US home prices are projected to increase by 5% in 2023, up from the previous forecast of 1.9%, according to Goldman Sachs Research.
This upward revision is based on a number of factors, including the prospect of interest rate cuts and strong momentum in housing prices.
The Federal Reserve has signaled that it may cut interest rates in the first quarter of 2024, which has led to expectations that 30-year fixed mortgage rates will fall to 6.3% by the end of the year. This will make homes slightly more affordable and help to support higher home prices.
Recent home price index releases have shown strong momentum, with the annualized rate running around 8%. This, combined with low inventory and stable demand, is expected to support higher home prices in the coming year.
On the other hand, Goldman Sachs Research’s forecasts are based on different models that incorporate the largest 380 metros, rather than a national model. This allows for a more nuanced view of the housing market, with housing falling into three main buckets: expensive areas that have gotten more expensive, affordable areas that have become somewhat expensive, and relatively cheap areas that are expected to see the strongest growth.
In case of rental, affordability is still a factor for many potential home buyers, particularly those in the largest demographic of 30- to 39-year-olds. With financing costs higher than they have been in recent years, it is still cheaper to rent than to buy in many cases. However, mortgage affordability is expected to improve slightly in the near term under Goldman Sachs Research’s baseline housing and mortgage forecasts.
This article was based on a Goldman Sachs Report which can be found at the following link.
Individual investor interest in sustainable investing is high and rising, according to a new “Sustainable Signals” report by the Morgan Stanley Institute for Sustainable Investing and Morgan Stanley Wealth Management.
“Nearly 80% of individual investors believe that it is possible to balance market rate financial returns with a focus on sustainability,” says Jessica Alsford, Morgan Stanley’s Chief Sustainability Officer and CEO of the Institute for Sustainable Investing. “A majority of individual investors also express a desire for their investments to advance positive environmental and social impact, creating opportunities for finance professionals to meet these needs.”
According to the survey, more than three quarters (77%) of individual investors globally are interested in investing in companies or funds that aim to achieve market-rate financial returns while considering positive social and/or environmental impact. In addition, more than half (57%) say their interest has increased in the last two years, while 54% say they anticipate boosting allocations to sustainable investments in the next year.
The findings also highlight key areas of interest and concern among investors. Climate action emerged as the top sustainable investing theme, with 15% of investors prioritizing it, followed by healthcare, water solutions, and the circular economy. Despite the shift towards sustainability, traditional energy companies remain in consideration for nearly 80% of investors, provided these companies demonstrate serious commitments to reducing their carbon footprint and addressing climate change.
However, challenges such as a lack of transparency and trust in sustainability reporting, alongside fears of greenwashing, are noted as significant barriers preventing investors from committing to sustainable investments. Many investors are also interested in social themes but are uncertain about how to engage effectively.
In addition, survey respondents cite a lack of transparency and trust in sustainability reporting (63%) and the potential for greenwashing (61%) as concerns that prevent them from making sustainable investments. They also express an interest in investing in social themes but uncertainty around where to begin.
The report concludes that investors could benefit from the guidance of investment professionals. More than half (52%) of respondents self-report limited knowledge about how to start investing sustainably, with 47% saying there is a lack of financial products available. These findings indicate increased opportunity for asset managers and investment platforms to help investors meet their sustainability goals; 58% of global investors would be likely to select a financial advisor or investment platform based on sustainable investment offerings.
The Sustainable Signals series was launched in 2015 and measures the views of individual investors, institutional investors and corporates on sustainable investing. The survey polled 2,820 active individual investors across the U.S., Europe and Japan to assess interest in sustainability and understand where investors see the most opportunity and potential risk.
View the full results of the Sustainable Signals survey here.
BlackRock announced two major developments supporting the growth and advancement of defined contribution (DC) advisors.
The firm has appointed Carrie Schroen as Head of US DC Intermediary Business, a newly created role, joining the already established leadership team for the business.
Schroen most recently served as a national sales manager within BlackRock’s U.S. Wealth Advisory team and brings more than 20 years of experience working with financial advisors, including starting her career as an advisor herself. Schroen’s track record and expertise uniquely positions her to lead the growth of BlackRock’s business with retirement plan advisors in an evolving landscape, where the role of intermediaries is expanding, large national firms are consolidating, and demand for personalized investment solutions is increasing.
