BlackRock plans to dismiss about 500 employees, about 2.5% of its global workforce.
“The uncertainty around us makes it more important than ever that we stay ahead of changes in the market and focus on delivering for our clients,” CEO Larry Fink and Chairman Rob Kapito wrote Wednesday in a note to employees accessed by Bloomberg.
One of the world’s biggest asset managers faced steep declines in equity and fixed-income markets last year.
It is the first round of job cuts at BlackRock since 2019, and will still leave the workforce about 5% higher than a year ago, Bloomberg claims.
The firm, which will report its fourth-quarter results this Friday, had about 19,900 employees at the end of September.
Rising inflation and rising interest rates have rattled asset managers and markets, with the S&P 500 index plunging 19% in the past year.
The firm, with $7.96 trillion in assets under management at the end of the third quarter, did not specify which businesses will be most affected by the job cuts.
The company’s two leaders said in the note that they would work to “manage expenses prudently” and invest profitably.
The executives sought to emphasize the firm’s ability to take in new client money. Flows into its long-term investment funds increased by $250 billion through the first nine months of last year, and analysts surveyed by Bloomberg predict they brought in an additional $116 billion in the fourth quarter.
“Our breadth and resilience,” Fink and Kapito wrote, “allow us to play offense when others pull back.”
BNP Paribas announced its plans to open a new office in the metro-Miami area.
The Miami office will support the continued growth of its Global Markets business in the US, amongst others, and the increasing number of clients with a foothold in South Florida. The hub will provide an additional gateway to its regional clients, as well as expand on its network of US campuses.
The new office will be located at 801 Brickell Avenue in Miami’s financial hub, officially open for business in the 4th Quarter 2023, and employ nearly 50 full-time professionals in credit, equities, and macro products. A seven and a half year lease for the office was recently signed.
José Placido, Chief Executive Officer of CIB Americas at BNP Paribas, said: “Our new office is another recent example of scaling our business in ways that fully support our client’s ambitions, as more of our clients build a presence in South Florida. With this opportunity to better serve our clients, we deliver on our ambitions to grow our corporate and institutional banking franchise in the Americas. Our new Miami office also continues with our ‘workplace of the future’ model, focusing on wellbeing and employee experience.”
John Gallo, Head of Global Markets Americas at BNP Paribas, said: “We’re very excited to be in the growing business environment of South Florida. This office will allow us to be closer and better serve our clients, many of whom have also migrated to the area, particularly Miami and Palm Beach.”
BNP Paribas has recently made several large real estate actions in the US including opening a new office in the Philadelphia area in October 2021. The bank has also made significant facilities and work space commitments in its two metro New York City offices in Midtown West Manhattan and Jersey City, NJ. BNP Paribas signed 20 year leases for all three properties in the greater NYC and Philadelphia areas in July 2020. The group also has offices in the following major cities* (Boston, Chicago, Dallas, Denver, San Francisco and Washington, DC).
BNP Paribas’ Miami campus will be the latest example of the bank’s efforts to create best-in-class platforms and products for its local Miami-area clients, the report says. As BNP Paribas continues to pursue and execute on its growth ambitions in the region, the Miami office will integrate seamlessly with its other offices.
Insigneo announced the hiring of Mauricio Viaud as Senior Investment Strategist & Portfolio Manager. He will report to Ahmed Riesgo, Chief Investment Officer.
Prior to joining the firm, Viaud worked as a Senior Equity Research Analyst at Janney, Montgomery, Scott, where he provided equity research insight and analysis for global stock portfolios. Before this, he was a buy-side equity research analyst at Bank of New York Mellon, where he provided equity research coverage for the energy and materials sectors for three large institutional mutual funds.
“Incorporating Mauricio within our CIO office will better position us to meet the growing demand from our network for high-quality research and asset allocation guidance,” said Javier Rivero, President and Chief Operating Officer of Insigneo. “This strategic hire further evidences our commitment to invest in our firm and expand our team, which is particularly exciting in light of our company’s international leadership positioning as well as the current market conditions.”
