Pictet Asset Management: After the Storm

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Photo courtesyLuca Paolini, Pictet Asset Management's Chief Strategist

New year, same risks? The global economy continues to face challenges – not least weak growth and tightening monetary conditions – and for this reason we have chosen to retain a defensive stance; we remain underweight equities and overweight bonds.

That said, there are encouraging developments in emerging markets.

China’s unexpectedly rapid exit from its zero-Covid policy is likely to result in a strong acceleration in growth towards the end of this year. This, coupled with a weakening US dollar and emerging market assets’ attractive valuations, should help boost the appeal of emerging market stocks and bonds over the medium term. We have consequently upgraded China and the rest of emerging markets to overweight.

Our business cycle indicators show that the deterioration in global economic conditions is gathering pace. A recession will be unavoidable this year, but it should be both shallow and short before the economy begins to recover in the middle of 2023.

Global inflation is likely to decline this year to 5.2 per cent from 7.7 per cent in 2023, helped by weaker commodity prices and falling wage demands and rental prices.

In the US, the high level of excess household savings should support consumption and help the economy avoid a sharp contraction; we expect the US to register real growth of 0.4 per cent this year.

We also think the risk of a deep recession in the euro zone has somewhat receded. Despite weak economic activity and tighter lending standards, industrial production remains resilient.

Falling energy prices, meanwhile, should lead to a significant decline in price pressures across the region, with core inflation more than halving to 1.6 per cent from a 2022 peak.

Japan’s economy, meanwhile, is likely to outperform the rest of the world next year, supported by improving leading indicators, booming tourism and resilient capital spending.

That said, weak retail sales and consumer morale and a rapid deterioration in the current account balance – which is now negative for the first time since 2014 – point to a weak recovery in the coming months.

China’s recent economic data has been weak across the board, but the recent reopening of its economy suggests plenty of scope for recovery, especially for retail sales, which are currently some 22 per cent below their long-term trend on a real basis.

Beijing is likely to adopt a more pro-growth economic agenda, which should help lift growth in the world’s second largest economy to 5 per cent in 2023 from last year’s 3 per cent, according to our calculations.

Our liquidity indicators support the case for retaining a cautious stance on risky assets over the near term. But conditions will likely improve after the first quarter of 2023, especially in emerging economies.

We expect the global economy to experience a net liquidity drain equivalent to 6 per cent of GDP in 2023 as central banks including the US Federal Reserve and European Central Bank continue to tighten the monetary reins. Investors should however expect a shift in monetary tightening trends.

The Fed is, we believe, entering the final phases of its tightening campaign with the benchmark cost of borrowing set to peak at 4.75-5 per cent in the first quarter of this year. The ECB’s balance sheet contraction, meanwhile, is likely to be more aggressive than the Fed’s, amounting to a reduction of some EUR1.5 trillion, or 11 per cent of GDP, which should add to downward pressure on the dollar.

After a hawkish statement in December, investors now expect euro zone interest rates to rise to 3.25 per cent by September 2023.

The Bank of Japan’s surprise change to its bond yield control policy – it will now allow the 10-year bond yield to move 50 basis points either side of its zero rate target – should pave the way for the central bank’s eventual exit from its zero interest rate policy.

Bucking the global trend, China is leading a moderate easing cycle with the People’s Bank of China delivering targeted support measures.

The credit impulse – a leading economic indicator – is positive while China’s real money supply (M2) is expanding at 12 per cent year on year, the highest in six years. In contrast, developed economies continue to experience tighter conditions.

Our valuation model shows bonds and equities are both trading at fair value.

Valuations for global bonds are neutral for the first time since February, with yields 50 basis points lower than their peak in mid-October.

Global equities, meanwhile, trade at a 12-month price earnings ratio of 15 times, in line with our expectations, but our models point to mid-single digit re-rating of multiples over the next year provided that US inflation-adjusted 10-year bond yields fall to 1 per cent.

Corporate earnings momentum remains weak across the world and we forecast 2023 global EPS growth to be flat, which is below consensus forecasts of around 3 per cent growth, with significant downside risks in earnings in case of weaker than expected economic growth.

Our technical and sentiment indicators remain neutral for equities with seasonal factors no longer supporting the asset class.

Data shows equity funds experienced outflows of USD17 billion in the past four weeks. Emerging market hard currency and corporate bonds posted consecutive weekly inflows for the first time since August.