Moreover, BlackRock launched the Defined Contribution Practice Management Program, providing robust tools and resources for retirement plan advisors of all sizes. It is the latest addition to BlackRock’s growing value-add program, developed to meet the needs of the 62% of retirement specialist advisors who want more support in building their DC business and the 39% of plan advisors who would value support growing their wealth business. The firm sees the convergence of wealth and defined contribution as a new frontier for the DC Advisor channel.
Anne Ackerley, Head of BlackRock’s Retirement Group, said, “As the DC Advisor landscape evolves, BlackRock is at the forefront – committed to anticipating and addressing the needs of this important channel. Through new tools and new leadership, we will help strengthen relationships and position BlackRock as the best partner to our clients.”
These announcements come at a time when advisors are playing an increasingly vital role in helping individuals plan a more secure retirement. The amount of corporate DC assets managed by retirement plan advisors grew by 14% CAGR between 2018 and 2022 versus 6% for the market overall.
“In an increasingly competitive environment, advisors are solving complex workplace and wealth needs for more sophisticated investors, as market and demographic dynamics lead clients to consider active and retirement income solutions,” said Schroen. “BlackRock reduces the complexity, partnering with advisors to deliver best-in-class investment solutions. With our new practice management hub, we are arming advisors with turnkey resources for plans and participants so they can spend more time building relationships that drive business growth.”
At launch, BlackRock’s Defined Contribution Practice Management Program includes digital resources for both seasoned retirement plan advisors as well as those who are newer to the DC space. Looking ahead, the firm plans to spearhead additional research, content, initiatives, and technology solutions to support advisors navigating the complex needs of DC plans and participants.
Blackstone announced Thomas R. Nides, former long-time Vice Chairman of Morgan Stanley, Deputy Secretary of State, and Ambassador to Israel has joined the firm as Vice Chairman, Strategy and Client Relations.
In this new role, Nides will support a variety of strategic firmwide initiatives and special projects, as well as focus on senior client relationships globally.
“We are delighted to welcome Tom Nides to Blackstone. Tom has operated at the highest levels of both the public and private sectors and brings a wealth of relationships across the financial, government and geographic spectrum. We are still in the early innings of our global expansion and believe he will be a tremendous asset to our people and clients,” said Stephen A. Schwarzman, Co-Founder, Chairman and CEO.
Nides has extensive experience in both the public and private sector. He served as the United States’ Ambassador to Israel from 2021 to 2023. Prior to that, he spent over a decade at Morgan Stanley in various capacities including Chief Operating Officer and Vice Chairman.
Nides was appointed Deputy Secretary of State and Chief Operating Officer of the U.S. State Department by President Barack Obama (2009-2017) and was awarded the nation’s highest diplomatic honor by Secretary of State Hillary Clinton for his service.
He has also previously been a senior leader at Credit Suisse, Fannie Mae, the Office of the U.S. Trade Representative, and on Capitol Hill.
Nides currently serves on the boards of the Partnership for Public Service, the International Rescue Committee, the Center for Strategic and International Studies (CSIS), and the Urban Alliance Foundation. He received his B.A. from the University of Minnesota. He formerly served as chairman of the board of the Woodrow Wilson Center.
Nides said: “Blackstone’s world-class people, consistent outperformance, and high-integrity culture have contributed to its stature as a leading global investment platform with considerable wind at its back. I’m excited to join this high-caliber team to help support the firm’s continued growth.”
Photo courtesySteve Preskenis, Bolton Global Capital President
Bolton Global is forecasting 15% to 20% growth in its US Offshore business this year going forward and are confident of achieving these goals through recruiting “top-tier” financial advisors, the firm’s president Steve Preskenis told Funds Society.
“We anticipate that we will grow our business by 15-20% and add at least 6 to 10 new affiliates, primarily from the wire house world,” Preskenis responded when asked what Bolton’s goals were for 2024 in the US Offshore market.
“Over the past decade, Bolton has invested significant resources and focused our efforts on raising our presence in Latin America and other parts of the world where investors seek access to the US financial markets. We are honored to be the Broker-dealer of choice of leading international financial advisors and their clients, ” he added.
In addition, on a more general level, Bolton expects “continued profitable” growth by adding advisors for both domestic US and international business, expanding capabilities to meet market demand, and adopting the ever-evolving technologies required by top-tier advisors, he added.
“Bolton is a uniquely balanced firm with strong domestic and offshore advisory practices. We have built brokerage and advisory platforms to accommodate a wide variety of client engagements for our advisors,” Preskenis noted.
