The implementation of the Foreign Account Compliance Act (FATCA) has presented new operational demands for U.S. and foreign financial institutions. As such, many of these organizations have ranked FATCA tax reporting obligations as a high priority.
This sentiment was revealed during a recent webinar hosted by Convey Compliance’s Vice President of Product Strategy Jeff Cronin and EY’s Financial Services Partner Neil Bromberg. During the webinar, an international audience of more than 400 attendees was asked, “On a scale from one to 10, how urgent would you rank FATCA reporting as a priority for your organization?” All respondents gave an answer of eight or higher.
Given the 30 percent withholding penalty on all U.S. source income for recalcitrant accounts, it is understandable that FATCA compliance is a major concern for most organizations. July 1 is the start date for mandatory reporting, which means FFIs have little time left to prepare.
The IRS recently announced in Notice 2014-33 that 2014 and 2015 will be transitional relief periods for FFIs. This will allow FFIs time to create an internal strategy for their FATCA reporting. However, these institutions are still required to put forth a “good-faith” effort during this transitional relief period.
“Many organizations view the recent IRS changes as yet another delay in the implementation of the FATCA reporting program,” Cronin said. “In reality the relief is more of a realization that mistakes will be made in the early going and that additional time and effort will be required to correctly implement a compliance program of this magnitude. The IRS has provided relief for these situations but only for those organizations who can demonstrate progress in their compliance efforts. This situation is reflected in our survey result and in the importance that FATCA compliance programs are receiving in the marketplace.”
To help expedite the process of implementing a FATCA reporting solution, many organizations are seeking the expertise of a third-party provider. Third-party tax information reporting services can provide technology and documented processes to demonstrate a “good-faith” effort for FATCA compliance, while also offering a platform to efficiently manage evolving multinational reporting requirements.
BBVA Compass has hired veteran banker Fred Wipperling as its Correspondent Banking relationship manager based in Mandeville, La.
The senior vice president will help financial institutions with cash management, credit liquidity, portfolio strategies, international transactions and more.
“We’re pleased to have someone with Fred’s credentials join our team,” said Bob Freeman, head of Correspondent Banking for BBVA Compass. “We expect him to help us develop by building a strong base of financial institution customers in Louisiana, Mississippi and Arkansas.”
Wipperling has nearly three decades of experience in the banking industry. Most recently, he was a Correspondent Banking relationship manager for JPMorgan Chase & Co. Early in his career, he served a stint as a manager at the Federal Reserve Bank of Atlanta.
Wipperling received his bachelor’s degree from Florida State University and a graduate degree from the Graduate School of Banking at Louisiana State University.
Carlos Slim. . WellAware™ Secures $37 Million in Additional Funding by High-Profile Investors Led by Carlos Slim
WellAware, the oil and gas industry’s only end-to-end remote monitoring and predictive analytics platform for oilfield intelligence, has announced that it has secured an additional $37 million of growth equity funding.
The new round of funding was co-led by Activant Capital Group and Carlos Slim, a prominent investor and the CEO of América Móvil, one of the largest mobile phone carriers in Latin America, along with participation from strategic investors and WellAware board members Mr. Ed Whitacre Jr., the former Chairman of the Board and CEO of AT&T and General Motors, who recently served on the board of ExxonMobil, and Mr. Dick Cheney, former Vice President of the United States and former Chairman & CEO of Halliburton. This funding will enable WellAware to further expand its end-to-end solution for oilfield data collection, storage, visualization, mobility, and predictive analytics.
The oil and gas industry is predicted to spend over $33 billion by 2022 on oilfield intelligence solutions to address key industry challenges such as managing labor shortages, maintaining license to operate, reducing capital expenditure, and increasing efficiency and production. Current oilfield intelligence solutions are expensive, dependent on communication technologies that can be antiquated and may soon be retired, and often include a software interface that can be difficult to use and are limited with regard to interoperability and scale.
In contrast, WellAware’s solution addresses these challenges through a simple yet powerful remote monitoring and production management platform that focuses on solving two key gaps in oilfield intelligence. The first is the communications problem where current data networks, which are very expensive and time consuming to deploy and maintain, cannot provide consistent reliability. Wellhead and pipeline data is not prioritized, and data storage and delivery can be inadequate to meet the growing demand of today’s oil and gas companies. The second key challenge is a data visualization gap. The oil and gas industry is increasingly focused on tapping the potential of big data, yet legacy software systems hold vast amounts of data that is virtually impossible to access and use to assist in strategic decision making. WellAware’s user-friendly software platform provides visual tools for interpreting field information and unlocks the value of oilfield data by providing better insights that drive better decisions.
