CC-BY-SA-2.0, Flickr. Goldman Sachs Head of Latin America Named New Chief Strategy Officer
Goldman Sachs named a new chief strategy officer on Monday, replacing an executive (Andrew A. Chisholm) who had worked at the firm for nearly 30 years and is retiring at the end of the year. Taking the reins at the new position is Stephen M. Scherr, who is the head of the firm’s financing group, according to firm memos reviewed by The Wall Street Journal.
Scherr, who will maintain his position as head of Latin America, a role he assumed in 2011, will work across the firm to develop and drive important growth initiatives as part of the firm’s global strategy. Such opportunities may include developing a more profitable private wealth-management business, or possibly using technology to develop and build new trading platforms.
“As a long-tenured leader in the Investment Banking Division (IBD), and as global head of the Financing Group since 2008, Stephen has a deep understanding of all of our businesses and of the needs of our clients,” Mr. Blankfein and Gary D. Cohn, the firm’s president, wrote in an internal memo. “As we advance the firm’s global strategy, Stephen will identify and help execute on opportunities to grow and build upon our strong client franchise across our core businesses.”
Stephen will help to coordinate the lending business as Goldman leverages its existing bank platform to provide credit to both corporate and individual clients, said Golman in the memos.
Stephen previously served as chief operating officer of the Telecom, Media and Technology Group, chief operating officer for IBD and head of the Americas Financing Group. He was named managing director in 2001 and partner in 2002. Stephen became a member of the Management Committee in 2012. He will continue to serve as a member of the Risk Committee, Firmwide Capital Committee and the Growth Markets Operating Committee.
Mr. Chisholm joined the firm in 1985 in New York as a mergers-and-acquisitions banker and also worked in London. He was made managing director in 1996 and partner in 1998. He became senior strategy officer in 2012 after running the financial-institutions group since 2003, a group he helped create, according to the memo.
Goldman also announced Monday that Jim Esposito and Marc Nachmann will succeed Mr. Scherr and become co-heads of the global financing group. Mr. Esposito was most recently head of the Europe, Middle East and Africa financing group. Mr. Nachmann was most recently co-head of the global natural-resources business, according to a memo sent out by the firm.
Succeeding Mr. Nachmann atop the global natural resources team are Gonzalo Garcia and Suhail Sikhtian as co-heads. Brett Olsher will also become co-chairman of the group, alongside John Vaske.
Wealth & Pension Services Group, based in Atlanta, GA, has brought on its first group member in the state of Florida. James Larson II, Certified Fund Specialist, was formerly a Vice President of Investments with The Mutual Fund Store. Jim will now head up the newest office for Wealth & Pension Services Group in south Florida near the West Palm Beach area. “Jim has a great depth of experience, and we are excited to have him join our team,” William Kring, President of Wealth & Pension Services Group.
William Kring adds, “We have been looking at Florida for some time, seeking an advisor that matches our philosophy of providing excellent client service, trusted advice and a high level of expertise. With the addition of Jim, we can continue to build our services footprint in areas that naturally fit our client residences and lifestyle.”
Jim Larson adds, “I am really pleased to join a proven team of financial experts at a firm where the client’s needs are truly priority number one. The comprehensive wealth management approach that Wealth & Pension Services Group is recognized for will be a very welcome addition to the financial planning needs of the south Florida marketplace.”
Wealth & Pension Services Group is a leader in wealth management and 401k plans in the Atlanta area and southeast. Value-added offerings include their Guardrail Growth Investment strategies for individuals, institutions and 401k plans, Financial View 360 – a one source, up-to date financial hub to organize client investments, banking and other financial data, and FRAME – a Fiduciary Readiness and Management Enhancement process for 401k plans. The firm custodies assets at leading institutions including NFS, TradePMR and TD Ameritrade Institutional.
Foto: Cheezepie, Flickr, Creative Commons. Renta variable: catalizador de la rentabilidad
Deutsche Asset & Wealth Management and Ivory Investment Management, have announced the launch of the UCITS compliant DB Platinum Ivory Optimal Fund on Deutsche Bank’s UCITS platform. The fund, currently at $130 million, will be managed by Curtis Macnguyen, founder and Head Portfolio Manager of Ivory.
