Lyxor was named “The Leading UCITS Hedge Fund Platform” at the Hedge Fund Journal Awards 2016 held in London last week. This accolade highlights Lyxor’s outstanding accomplishments in the field of Alternative UCITS.
By the end of 2015, Lyxor grew its assets under management to $2bn across 8 alternative UCITS fund and is the 6th largest provider of Alternative UCITS funds. Lyxor’s Alternative UCITS Platform achieved a progression in assets of more than 30% vs. 2014 (and 450% vs. 2013). HFM Week also recently distinguished Lyxor as the 3rd platform with the highest growth in the industry last year (with net new assets of $504m in 2015).
Since the end of 2014, Lyxor has expanded its Alternative UCITS range with the launch of several new managers, including Capricorn Capital Managers with a long/short equity program focusing on global emerging markets, Chenavari’s European-focused long/ short credit strategy, and Och-Ziff with a Long/Short US equity fund. The firm is eyeing the addition of a further managers in 2016 and will look to add strategies that are currently not present or under-represented on the platform
Foto: Hugo A. Quintero G.
. Turquoise Partners y REYL Finance lanzan un fondo de private equity para invertir en Irán
Turquoise Partners is launching an Iran-focused private equity fund in partnership with REYL Finance, REYL & Cie’s Dubai based entity.
The new fund will be broadly focused on the rise of the Iranian consumer and will include, but will not be limited to, consumer goods, pharmaceuticals and hospitality. It aims to raise $200m in the first six months of the year.
Rouzbeh Pirouz, Chairman of Turquoise Partners, said: “Iranian companies are in great need of investment which can drive operational and financial restructuring that will allow them to realize tremendous potential”.
Pasha Bakhtiar, Partner & CEO of REYL Finance, added: “We believe this venture provides an excellent opportunity for international investors looking to gain exposure to the Iranian growth story. Together we bring a robust, thorough and diligent understanding on how to invest in Iran under the new economic environment, and we are extremely excited to be the first private equity vehicle for an international investor base.”
Turquoise has been the only Iranian group that has been active in the private equity market prior to the removal of sanctions and only one day after their removal the announced the launch of the Turquoise Variable Capital Investment Fund, together with Charlemagne Capital.
REYL Group is an independent banking group with services in Wealth Management, Asset Management, Corporate & Family Governance, Corporate Advisory & Structuring and Asset Services.
. Julius Baer Announces Final Settlement with the U.S. Department of Justice Regarding its Legacy U.S. Cross-Border Business
Julius Baer announced that it has reached a final settlement with the DOJ in connection with its legacy U.S. cross-border private banking business. This settlement is the result of Julius Baer’s proactive and long-standing cooperation with the DOJ’s investigation. The two Julius Baer employees indicted in this context in 2011 have also taken an important step towards a resolution of their cases.
Julius Baer has entered into a Deferred Prosecution Agreement pursuant to which it will pay USD 547.25 million. In anticipation of the final resolution, the Group had already taken provisions in June and December 2015, totalling this amount, and booked them to its 2015 results.
In announcing the settlement, Daniel J. Sauter, Chairman of Julius Baer, commented: “Julius Baer’s ability to reach this final settlement with the U.S. Department of Justice is the result of its constructive dialogue and cooperation with U.S. authorities. I would like to thank all our employees, clients and shareholders for their ongoing trust and support.”
Boris F.J. Collardi, CEO of Julius Baer, added: “Being able to close this regrettable legacy issue is an important milestone for Julius Baer. The settlement ends a long period of uncertainty for us and all our stakeholders. This resolution allows us now to again fully focus on the future and our business activities.”
MUFG Investor Services, the global asset servicing group of Mitsubishi UFJ Financial Group, has reached an agreement with Neuberger Berman, one of the world’s leading private, employee-owned investment managers, to acquire its private equity fund administration business, Capital Analytics.
This deal brings MUFG Investor Services’ private equity and real estate assets under administration (AUA) to US$ 145 billion and total AUA to US$ 384 billion.
Junichi Okamoto, Group Head of Integrated Trust Assets Business Group, Deputy President, Mitsubishi UFJ Trust and Banking Corporation said: “This transaction represents the next step in our strategy to support MUFG Investor Services position as an industry-leading administrator. Incorporating Capital Analytics’ capabilities will enhance MUFG Investor Services’ proposition and will enable us to continue to provide a full market offering for both new and existing clients, whilst maintaining the highest quality of service. We welcome Capital Analytics to our growing business.”
