Filipe Bergaña. Filipe Bergaña Joins W4i Investment Team as a Fund Manager and Investment Partner
W4i has announced the incorporation of Filipe Bergaña as a fund manager and investment partner. This is in line with the previously stated objective by W4i of attracting the best talent of experienced investment professionals with outstanding track record.
Filipe Bergaña brings over 12 years of investment experience and adds unique skills to W4i team’s capabilities in the European equity space. He developed his career in well known traditional long-only firms such as MLIM/ Blackrock and Fidelity International and most recently Och-Ziff, one of the world’s largest alternative investment managers. Filipe has accumulated a unique blend of experience in a broad array of sectors from TMT to consumer and industrials, amongst others.
“I am delighted to join this venture and I am highly confident on the prospects of success of W4i. Despite the proliferation of asset managers, there is a lack of genuinely active investment solutions, truly aligned with the interests of the clients who they represent – a gap which W4i directly addresses. It is a privilege to work again alongside Firmino Morgado, with whom I share the passion for investing and the discipline of a fundamental approach to stock picking and portfolio construction. In addition, in Renta 4 – and its research and execution team – we have the backing of a strong and long-established player in the Spanish and Latin American markets, with an investment horizon similar to ours. So we have all the ingredients to build a truly unique success story” – Filipe said.
In turn, Firmino welcomed the new addition to the team and highlighted the complementary aspect of the investment profiles: “Filipe is one of the best investment professionals that I have ever had the pleasure to work with. Apart from his exceptional expertise in the European cyclical sector, Filipe brings along shorting skills which the team will benefit from given the flexible investment features of the funds we manage. W4i will therefore be better equipped to cope with the different contexts of the market, therefore achieving our ultimate goal of delivering superior and consistent performance for our investment clients.”
W4i – working for investors – is a newly created range of investment funds, mainly focused on the institutional market, whose foundation pillars are i) truly active management, ii) total alignment of interests between investors and managers and iii) social responsibility. Its funds are incorporated in Luxembourg and Spain and will soon be open for subscription on the Spanish market.
Renta 4 Banco is a publicly listed Bank founded in 1985, specialized in wealth management, brokerage services and corporate advisory. It is the parent company of a number of companies providing investment and asset management services (the “Renta 4 Group”). It is not affiliated with any industrial group and prides itself in being independent.
Photo: Hernán Piñera. 86% Thinks Social Media Tools Do Not Add Value To Investment Decisions
According to a poll carried out by CFA Institute, investment analysis includes sophisticated financial analysis, the construction of cash-flow models, strategic and competitive analysis, and various forms of assessing management. However, forming our opinions of a security is only half the battle; the other half is understanding the market’s perception of the very same security — and how that perception is manifested in the security’s price.
Social media can be a tool for gauging the perceptions of others, be it the market’s receptivity to a company’s product or the feelings investors have about a particular stock or bond. Nevertheless, the overwhelming majority of the respondents of the survey among NewsBrief readers rejected the idea that social media adds value when asked on how important social media was to their investment decision-making process. Of the 704 respondents, roughly 86% indicated that social media tools, such as Twitter, are not useful and are even counterproductive. Only 14% believe that social media tools are useful. Are these latter respondents on the vanguard of a new trend in investing? Perhaps learning how to use these new tools to their highest and best use — without getting sucked into time-wasting activities — might sway the masses.
Foto: Dennis Jarvis. Natixis Has Entered Exclusive Negotiations to Acquire DNCA
Natixis has entered into exclusive negotiations with TA Associates, Banca Leonardo and the managers of DNCA related to the proposal by Natixis Global Asset Management to acquire their equity interests in DNCA.
The addition of DNCA to Natixis Global Asset Management’s global lineup of affiliates would represent a major step forward in Natixis’ New Frontier strategic plan by making a strong contribution to growth in asset management revenues in Europe, while also offering substantial potential for revenue synergies.
With €14.6bn of assets under management at the end of January 2015, DNCA has pursued an entrepreneurial approach to developing a broad range of high-performing, well-recognised investment solutions for retail clients across Europe.
The combination of the proven expertise of Natixis Global Asset Management’s investment managers, DNCA’s solid investment performance and controlled risk profile, and the strong DNCA brand name would make a substantial contribution to the further development of Natixis Global Asset Management’s global multi-affiliate model and the reinforcement of its existing expertise.
DNCA’s management would remain a shareholder alongside Natixis Global Asset Management and would benefit from a progressive withdrawal mechanism beginning in 2016 that would align medium-term interests and gradually increase Natixis Global Asset Management’s stake in DNCA to 100%.