Ivory IM is a research-intensive, fundamental value-based investment firm founded by Curtis Macnguyen in 1998. Ivory’s investment strategy is to deliver superior, risk-adjusted returns with low correlation to market indices, while protecting capital in all market conditions. Ivory seeks to take long and short positions primarily in equity securities of publicly traded companies. Ivory emphasizes superior security selection over broad market exposure and combines bottom-up, value-based investments with a proprietary spread risk management system that significantly reduces volatility. Ivory manages over $2 billion in equity strategies and is based in Los Angeles. Prior to Ivory, Curtis Macnguyen was a partner at Siegler, Collery & Co.
Commenting on the launch, Tarun Nagpal, Head of DeAWM’s Alternative & Fund Solutions group for Europe and Asia, said: “This fund is an important addition to our range of UCITS products. We are pleased to have attracted such strong investor demand and oversubscription for this new product prior to launch. The fund provides a compelling opportunity to gain exposure to US equity markets, a key current investment theme for many of our clients.”
Curtis Macnguyen, Head Portfolio Manager of Ivory said: “We are excited to be working with Deutsche Asset & Wealth Management on the launch of the DB Platinum Ivory Optimal Fund. We are seeing significant interest from investors globally and this UCITS fund allows Ivory to offer our investment strategy to a larger and more diverse investor base.”
Photo: Thomas Pintaric. Bank Leumi USA Opens New Commercial and Private Banking Office in Los Angeles
Bank Leumi USA announced the opening of its new branch office in downtown Los Angeles on June 2, 2014 at 555 West Fifth Street, 33rd floor. Bringing the bank’s three LA area branches into a single location will provide more efficient, client-focused service to ensure that client needs are met.
For nearly 40 years, Bank Leumi USA has served the Los Angeles community with branches in Los Angeles, Beverly Hills and Encino. By moving to a single new location, the bank will strengthen its resources and teams to provide holistic banking and investing services to its commercial and private banking clients.
“We are proud to build on our decades of service to the Los Angeles community with our new office,” says Avner Mendelson, President and CEO of Bank Leumi USA. “Bringing our teams together in one location reinforces the services our clients rely on, and offers the support our customers – and prospective customers – need in their business and investments today.”
The new branch office will benefit clients through expanded commercial business services in key areas, such as Healthcare, Commercial Real Estate, Apparel, Technology and more. Similarly, private banking clients will benefit from innovative solutions and broker-dealer services through Leumi Investment Services Inc. (LISI).
BTG Pactual is looking for new talents for its trainee program. Candidates can be either Brazilians or foreigners, with a degree in Business Administration, Accounting, Economics, Math, Engineering and other sciences and technology, and must have graduated between June 2012 and December 2014. Candidates must also be fluent in English and Portuguese.
BTG Pactual is the leading investment bank in Latin America, with over 2,800 employees working at 19 offices in Latin America (Brazil, Chile, Peru, Colombia and Mexico), the US, the UK and China. In 2013, it was elected the Most Innovative Investment Bank in Latin America by The Banker and the Best Investment Bank in Brazil and Chile by World Finance.
In selecting candidates, those individuals more aligned with the bank’s culture stand out. BTG Pactual prioritizes identification with the values of the Bank over prior technical knowledge. Candidates who show initiative, focus on results, a long-term vision, an entrepreneurial spirit and determination are likely to receive a better evaluation. The apprenticeship experience at the Bank is based on day-to-day activities and candidates must be able to deal with managing multiple tasks.
The selection process includes online tests, as well as group dynamics and interviews with the HR area, managers and partners of the Bank. The job openings are for the São Paulo and Rio de Janeiro offices, which means those approved must be willing to live in either of these two cities. This edition of BTG Pactual’s Trainee Program features 40 job openings.
The program lasts for one year, starting in January 2015. During this period, trainees will undergo job rotation, meaning they will work in up to three different areas of the Bank. Job rotations occur every 4 months and individual performance will be assessed at the end of each period. Trainees will be closely monitored by the HR team and by the managers, and will receive a plan of technical and behavioral training throughout the Program. The technical training sessions are developed internally in partnership between HR and the business lines. Partners, associates and other senior managers of the respective areas are responsible for organizing these sessions. In addition to a salary, BTG Pactual offers trainees a health plan and restaurant/supermarket vouchers.
As an institution based on meritocracy, trainees may be retained on a full-time basis at the end of the program, in accordance with their performance during the period. This is the sixth edition of the trainee program and the retention rate of trainees usually surpasses 95%.
