Foto: Randy Heinitz
. Cantor & Webb trabajará con Markit ǀ CTI Tax Solutions para ampliar servicios relacionados con FATCA o CRS
Cantor Webb will work with Markit | CTI Tax Solutions to expand its offerings related to the classification and compliance with the Foreign Account Tax Compliance Act (“FATCA”) and the Common Reporting Standard (“CRS”). This will enable broader representation forexisting as well as new clients who need to comply with unprecedented levels of regulatory initiatives, which are designed to promote tax transparency.
Markit | CTI Tax Solutionshas participated in numerous committees and working groups including the IRS Electronic Tax Administration Advisory Committee (“ETAAC”), the IRS Information Reporting Public Advisory Committee (“IRPAC”), the OECD CRS Working Group, and the HMRC FATCA Working Group. Through its products and services, it provides customers with the tools they need to comply with evolving regulatory requirements.
“Now, more than ever, clients need experienced advisors with a practical, global focus designed to assist them in successfully navigating these complexities”, said Cantor & Webb, an international tax and estate planning law firm focused on the representation of high net worth international private clients.
Foto: James Kim
. Asia amenaza la hegemonía norteamericana como región más activa en operaciones de venture capital
Venture capital deals in Asia comprised 38% of the global number, and 45% of global deal value in the quarter, while North America represented 44% of both global number and value.
The venture capital industry in Asia has seen strong growth over the past year, and in Q3 the aggregate value of deals was comparable to the total value of deals in North America. India and China, the largest part of the Asian industry, marked 709 financings in the quarter, worth a combined $16.9bn.
There were 932 venture capital deals in North America in the same period, worth an aggregate $17.5bn. Asia’s share of global deal flow has increased by seven percentage points from Q2 to Q3 2015, and its share of deal value has increased by nine percentage points. At the same time, the North American market share of the number of deals dropped by six percentage points from Q2, while the aggregate value that the region contributed to the global total fell by nine percentage points from 53% inQ2 to 44% in Q3.
Globally, there were 2,121venture capital financings in Q3 2015, worth a combined $39.8bn. Although this marks a 9% drop in deal numbers from Q3 2014, the aggregate value is 88% higher than the same period last year.
Europe is declining and China increasing the value of deals. Europe witnessed 297 deals in Q3, a 7% drop from last quarter. In 2015 YTD, 980 deals have been seen in the region, a 25% decrease from the 1,307 deals in the first three quarters of 2014. On its side, in Q3 2015, the aggregate value of deals in Greater China increased 88% from Q1. In that quarter, there were 252 deals worth a combined $6.9bn, while in Q3 there were 437 deals, worth $13bn.
Other findings show that angel and seed investments comprised 22% of venture capital deals in Q3, unchanged from Q2. Series A deals comprised 20% of the number of deals, and series B comprised 10%. Add-on deals decreased from 8% of the number of deals in Q2 to 5% in Q3.
The mean value of venture capital deals has increased across all financing stages from 2014 to 2015 YTD. Average series A deal value has increased 35%, from $7.9mn in 2014 to $10.7mn for 2015 YTD. Average venture debt deal size was stable in 2013 and 2014, at $9.7mnand $9.6mn respectively, but has now increased to $40.9mn in 2015 YTD.
The two largest investments in Q3 2015 were both in Chinese transport technology firm Didi Kuaidi.The company received $2bn in July, and a further $1bn in September, from a consortium of investors including Alibaba and CIC. The next largest financing was $1bn to Uber Technologies Inc., from Microsoft and Times Internet. Nine of the ten biggest venture capital deals in Q3 were based in Asia.
The unspent capital available to venture capital firms currently stands at $143bn globally, up slightly from the $141bn in dry powder recorded at the end of last quarter.
“The venture capital industry is developing in two different directions between emerging and mature markets. In emerging markets, particularly in Asia, rapidly developing economies like China and India are providing increasing numbers of opportunities for investors and fund managers. While average deal size is increasing slightly, the key driver of growth is the increasing number of deals.
In the more mature markets of North America and Europe, deal numbers have fallen, and the total number of deals in 2015 so far is a quarter lower than in the first three quarters of 2014. However, average deal sizes are still rising in these regions, especially for later stage and debt financings, and now stand at record levels. Declared Christopher Elvin, Head of Private Equity Products–Preqin.
With the objective to promote innovation and sustainability, European Fund Administration (EFA)has recently upgraded its IT infrastructure to offer clients fund administration services powered by a state-of-the-art and green IT platform.