 

Opinion written by Luca Paolini, Pictet Asset Management’s Chief Strategist

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AXA IM Appoints Olivier Paquier as Global Head of ETF Sales

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Photo courtesyOlivier Paquier, Global Head of ETF Sales of AXA IM

Olivier Paquier is appointed Global Head of ETF Sales of AXA IM, effective immediately.

Paquier has extensive experience in ETF sales from State Street as Head of SPDR ETF distribution in France, Monaco, Spain and Portugal, and then within J.P. Morgan Asset Management where he built their successful active ETF business in EMEA.

In his missions within AXA IM, he will be supported by an ETF business manager and 9 salespeople worldwide who will extend their expertise of selling the AXA IM product range with ETF instruments. Paquier reports to Nicolas-Louis Guille-Biel, Global Head of ETF & Product strategy.

Following the launch of its ETF platform last September , AXA IM continues its journey to build a significant ETF business and grow its footprint on this market.

The AXA IM ETF platform is now centred around three pillars:
1. Products and Capital Markets, with a dedicated product developer and two Capital Markets officers.
2. Investment and Research insights, with ETF portfolio managers getting insights from AXA IM’s Core investment teams.
3. Sales and marketing, with Olivier as new Global Head of ETF Sales, an ETF business manager, a dedicated marketing manager as well as 9 identified salespeople with a global reach.

Commenting on the arrival of Olivier Paquier and the growing ETF platform, Hans Stoter, Global Head of AXA IM Core, said: “We have adopted an entrepreneurial spirit to develop our ETF platform and deliver the project in house, leveraging our internal capabilities with people from different teams, as well as additional skills with external recruitments to continuously strengthen our ETF community. We have now reinforced our ETF distribution value chain and are delighted to welcome Olivier, one of the most recognised ETF professionals in the industry.

FDS Signs Agreement with Polar Capital to Extend their Reach into US Offshore and Latin America

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Fund Distribution Services (FDS) has reached an  agreement with Polar Capital to offer their strategies into the US Offshore and Latin American market. 

Polar Capital is an experienced, investment-led, active fund manager. The company prides itself  on its collegiate and meritocratic culture where capacity of investment strategies is managed to enhance and protect performance. Since its foundation in 2001, it has grown steadily and  currently has 15 autonomous investment teams managing specialist, active and capacity  constrained portfolios, with combined AUM of $22.4 billion (as of December 31, 2022), said the firm in a press release. 

“Polar Capital’s distribution strategy is growth with diversification, by both client segment and  geography, and we see significant opportunities outside of our home markets of the UK and  Continental Europe. Our approach to wider global expansion is both targeted and measured.  We are delighted to be partnering with FDS in the US offshore and Latin American markets,” said Iain Evans, Head of Global Distribution, Polar Capital.   

In addition, Evans told that FDS team “brings a wealth of experience and long-standing investor relationships in these markets, and they are the perfect complement to work alongside our existing North American distribution team.”

“Partnering with Polar gives our clients access to highly skilled, specialized managers that  deliver an experience that you would expect from a strong boutique, investment led, organization,” added Lars Jensen, Managing Partner FDS.

Fed Unveils Pilot Plan for Banks to Manage their Financial Risks from Climate Change

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The Federal Reserve Board provided additional details on how its pilot climate scenario analysis exercise will be conducted and the information on risk management practices that will be gathered over the course of the exercise.

As described in the instruction document, Bank of America, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley y Wells Fargo will analyze the impact of scenarios for both physical and transition risks related to climate change on specific assets in their portfolios, the release said.

To support the exercise’s goals of deepening understanding of climate risk-management practices and building capacity to identify, measure, monitor, and manage climate-related financial risks, the Board will gather qualitative and quantitative information over the course of the pilot, including details on governance and risk management practices, measurement methodologies, risk metrics, data challenges, and lessons learned.

“The Fed has narrow, but important, responsibilities regarding climate-related financial risks – to ensure that banks understand and manage their material risks, including the financial risks from climate change,” Vice Chair for Supervision Michael S. Barr said. “The exercise we are launching today will advance the ability of supervisors and banks to analyze and manage emerging climate-related financial risks.”

The pilot exercise includes physical risk scenarios with different levels of severity affecting residential and commercial real estate portfolios in the Northeastern United States and directs each bank to consider the impact of additional physical risk shocks for their real estate portfolios in another region of the country. For transition risks, banks will consider the impact on corporate loans and commercial real estate portfolios using a scenario based on current policies and one based on reaching net zero greenhouse gas emissions by 2050.

These scenarios are not forecasts or policy prescriptions, but can be used to build understanding of climate-related financial risks.

