Photo: Restu20 . HSBC Private Banking Hires Vicente Garcia as Head of Mexican Market for Switzerland and Luxembourg
According to information passed to Funds Society by sources close to the appointment, HSBC Private Bank has hired Vicente Garcia as the institution’s Head of Mexican Market in Geneva and Luxembourg, a post which he took up a few weeks ago from And Private Wealth of Andbank group.
With over 15 years experience in the Mexican market, living in Mexico during six of those years, he has extensive experience in financial markets, products, and investment and estate planning, as shown by his Linkedin profile.
From1999 until 2011, Vicente Garcia worked between Geneva and Mexico as private banker in Santander Private Banking, where he held the positions of Senior Relationship Manager and Team Leader for Mexico’s table. He began his career as a trader at Banque Kankaku and Cogetex, where he worked in Geneva for two years.
Garcia, CFA, has a degree in International Relations from The Graduate Institute for International Studies (IUHEI).
Nicolas Descoqs. Courtesy photo.. Alken Adds Two Specialists to Investment Team
European equity specialist Alken Asset Management has added two experienced analysts to its highly regarded investment team.
Alken founder Nicolas Walewski says the addition of Michael Aubourg and Nicolas Descoqs further reinforces Alken’s long standing commitment to client service and delivering outsized alpha for investors.
Aubourg – an analyst in the food, beverages, tobacco and household & personal care industries – joins from Credit Suisse in Paris, where he was an associate in the group’s French investment banking division.
Before Credit Suisse, Aubourg spent three years at Lazard in the M&A and restructuring teams. He started his career in the research department of the IMF in Washington DC, assisting economists with quantitative models and econometric analysis. Aubourg holds a Master of Science in Applied Mathematics from Harvard University, as well as an engineering degree from Ecole Centrale Paris.
Descoqs – an analyst in the oil & gas, metals & mining, and aerospace & defence industries – joins from exploration and production giant ConocoPhillips, where he started his career in 2005.
At ConocoPhillips, Descoqs worked on a number of high level assets across the world. He began as a drilling and completions engineer in Norwegian and Chinese offshore oilfields, before becoming a project engineer in Houston. Descoqs holds a Master of Science in Engineering from Ecole Polytechnique in France, as well as Master of Science in Petroleum Engineering from Norway’s NTNU University.
“It has been always been our plan to continue investing in and reinforcing our research capability,” Walewski says.
“The insights of our trusted analysts have played a pivotal part of the outperformance Alken has delivered for investors. The addition of Michael and Nicolas further strengthens our investment proposition.”
Photo: Christian Frausto, Flickr, Creative Commons. Navigating the Regulatory Headwinds, at the 4th Annual Latin America Conference
BBH will co-sponsor the 4th Annual Latin America Conference with Vanguard, where BBH and Vanguard’s experts to discuss some of the most important and timely topics affecting our industry.
BBH will cover 2014 key regulatory developments, including the post-crisis regulatory agenda and an overview of asset management regulations, as well as: asset management as systemically risky (from global perspective); Volcker Rule & Money Market Reform , in USA; AIFMD/UCITS, in UE; and fund passport schemes in Asia.
Vanguard will provide an in-depth overview of ETF trends from one of their resident experts.
The event will be hosted twice, in two convenient locations: Las Condes, Santiago (Chile), on Tuesday 4th November, 2.30 to 6.30 pm at Ritz-Carlton (El Alcalde No. 15); and Lima (Peru), on Thursday 6th November, also 2.30 to 6.30 pm, at Hilton Miraflores (Avenida de la Paz 1099).
Please RSVP to: eventplanningny-nj@bbh.com or by calling 00-1-212-493-7958 by October 17th. Please identify which of the two locations you plan to join at.
Las Generaciones. By Roger Langevin artist. Ultra-Wealthy “Millennials” Are Idealistic, But Not Alienated; Challenge Stereotype of the “Idle Rich”
Ultra-wealthy “millennials,” those born between 1982-2000, are idealistic about the uses of their wealth, but say they are generally aligned with the values of their parents as Morgan Stanley Private Wealth Management/Campden Wealth “Next Generation” survey, that looks at families ranging in net worth form $25 million to over $100 million.
“The next generation members of ultra-affluent families are seeking to define their place in the family and find their voices. Education and opportunities will be central to their success. Areas such as philanthropy, values-based investing and entrepreneurism have high appeal with this group and present strong opportunities for engagement”
63% of millennials view themselves as stewards of their wealth for future generations, compared with 46% of older siblings.
58% view their wealth as a vehicle to help the community (vs. 38% of older inheritors).
74% view their wealth as a source of empowerment to pursue what is most important (vs. 54% of older generation).