To guarantee best performance and permanent continuity of EFA’s services, the infrastructure, distributed across two IT rooms, individually sized to operate all production activities are now both hosted in certified Tier-IV data centers.
Jean-Marc Verdure, Director of IT, Organization & General Services says: “Our applications are running on mission critical computer systems hosted in award-winning Tier-IV data centers offering the highest level of availability with fully redundant subsystems, supervised and managed on a 24/7 basis. In the event of a technical incident or unavailability of a data center, a partial or overall take-over of our services and applications can be done instantaneously in a single data center”.
This upgrade has also enabled EFA to renew hardware and systems with sustainable and eco- friendly components and processes (materials, cooling systems, power consumption management, recycling…) to promote a better approach to Corporate Social Responsibility. To confirm its commitment in behaving responsibly by integrating environmental concerns into business operations, EFA was also recently awarded the EcoVadisCorporate Social Responsibility silver rating.
Conference "Embrace New Sources of Return" hosted by Pioneer Investments in Miami. Pioneer Investments’ Miami Forum “Embrace New Sources of Return” Gathers Attendance of 50 Investors from Across Latin America and the U.S.
Last week, Pioneer Investments had the pleasure to host an event in Miami under the theme “Embrace New Sources of Return”. Over 50 attendees from Latin America and the U.S. Offshore wealth management industry had the opportunity to listen to Pioneer Investment’s top portfolio managers talking about several topics of interest.
Jimmy Ly, SVP, U.S. Offshore Senior Sales Manager welcomed the delegates and conducted the agenda for the day. During the morning, Piergaetano Iaccarino, Head of Thematic and Disciplined Equity shared Pioneer Investments’ Macroeconomic view for the following months. He was followed by Andrew Feltus, Director of High Yield Bank Loans, who shared his ideas about ‘How to Navigate the Fixed Income Markets, Now and Into the Future.’
Thomas Swaney, Head of Alternative Fixed Income U.S., talked about the role of alternative solutions within credit investing. The morning session ended with a presentation about opportunities in Emerging Markets by Giles Bedford, Client Portfolio Manager of Pioneer Funds – Emerging Markets Corporate High Yield Bond.
After a networking lunch, the program continued with a session about opportunities in U.S. Equities, conducted by Alec Murray, Client Portfolio Manager of Pioneer Funds – U.S. Fundamental Growth. Then came the turn for Income Solutions in today’s economic environment; a topic discussed through a panel in which Piergaetano Iaccarino was joined by Adam MacNulty, Client Portfolio Manager of Pioneer Funds – Global Multi-Asset Target Income. He also shared his thoughts about portfolio construction using non-traditional solutions, such as the Absolute Return Multi-Strategy portfolios.
To wrap up the program, Florian Schneider, Head of Product Research and Development, shared his thoughts about Industry Trends in product and asset management.
Pioneer Investments’Jose Castellano, MD, Head of U.S. Offshore, Latin America, and Iberia, along with Florencia Bunge, SVP, Director of Pioneer Investments’ office in Argentina, joined Jimmy Ly as additional hosts for the event.
You may follow the photos of the event through this link.
Multi-asset funds are set to stay at the top of European inflow tables, as the bond rout of the spring and August’s equities plunge serve as reminders of the dangers of being stuck in one asset class, according to the latest issue of The Cerulli Edge – Global Edition.
Cerulli Associates, a global analytics firm, believes there may yet be opportunities for asset managers to launch more multi-asset products, especially in the passive space. It notes that more advisors are recommending this funds, despite previous concerns that asset allocation products were usurping their role. Following the Retail Distribution Review (RDR) in the United Kingdom, many advisors are outsourcing asset allocation and find multi-asset products the best solution.
By highlighting the cost of advisors, the RDR may have also inadvertently boosted MA funds. Cerulli says that more investors, whether pension-oriented or not, are going down the direct-to-consumer route and MA funds offer cheap access to a range of asset classes, often through low-cost platforms.
“Asset management companies should not be reluctant to take risks and differentiate themselves from the crowd. For the best, the rewards can be significant, even with products that are largely fettered funds of funds,” says Brian Gorman, an analyst at Cerulli.
With investors abandoning low-yielding products in favor of better, but safe, returns, flows into multi-asset funds in the first half of 2015 alone, at €123.9 billion (US$137.5 billion), almost matched those for last year as a whole, and were about five times those of the 12 months of 2012. For established asset managers with expertise across asset classes, existing products can easily be leveraged to offer MA funds.