Separately, Bolton will continue its existing management structure, enhanced by the addition of John Cataldo, who arrived from Integrated Partners, as Chief Administrative Officer & Chief Legal Officer. “John brings a wealth of legal, risk management and operational experience to our team.” Preskenis commented.
The firm is in the process of recruiting for the new position of Head of Business Development, following the announcement of Michael Avarett’s departure.
Market Forecasts
In reference to the trends that Bolton expects to resonate in 2024, “technology will continue to dominate the evolution of our space and lead the way in 2024,” summarized Bolton’s president.
He expects that as technology becomes more entrenched in financial services, advisors who learn how to leverage those resources while still providing personal white-glove service to investors, will gain the advantage over those who rely too heavily on technology or shun it altogether. “Technology is a resource. Like any other tool, it requires skill and expertise to use it effectively to the client’s advantage. Bolton provides its advisors with access to industry-leading technology and platforms that they can deploy at their discretion. Independent advisors seek us out specifically for the flexibility that we provide them.”
In addition, Preskenis anticipates that “the ESG frenzy will continue to subside, interest rate fluctuations will impact investment decisions, and markets will continue to look for signs of frothy, overvalued sectors.”
Election year
2024 will also be marked by national elections, and that has the industry on its toes.
“A lot of people make predictions about the impact of elections on the financial markets. In fact, these predictions change faster than the polls,” observed the Bolton president who noted that “in general a republican administration tends to generate a more positive business climate. It is too early to anticipate how the election will impact the US and global financial markets, but, as the Republican party coalesces around one candidate, a picture will come into focus on the strength of Biden against his competitor. One thing that is certain is that it will be a hard-fought campaign.”
Photo courtesyMichael Averett, Chief Revenue Officer (CRO) at Insigneo
Insigneo announced the appointment of Michael Averett as Chief Revenue Officer (CRO). This newly created role, based in Miami, will be reporting to Javier Rivero, President & COO of Insigneo.
As CRO, Averett will be overseeing the firm’s revenue-generating facets and actively driving the company’s organic growth strategy, the firm said.
Averett brings to Insigneo more than two decades of experience in financial services, concentrated in the United States as well as in Latin America. He has held leadership roles at Citigroup and led teams that delivered annual revenues of more than $150 million and, most recently, as Head of Business Development for Bolton Global Capital.
His expertise spans all functional areas of Global Wealth Management, including Cross-Border Team Leadership, Securities Industry Regulatory Environment, Business Strategy and P&L Management, showcasing a robust and proven track record in the financial services space.
He holds a Master of International Management from the Thunderbird School of Global Management and has his Series 7, 9, 10, 24 and 66 investment licenses.
During his career at Citi, Averett, who is fluent in Spanish, lived in Mexico and Colombia, where he gained valuable insights and experiences that contribute to his global perspective.
“We are delighted to welcome Michael to our growing Insigneo family; we are confident that his experience and background will complement our senior management team to contribute greatly to the future development and success of the firm and our clients,” mentioned Rivero.
The addition of Michael Averett to Insigneo’s leadership team highlights the company’s continued momentum to attract top industry talent, reinforcing its commitment to growth and excellence. With this incorporation, the company is poised for continued success by providing an exceptional experience to its network of investment professionals and positioning Insigneo as a leader, concluded the statement.
ATL, a broker of commercial insurance solutions, has expanded its global presence with the launch of ATL RE, an independent reinsurance broker serving the Latin America and the Caribbean markets via its new Miami office.
Through the new Miami hub, ATL RE will offer a comprehensive range of commercial reinsurance products including Financial Lines, Property and Energy, Construction, Accident and Health, Treaty and Marine, across a number of key Latin American markets, including Mexico, Ecuador, Argentina, Uruguay, Peru and Bolivia, the statement said.
To oversee ATL RE’s continued growth in this region, the company has appointed José Astorqui, former CEO and CCO of BMS Group Latin America and Caribbean, as Partner and CEO of ATL RE. Astorqui has a renowned track record of driving growth at some of the largest insurance brokers and providers in the world, having previously held the positions of CEO at Lions Gate Latin America and Caribbean, and Managing Director Latin America at Howden Insurance Brokers.