While they may think differently about their wealth than their parents or grandparents, next generation wealthy of all ages remain close to their families.
95% say they recognize what is important to their families.
64% believe their values are highly aligned with those of their parents.
Only 6% said they have belief systems that differ significantly from their parents.
These are among the findings of a Morgan Stanley Private Wealth Management and Campden Wealth-conducted survey of 87 ultra-high net worth individuals under the age of 40, who come from families with a minimum wealth of $25 million. Over half (57%) had a family net worth of more than $100 million.
“A generation that stands to inherit considerable wealth tells us that the myth of the idle rich is just that – a myth. And, while they may use social media to connect in their personal lives, today’s next-gen wealthy say they prefer to manage their wealth in face-to-face meetings with an advisor,” said Douglas J. Ketterer, Head of Strategy and Client Management for Morgan Stanley Wealth Management.
“The next generation members of ultra-affluent families are seeking to define their place in the family and find their voices. Education and opportunities will be central to their success. Areas such as philanthropy, values-based investing and entrepreneurism have high appeal with this group and present strong opportunities for engagement,” said Mindy Rosenthal, President of the Institute for Private Investors and author of the study.
The myth of the “idle rich”
Among other key findings, the survey discovered that a substantial majority of wealthy inheritors do not plan to live a life of leisure, even though they could afford it.
81% of the wealthy next generation – irrespective of age – believe it is extremely or very important to have a successful career.
68% expect to continue working even after they inherit significant wealth.
In terms of their own spending habits, majorities believe it is extremely or very appropriate to borrow for education (67%), to purchase a primary residence (63%) or to fund a business opportunity, while only 7% believe borrowing to buy personal luxuries is somewhat appropriate.
Millennials are the most risk adverse among next generation wealthy
Perhaps reflecting the volatile market and economic environment in which they grew up, millennials are the most risk adverse of the next generation wealthy:
Only 11% say they are willing to undertake substantial risk for the possibility of substantial gain, compared with 33% among inheritors aged 30-40.
Managing wealth the old-fashioned way
A majority of next generation wealthy across all age groups (63%) believe working with advisors is necessary to make sound financial decisions, and half (49%) say they are extremely or very likely to continue working with their parents’ advisors.
While much is made of the growing power of digital and social media, most next generation wealthy prefer to manage their wealth the old-fashioned way:
82% want more in-person engagement with their financial advisors
74% want to do more business via phone
68% want more e-mail communication
15% want more social media interaction
5% want more communication via internet video/Skype.
Now in its seventh year, Investec Asset Management is hosting in London its Investec Global Insights 2014 conference, which is expected to attract 250 delegates from around the world.
Delegates from United States, Latin America, Europe, United Kingdom, Middle East, Africa and Asia will be able to debate key themes and drivers of investment markets. They will also have the opportunity to attend the personalized ‘Meet the Portfolio Manager’ sessions and interact with peers from major fund buyers from all around the world.
With market leadership having changed significantly over the last twelve months it is important to take stock and consider where opportunity exists. Are Developed Equity Markets over-developed? Where is there still opportunity? Are there sustainable sources of income? Is investing in emerging markets still worth it? The Investec Global Insights 2014 conference will explore these opportunities and more.
To know more about the agenda, please follow this link.
Ezentis' Chairman, in Madrid Stock Market. Courtesy photo. Spain's Ezentis Group Achieves a New Contract from Vivo in Brazil
Ezentis Group, through its subsidiary in Brazil, Serviços e Engenharia Instalação of Comunicações (SEICOM) has been awarded a contract for works of installation and maintenance of mobile network sites of the company Vivo (Telefónica Brazil) amounting to 96,194,366 reais (31.5 million euros).
The contract – which have a duration of three years – plans to manage the installation and maintenance works of the mobile network Vivo in the states of Rio de Janeiro and Espírito Santo.
Ezentis has increased its portfolio of contracts in Brazil amounting to 198 million euros since it presented to investors and analysts the 2014-2017 Strategic Plan on April, 2. This Plan involves placing Brazil as the main market for the company with a weight of 37% in sales in the coming three years.
Ezentis is an entrepreneurial group with presence in nine Latin American countries, whose goal is to improve the quality of life of people in over 15 million homes, through total satisfaction of the telecommunications, energy, and water operators in the region. Ezentis bases its vision on two solid pillars: innovation and social corporate responsibility, because by working to improve work and workers’ productivity it is able to guarantee greater satisfaction of its clients, greater security for their workers, and a positive environmental impact.
Courtesy photo by DeVanx Assets. Fancy Red Diamonds Emerge as New Asset Class
DeVanx Assets, a Swiss rare mineral investment advisory, has reported that demand for red diamonds among institutional, ultra-wealthy investors, and intermediaries is surging as their value continues to increase. Red diamonds are one of the rarest minerals in the world and the highest quality of these diamonds have more than tripled in value in the past decade.