Viaud has over 22 years of experience in capital markets and the financial services industry, including experience in equity research, portfolio management, and formulating and communicating firm-wide investment strategies.
He also has significant experience providing equity research for institutional mutual funds, writing equity research reports, formulating investment strategy as a member of various strategy committees, and executing portfolio management responsibilities.
“We are pleased to add a professional of Mauricio’s caliber to our growing team, as part of our commitment to align ourselves with the industry’s best and brightest talent and continue to expand our asset management, research, and data analytics capabilities,” Riesgo said. “Mauricio’s outstanding track record of execution, his impressive market insights and strategic thinking make him an ideal fit for this important leadership role at Insigneo, where he will have a pivotal role in helping chart the path for our next chapter of success.”
Specifically, Viaud will join the CIO Office in a dual role as a Senior Investment Strategist and Portfolio Manager. He will become an integral part of the firm’s research team and investment committee, as well as the service offering of the team. On the research side, he will issue equity research reports for major Latin American companies, provide investment recommendations and opinions, and participate in high-level client meetings. In addition, he will publish a weekly newsletter for clients. On the portfolio management side, he will manage a Latin American Equity SMA focused on providing alpha in the space for equity investors in the region.
“I am thrilled to join Insigneo and consider it a natural next step in my career,” Viaud said. “Insigneo’s powerful platform, market leadership and dynamic growth opportunities will enable me to apply my knowledge, skills and talents in a rewarding, collaborative team environment.”
Viaud’s diverse financial-services experience spans high-net-worth client relationship management, equity analysis, portfolio management and equity strategy. He has provided analyst coverage for a wide range of global stocks and helped manage equity portfolios and formulate investment strategies. He has appeared on a variety of radio and printed media publications, including Financial Times.
Viaud has a bachelor’s degree in finance and international business from the University of Richmond, as well as an Executive MBA focused on asset and wealth management from Carnegie Mellon’s Tepper School of Business and HEC Lausanne in Switzerland. He is currently working on attaining the CFA charter, having completed the Level II examination.
Byron R. Wien, Vice Chairman together with Joe Zidle, Chief Investment Strategist in the Private Wealth Solutions group at Blackstone, issued their list of the Ten Surprises of 2023.
This is the 38th year Byron has given his views on a number of economic, financial market and political surprises for the coming year.
Byron defines a “surprise” as an event that the average investor would only assign a one out of three chance of taking place but which Byron believes is “probable,” having a better than 50% likelihood of happening.
Byron started the tradition in 1986 when he was the Chief U.S. Investment Strategist at Morgan Stanley. Byron joined Blackstone in September 2009 as a senior advisor to both the firm and its clients in analyzing economic, political, market and social trends. In 2018, Joe Zidle joined Byron Wien in the development of the Ten Surprises.
Byron and Joe’s Ten Surprises of 2023 are as follows:
Multiple candidates on both sides of the aisle organize campaigns to secure their party’s presidential nomination. There are new headliner names on the respective tickets for 2024.
The Federal Reserve remains in a tug-of-war with inflation, so it puts the word “pivot” on the shelf alongside the word “transitory.” The fed funds rate moves above the Personal Consumption Expenditures price index and real interest rates turn positive, a rare phenomenon relative to the last decade.
While the Fed is successful in dampening inflation, it over-stays its time in restrictive territory. Margins are squeezed in a mild recession.
Despite Fed tightening, the market reaches a bottom by mid-year and begins a recovery comparable to 2009.
Every significant correction in the market has in the past been accompanied by a financial “accident.” Cryptocurrencies had a major correction and that proved not to be a systemic event. This time, Modern Monetary Theory is fully discredited because deficits have proven to be inflationary.