“WellAware is very pleased to welcome our newest investors and board members. Their involvement will significantly help drive our success as we focus on helping our customers increase production, profits and safety by transforming the way energy assets are managed”, said Matt Harrison, Co-Founder and CEO of WellAware. “WellAware’s platform delivers secure, reliable intelligence to our customers anytime, anywhere”, Harrison added.
By providing its customers with innovative automation, a highly reliable and less expensive communications network, user-centered data visualization software, and predictive analytics, WellAware delivers a next generation production management solution. This is all available at a lower cost and greater scale than conventional industry solutions in use today.
Stronger global demand growth, combined with signs of cyclical bottoming in emerging markets and rising concerns over supply side dynamics in certain commodity segments have led to an upgrade of commodities in ING IM’s tactical asset allocation.
The upgrade for commodities means that we now the asset manager has overweight positions in all ‘risky’ asset classes in our TAA, with the highest conviction on equities followed by smaller positions in real estate, spread products and commodities.
Commodity sector performance in 2014
Pick-up in global demand growth supports commodities
The positive mood on the global financial markets was affected a bit in the past two weeks, which caused some form of consolidation after the strong upward trend in May and early June. Commodities were the only asset class with strong positive returns.
One of the reasons for the performance improvement in commodities is the increased visibility on stronger global demand growth in recent weeks. The Global PMI rose sharply in May, with nice gains for the new orders sub-index of the Composite PMI and the new orders-to-inventory component in manufacturing.
Encouraging was also that the Composite PMI for emerging markets (EM) finally rose again, after sliding for many months. This suggests that EM growth momentum might be close to the bottom. If this is indeed the case, the most important driver would be an improvement in EM export momentum on the back of better growth in developed markets. This development is already foreshadowed by the moderate rise in the export orders component of the PMI Manufacturing in EM.
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Photo: Jeekc. HSBC Sells $12.5 Billion Of Swiss Private Banking Assets to LGT
HSBC Private Bank (Suisse) SA, an indirect wholly-owned subsidiary of HSBC Holdings plc, has entered into an agreement to sell a portfolio of its private banking assets in Switzerland (with assets under management of US$12.5bn as at 31 December 2013) to LGT Bank (Switzerland) Ltd, a wholly-owned subsidiary of the LGT Group Foundation.
The transaction, which is subject to regulatory and other approvals, is expected to complete in the last quarter of 2014 and it represents further progress in the execution of HSBC’s strategy.
HSBC remains fully committed to Switzerland as a key international centre for its Global Private Banking business and a priority market for the Group.
The number of customers served by the private bank in Switzerland would be reduced from around 150 countries to about 70. The sale follows a strategic business review by HSBC which has seen it shed a number of businesses globally as it seeks to concentrate its growth on a focused group of markets.
Upon closing, the acquired business will be integrated into LGT Bank (Switzerland), which had assets under management of SFr21.0 billion ($23.5 billion) at the end of 2013.
HSBC and LGT said that around 70 HSBC employees will transfer as part of the deal. The deal includes assets from a number of regions, including Central and Eastern Europe, Latin America and Western Europe. A smaller part of the portfolio relates to clients advised by Swiss-based external asset managers.
The move is also a sign of continued busy M&A activity in the European wealth management arena, including Switzerland, as firms look to sell businesses that have become unprofitable. Barclays and Morgan Stanley have made similar movements in the last months.
Alastair Mundy, head of Vaule at Investec AM. Is The Time for Contrarians to Be Invested in Large Caps
Alastair Mundy, Head of Value at Investec AM, takes a look at events so far in 2014 and provides his view for the coming months. According to the expert, now is the time for contrarians to be invested in large caps and even very large caps.
Foto: Archer10Dennis. Natixis Global Asset Management expande su negocio al mercado canadiense
Natixis Global Asset Management has announced the kick-off of a new business development initiative in Canada. The expansion will focus on tapping the steadily growing Canadian institutional market by forging and strengthening Natixis relationships with institutional and subadvisory clients throughout the region.
“We are confident that our proven ability to help manage risk through our Durable Portfolio Construction approach will resonate with pension funds, endowments and foundations seeking ways to protect their clients from volatility,” said John Hailer, chief executive officer of Natixis Global Asset Management in the Americas and Asia. “The current Canadian institutional market, estimated to be $1.5 trillion and growing, is a diverse market that pairs well with the investment solutions available through our worldwide network of affiliated investment managers.”
Natixis manages more than $899 billion in assets through its affiliates and was selected as the top U.S. mutual fund family based on an evaluation of 2013 performance, according to the annual Barron’s/Lipper ranking of U.S. mutual fund families.