One of the most anticipated red diamond events, Rio Tinto’s annual Argyle tender, is currently creating a global bidding war featuring the Argyle Cardinal, a rare red 1.2–carat diamond, 3 additional reds, and 51 Argyle pink and purplish-red diamonds. Experts say the highest quality investment worthy red diamonds can command up to $2.5 million a carat. Only 13 fancy red diamonds have been included in the annual tender during the past 30 years. This year’s tender ends on October 8, 2014.
Accordingto Paula Vance, CEO of DeVanx Assets, her company has standardized the red diamond industry by tracking data including sales and pricing over the past 50+ years from the entire supply chain, mining to investors.
“The careful review and selection of an investment grade red diamond is critical to enjoy the highest ROI for these stones,” she said. “While certainly beautiful and precious, not all red diamonds are of investment quality. The best in red diamonds have become a new asset class offering stable value appreciation and low volatility, and are an excellent inflation hedge and substitute for gold and other precious metals.” Accordingto DeVanx’s in-house GIA Master Gemologist, Doris Hangartner, only 126 investment grade fancy red diamonds are known to exist in the world today.
DeVanx Assets offers exclusive access to 82% of the world’s limited supply of open market investment grade red diamonds. It provides customized asset packages meeting client specifications and liquidity programs to allow investors to capture capital in six to 12 months versus the typical three to five years.
“Our client base is shifting,” says Vance. “While the majority is institutional, such as independent wealth managers, private banks, intermediaries and family offices, more Ultra High Net Worth Investors are seeking to directly invest in red diamonds. These investors hail from all over the world: Europe, Russia, China, Japan, Korea, U.S., Canada, and South America.”
Photo: Ork.ch. JP Morgan Recruits María Ángeles Arias to Join its Team in Switzerland
As was reported to Funds Society by sources familiar with the appointment, Maria Angeles Arias, from AndPrivateWealth in Geneva, joins JP Morgan Suisse to take up her post as senior banker for the company’s Mexican team.
With over 13 years experience in private banking, Arias worked for over two years as Senior Banker, also for Mexico, at Andbank’s AndPrivateWealth. She was previously relationship manager for Santander Private Banking for a period of 11 years during which she worked from Madrid, Miami and Geneva.
Arias, a graduate in Law from the Complutense University of Madrid, has a Master in Financial Markets from the “Instituto de Estudios Bursátiles” (IEB, Madrid), and a Management Development Program (MDP) from the IE Business School, as is listed in her Linkedin profile.
Photo: Kallerna. BNY Mellon to Acquire U.S. Investment Manager Cutwater Asset Management
BNY Mellon has announced that it has reached an agreement to acquire Cutwater Asset Management, a U.S.-based fixed income and solutions specialist with a 20-year track record and approximately $23 billion in assets under management. Located in Armonk, NY, the firm is currently a wholly-owned subsidiary of MBIA Inc.
Upon completion of the deal, Cutwater will operate as part of BNY Mellon Investment Management and will work closely with, and be administered by, Insight Investment. Insight is one of BNY Mellon’s premier investment management boutiques and one of Europe’s leading investment managers. The addition of Cutwater’s capabilities will enhance BNY Mellon’s and Insight’s U.S. platform and abilities to offer specialized fixed income solutions.
Cutwater’s products and investment solutions include a wide range of fixed income strategies such as core, long duration, high yield, loans and absolute return strategies.
Curtis Arledge, CEO, BNY Mellon Investment Management, said, “BNY Mellon’s strategy is to deliver the most innovative solutions via the most talented investment managers to meet our clients’ objectives. Cutwater brings an impressive performance history, strong intellectual capital and an investment culture consistent with BNY Mellon’s. Given the unprecedented interest in the fixed income market at this time, we are excited by the opportunity to expand our investment offerings for clients as a result of this combination of fixed income capabilities.”
Abdallah Nauphal, CEO and CIO, Investments, Insight Investment, said, “Insight has grown by aligning our investment solutions with the needs of our clients. Cutwater’s strong U.S. domestic fixed income and solutions track record and experienced team will complement Insight’s strategy in the U.S. as we build upon our existing position as a European leader in liability risk management and fixed income. Working closely with Cutwater will augment our current fixed income capabilities, deepening our fixed income research and portfolio management expertise in the world’s biggest and most diverse credit market.”
Clifford D. Corso, CEO and CIO, Cutwater, added, “Cutwater is delighted to be joining a true global leader in the asset management industry. This union is a logical next step for Cutwater. We share a similar investment philosophy and approach designed to offer products and relevant client solutions.”