However, there is not universal enthusiasm. Several wealth managers have told Cerulli that they are not recommending MA funds, with some advisors preferring to retain control of the asset allocation process, despite the increased burdens of RDR. Another common complaint concerns the complexity of the product.
“Some investors, and even advisors, say MA funds are hard to understand,” says Barbara Wall, Europe research director at Cerulli. “If advisors do not know what is going on with a fund, it may conflict with the asset allocation they are trying to effect through other products they are recommending for their clients.”
There is some skepticism as to whether the U.K. pensions revolution introduced this year represents a bonanza for fund providers. Acknowledging that considerable scale may be required to realize a significant gain, Cerulli maintains that the downside is minimal, especially for firms that can set-up suitable low-cost products. It believes that the balance of probability is in favor of such funds offering sizeable opportunities for asset managers.
While the RDR driver for MA is not yet as strong in most of Continental Europe as it is in the United Kingdom, some asset managers say change is on its way. One told Cerulli it had already seen a trend of retail banks, aware the days of retrocessions are coming to an end, setting up their own MA products. They are also seeking firms to act for them as subadvisors.
Other Findings:
Increasing headcount is on the agenda in the United States as institutional sales managers at large and small asset managers respond to the changing needs and expectations of clients. Cerulli notes that increasing client-service roles is particularly important. Experts are required, as is greater collaboration between teams, says the global analytics firm.
In charting the fund-buying journey of more than 70,000 individuals in 11 jurisdictions across Asia, Cerulli has observed the importance of trust and the explosive growth of online direct-to-consumer platforms. Regular income/dividend payout is key for investors in the region. Cerulli notes that a clear and well-executed digital strategy is crucial for marketing success.
Regulatory risk is inhibiting asset managers in Europe and the United Kingdom, while potential disruptors are deterred by regulatory requirements and reputational damage, says Cerulli. It warns that asset managers slow to embrace mobile technology risk disruption from alternative distribution channels, where the emphasis is less on buying products–which the industry is comfortable with–and more on engaging and empowering customers.
CC-BY-SA-2.0, FlickrPhoto: Aaron Goodman. The Evolution of China’s Capital Markets
There is little doubt China is going to play a major role in determining the trajectory of global markets. So with the world’s second-largest economy going through a period of profound change, says Investec, it is crucial for investors to gain an understanding of the challenges and opportunities inherent in this transformation.
For the past five years or more China has been rebalancing to make consumption a bigger part of the domestic economy than investment, and services a more important driver of growth than manufacturing. The People’s Republic is also seeking to become better integrated into the global financial system by allowing greater foreign participation in its domestic capital markets and encouraging its companies to invest abroad.
“The recent turmoil in China’s onshore markets was further evidence that this rebalancing process was not going as smoothly as planned, while the global reaction highlighted the fact that many investors have not understood it or the challenges it represents”, points out the firm.
But Investec believe such gyrations should be expected as structural adjustments play out. “As the rebalancing process continues, we anticipate a wealth of opportunities may be uncovered for investors who are prepared to take a disciplined, bottom-up approach with a long-term time horizon”.
According to the Investec´s experts, while many investors may not yet be ready to invest in China’s onshore markets today, there is growing recognition of the importance of developing a more nuanced understanding of the changes taking place in China and the country’s role in the evolution of the global financial system. “We believe that the sharp global reactions to China’s stock market volatility and devaluation of the renminbi over the summer of 2015 make clear that we are embarking on a new era in global markets, one that has China’s increasing integration into the global financial system at its core”.
“This process is only just beginning and the road is likely to be bumpy. Beijing’s policy response to steering the country through its major economic and financial transitions, is not going to be familiar. China is taking an alternative path to financial regulation than that traced by the West by choosing to experiment to find an appropriate position. Beijing will likely make small, regular adjustments to various policy levers to find out what works”, state Investec.
Since the firm established our Hong Kong office in 1997, Investec Asset Management has invested in both onshore and offshore Chinese securities. “Over the past two decades we have learned to navigate the country’s complex and evolving regulatory processes, and understand its unusual market dynamics. We hope to share this insight with our clients and use our knowledge and expertise to help them understand the impact of events in Beijing on their portfolios, wherever they are invested”, conclude.