Joining Astorqui as part of ATL RE’s leadership team will also be Andrew Hye in the role of Partner and Executive Director, who joins from Summa Brickell where he was Head of Treaty and Energy, heading up the development of the business’ local network in the region. With over 40 years of experience in the international insurance and reinsurance industry, Andrew has also held leadership roles at BMS, Guy Carpenter and Aon.
Astorqui & Hye appointments are the first of several to be announced in the coming months as ATL RE continues to add internationally-recognised expertise to its team.
Iñaki Bandres, CEO at ATL and Chairman at ATL RE, commented: “We are delighted to announce the launch of ATL RE in Latin America and the Caribbean, as well as the appointments of José and Andrew to the leadership team. By bringing together some of the most distinguished experts from across the global insurance and reinsurance industry, with specialist knowledge of Latin America and the Caribbean markets, we’re able to expand our footprint further and provide our clients with a first-class service wherever they trade.”
José Astorqui, CEO at ATL RE, added: “I’m excited to be joining ATL RE and to oversee its growth into Latin America and the Caribbean; markets I have grown to know very well throughout my career. With the expertise already within the business, as well as incoming appointments, I’m very confident that we will be able to provide an unbeatable service to customers in the region.”
What a difference one quarter, let alone one year, can make. Markets entered 2023 battered and bruised. A war in Ukraine and a war on inflation threatened to wreck the global economy. Cracks emerged as a succession of banks (Silicon Valley, Signature, First Republic, Credit Suisse) failed. In keeping with recent history, Congress took us to the precipice before agreeing to more spending. Tragically, another front has opened in the battle against the axis of Russia/Iran/China. Yet, notwithstanding signs of economic deceleration, inflation appears headed south while employment remains steady. Remarkably, the odds that the Federal Reserve pulls off a soft landing have grown; as Chair Powell noted in his most recent testimony: “so far, so good”.
Merger Arbitrage concluded the year on a strong note as Pfizer successfully completed its acquisition of Seagen (SGEN-NASDAQ) for $43 billion in cash. This followed a comprehensive second request process conducted by the U.S. Federal Trade Commission (FTC). Additionally, Bristol-Myers received U.S. antitrust approval in Phase 1 for its acquisition of the targeted oncology company, Mirati Therapeutics (MRTX-NASDAQ), contributing to a positive antitrust sentiment. Deal spreads, including those for Capri Holdings (CPRI-NYSE), Albertsons (ACI-NYSE), and Amedisys (AMED-NASDAQ) among others, firmed in response. Global M&A activity reached $2.9 trillion, marking a 17% decrease compared to 2022. However, the U.S. market remained robust with $1.4 trillion in announced deals, maintaining a level comparable to 2022.
Worldwide M&A totaled $2.9 trillion in 2023, a decrease of 17% compared to 2022 activity. However, fourth quarter deal making increased 23% sequentially compared to third quarter 2023, an encouraging sign that deal making may be recovering. The US remained a bright spot for deal activity with deal volume of $1.4 trillion, a decline of about 5% and accounting for 47% of worldwide M&A (compared to 42% in 2022.) Energy & Power was the most active sector with deal volume that totalled $502 billion and accounted for 17% of overall value. Industrials, Technology and Healthcare M&A each accounted for 13% of total M&A in 2023. Private Equity acquisitions totalled $566 billion and accounted for 20% of total deal activity. Despite PE deal volume declining 30% compared to 2022, it was still the sixth largest year on record for PE acquisitions.
Reflecting on a volatile year in the convertible market, we have some positive takeaways. Issuance returned to pre-pandemic levels at relatively attractive terms. We expect the pace of issuance to accelerate in 2024 as companies face a maturity wall that must be refinanced. We expect the allure of relatively lower interest rates in convertibles will bring many more companies to our market offering continued asymmetrical return opportunities. Additionally, convertibles that were issued at unattractive terms at market highs in 2021 have generally found bond floor and some offer a compelling yield to maturity. Companies that can have been repurchasing these bonds in an accretive transaction, or refinancing them by issuing converts with a more attractive profile. We expect this trend to continue in 2024 and continue to look for opportunities in this segment of the market.
Opinion article by Michael Gabelli, managing director at Gabelli & Partners
Photo courtesyAleksandar Ivanovic, UBS’s Group Executive Board as President Asset Management
Following Suni Harford’s decision to retire from UBS, Aleksandar Ivanovic will join UBS’s Group Executive Board as President Asset Management and Beatriz Martin Jimenez will become the GEB Lead for Sustainability and Impact in addition to her existing responsibilities.