The Fed remains more hawkish than other central banks, and the US dollar stays strong against major currency pairs, including the yen and euro. This creates a generational opportunity for dollar-based investors to invest in Japanese and European assets.
China edges toward its growth objective of 5.5% and works aggressively to re-establish strong trade relationships with the West, with positive implications for real assets and commodities.
The US becomes not only the largest producer of oil, but also the friendliest supplier. The price of oil drops primarily as a result of a global recession, but also because of increased hydraulic fracking and greater production from the Middle East and Venezuela. The price of West Texas Intermediate crude touches $50 this year, but there’s a $100 tick out there sometime beyond 2023 as the world recovers.
The bombardment, destruction and casualties in Ukraine continue for the first half of 2023. In the second half, the combination of suffering and cost on both sides necessitates a ceasefire and negotiations on a territorial split begin.
In spite of the reluctance of advertisers to continue to support the site and the skepticism of creditors about the quality of the firm’s debt, Elon Musk gets Twitter back on the path to recovery by the end of the year.
The “Also Rans” of 2023
Every year there are always a few Surprises that do not make the Ten, because we either do not think they are as relevant as those on the basic list or we are not comfortable with the idea that they are “probable.”
Because of medical breakthroughs across the board, many people decide on a cryogenic burial, expecting to be defrosted when a cure for the disease that caused their demise is discovered. Funeral homes across the country advertise that “It’s Nice to Be On Ice.”
A technology breakthrough in reducing the carbon emissions of coal-fired plants takes the edge off the climate / global warming scare. This lowers the political pressure on emerging markets to make a rapid transition to renewable energy sources.
India begins to compete seriously to win/retain the manufacturing base that started looking for a new home after becoming increasingly uneasy with the uncertainty that has continuously surrounded US–China policies. The country initiates a campaign to attract global multinationals, focusing on its young population, relatively low income and growing consumer market, and prioritizing policies that incentivize investment in the auto, energy, pharma and tech sectors. Apple and Samsung are a proof of concept after successfully producing their respective flagship phones for global markets.
iCapital announced the appointment of Agnes Bundy Scanlan to the company’s board of directors, effective January 1, 2023.
Bundy Scanlan brings a wealth of experience from her 30-year career in regulatory risk management and compliance.
Since May 2020, she has served as president of The Cambridge Group, a regulatory risk management firm that advises financial services and fintech firms. A former chief regulatory and compliance officer and global chief privacy officer at TD Bank,
She also serves on the boards of AppFolio, R1 RCM, and Truist Financial. In 2021, she was recognized as one of Savoy’s Most Influential Black Corporate Directors.
“Having an active and engaged board of directors with a variety of backgrounds and experiences is vital to the success of iCapital. I’m delighted to welcome Agnes to our board,” said Lawrence Calcano, Chairman and Chief Executive Officer of iCapital. “We look forward to working with her and benefiting from her wisdom and experience.”
Before joining The Cambridge Group, Ms. Bundy Scanlan worked as a senior advisor for consulting firm Treliant and northeast regional director at the Consumer Financial Protection Bureau. She also has held various executive roles at Bank of America and FleetBoston Financial. Earlier in her career, she was counsel at the U.S. Senate Banking Committee.
“I’m excited to join iCapital’s board of directors,” said Bundy Scanlan. “iCapital is a leader in making alternative investments more accessible to advisors and investors. I look forward to working with Lawrence and iCapital to continue to deliver on this mission.”
Heading into 2023, it’s time to take stock of your budget, debt and investments—and check them against your financial goals. These six steps can get you started
The start of a new year offers an opportunity to reflect on the past and set goals for the future. Revisiting both your personal and financial goals can help set you up for success in 2023 and beyond.
Here are six ways to kick off the new year with fresh a perspective:
1. Revisit Your Household Budget
Start the year by revisiting your budget. Assess your average monthly income, as well as your fixed and variable expenses, and determine your financial priorities for 2023 to develop the ideal budget for you. Reassessing your budget may be especially valuable now, as high inflation forces many households to allocate more for essentials like groceries or gas.