This projected acquisition was presented to Natixis Global Asset Management’s representative bodies on Wednesday, 18 February.
The planned transaction would provide Natixis Global Asset Management with a unique combination of funds with which to strengthen its position in retail markets.
It would help DNCA step up its international expansion in retail markets outside of France and Italy and deploy its equity solutions to institutional clients by leveraging Natixis Global Asset Management’s global centralised distribution platform and support functions.
“We hope to welcome DNCA – an entrepreneurial French investment management company with renowned expertise – as one of our affiliates as soon as possible. This projected acquisition furthers Natixis Global Asset Management’s strategy of expanding its multi-affiliate model in Europe and fueling our growth in retail markets through a unique combination of funds,” says Pierre Servant, CEO of Natixis Global Asset Management and member of the senior management committee of Natixis in charge of Investment Solutions.
“We are looking forward to joining Natixis Global Asset Management and working together on a genuine international project. In view of DNCA Finance’s success over the last 15 years in France and Italy, our preference was to find a fast-growing French group to assist us in new markets, while retaining our own characteristics and our staff’s entrepreneurial strengths. The support and synergies that we will develop with Natixis Global Asset Management’s distribution platform and support functions will help us step up our international expansion,” explains Jean-Charles Mériaux, President of DNCA Finance, and Joseph Châtel, President of DNCA and Company.
Photo: Teamwork. Pivotal Role of Digital Media Prompts European Managers to Enlarge Teams
Managers boost specialized teams in recognition of their value in reaching and retaining clients, finds new Cerulli Report European Sales and Marketing Organizations 2014.
The number of digital media teams with more than 10 employees leaped by 15.5% in 2014 compared with the previous year. This increase suggests that managers are reacting to the latest technological trends by hiring specialized people, rather than pre-empting the changes by training existing staff to deal with the advances.
A total of 79% of managers expect digital media headcount to climb further-an increase of more than 50% on those polled the previous year. Only 21% of managers expect to keep their resources at the same level.
Company websites are the top digital media channel used by asset managers to target advisors, institutional investors, distributors, and end consumers, according to Cerulli research. Fully 100% of managers target advisors this way, while 80% of firms use their website to pitch to institutional investors.
It is no surprise that improving websites was asset managers’ most important digital strategy for 2013 and 2014. Several managers surveyed by Cerulli said their company had customized the website with “microsites” containing material that was relevant to specific countries.
Meanwhile, social media strategies were rated less important by managers, compared with the previous year. Cerulli research found that many asset managers allocate fewer resources to social media because of its limited take-up among some channels. Only 45% of managers use social media to reach institutional investors and 35% use it to engage with end consumers.
The challenge for asset managers is to connect with clients across all devices in real time. But social media is more challenging to use as a communications tool in the financial services industry owing to the intricacies of compliance.
“Compliance and regulation are always a big concern for asset managers and the industry in general,” says Barbara Wall, Cerulli Associates’ Europe research director. “Communication is tightly regulated and there is less flexibility to be playful or light-hearted when using social media, compared with other brands,” she adds.
“As regulation, technology, and its users mature, this could change,” says Angelos Gousios, an associate director at Cerulli.
“Several asset managers said that the institutional channel prefers face-to-face interaction and targeted industry information, which is easily accessible on blogs and company websites,” Gousios says. “Social networking on a mobile device in Europe is generally more popular with younger age groups, so we might see usage of social media increase as the workforce ages,” he adds.
Photo: Ares Nieto Porras, Flickr, Creative Commons. Lyxor Launches Currency-Hedged ETF Share Classes on Euro Stoxx 50
Paris headquartered Lyxor AM launched the first currency-hedged ETF share classes on Euro Stoxx 50 index, on 17 February. It has a total expense ratio of 0.20% per annum.
Lyxor said that these hedged ETFs, Lyxor Ucits ETF Euro Stoxx 50 Monthly Hedged C-USD and Lyxor Ucits ETF Euro Stoxx 50 Monthly Hedged C-GBP, are meeting investors’ needs “in an environment where monetary policies’ misalignment has contributed to an increase in currency volatility.”
Fluctuations in foreign-exchange rates can affect the performance between the index returns in its local currency and the returns of a non-hedged ETF listed in a different currency.
Arnaud Llinas, Lyxor’s head of ETFs and Indexing, commented: “Lyxor is always looking for new investment opportunities to meet investor needs and has expanded its ETF range accordingly. Our currency-hedged ETFs tracking the Euro Stoxx 50 Index therefore offer exposure to European equities, while mitigating the fluctuations of the Euro against the listing currency.”
Lyxor has currently $6.5bn (€5.7bn) of assets under management on the Euro Stoxx 50 index, covering 50 stocks from 12 Eurozone countries.