Jeremy Lawson, Chief Economist, Standard Life Investments said at the publication of the Global Outlook from Standard Life Investments: “We continue to see a moderate global expansion into 2016, supporting modest corporate earnings growth outside the energy and materials sectors. Our view remains that a widespread or systemic emerging market financial crisis is unlikely, but the pressure on a number of large developing economies will not disappear quickly. Global GDP growth is expected to improve marginally but remain below trend.
“The implications for investors are considerable, as they need to consider throughout their strategic asset allocation process what the repercussions are of low returns on bond, cash and equity prices over the remaining part of this business cycle. Listed equities in particular are sensitive to developments in global activity, as they tend to have larger external exposures than do economies as a whole. Moving up the capital structure towards selected credit may have advantages in this environment.
“At the epicenter of the crisis, in China, a hard landing is not our central scenario as we expect extra fiscal stimulus, but the transition to a new growth model will remain bumpy and unfriendly for commodity producers. More deceleration in growth could lie ahead and the Chinese currency is likely to weaken moderately against the dollar.
“Our forecast assumes no further falls in commodity prices and stabilization in the recent levels of financial stress. If stress builds further then there is a large risk that growth will not rebound, through its effect on consumer and business sentiment, when monetary policy easing in the developed economies will quickly come back on to the agenda.”
Global private equity fundraising saw a further slowdown through the third quarter of 2015. One hundred and seventy funds closed, down from 317 in Q2 2015 and 290 in the same period last year. The aggregate capital raised by funds closed in this quarter was $116.9bn, down from $129.3bn in the previous quarter. It was the third consecutive quarterly decline in fundraising, and represents a 29% decrease from the $164.9bn raised in Q4 2014, the most recent fundraising peak. In 2015 YTD, private equity funds have raised an aggregate $385.4bn, down from $388.1bn in the first three quarters of 2014.
“The global private equity fundraising market has continued to stall in the third quarter of 2015. The number of funds closed is the lowest of any quarter Preqin has on record, and aggregate fundraising totals declined for the third consecutive quarter. Despite recent turmoil in Asia, there has been an increase in fundraising for funds focused on the region, and on Rest of World. This, though, does not offset a lack of growth in the mature North American and European markets, as both the number of funds closed and aggregate capital figures continue to fall there.” Says Christopher Elvin – Head of Private Equity Products, Preqin.
Private equity funds closed so far in 2015 have taken an average of 16.3 months to reach a final close. This figure has risen slightly from Q2’s 16.2 months, but is still below the average 16.7 months that it took for funds closed in 2014 to fundraise.
Fundraising totals for venture capital, real estate, and funds of funds all decreased, while infrastructure fundraising rose from $4.4bn in Q2 to $13.1bn in Q3.
The number of private equity funds in market is currently at a record high. 2,348 funds are seeking a combined $831bn in commitments, up from 2,248 funds seeking $781bn at the end of last quarter. Dry powderlevels have not continued the rapid increase seen through H1 2015, and currently the overall figure stands at $1.35tn.
Foto: Alice Popkorn
. El número global de millonarios podría crecer un 46% en los próximos cinco años
The size and wealth of the middle class globally grew quickly before the financial crisis, but growth subsided after 2007 and rising inequality has squeezed its share of wealth in every region, according to the sixth annual Global Wealth Report, just released by The Credit Suisse Research Institute, which focuses on how the middle class has developed since the turn of the century.
The report shows that global wealth fell by USD 13 trillion from mid-2014 to mid-2015, due to dollar appreciation. If measured at constant exchange rates, global wealth would have risen by USD 13 trillion since last year. According to the company´s estimates global wealth could reach USD 345 trillion by mid-2020, 38% above its mid-2015 level, and the number of dollar millionaires worldwide could increase by 46% in the next five years, reaching 49.3 million by mid-2020.
The USA again led the world with a substantial rise in household wealth of USD 4.6 trillion. Meanwhile, China -also posted a large annual rise of USD 1.5 trillion- has the largest middle class with 109 million members, surpassing the USA with 92 million. And Switzerland again ranked highest in average wealth, but fell USD 24,800 to USD 567,100 per adult.
Wealth per adult fell by 6.2%to USD 52,400 and is now back below the level of 2013, -shows the report-, and a person needs just USD 3,210 (after debts) to be in the wealthiest half of the world.
In its analysis, the company has taken a new approach to defining the middle class category, using a wealth-based definition – versus an income-based one – that allows for adjustments over time to reflect inflation, and also varies across countries depending on local purchasing power.