2. Check Your Emergency Fund
It’s always a good idea to double-check that you have adequate funds set aside for a rainy day—but that’s especially true in times when the economy may be slowing from its once robust pace. Morgan Stanley’s economics team forecasts year-over-year U.S. GDP growth to remain flat in the fourth quarter of 2022 and to increase just 0.5% in 2023,1 down sharply from 5.7% in 2021.
Not only can an emergency fund help you to avoid liquidating portfolio assets at potentially depressed prices during periods of market volatility, it can also help keep you financially afloat in unforeseen life circumstances, such as a change in your or a loved one’s employment situation. A general rule-of-thumb for an emergency fund is saving three to six months’ worth of living expenses in a safe, liquid account.
3. Tackle Your Debt
Even if you’re already good about managing debt, consider taking steps to help reduce and consolidate it further. For example, if you’re expecting a raise or year-end bonus, consider applying the extra income to any balances with high interest rates.
Then, think about consolidating any remaining debt, which may help you swap a varying interest rates on multiple loans, credit lines or cards, for a potentially lower rate on a single loan. Reducing the number of loans you carry can also help simplify your financial life and ease money stress. You may want to ask your Financial Advisor about possible strategies.
4. Prioritize Your Wellness
The pandemic may no longer be weighing as heavily on some people’s minds as it once did: According to Morgan Stanley’s 2022 Investor Pulse Poll, a lower percentage of survey respondents (37%) reported that their emotional health had suffered due to the pandemic in 2022, down from 43% in 2021.
The new year can be an opportunity to continue prioritizing your personal and financial wellness. Consider taking advantage of any employer wellness resources for physical, mental or financial health. Many companies offer financial-education programs and digital learning tools, which can supplement the advice you receive from a Financial Advisor. Using these tools can help you not only bring a sharper version of yourself to the job, but also set you up to make better use of other workplace benefits, such as a retirement plan, equity compensation or group insurance, if available.
5. Make Sure You’re on Track With Your Goals
Be sure to check whether you’re still tracking toward your goals, such as saving and investing for a comfortable retirement. If the recent bear market or other factors have temporarily thrown you off course, work with your Financial Advisor to figure out how you can get back on the right path.
Or, if you’re still on track with your goals, talk with your Financial Advisor about new goals you want to work toward. For example, in 2022, were you able to boost your contributions to a workplace retirement plan or individual retirement account? In 2023, can you contribute even more to these or other accounts?
6. Consider Investing in Ways that Matter to You
Morgan Stanley’s 2022 Investor Pulse Poll also reported that 71% of all respondents say it’s important that their portfolio aligns with their values, beliefs and issues that matter to them—yet only 44% believe it’s currently happening. Not only that, 66% of all respondents express a desire for companies they invest in to have policies in place to promote diversity, equity and inclusion.
Preqin finds that the optimism for real estate at the end of 2021 is now replaced with a more pessimistic view for the year ahead. As interest rates are expected to increase further, asset values are falling, with Preqin analysts predicting a difficult 2023 for real estate, according Preqin Global Report 2023: Real Estate.
Fundraising numbers dropped this year compared to 2021. According to Preqin data, 249 funds had closed at the end of Q3 2022, equal to 46% of the 546 funds closed throughout the whole of 2021.
While Preqin analysts expect Q4 to bring an increase compared to the previous three quarters of 2022, they remain doubtful that the strength witnessed at the end of 2021 will be repeated this year. What is more, the $101.9bn of aggregate capital raised by end of Q3 2022 is equal to just 48% of 2021’s $210.7bn total.
Surprisingly, first-time funds have been one of the winners in 2022. By the end of Q3 2022, first-time managers secured $10.5bn in capital, significantly more than the $9.4bn they raised throughout the whole of 2021.