The Board anticipates publishing insights gained from the pilot at an aggregate level, reflecting what has been learned about climate risk management practices and how insights from scenario analysis will help identify potential risks and promote effective risk management practices. No firm-specific information will be released.

Climate scenario analysis is distinct and separate from bank stress tests. The Board’s stress tests are designed to assess whether large banks have enough capital to continue lending to households and businesses during a severe recession. The pilot climate scenario analysis exercise, on the other hand, is exploratory in nature and does not have capital consequences.

M&G Appoints Joseph Pinto as CEO M&G Asset Management

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Photo courtesyJoseph Pinto, CEO of Asset Management at M&G AM.

M&G plc announces the appointment of Joseph Pinto as its next Chief Executive Officer of M&G Asset Management.

Joseph will have accountability for all investment capabilities including the equity, fixed income, multi asset, private and alternative asset strategies alongside distribution, operations and proposition management across the Asset Management business.

Andrea Rossi, Group Chief Executive, M&G plc said: “M&G’s purpose is to help people manage and grow their savings and investments responsibly.  Joseph brings to M&G a profound understanding of client needs and how they have evolved through changing economic conditions.  He has a strong record of delivering on strategic ambitions in investment management, and I am confident his combination of commercial vision and pragmatic leadership will help transform how M&G delivers value to its clients and other stakeholders.”

With 30 years of experience in asset management, financial services, and consulting, Joseph joins from Natixis Investment Managers where he has served as a Head of Distribution and Investment Solutions for EMEA, APAC and LATAM and Global Chief Operating Officer.

Previously at AXA Investment Managers for 13 years, Joseph held senior positions, including Global Chief Operating Officer, Global Head of Markets & Investment Strategy and Head of Business Development for South Europe and the Middle East.

Joseph joins in March 2023 and will become a member of M&G’s Executive Committee, reporting to Chief Executive, Andrea Rossi. He is succeeding Jonathan (Jack) Daniels who, in July 2022, announced his intention to retire following 21 years with the business.

“The breadth of M&G’s active asset management capabilities combined with its strong balance sheet, has long provided innovative solutions for clients. I look forward to leading their respected investment teams to drive M&G’s international growth and sustainability agenda, while providing excellent outcomes for clients,” said Joseph Pinto, incoming Chief Executive Officer Asset Management, M&G plc.

The appointment is subject to regulatory approval.

Natixis Investment Managers Appoints Fabrice Chemouny as Head of International Distribution

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Photo courtesyFabrice Chemouny, Head of International Distribution for Natixis IM

Fabrice Chemouny is appointed Head of International Distribution for Natixis Investment Managers, overseeing client and development activities for EMEA, APAC and LATAM. He was previously Head of Asia Pacific at Natixis Investment Managers and has more than 20 years of experience in asset management. 

In addition, Christophe Lanne, Chief Administration Officer for Asset & Wealth Management, will oversee post-sales support activities for international distribution, as well as Natixis IM Solutions activities, in addition to his existing responsibilities for global operations and technology, human resources and corporate social responsibility strategy. 

Fabrice Chemouny and Christophe Lanne will both report to Tim Ryan, Head of Asset & Wealth Management within Groupe BPCE’s Global Financial Services and will continue to serve on the Management Committee of Asset & Wealth Management.

“We remain committed to becoming the most client-centric asset and wealth manager, delivering the best experience for our clients throughout their investment journey. Fabrice and Christophe bring their robust experience and expertise to Natixis Investment Managers’ commercial development and operational excellence, in the benefits of our clients”, said Tim Ryan, Head of Asset & Wealth Management within Groupe BPCE’s Global Financial Services.  

Fabrice Chemouny joined Natixis from CDC IXIS Group in 2000 as Senior Analyst in the Strategy Department. In 2003, Fabrice was appointed Executive Vice President, Head of International Strategy & Marketing at Natixis Investment Managers before becoming Head of Business Development and Affiliate Coordination. He was then appointed Executive Vice President, Global Head of Institutional Sales. In 2017, Fabrice became Head of Asia Pacific for Natixis Investment Managers. 

Christophe Lanne began his career in 1990 with Banque Indosuez (now Crédit Agricole Corporate and Investment Bank) in the General Inspection department. In 1995, he first joined Global Markets in Paris, and later was named Head of Global Markets activities for the London platform. After holding several senior positions in Paris, in 2002 he became CEO of Crédit Agricole Indosuez Securities Japan and Head of Global Markets. Christophe joined Credit Suisse in 2005 as Managing Director and COO for France. He joined Natixis in 2010 as COO for Corporate & Investment Banking. He became Chief Risk Officer for Natixis in 2015, before joining Asset & Wealth Management in 2018 as Chief Transformation & Talent Officer and was appointed Chief Administration Officer in 2021.