The firm’s business development effort will initially focus on the institutional markets in Ontario and Quebec. Montreal-based Roxane St.-Martin, senior vice president, institutional services, and Boston-based Ian Macduff, senior vice president, institutional services, will co-manage the Natixis Canadian distribution efforts.
St.-Martin brings more than 16 years in asset management experience to the position, and has served with Natixis in the U.S., Paris and her native Canada. She joined Natixis Asset Management in Paris in 2009, becoming head of wholesale in 2010. She is a CFA® charterholder.
Macduff is a 20-year veteran in the financial services industry, having previously worked in retirement sales at Fidelity Investments. He is a Certified Investment Management Consultant. Both managers hold FINRA Series 7 and 63 licenses.
The team reports to Robert Hussey, executive vice president of institutional services for Natixis Global Asset Management – U.S.
Schroders, the $446.8 billion global asset manager, has announced the launch of two new U.S. mutual funds as part of its commitment to offer investors a broader set of global solutions.
The Schroder Global Multi-Asset Income Fund (GMAI) is a diversified portfolio that seeks to maximize income and manage volatility by investing directly into both equities and fixed income securities around the globe. GMAI offers investors the potential to fulfill a broad range of goals, risk reduction and income both in and out of retirement.
The Schroder Global Strategic Bond Fund is an actively managed portfolio with the flexibility to invest in the best opportunities throughout the fixed income universe. The Fund offers investors the potential for total return in different market environments—including periods of rising rates.
With the addition of these new funds, Schroders has grown its family to 15 different mutual funds, giving advisors a wider opportunity set to help meet the changing needs of their clients over the long term.
“As a leading global asset manager, we are dedicated to providing solutions to address a variety of needs, and we are always looking for ways to expand our product availability in the U.S.,” said Karl Dasher, CEO of Schroder Investment Management North America Inc. and Co-Head of Fixed Income. “We have been in steady growth mode in the U.S., and we believe these two funds offer a differentiated approach to the growing need for diversified investment income. This brings our stable of income-oriented mutual funds to 7, each with a unique value proposition and role in client portfolios. We are committed to being a partner of choice to advisors and their clients in the provision of income solutions.”
Global Multi-Asset Income
The Global Multi-Asset Income Fund seeks to generate an attractive level of income on a sustainable basis through security selection and dynamic asset allocation, while seeking to deliver capital growth over the medium to longer term. The Fund’s benchmark is unconstrained which enables the team to be flexible in its search for the best risk-adjusted income opportunities across regions, asset classes and sectors. The Fund will be well diversified and invested directly into equity and fixed income securities, while focusing on high quality companies with positive cash flow and strong balance sheets. There is also a strong focus on risk management at both the security and portfolio level, in seeking to minimize the volatility of investor capital.
The Fund’s portfolio managers draw on the expertise of over 100 investment professionals in the Multi-Asset team who manage $91 billion for clients around the world as of March 31, 2014. The Fund is the U.S. version of a substantially similar fund managed by Schroders for non-U.S. investors, which recently marked its two-year anniversary after delivering on its objectives since inception and has $5 billion in assets under management with investors across Asia, Europe, Latin America and the Middle East as of June 13, 2014.
The search for income has increased due to lower bond yields, changing demographics and lower global growth prospects. The Fund was created in response to the challenges and aims to help investors who need to draw income from their portfolios but do not want to move into higher risk asset classes. The Schroders’ solution mitigates the risks posed by single-asset-class income funds, which are often highly concentrated and will not necessarily fare well in a rising interest-rate environment.
Global Strategic Bond
The Global Strategic Bond Fund aims to seek out the best opportunities in global bond markets and provide the greatest investment potential. The Fund enables investors to invest tactically and strategically across the whole spectrum of global fixed income sectors, regions, asset classes and FX. We believe this provides a market rich opportunity for alpha generation. It is essentially a multi-sector fixed income product with a twist—and the twist is that the strategy aims to avoid any directional bias to generate a positive return in any market environment over the long term. “That means the product is designed to generate a positive return whether interest rates rise or fall, or whether credit spreads narrow or widen,” said Bob Jolly, Head of Global Macro for Schroders and lead portfolio manager, with more than 30 years of investment experience. “The goal is to build a portfolio that is diversified in terms of alpha sources and investment horizon.”
Bob Jollyand Gareth Isaac, Senior Portfolio Manager, lead a highly experienced portfolio management team backed by Schroders’ integrated and experienced Global Fixed Income Group. The investment team is able to leverage Schroders’ global research capabilities across asset classes and regions. This combination of analysis allows for valuable, in-depth insights, with the added benefit of local market intelligence. “When we say we’re global, we mean that we have an integrated and experienced team with a local presence in countries around the globe. Our members meet daily to discuss developments in world markets,” Mr. Jolly added. The fund uses a substantially similar strategy as a fund which Schroders launched in Europe in September 2004.