Photo: Stephanie Ouwendijk, new a vice president and portfolio manager at Franklin Templeton Investments. Franklin Templeton Hires Portfolio Manager From Ashmore
Franklin Templeton Investments has announced that it has appointed Stephanie Ouwendijk as a vice president and portfolio manager.
Ouwendijk joined Franklin Templeton on 16 February 2015, as part of its Emerging Markets Debt Opportunities team which sits within the Franklin Templeton Fixed Income Group.
She is based in London and reports to William Ledward, senior vice president and portfolio manager, who leads the Emerging Markets Debt Opportunities team. The team currently manages over $10bn for institutional investors.
Ouwendijk joins Franklin Templeton from Ashmore Group, a London-based emerging markets asset management firm, where she served as fund manager since June 2010. Most recently, she was part of a team responsible for External Debt and Blended Debt funds, and in particular was responsible for CEE and Africa sovereign and quasi-sovereign credits.
Prior to working at Ashmore, she was an emerging markets analyst/portfolio assistant at Gulf International Bank Asset Management. She holds an MSc in investment management from Cass Business School in London, and MSc and BSc in business administration from Vrije Universiteit in Amsterdam. She is a Chartered Financial Analyst (CFA) Charterholder.
The Franklin Templeton Fixed Income Group is an integrated global fixed income platform comprising over 100 investment professionals located in offices around the world. The group launched its first fixed income portfolio more than 40 years ago and has been managing money for the institutional market for more than 30 years.
Spain’s CaixaBank has announced the launch of a takeover bid for above the 50% of Portuguese lender Banco BPI on top of the 44.1% that it has owned for the last 20 years.
CaixaBank said it would pay €1.329 per share in cash to buy Portugal’s fourth bank. The price was 27% up compared to BPI’s closing price on Monday.
The number would bring the Spanish lender’s purchase price up to €1.09bn.
According to the deal, BPI’s shareholders must also vote to remove a rule that restricts CaixaBank to voting rights equivalent to 20% of BPI’s capital.
Through its current stake in BPI, CaixaBank, which is also Spain’s third-largest lender by market value, serves some 1.7m Portuguese clients.
The offer, which will be filed in Portugal’s Comissão do Mercado de Valores Mobiliários portuguesa (CMVM) once regulatory approvals will be obtained, will be completed during the second quarter of 2015, CaixaBank said in a note today.
Photo: Jacob Ehnmark. Investec Asset Management Announces Use of Stock Connect in UCITS Fund Range
Investec Asset Management announced today that funds within its flagship Luxembourg-domiciled UCITS Global Strategy Fund range will now have the capability to invest in the Chinese domestic equity market using Shanghai-Hong Kong Stock Connect. Regulatory approval was received in December 2014 and it is believed that Investec Asset Management is the first global investment manager of UCITS funds set up to invest using Stock Connect.
This news follows the award of an RQFII (Renminbi Qualified Foreign Institutional Investor) licence by the China Securities Regulatory Commission (CSRC) and the allocation of its RQFII investment quota by the Chinese State Administration of Foreign Exchange (SAFE).
In the near future, Investec Asset Management intends to utilise its RQFII licence and quota to launch two new daily dealing UCITS funds in its GSF range, one focusing on Chinese equity exposure and the other on onshore Chinese bonds. This builds on its range of dedicated Asian investment strategies, including the Investec 4Factor All China Equity Strategy and the Investec Asia ex Japan and Investec EM Equity Strategies.
These developments allow Investec Asset Management to provide clients with direct access to mainland Chinese equity markets across both global and regional products in a product structure offering both flexibility and liquidity.
Greg Kuhnert, Manager of the Investec Asian Equity Strategy commented, ‘The A share market represents the other 50% of the China pie previously closed to foreign investors. Because of our long-term investment in the region and investment hub on the ground, this market appears rich with opportunities for investors such as us who are focused on companies demonstrating improving profitability, return on capital, capital discipline and valuations.’
Amadeo Alentorn, Manager and Head of Analysis for the Global Equity team at Old Mutual Global Investors, who was recently in Madrid . “The ECB has Disappointed by Acting too Late; There Was an Opportunity to Change the Sentiment a Year Ago”
After the last few years of constant increases in the equity markets, uncertainty is once again starting to make an appearance, in response to aspects such as the divergence in worldwide monetary policies, or the political and electoral events which could cause significant changes over the course of the year. In this current backdrop of greater uncertainty and volatility, the proposal of Old Mutual Global Investors, which recently presented in Madrid its long / short global equity strategy with an absolute return perspective (Global Equity Absolute Return), makes complete sense.