KKR Commits to Invest an Addiotional $1.15 Billion in Aircraft Leasing with Altavair

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KKR and Altavair L.P. announced that KKR is making an additional $1.15 billion commitment to expand its global portfolio of leased commercial aircraft in partnership with Altavair.

The investment will come from KKR’s credit and infrastructure funds.

KKR has deployed and committed $1.7 billion of capital into aircraft deals since forming a partnership with Altavair and acquiring an interest in the company in 2018.

KKR, in partnership with Altavair, has acquired more than 90 commercial and freighter aircraft through a variety of transactions, including lessor trades, airline direct used and new delivery sale leasebacks, structured transactions and passenger-to-freight conversions and has successfully leased more than 75% of the portfolio to tier-one airlines and operators around the world.

“We are thrilled to deepen our footprint in aircraft leasing through this new commitment, which underscores the conviction that we have in this space and our confidence in Altavair as a partner,” said Dan Pietrzak, KKR Partner and Co-Head of Private Credit. “We look forward to growing our portfolio further to support the fleet needs of airlines and operators around the world.”

“Airlines are increasingly seeking greater liquidity and fleet flexibility, which is creating significant opportunities for high quality leasing teams with deep access to private capital,” said Brandon Freiman, KKR Partner and Head of North American Infrastructure. “We are proud to serve this growing need in partnership with Altavair.”

“Aircraft leasing continues to be a dynamic and growing market that offers compelling and differentiated opportunities for experienced investors,” said Steve Rimmer, CEO of Altavair. “The portfolio that we’ve created over the past several years further evidences the power of combining KKR’s quality capital and capabilities with Altavair’s deep technical and aircraft investing expertise and innovation. We greatly appreciate KKR’s ongoing trust in our platform and look forward to building further on this success in the years to come.”

KKR has invested approximately $8.3 billion of capital in the aviation sector since 2015. Investments include Altavair, AV AirFinance, Atlantic Aviation, KKR DVB Aviation Capital, K2 Aviation, Wheels Up, Global Jet Capital and Jet Edge, among others.

Emerging Market Corporate Bonds Begin to Sparkle

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Photo courtesySabrina Jacobs, Pictet Asset Management's Senior Client Portfolio Manager

Professional investors joke that the UK is turning into an emerging market (EM). This is a disservice to actual EM economies. In fact, in some respects less developed countries are proving a relative haven of stability – not least in the corporate bond market.

Broadly speaking, EM corporate borrowers are less vulnerable to capital flight than in the past due to greater local investor ownership of their bonds, have relatively low leverage and are by and large based in countries with robust macro-economic fundamentals. And at a time of general bond market volatility, yields on short duration EM corporate credit look particularly attractive (see Fig. 1).

Of course there is plenty of variation between regions and sectors, so investors need to be diligent in analysing corporate nitty gritty as well as having good understanding of the macro-economic picture. But such efforts are likely to be well rewarded: in many cases, EM corporate bonds are cheap compared with their fundamentals, such as, for instance, the yield spread they offer relative to leverage.

Fundamental attractions

EM companies have done exceptionally well so far in 2022, with revenues up 22 per cent and earnings up 27 per cent during the second quarter on the same period a year earlier. At the same time, their balance sheets are looking healthy, with net debt down 7 per cent year-on-year in the second quarter. This has helped reduce the net leverage ratio to some 1.2 times from 1.3 times in 2021 (excluding Russia and Ukraine for obvious reasons and real estate), according to JP Morgan research.

Many EM companies have built up their profit margins in the wake of the pandemic. This, in turn, leaves them better able to absorb among other things, higher costs from commodity price inflation. Take steel companies in India. The sector has been one of the hardest hit from rising input costs and more recently export taxes. Yet, due to their post-pandemic profit surge, domestic operators have been able to absorb a reduction of 6 percentage points in profit margins to a 12–month average of 21 per cent in Q1 versus a peak of 27 per cent last year.

For credit investors, this still represents a good margin of safety. Furthermore, while these rising input costs might prompt a tick up in leverage, large Indian steel makers have also been on a deleveraging trend for the past few years. Similarly, most other commodity exporters have been doing well.