Foto: Archer10, Flickr, Creative Commons.. Las oportunidades escondidas en el mercado danés de deuda hipotecaria
AllianceBernstein, a global investment management firm with $466 billion in assets under management as of May 31, 2014, has announced that it has completed the acquisition of CPH Capital Fondsmaeglerselskab A/S, a global core equity investment manager based in Copenhagen, Denmark. CPH Capital manages approximately $3 billion in global equity strategies for institutional and retail clients. Beginning next month, AllianceBernstein will market the CPH Global Core Equity strategy as a Luxembourg-based UCITS fund and in separate accounts.
The six-member CPH investment team, which is led by David Dalgas, and also includes senior team members Klaus Ingemann and Kenneth Graversen, will remain in place and continue to manage their strategies as they have previously. These team members have worked together for more than a decade and have consistently demonstrated a strong track record of success across market environments.
“CPH Capital’s investment strategies are an excellent complement to our already strong, diverse and global equity platform,” said Sharon Fay, Head and Chief Investment Officer Equities at AllianceBernstein. “They bring an investment approach that combines active stock selection with rigorous risk management. The resulting portfolios exhibit high active share and remarkably consistent alpha. I’m confident that having the CPH Capital investment team on board will bolster our ability to serve our clients.”
AllianceBernstein is a leading global investment management firm that offers high-quality research and diversified investment services to institutional investors, individuals and private clients in major world markets. At March 31, 2014, AllianceBernstein Holding L.P. owned approximately 35.8% of the issued and outstanding AllianceBernstein Units and AXA, one of the largest global financial services organizations, owned an approximate 63.6% economic interest in AllianceBernstein.
Patrice Gautry, Chief Economist at Union Bancaire Privée (UBP). Growth: Stronger Than You Think
Global economic performance has been weaker than expected; nevertheless, financial markets were relatively unfazed by these developments, as central banks’ policies remain highly accommodative. “After having seen weak growth in the first quarter, we’re staying positive on the economic outlook and expect more solid activity, buoyed by good news”, says Patrice Gautry, Chief Economist at Union Bancaire Privée (UBP).
The trend towards risk assets – especially equities – is still there thanks to recoveries in both growth and earnings. With this in mind, the scenario set out at the end of 2013 remains valid and should crystallise over the coming quarters.
Accelerated world growth
The economic recovery is set to firm up; growth is improving in the United States and Europe is out of recession. Beyond the cyclical upturn, the key factors for a durable recovery are being put in place thanks to corporate investment and more solid domestic demand in developed countries. “A new productivity cycle should start to appear, feeding growth over the next few years”, predicts Gautry. The United States has resumed its place as leader of the pack at both economic and industrial levels, as well as in terms of the financial markets.
Some emerging countries – notably China – are changing their growth models, which will act as a drag on activity in the short term, but this action is set to be positive in the medium term. We remain confident that the authorities in China will make sure that this transition will happen without any major impact on world growth.
Equity bias remains in place
“The scenario of a rise in US long rates and a steepening of the curve has not come about”, stresses Jean-Sylvain Perrig, UBP’s Chief Investment Officer. The fall in long rates – which came as a surprise to several investors – is, in our opinion, the result of three major phenomena: an unwinding of strong short positions on long bonds; disappointing economic activity in the first quarter; and the US Federal Reserve taking a stance that was more accommodative than expected.
“It should be remembered that this trend does not call our scenario into question: this sees a rise in rates stimulated by stronger growth in developed countries”, continues Perrig. In this framework, corporate debt continues to be favoured, particularly the high-yield segment and the external debt of emerging countries, given that carry trade is still attractive, even if the expected returns are lower than a year ago; short durations are therefore recommended in such an environment.
Equities remain the asset class of choice. Their higher valuation levels (in absolute terms) do not seem to be a constraint at this stage given the upturn in earnings, the recovery in economic activity in developed countries and the high price of bonds. “It is true that, since the beginning of 2014, we have been seeing a sector rotation out of growth assets and into defensives; nonetheless, we remain convinced that innovation is still a central theme in both the medium and long term”, concludes Perrig. Further, the number of mergers and acquisitions, coupled with share buy-back schemes should continue to support equity markets.
Consequently, themes such as innovation (especially US growth stocks), and the EU and its periphery, are still to be favoured. Emerging markets are offering relatively low valuations, but any potential improvement in company margins remains highly uncertain given their low levels of commitment to boosting productivity. For this reason, we are maintaining our bias towards the major stock markets in developed economies.