John Sergides, Managing Director, Global Head, Business Development and Marketing, MUFG Investor Services, said: “This acquisition will add 150 staff with specialist private equity and real estate expertise, enhancing MUFG Investor Services’ comprehensive offering in the alternative investment space and ensuring that we are the ideal partner to support clients of all sizes and complexities, as they maximize the growth opportunities that arise for their business.”
Anthony Tutrone, Global Head of Alternatives at Neuberger Berman, commented, “We believe the new ownership will create greater opportunities for Capital Analytics given trends in the fund administration industry, while allowing them to continue providing the best-in-class services that we and our clients have come to rely upon. We are confident that MUFG Investor Services, with its commitment to investing in the franchise and people, is the right steward to take Capital Analytics through to the next stage in its evolution and we look forward to continuing our close partnership.”
MUFG Investor Services is acquiring all of Capital Analytics’ business, and intends to provide a seamless transition for its employees and clients. Neuberger Berman funds will continue to receive administrative services from Capital Analytics, however, no funds or investment professionals will transfer as part of the acquisition.
Terms of the deal are undisclosed. The transaction is expected to close in second quarter of 2016, subject to regulatory approvals and customary closing conditions.
Wikimedia CommonsPhoto: Wes Sparks, Head of Credit Strategies and Fixed Income at Schroders. Wes Sparks, of Schroders, Will Discuss High Yield Bond at the Funds Selector Summit 2016
Continuing volatility and elevated risk premiums mean that high yield bond returns in 2016 could be in the mid single-digit range; however, Wes Sparks, Head of US Credit Strategies and Fixed Income at Schroders, believes that the asset’s expected performance will continue to make it attractive in relation to many other fixed income alternatives.
Wes Sparks will be discussing this market’s expected performance at the second edition of the Fund Selector Summit on the 28th and 29th of April. The meeting, aimed at leading fund selectors and investors within the US-Offshore business, will be held at the Ritz-Carlton Key Biscayne.
The event, a joint venture between Open Door Media, owner of InvestmentEurope, and Funds Society, provides an opportunity to hear several management companies’ view on the industry’s current issues. During his presentation, Sparks will also give his views on global corporate debt market, on which he is an expert following 22 years in the industry.
Wes Sparks is based in New York, leading the US team responsible for all of Schroders’ investment-grade and high yield credit portfolios. He is the lead fund manager for Schroder ISF Global High Yield, a position he has held since the inception of the fund in 2004, and is additionally a co-manager for Schroder ISF Global Corporate Bond and various US Multi-Sector funds.
Sparks joined Schroders in 2000 from Aeltus Investment Management (1999 to 2000) and Trust Company of the West (1996 to 1999), where he worked as Vice President and Portfolio Manager with the corporate sector.
You will find all the information regarding the Fund Selector Summit Miami 2016, which is aimed at leading fund selectors and investors within the US-Offshore business, in this link.
Bennett Golub, Ph.D., Chief Risk Officer and Co-Founder of BlackRock, was bestowed the 2016 Lifetime Achievement Award by Risk magazine at Risk’s annual awards event in London. Risk forms the leading subscription service covering financial risk management, regulation and derivatives news and analysis.
“As a founding partner of BlackRock, Ben has played a critical role in the firm’s success,” said Duncan Wood, editor in chief of Risk. “He is a strong advocate of fund industry changes that have the potential to mitigate systemic liquidity risk, and a passionate supporter of risk management as a profession.”
“BlackRock was built around risk management — it’s been in our DNA from the start. Ben epitomizes our belief that understanding and managing risk is the cornerstone to responsibly investing our clients’ assets,” said Rob Kapito, President of BlackRock. “Over the years, Ben has played a critical role in developing BlackRock’s Risk and Quantitative Analysis capabilities and firm’s Aladdin platform. He has ensured that BlackRock remains true to its legacy, keeping risk management as a core piece of its fiduciary culture. It is with great pleasure that I congratulate my friend and colleague on this well-deserved recognition.”
In his capacity as Chief Risk Officer for BlackRock, Dr. Golub also serves as co-head of the Risk and Quantitative Analysis team (RQA). RQA provides independent top-down and bottom-up oversight to help identify investment, operational, technology and counterparty risks. RQA ensures portfolio risks are consistent across mandates, reflect current investment themes within particular strategies, and comply with client-specific risk guidelines. RQA also provides independent quantitative analysis as part of the groups value add. RQA leverages Aladdin, BlackRock’s centralized, industry-leading operating platform within BlackRock Solutions, integrating risk, investment and client management, to assess and process manager investment, market and liquidity risks. Dr. Golub was one of eight founders of BlackRock in 1988.
“I am honored to be recognized by Risk for my efforts to promote effective risk management techniques to meet the challenges faced by investors,” added Dr. Golub, who attended the awards program in London.