Meanwhile, many retail-focused companies and those with premium products are in a strong position to maintain pricing power and thus keep up with inflation. In China, large and highly rated tech companies have maintained strong margins as their ultimate customers are to a good extent retail, as well as to the fact that inflation has been running at a considerably lower rate in China than elsewhere. Signals from central government that its regulatory clampdown has come to an end has also helped. At the same time,  US restrictions on Chinese tech is having limited impact, restricted to chipmakers.

At the other end of the spectrum there are industries in which rapidly rising costs cannot immediately be passed on to customers and where there is no natural hedge against foreign exchange volatility, such as telecoms. We generally like the sector for its defensive characteristics and predictability of cash flow. But where companies have issued longer tenured contracts for instance for broadband, this means no opportunity to raise pricing for existing customers in the near-term.

What’s more, the more generic the product, the harder it is for companies to pass on costs. And some sectors have been heavily exposed to the energy shock – those utility companies not fortunate enough to be extracting oil or natural gas are feeling the pinch. This is especially the case for utility companies selling to retail customers, not least where governments have been keen to stem inflationary pressures by limiting how much costs are passed through to households.

Prudent financial policies and balance sheet deleveraging in the past five to 10 years have helped most EM corporations across Europe, Africa and the Middle East to prepare themselves for current financial market disruptions.

The wider good health of the EM corporate universe is reflected in its default rates. Strip out Russia, the Ukraine and Chinese real estate and the default rate is a mere 1.2 per cent year-to-date.

Sticking closer to home

EM corporations are also benefiting from increasingly mature domestic financial markets. Being less reliant on foreign sources of capital means that investment programmes are less prone to the whims of global finance and therefore can be more stable than in the past – domestic sources of finance also tend to be stickier. As these countries have grown richer, their banking sectors have become better able to service increasingly sophisticated domestic savers. Furthermore, domestic banking sector balance sheets have been built up in the wake of the Covid pandemic and thus enabled banks to extend credit actively again.

As such, companies in Indonesia, the Philippines and India in particular have increasingly been buying back their outstanding dollar denominated debt and refinanced through cheaper bank loans priced in local currency. That shift is being accelerated by the US dollar’s appreciation and rising US interest rates – increasing the cost of dollar funding – and the cost of these liabilities has helped push companies toward domestic lenders. So, for instance, Indian banks, supported by strong and improving credit quality, have been happy to extend credit and as a result their loan books have grown at a rate of some 12-15 per cent through the first half of 2022 (see Fig. 2).

And with many EM central banks either well ahead of developed market peers in tightening monetary policy or not needing to act as forcefully in combating inflation, funding rates there are likely to grow less significantly than they are for dollar borrowers – though determining the balance of effects here needs good macro analysis on the part of investors.

A good place to start

Seasoned investors know that entry points matter. As with other asset classes, EM debt has been battered during the past year. Overall, there was USD62 billion in cumulative outflows by September, though there were signs that this was stabilising, with around a quarter of that likely to have been in credit products.

Spreads over US Treasury bonds are generous – at 400 basis points against a ten-year average of 315 basis points. And given that Treasury bond yields are themselves at highs not seen in a decade, actual EM corporate yields are at levels not seen in years – 8.3 per cent, last seen in August 2009.1

With lower demand and market volatility, gross supply of EM corporate debt has slumped to USD196 billion so far in 2022 (as per end Sept), against around USD450 billion during the same period in 2021 (see Fig. 3). However, EM companies are relatively well insulated against current fixed income market gyrations. Many firms took advantage of historically low rates during recent years to extend the maturity of their debt, so there’s little in terms of a near-term financing wall, especially in high yield EM, where only USD85 billion comes due in 2023, USD95 billion in 2024 and USD100 billion in the following year.

Times of market stress create opportunities for investors who can pick out the diamonds from the shattered glass. There are plenty of these in the EM corporate universe, where investors are increasingly well compensated for taking on risk with yields that haven’t been seen in many years generated by high quality, well-run companies.

 

 

Opinion written by Sabrina Jacobs, Pictet Asset Management’s Senior Client Portfolio Manager

 

Discover more about Pictet Asset Management’s Emerging Markets capabilities 

 

Note

[1] All for JP Morgan CEMBI Broad Diversified as per 14th October 2022; average rating of BBB-.

AXA IM Launches an Equity Fund Dedicated to the Plastic and Waste Transition

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AXA Investment Managers (AXA IM) announces the launch of the AXA WF ACT Plastic & Waste Transition Equity QI fund which supports, on the long-term, the United Nations Sustainable Development Goals (UN SDGs), in particular the SDG 12, Responsible consumption and production, by investing in companies that are limiting or managing in a sustainable way their plastic use or have efficient waste management practices.