BNY Mellon Investment Management is one of the leading fixed income managers with a diversified portfolio of investment boutiques offering fixed income solutions. These include Standish Mellon Asset Management Company, LLC and Mellon Capital Management Corporation headquartered in the U.S.; Insight Investment, the Alcentra Group, and the Newton Group headquartered in the UK; and Meriten Investment Management GmbH headquartered in Germany.
The terms of the transaction were not disclosed. The transaction is subject to standard regulatory approvals and certain other conditions and is expected to close by the beginning of the first quarter of 2015.
Following an explosive re-rating in 2013 that saw the Tokyo Stock Price Index (TOPIX) gain approximately 51% (in local currency terms), we have seen a reversal of Japan’s equity markets so far this year. This has led some investors to question the efficacy of “Abenomics.” With the recent announcement of Prime Minister Shinzo Abe’s revamped growth strategy, Kenichi Amaki, Portfolio Manager at Matthews Asia, believes it’s a good time to reassess the impact of his economic plan, and consider what the future may hold.
There are literally hundreds of components that comprise Abenomics but one successful area has been job creation. Since it took over at the end of 2012, the Abe administration has created more than 1 million new jobs, with more likely to come given the robust growth in job offers. Discouraged job seekers who had previously left the labor pool have begun to re-enter the workforce. Critics often note that many of these jobs are at the low end of the wage curve in primarily part-time jobs but for the incremental worker and the economy as a whole, a job at a low wage is better than no wage at all. Supported in part by these job gains, corporate earnings have remained robust. The bottom-up picture appears fine as better earnings and share price underperformance have made valuations in Japan that much cheaper.
Nevertheless, macroeconomic statistics point to some emerging challenges on the horizon, near term. Amaki notes that judgments should not be made based solely on the numbers from the first two quarters of 2014, as they are heavily distorted by the tax hike. However, it still would seem fair to say that the tax hike has dampened consumer sentiment while causing a stiff decline in real household incomes and spending. The major issue behind this is wage growth, which remains muted. Improved corporate earnings have led to wage increases at many larger listed businesses, but smaller and medium-sized enterprises, which employ the vast majority of Japan’s workers, have been more reluctant to raise wages. Wages remain the main hurdle on the path toward sustainable consumption-oriented growth and more concrete steps to address labor regulation must be undertaken.
Meanwhile, over the past year, inflation has turned higher. At the end of 2012, Japan’s consumer price index excluding fresh food—the Bank of Japan’s preferred inflation benchmark—was -0.2%. But by the end of 2013, that had advanced to +1.3%, quite a big change in just 12 months. According to Amaki, this transition to an inflationary environment is slowly starting to change corporate mindsets. In aggregate, Japanese companies have been sitting on piles of cash, which would lose value in real terms in an inflationary world. Share buybacks announced so far in 2014 have already surpassed 2013. We’ve seen companies raise dividends and more have started to set specific dividend payout ratios in lieu of “stable dividends” (i.e. investors get whatever companies feel like paying).
At the same time, measures to strengthen corporate governance are being put forth By the middle of next year, Prime Minister Abe intends to establish a corporate governance code that will require, amongst other things, stronger oversight by independent directors. Of course, better governance is no guarantee of success but it should, on average, improve the quality of decision-making that goes on inside Japanese board rooms.
The potential for productivity enhancement induced by better corporate governance is enormous. According to Kenichi Amaki, productivity improvements will be the most important driver of growth for Japan going forward. Currently, productivity of Japan’s manufacturing and non-manufacturing sectors, as measured by output per worker per hour, remains far lower than the U.S., as highlighted in the chart below. Why? Pretty simple: over a decade of deflation caused by oversupply. There are many sectors of Japan Inc. that remain simply too fragmented and companies have little or no pricing power. Such fragmentation causes duplication of capacity and development costs, while keeping competition unnecessarily high, lowering selling prices and profitability.
In addition to consolidation, the emergence of Internet-based services with disruptive business models can also make an impact on productivity. These new companies don’t carry the legacy costs that plague many incumbent players. Recently, there is evidence that risk-taking is creeping up as Japan’s entrepreneurs attract more capital. Through June, Japanese start-ups attracted 32% more investment from venture capital firms compared to last year. Despite this year’s stagnant markets, investor appetite for new IPOs has remained resilient and venture capital funds seek to seize this opportunity. A government initiative to allow state-owned universities to set up venture capital funds that will invest in the commercialization of innovative research is also being set forth.
Improving productivity in Japan will involve making many difficult choices. For many years, managers have opted to kick the can down the road. But there isn’t much road left anymore. “These developments have me feeling more optimistic over the prospects for Japanese companies over the medium term”, concludes Amaki.
You may access the full article by Kenichi Amaki, Portfolio Manager at Matthews Asia, through this link.