Bright spots remain in value-add strategies
Preqin data also shows that value-added funds have been the dominant strategy throughout 2022, accounting for almost 40% of funds closed, at 99, in the first three quarters of the year – in comparison to the 2001-2021 average of 32%. When measured by the proportion of aggregate capital raised, the value-added strategy accounts for 35% ($35.6bn), far above the 2001-2021 average of 27%.
Value-added funds are well placed to capitalize on repositioning older office stock, for example, toward modern ways of working. The strategy offers the ability to commit capital to significantly improve the quality and rental prospects of an asset. Providing the opportunity to generate returns in the double digits, this strategy is favoured by many fund managers and investors because of the breadth of opportunities to put capital to work.
Recession could create opportunity for real estate risk assets
Overall, 2023 is likely to be a difficult year for real estate. There are strong headwinds to the global real estate outlook, with rising interest rates dominating the immediate trajectory of the asset class. This is likely to hit both fundraising and deal activity. With borrowing costs rising and patchier occupier demand, this situation could worsen even more should many countries enter a recession. Adding to this, households have less disposable income to spend in shops or online, potentially hitting retail and industrial activity.
74% of investors believe real estate assets are overvalued, according to Preqin’s 2022 November investor survey. 2023 is therefore likely to be a difficult year for real estate. Fund managers agree with investors on the outlook for valuations and expect them to fall, ultimately putting a brake on activity.
With higher interest rates likely to push many developed markets into recession, it is possible that we see central banks pivoting towards either cutting or raising rates to a lower degree than currently expected. Both scenarios would be positive for risk assets – and positive for income-focused assets, such as prime real estate. However, Preqin analysts believe that this is one possible scenario, and it is also feasible that recessionary effects outweigh any easing, resulting in weak growth.
Dave Lowery, SVP, Head of Research Insights at Preqin says: “The real estate market appears to be in the preliminary phase of a readjustment. After benefiting from low rates for an extended period, the market is adjusting to higher rates – a trend witnessed in many parts of the world. This will mean falling prices for even the best quality assets, and if we see recessions in some markets, occupier demand may also weaken, with implications for rents. Investors may well sit on their hands and wait for the market to settle before making any new allocations, while fund managers will need to find agreement on pricing for deal activity to increase.”
To see the full report you can access the following link.
The portion of advisors who use U.S. fixed–income exchange-traded funds (ETFs) continues to grow, with 70% reporting use in 2022 vs. 63% in 2021, according to The Cerulli Report—U.S. Exchange-Traded Fund Markets 2022.
Myriad reasons are leading to fixed–income ETF uptake, and managers should pay close attention to a category that has the potential for long-term sustainable growth.
The top-three drivers of fixed–income ETF flows include greater advisor (66%) and institutional (55%) familiarity, followed by the prospect of higher yields (38%).
“As advisors increase ETF uptake, they are using the vehicle for more exposures, including fixedincome. Institutional investors are also increasing use of fixed–incomeETFs,” says Daniil Shapiro, director.
According to the research, 66% of ETF issuers consider fixedincome a primary focus for ETF product development, overtaking even U.S. equity (57%). Cerulli believes a strong product development opportunity exists for those firms offering active fixed–income exposures given the existing white space to offer fee-competitive, attractively priced product within categories that have few competitors.
“There is opportunity for managers to launch products into categories that have fewer competitor products and ones where they can offer their expertise while serving as a cost leader,” says Shapiro. “Fee dynamics in active fixed–incomeETFs will intensify as they have in the rest of the ETF ecosystem. Managers offering excellent performance and managing strategies meant to generate greater returns will likely be able to charge a premium relative to ultra-low-cost short-term exposures.”
Managers can also stand out in seemingly product-saturated categories by offering unique exposures.
Cerulli expects fixed–income thematic and sustainable products to play a greater role especially as a wider base of investors takes to the exposures.