It is a totally neutral market strategy with zero exposure to market or beta, and uncorrelated with the market behavior, which makes it a good strategy to diversify risks. “It has an absolute return profile that is generating much interest among Spanish investors and looking for a 6% return over liquidity,” says Amadeo Alentorn, Manager and Head of Analysis for the Global Equity team at Old Mutual Global Investors. Something that has been achieved in recent years with a volatility of around 5% and which has allowed it to increase its assets to 3 billion dollars (of the total 5 billion which the company manages in equity, between this and other long only strategies).
Behind their success lies a systematic model, which, out of a global universe of 3,500 companies with the largest capitalization and liquidity in the world, selects 700, through the implementation of five criteria of a fundamental nature: valuation, growth, sentiment analysis, business management, and market dynamics.
These criteria change their weight and become more or less important depending on the market situation. Thus, the model has a number of historical situations by which it analyzes which factors have worked better, and acts accordingly. Therefore, the emphasis changes depending on the economic climate: if the market falls, the greatest weight will be on the quality of the companies, business management, etc., factors that tend to work better. “Currently, the sentiment is neutral: there is still risk aversion, despite the ECB. Although volatility will grow, and is greater than in the past, it’s still not too high. The current economic climate values strong balance sheets and the quality of the companies, the most defensive stocks; and valuation criteria do not work too well,” says the manager. In his opinion, the ECB has disappointed markets by acting too late, and a year ago would have had the opportunity to change the sentiment; hence he predicts lateral movements in the markets and increased volatility.
The model, which gets its profitability mainly from stock selection (i.e. choosing the securities on the long side to be better than short), also gets profitability through sector positions, which can afford to have some exposure: for example, they are short on energy securities and long in defensive sectors such as the health sector or utilities. In fact, amongst their long positions in Spain these sectors stand out, in securities such as Iberdrola and REE, for the strength of their balance sheets and sustainable growth of the sector. But regardless of sector positions, exposure is zero in currency, regional positions, or by country, the manager explains.
Amadeo Alentorn, Manager and Head of Analysis for the Global Equity team at Old Mutual Global Investors, works from London within a team consisting of two others managers, analysts, and training experts.
Global gross domestic product (GDP) growth should accelerate somewhat in 2015 and 2016 from the pace of the last three years because of much lower oil prices, the avoidance of special drags on the world economy, and continuing easy monetary policies from global central banks, according to BNY Mellon Chief Economist Richard Hoey. Hoey made the comments in his February outlook.
Among the drags on the economy in recent years that are unlikely to be repeated are the weather-impacted decline in U.S. GDP in the first quarter of 2014 and the Japanese recession in the middle two quarters of 2014 due to the rise in the value-added tax, Hoey said. Furthermore, he added that in recent weeks there have been monetary policy easing moves from the European Central Bank, the Swiss National Bank, the Bank of Canada, the National Bank of Denmark, Norway’s Norges Bank, the Central Bank of the Republic of Turkey, the Central Reserve Bank of Peru, the Reserve Bank of India, and the Central Bank of Egypt, among others.
“Recent currency trends should support global growth,” Hoey said. “There should be a boost to export competitiveness in such economically weak regions as Europe and Japan, due to sharp declines in their currencies. These currency declines have coincided with a sharp drop in oil prices. As a result, they are more likely to have cyclically-appropriate anti-deflationary effects than to generate excess inflation.”
Hoey noted the recovery in global growth has been more sluggish in this cycle than in past recoveries. Despite the aggressive use of credit to finance the leveraged purchase of existing assets, he said the appetite to use credit to finance increased current spending has been restrained until now in many countries.
While Hoey is seeing tailwinds to economic growth from inexpensive energy that is likely to last for some time and the accommodative monetary policies, he points to a number of factors that could moderate the expansion in global GDP.
These restraints include a downward shift to lower trend growth in China, according to the report. China engineered a domestic credit boom a half-decade ago to limit the impact of the global financial crisis and global recession on its economy, Hoey said. However, he said the hangover from that credit boom is now contributing to a slowdown in the growth rate of China.
Hoey said the slowdown is occurring just as there is a demographic inflection point to slower growth in the Chinese labor force. He added, “We believe that the outlook for the Chinese economy is a downward shift to slower trend growth rather than a hard landing.”
Another challenge to growth cited by Hoey is the decline in the global trade multiplier. Before the financial crisis, global trade grew faster than GDP, but that does not appear to be the case now.
“As emerging markets are now becoming more dependent on domestic demand growth, the global trade multiplier has shifted down, with global trade and the global economy both growing at about the same pace,” he said.