Michael O’Sullivan, Chief Investment Officer for the UK & EEMEA, Private Banking and Wealth Management at Credit Suisse said, “We are clearly in a growth industry, with wealth set to continue its upward trajectory. By our estimates, wealth could grow at an annual rate of 6.6%, reaching USD 345 trillion in 2020. Furthermore, the number of dollar millionaires could exceed 49.3 million adults in 2020, a rise of more than 46.2%, with China likely to see the largest percentage increase, and Africa as the next performing region. Overall, emerging markets account for 6.5% of millionaires and will see their share rise to 7.4% by the end of the decade. High-income economies will still account for the bulk of new millionaires, with 14.0 million adults entering this category. Millionaire net wealth is likely to rise by 8.4% annually, as more people enter this segment. Emerging markets will likely account for 9.1% of millionaire wealth in 2020, 1% above current levels.”
Credit Suisse Research Institute’s Markus Stierli said: “From 2008 onwards, wealth growth has not allowed middle-class numbers to keep pace with population growth in the developing world. Furthermore, the distribution of wealth gains has shifted in favor of those at higher wealth levels. These two factors have combined to produce a decline in the share of middle-class wealth.”
Foto de William Warby
. La Fed subirá las tasas, pero no debe cundir el pánico
Eight years after the Federal Reserve (Fed) last hiked its target short-term rate, and over six years since it last touched it, the time has come for a new hike. Monetary policy shifts have always been impactful to the markets, and given the length and extent of global central banks’ interventions since the 2008 financial crisis, the impending rate hike will follow suit.
While rate hikes have often been a response to an overheating economy, this time around is decidedly different. The Fed is simply exiting emergency measures placed in 2008, in a move toward “normal” in a global economy that is inherently different than it was nearly half a generation ago. The Fed has also pledged rates increases will be measured and gradual, which should not derail the U.S. expansion in the long run.
But the changes to the investment backdrop don’t stop there. Looking beneath the surface reveals structural factors that are reshaping the economic, inflation and investment landscape. Understanding these influences is equally, if not more, important for investors developing long term strategies for the post-rate hike economy.
First among these structural factors? Technology and innovation. Essentially reducing total labor costs while simultaneously enhancing efficiencies, technological innovation has the potential to enable asset-lite business models and even act as a deflationary force. The effect is not always easy to measure, but various sectors are showing notable signs (for example the energy industry). Output is able to increase with limited incremental investment, resulting in what is called productive disinflation. So, while wage increases may be dulling despite the labor market tightness, net disposable income can increase because of the lack of inflation.
A second, equally important factor affecting the market outlook is world demographics. Considering that aging populations generally draw more from the economy than contribute to it, the current demographic shift in developed countries is believed to be contributing to the long-term downshift in economic growth. Beyond the long-term implications on economic growth, older demographics also tend to borrow less and exhibit a preference for fixed income, thus driving demand for longer-term bonds while holding yields down and affecting interest rates.
The prevailing impact of these technological and demographic trends will be felt in lower inflation than in the past and, to the chagrin of central banks’ attempts, will not be easily swayed by monetary policy. All of this indicates that global economies are likely to remain in a slow-growth, low-inflation low-rate cycle for some time beyond the first Fed rate hike.
Some Ideas to Fine Tune Your Portfolio
In this environment, being aware of duration risk is crucial. Given the current factors shaping the fixed income landscape, ultra short and long duration bonds in the US appear less vulnerable than medium-term maturities to a rate rise. Think of other fixed income assets for your income needs, for example Treasury Inflation Protected Securities (TIPS) and High Yield bonds, but don’t overreach for yield.
Foremost, remember the role of bonds in your portfolio. Whether you are looking for income or risk diversification, or are aiming to dilute the effects of interest rate, credit and inflation risk, be mindful of the motivations behind your bond strategy. Now is the opportunity to rethink your bond strategy and prepare your portfolio for performance in the impending new “normal” economy.
This material is for educational purposes only and does not constitute investment advice nor an offer or solicitation to sell or a solicitation of an offer to buy any shares of any Fund (nor shall any such shares be offered or sold to any person) in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that jurisdiction. If any funds are mentioned or inferred to in this material, it is possible that some or all of the funds have not been registered with the securities regulator in any Latin American and Iberian country and thus might not be publicly offered within any such country. The securities regulators of such countries have not confirmed the accuracy of any information contained herein.