“While inflation and rising rate protection strategies are getting attention in the current environment, managers have an opportunity to create interesting exposures that target a broader range of themes, ideally in a diversified and responsible manner,” adds Shapiro. “In doing so, managers may be able to broaden their reach to a retail investor base,” he concludes.
Guillermo Eiben, Stan Babakhanov and Emiliano Méndez
Guillermo Eiben, Emiliano Mendez and Stan Babakhanov have joined the UBS International staff in New York, announced Catherine Lapadula, Managing Director of UBS New York International.
“Please join me in welcoming Guillermo Eiben, Emiliano Mendez and Stan Babakhanov to our New York International family at UBS!,” posted Lapadula on her LinkedIn account.
All three come from Morgan Stanley and specialize in Latin American Ultra Hight Net Worth families.
He holds an MBA in General Management from the University of Virginia Darden School of Business, according to his LinkedIn profile. su perfil de LinkedIn.
Mendez, meanwhile, started in 2006 at Santander Investment Securities where he worked until 2010. After joined Morgan Stanley where he served until 2013 when he started in Citi Global Markets, all of his experience recorded on Finra’s portal is listed based in New York.
Finally Babakhanov, with nearly 20 years in the industry, had two stints at Morgan Stanley. He started in 2003 at HSBC and in 2008 began his first stint at the wirehouse.
After nearly eight years at Morgan Stanley, in 2016 he joined Bloomberg’s Financial Solutions team where he stayed until May 2017, according to his LinkedIn profile.
He then returned to Morgan Stanley where he remained until his registration at UBS International, according to his Brokercheck profile.
” The team brings a breadth of experience and knowledge. Welcome Guillermo, Emiliano and Stan, so proud to work with you!!,” Lapadula culminated in her statement.
FlexTrade Systems, a global leader in multi-asset execution and order management systems, announced its first direct EU electronic execution between UBS Asset Management and J.P. Morgan on FlexTrade’s Fixed Income EMS solution, FlexTRADER FI (FlexFI).
The bilateral electronic trade between UBS Asset Management (buy side) and J.P. Morgan was made possible by J.P. Morgan’s ability to provide its differentiated and high-quality electronic liquidity directly into UBS Asset Management’s instance of FlexTrade’s FlexFI solution. This type of integration enables UBS Asset Management to interact and source liquidity directly from their key liquidity providers, improving efficiency, enhancing trading-decision making, and positively impacting best execution.
“Our bilateral connectivity to J.P. Morgan, using FlexTrade’s fixed-income EMS, FlexFI, is the next big step in the electronification of our bond and credit trading activities. Working on this initiative with FlexTrade and J.P. Morgan, we have produced a highly sophisticated, transparent way of simplifying and streamlining our workflows and interacting with the sell-side,” said Lynn Challenger, Global Head of Trading and Order Generation at UBS Asset Management.
On the other hand, Eddie Wen, Global Head of Digital Markets at J.P. Morgan, commented: “Over the past few years, J.P. Morgan has made significant strides in expanding the digital distribution of our liquidity to clients. J.P. Morgan’s ability to connect its liquidity directly into client workflows through EMS solutions like FlexTrade, delivers significant efficiency gains and cost savings to our clients. Further, this solution provides clients with greater choice in the ways they can execute with J.P.Morgan.“
Andy Mahoney, Managing Director, EMEA at FlexTrade, noted: “Working with UBS Asset Management and J.P. Morgan on this new initiative and the outcomes it can create illustrates how revolutionary an EMS can be for fixed income trading. Incorporating actionable sources of liquidity into the trading workflow seamlessly gives clients a unique view of the market. In addition, bringing manual, opaque processes into a machine-readable format offers a first step toward improving transparency and efficiency with technology. As a result of industry collaboration, we’ve delivered true innovation – at speed – in the fixed-income EMS space. This will be crucial to driving efficiency, ultimately benefiting the end investor.”