CC-BY-SA-2.0, FlickrFoto: Petr Dosek. No hay burbuja en la deuda high yield europea pero los inversores deben permanecer alerta
There is much talk at present about the European high yield market and whether the supposed bubble is about to burst.
Investors have enjoyed a stellar five year performance since the financial crisis. The BofA Merrill Lynch European High Yield Constrained index returned 165%, outperforming the stock market by over 40% (FTSE World Europe index). Spreads on the BofA Merrill Lynch European High Yield Constrained index have tightened more than 1700 basis points to approximately 350 bps over the German Bund. After such a buoyant period it is hardly surprising that concerns are emerging about the future trajectory of the asset class.
In a recently published report, Aberdeen AM discusses these issues explaining why they believe the European high yield is not in bubble territory, but investors still need to be alert.
Though yields are at all-time lows and the asset manager expects returns to be more muted it does not adhere to the argument that the asset class is a bubble for a number of reasons.
Tight valuations are not the same as a bubble
Aberdeen AM believes there are fundamental reasons why spreads trade where they do. Default rates are low and they expect them to stay low. The majority of issuance continues to be used to refinance debt, which has allowed companies to borrow at lower interest rates and extend maturity profiles. Failure to refinance debt when it comes due or an inability to fund interest expenses are the two most common triggers for default. Aberdeen AM estimates 25% of the market is pricing to call by the end of 2015, which will bring the cost of debt down meaningfully for these companies assuming no great exogenous shock occurs. Furthermore, companies are increasingly preparing for or are rumored to be preparing an IPO later this year. This is generally a positive as it is a de-leveraging event (“equity claw” clauses in the docs) and provides a tangible equity cushion.
Spreads nowhere near all-time lows
In 2007 spreads fell to 179 basis points at a time when the market was lower quality and a quarter of the size. Aberdeen AM thinks, based on historical trends with spreads where they are there is room for further tightening. Having said that they believe this is more likely to come from rising government bond yields than capital upside as high bond prices and call options limit that. However, assuming defaults remain low there should be some ability for spreads to cushion government yield increases. Spreads primarily compensate investors for default risk and loss given default. The good news is that since 2010 nearly half of new issuance in European high yield (as of year-end 2013) has been secured, which means recovery rates going forward will be higher than they have been historically. This needs to be factored in when looking at what spreads are discounting in terms of default rates. Aberdeen AM is of the opinion that today spreads represent no worse than fair value when analyzing them in this way.
Correlation to government bonds is low
If there is a bubble the asset manager believes it is in government bonds which have experienced a 30-year bull run and have been artificially supported by quantitative easing. However, even if this is a bubble, they think it is unlikely to burst anytime soon. Given the anemic state of the European economy the European Central Bank is unlikely to raise interest rates any time soon. Eurozone unemployment is not expected to fall much below 12% this year, inflationary pressure is currently non-existent and the most bullish Eurozone growth forecasts cap out at 1.5% for 2014. Even when rates do start to rise, the effect on high yield may be somewhat limited compared to say investment grade. The average maturity in European high yield market is around four years; so relatively short-dated. The four year bund yields 0.4% so almost all the yield is spread which is a key reason sensitivity to government bonds is so low.
Outlook
Whilst Aberdeen AM is not anticipating a significant sell-off in European high yield the asset manager is certainly cautious and would view a period of consolidation or even a modest correction as healthy. In what is often a seasonally weak period for financial markets, the second quarter could offer better opportunities to top up positions in favored holdings. At the same time, they believe investors need to be watchful as lower quality companies continue to take advantage of the borrowing environment and bondholder protection from covenants erodes. Longer term, the maturity wall and interest rate expectations suggest 2017 could be when defaults begin to tick up. Between now and then there is the opportunity to possibly harvest a healthy income yield.
1 The BofA Merrill Lynch Euro High Yield Constrained Index contains all securities in The BofA Merrill Lynch Euro High Yield Index but caps issuer exposure at 3%. The BofA Merrill Lynch Euro High Yield Index tracks the performance of EUR denominated below investment grade corporate debt publicly issued in the euro domestic or Eurobond markets.
2 The FTSE All-World Europe Index is a free float market capitalization weighted index. FTSE All-World Indices include constituents of the Large and Mid capitalization universe for Developed and Emerging Market (Advanced Emerging and Secondary Emerging) segments. Base Value 100 as at December 31, 1986.