These changes are effective 1 March 2024.
As Head of Client Coverage and Head of the EMEA and Switzerland regions for Asset Management, Aleksandar Ivanovic has played a key role in developing and executing UBS’s Asset Management strategy and leading the engagement with institutional and wholesale clients. Since starting his UBS career in 1992 as an apprentice, Ivanovic has worked in all UBS business divisions and has additionally held various leadership roles at Credit Suisse and Morgan Stanley. He holds a Master of Science in Finance from the London Business School.
Beatriz Martin Jimenez will succeed Suni Harford as GEB lead for Sustainability & Impact, in addition to her existing responsibilities as Head Non-Core and Legacy and President EMEA and UK Chief Executive. Beatriz Martin Jimenez, who joined UBS in 2012, has held key business and finance roles during her 12 years at UBS, including Investment Bank Chief of Staff and COO, Group Treasurer, and Group Head Transformation and has been closely involved with the firm’s culture-building activities.
Suni Harford was appointed President Asset Management in 2019 after joining the firm in 2017. Under her leadership, UBS has continued to evolve and scale its Asset Management business to meet clients’ changing needs. Most recently, Suni has led the integration of Credit Suisse’s asset management activities, creating one of the largest global players with USD 1.6 trillion in assets under management and recognized strengths in areas including alternatives and sustainability. As the GEB Lead for Sustainability and Impact since 2021, Suni has spearheaded UBS’s efforts to align our activities across the entire firm and drive our transition to a low-carbon economy, including publication of our Climate Roadmap.
Group Chief Executive Officer Sergio P. Ermotti said: “I’m delighted to welcome Aleksandar Ivanovic to the UBS Group Executive Board. His extensive experience and broad network across the firm make him the ideal person to build on our strong foundation and progress our integration plans. At the same time, Beatriz Martin Jimenez’s many years of experience at UBS, as well as at other leading financial services firms, will be invaluable in her role as GEB lead for sustainability and impact. I’d also like to thank Suni Harford for her leadership and commitment to UBS and for the significant contribution she has made to our success. I wish her all the best for the future.”
Insigneo announced the addition of Aventura Private Wealth LLC, and its founder Shmuel Maya, to their platform of global financial advisors.
“Leveraging the sophisticated capabilities of Goldman Sachs Advisor Solutions for domestic clients, Shmuel Maya and his team at Aventura Private Wealth, which includes Ahmed Roshdy and Andrea Bruno, both formerly of JPMorgan Chase, bring over 20 years of combined experience in private wealth management to their new venture. They collectively managed over $430 million at their previous firm. The new firm will draw on extensive experience in global financial markets and cater to high-net-worth individuals, the press release said.
“Our decision to transition aligns with the evolving needs of our valued clients. The launch of Aventura Private Wealth empowers us to seamlessly serve our client base. Our clientele spans a broad spectrum, encompassing business owners, individuals in the hotel industry, and multi-generational family wealth offices, for which we recognize the unique aspirations and objectives of such diverse groups. With this move, we unlock a realm of possibilities for our clients. The horizon is very bright, not just for our team but, most importantly, for our clients,” stated Shmuel Maya, owner of Aventura Private Wealth
Insigneo and Goldman Sachs Advisor Solutions have signed a custody agreement to support the domestic clients of Aventura Private Wealth.
Clients of Aventura Private Wealth will have access to Goldman Sachs Advisor Solutions’ institutional-grade investment capabilities, portfolio analytics, lending solutions, intellectual capital and research.
Shmuel and his team will focus on providing wealth management solutions to individuals, families, endowments, and retirement plans. This strategic move aims to capitalize on the growth and expansion opportunities in the Florida and Southeast markets, the statement added.
Jose Salazar, Market Head for Miami at Insigneo, expressed excitement about Shmuel’s addition to their wealth management platform stating, “We are thrilled to welcome Shmuel and Aventura Private Wealth to our team. Their experience and proven success in the industry will be a valuable asset as we continue to expand our business model in key markets across the US.”
Prior to Aventura Private Wealth, Shmuel worked at JP Morgan Chase for twelve years. He attended Northeastern University in Boston, with a focus in finance and political science. A native of South Florida, Shmuel lives in Aventura with his wife and three young children. He enjoys playing pickleball and participating in Miami’s vibrant art community.