Managed by the AXA IM Equity QI team, responsible for AXA IM’s quantitative equity capabilities, the fund invests in companies that are UN SDG 12 aligned, for example through the actions they are taking in their operations, such as production processes, recycling rates and supply chain management, to limit or manage in a sustainable way their plastic and waste footprint or because the company provides products that directly support responsible consumption and production. 

The fund invests in large, mid and small cap companies across developed and emerging markets. The selection and weightings of the stocks is based on a proprietary quantitative process that incorporates both financial and non-financial data with the objective of identifying fundamental drivers of risk and return whilst structuring the portfolio in a way that meets the fund’s SDG objectives. As an example, the management team uses Natural Language Processing (NLP) to increase exposure to companies that are actively articulating a plastic or waste approach in their earnings calls. 

The fund forms part of AXA IM’s ACT range. It harnesses both external and internal data (including AXA IM qualitative SDG insights) to measure positive contributions of the companies to the UN SDG 12. 

Commenting on the launch of the fund, Jonathan White, Head of Investment Strategy & Sustainability in AXA IM Equity QI team, said:“Companies that are reducing waste and supporting a more sustainable approach to their use of plastic play a key role in the effort to mitigate climate change and stem biodiversity loss.

We expect the next few years to be pivotal in plastics pollution mitigation driven by both government regulation and changing end-consumer preference. These structural trends are likely to drive significant growth in segments of the markets such as sustainable packaging and plastic recyclying.

As such its our view that companies that are facilitators or leaders in waste management and plastic-use are not only sustainable investments but could also be an attractive long term investment opportunity.”

The fund is or will be registered and available to professional and retail investors in Austria, Belgium, Denmark, France, Germany, Italy (institutional only), the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

Snowden Lane Partners Secures $100 Million Credit Facility

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Snowden Lane Partners and Estancia Capital Partners (“Estancia”), announced that Snowden Lane secured a new $100 million credit facility.

The new facility replaces a facility originally secured with ORIX Corporation in 2018 and subsequently expanded in early 2022. The $100 million of available credit will enable Snowden Lane to significantly bolster its recruiting momentum and position itself for sustained growth through 2023 and beyond.

In 2021, Snowden Lane recruited $2.4 billion in client assets and 13 advisors, and in 2022 the firm recruited over $1.5 billion in client assets and 10 advisors, making it one of the fastest-growing firms in the independent RIA space. Snowden Lane currently services ~$9 billion in client assets.

“We’re excited to kick off the new year with this announcement, as this additional, non-dilutive capital will allow us to execute our vision for the firm’s next stage of growth,” said Rob Mooney, Managing Partner & CEO of Snowden Lane Partners. “We are extremely grateful for Estancia’s support. Estancia continues as a committed partner since the early days of our business and played a crucial role helping Snowden Lane realize its potential. We look forward to continuing our shared success in the coming year.”

Takashi Moriuchi, Managing Director and Co-Founder of Estancia added: “Estancia’s most important investment criteria is always partnering with companies who have experienced management teams capable of executing on their growth strategy and maximizing value. Snowden Lane and its executive team is a prime example of why this is so important. Under the management team’s leadership, the firm rapidly become a key player in the independent wealth management space and is an attractive destination for advisors seeking a full-service alternative to the wirehouses. As Snowden Lane’s partner, we believe this financing provides even more support for management to continue attracting amazing financial advisors leading to even greater growth.”

Since its founding in 2011, Snowden Lane has built a national brand, attracting top industry talent from Morgan Stanley, Merrill Lynch, UBS, JP Morgan, Raymond James, Wells Fargo, and Fieldpoint Private, among others, the firm said.

Similarly, Estancia raised $420 million in committed capital and nearly $150 million in co-investment capital across two funds, completed 14 platform investments and 18 add-on investments over the last decade.

Snowden Lane employs 132 total professionals, 72 of whom are financial advisors, across 12 offices around the country: Pasadena and San Diego, CA; New Haven, CT; Coral Gables, FL; Chicago, IL; Pittsburgh, PA; Baltimore, Salisbury and Bethesda, MD; San Antonio, TX; Buffalo, NY, as well as its New York City headquarters.

In connection with the new facility, Apogem Capital served as joint lead arranger, joint bookrunner, and administrative agent. Monroe Capital also served as joint lead arranger and joint bookrunner.