According to ING IM, the rally in peripheral bond and equity markets has not come to an end, as the fundamental picture is still sound. Yet, the recent rise in volatility and the increased short-term risks have made the asset manager decide to close their overweight positions in both bonds and equities of Eurozone peripherals.
One of the consequences of the risen interest of investors in the peripheral markets is that it has become a “crowded trade”. Investor positioning and in particular the concentration of active exposures have been very dominant drivers of market dynamics this year. The recent volatility in peripheral markets seems to be the latest reflection of the sensitivity of “consensus” trades for position squaring on the back of sudden mood swings over the direction of policy or politics.
Rally in Spanish and Italian markets since July 2012
Both bond and equity markets of peripheral Eurozone countries like Spain and Italy have been enjoying a strong rally, effectively since ECB President Mario Draghi held his famous “whatever it takes to save the euro” speech on July 26, 2012. The ongoing rally resulted in declining risk premiums and increasing investment flows towards these countries’ markets, as investors increasingly perceived the systemic risks surrounding the Eurozone to be fading, while at the same time economic data started to improve.
In the past months, the anticipation of additional stimulus provided by the ECB and upgrades of credit ratings by the rating agencies also led to a further tightening of credit spreads. The intensification of the search for yield by investors, combined with stretched valuations in other fixed income asset classes (like investment grade and high yield credits), have also contributed to the decline in risk premiums.
To view the complete story, click the attached document.
CC-BY-SA-2.0, FlickrJames Swanson, Chief Investment Strategist at MFS Investment Management. Three Things to Think About This Spring
Chief Investment Strategist, Jim Swanson, reviews why equity and fixed income prices have been going up, while China’s moderating pace of growth is a concern but not an immediate threat to the global economic expansion. Three things to think about this spring…
Photo: Romina Campos. Henderson Makes a New Appointment in Uruguay
Capitalising on its growing presence in Latin America, Henderson Global Investors has appointed John Philip Davies of Accurate Partners, as its representative in Uruguay based in Montevideo to work with global and local leading private banks. Commenting on the appointment Ignacio de la Maza, Director of Sales Iberia and Latin America, said “This strategic appointment aims to develop Henderson’s presence in Uruguay while enabling the firm to further deliver and re-enforce its commitment to better service for clients in the region.”
John has had a distinguished career to date having started his profession at Bank Boston in Uruguay and Argentina before working for Deutsche Bank in London, and then becoming the Regional Head Latin American for Dominion Funds, a niche Swiss Fund Manager. His previous position was Senior Sales Executive for MAN Group in Latin America. John has a BA in Business Administration from ORT University in Uruguay and Masters in Finance from CASS Business School in London.
Henderson Global Investors is already active in various Latin American markets with a diverse array of investment funds. All of these products are available to Henderson’s clients in Uruguay as well, including the principal Luxembourg based SICAVs.
Ignacio de la Maza added: “There is a clear and growing commitment on behalf of Henderson to work in the region and to this end the Latin American Sales Team will continue to be strengthened”.
Manchester Capital Management (MCM) announced that Daniel Goldstein has joined MCM as a Senior Managing Director based out of its Montecito office.
In his role, Daniel will be working closely with clients and Ted Cronin, CEO of MCM, to advise on wealth management and family office services. Daniel’s extensive experience with the many varied aspects of running a single family office will complement the skills of the MCM team, allowing the firm to offer a more comprehensive array of services.
Founded in 1993, MCM is a boutique wealth management firm with 33 professionals advising wealthy families across the United States. The firm maintains offices in Manchester, VT, Montecito, CA, Charlottesville, VA and New York, NY.
For twenty years prior to joining the firm, Mr. Goldstein was advising ultra high-net-worth families across Europe and in the United States on their liquid investments, businesses, structuring, direct real estate investments, family dynamics, yachts, concierge services and philanthropy. For 15 years he was a director of a global single family office principally located in Europe, with activities ranging across Europe, the U.S., Africa and India. Previously he was the investment analyst on a two-person team managing a $1.25B portfolio for a U.S. family foundation. He has spoken at and chaired numerous family office, investment, family business and philanthropy events around the world.
As a Board member, he has helped found and develop several international non-profit organizations. Before entering the family office field, Daniel worked in finance in both the private and public sectors in the U.S. He earned a B.A. in Fine Arts from Colgate University, as well as an M.B.A. in Finance and an M.S. in Science and Technology Studies from Rensselaer Polytechnic Institute, both with honors.
