Insigneo has announced the addition of financial advisors Patricia Holder and Nicole Spirgatis to its network.
Along with Renato Izaguirre as a Client Associate, they form Phoenix Private Client Group, a team dedicated to providing exceptional client service and expertise in Latin American markets, the press released said.
Holder and Spirgatis bring a combined 50 years of experience in financial services, specializing in Latin American markets.
Prior to joining Insigneo, they worked at Morgan Stanley, with Holder spending 25 years at the firm and holding advisory roles at Citi Smith Barney and Merrill Lynch. Spirgatis has a distinguished background at Merrill Lynch, Banco de Crédito del Peru, and Scotiabank.
“We are thrilled to join Insigneo and start this new chapter in our careers,” said Holder, Managing Director. “Our expertise in Latin American markets positions us to contribute significantly to Insigneo’s commitment to excellence. Together, we aim to navigate the complexities of wealth management, build lasting client relationships, and capitalize on opportunities in the dynamic international financial services industry.”
Holder and Spirgatis’ cultural fluency in Latin American markets highlights their ability to deliver tailored wealth management solutions. They recognize the importance of understanding local nuances to provide optimal client service, demonstrating their commitment to building relationships based on trust, expertise, and integrity, the firm added.
“We are excited to welcome Patricia and Nicole to Insigneo. Their experience and success in international markets align perfectly with our growth strategy,” said Jose Salazar, Market Head Miami-US. “Their addition strengthens our commitment to excellence and enhances our ability to serve clients in key markets.”
The addition of Phoenix Private Client Group is another milestone in Insigneo’s expansion efforts, reinforcing its position as a leading wealth management institution in the US and Latin America, the memo ends.
BNY Mellon Investment Management will highlight the virtues of the international context for equity investment at the IV Funds Society Investment Summit & Rodeo in Houston, exclusively for professional investors from Texas and California.
The event, scheduled for February 29th at the JW Marriott Houston by The Galleria, will feature James Lydotes, Head of Equity Income & Deputy CIO at Newton, presenting the BNY Mellon Global Equity Income strategy.
Lydotes will discuss the fund’s features, including “the goal of income and long-term capital growth from a portfolio of high quality global companies, the philosophy that dividend capitalization is the dominant source of long-term returns, and a disciplined and systematic buy/sell investment approach,” according to the information provided by the company.
Moreover, BNY Mellon attributes the strategy’s success to “buying companies with yields greater than 25% BM (FTSE World TR Index) and selling companies with yields below market.”
Additionally, through its boutique Newton, the American bank emphasizes the importance of investing in companies that meet profitability requirements, have sustainable dividends, and are traded at attractive valuations.
After the experts’ presentations, guests will be transported to the NRG Stadium to enjoy the Houston’s Livestock Show and Rodeo from the Funds Society’s private suite.
About James Lydotes
Lydotes is the Head of Equity Income at Newton and the Deputy Chief Investment Officer for Equities. He is also the lead portfolio manager for the Global Equity Income strategy. Additionally, he has been the primary manager for the Global Infrastructure Dividend Focus Equity and Global Healthcare REIT strategies since their inception in 2011 and 2015, respectively. He designed both income-oriented strategies to offer exposure to different themes within a risk-aware framework.
He joined Newton in September 2021, following the integration of Mellon Investments Corporation’s equity and multi-asset capabilities into the Newton Investment Management Group. Prior to joining Newton, he had 22 years of experience across multiple roles at Mellon Investments Corporation and The Boston Company Asset Management (both part of the BNY Mellon group).
J.P. Morgan released its 2024 outlook for the alternative investment landscape.
Uncertainty has remained a central theme in financial markets over the past several years. Surging inflation, rapid interest rate increases, slowing global growth, increased geopolitical risks and elevated stock and bond market volatility have all dramatically shifted the investment landscape, and alternative investments have not been immune.
To help investors take advantage of these market dynamics, J.P. Morgan asked experienced investment leaders from across its $213 billion Global Alternatives platform to share their 12- to 18-month outlooks on several alternative investment markets. Their insights into the trends, risks and opportunities influencing multi-alternatives strategies, core private infrastructure, private equity and commercial real estate are featured in individual papers within the research.
“The case for investing in alternatives remains as strong as ever,” said Anton Pil, Global Head of Alternatives for J.P. Morgan Asset Management. “These assets have historically helped investors diversify traditional portfolios by pursuing investment returns largely independent from publicly traded equity and bond markets, potentially helping to diversify portfolio correlations, lower overall volatility, expand investment income sources, mitigate inflation risk and enhance both absolute and risk-adjusted performance.”
Looking ahead into 2024, the firm expects to see growing demand for alternative investments driven by three broad themes: Displacement, Democratization and Diversification.
Displacement: Much of 2023 saw a slowdown in private market activity, which broadly pressured pricing in many alternative assets. This opened considerable investment value in some segments and could result in a compelling 2024 vintage, especially if the current interest-rate tightening cycle proves to be at or near its peak.
Democratization: Investment innovation continues to expand access to alternative investments through a growing range of strategies and structures available to a much broader number of investors.
Diversification: The investment markets of the past few years have shown the limits of relying solely on traditional stocks and bonds to provide adequate portfolio diversification in the current market cycle. Alternative investments can offer solutions to tap into new, dynamic investment opportunities designed to help better balance portfolio risk/return exposures.
More information about the research and J.P. Morgan’s alternatives offering can be found at the following link.
Morgan Stanley plans to eliminate several hundred jobs, in what would be the first measure of its kind under the presidency of Ted Pick, local press reported.
The cuts would affect less than 1% of the employees of the wealth management business, which has about 40,000 workers and is the firm’s largest unit, according to a person with knowledge of the matter, reported by the media AdvisorHub.
However, brokers and their support teams would not be affected by the layoffs, according to the specialized media citing the Wall Street Journal.
Among the employees who will be laid off are some from its self-directed E-Trade channel and its stock plan business, as well as management and sales positions, the report adds.
The press reports do not clarify if the positions will be related to the wirehouse’s international business section.
In June 2023, Morgan Stanley announced to its clients that it would make changes and increase requirements for international accounts with a main focus on some countries in Latin America.
This caused many advisors to leave the wirehouse for other firms such as Bolton, Insigneo, Raymond James, among others.
On the other hand, AdvisorHub recalls that the bank’s shares have been the worst-performing this year among its main American counterparts, with a drop of around 10%.
Last month, the company warned that it would take longer to achieve its profit margin targets in the wealth management unit and noted that the below-target results will last a bit longer.
The division, which was boosted for much of last year by higher net interest income, could see that benefit start to fade if the Fed begins to lower interest rates towards the end of this year, the report adds.
The unit’s new net assets remained below $50 billion for the second consecutive quarter in the last three months of 2023. This pace is lower than Morgan Stanley’s target of more than $300 billion per year.
BNY Mellon announced the launch of its next-gen ETF basket construction platform.
The new comprehensive platform will provide asset managers with a digital workflow, backed by start-of-day net asset value (NAV) data, to present vital market-making information to liquidity providers. This solution will support asset managers in valuing, creating, and publishing basket information more efficiently in the rapidly growing ETF market, allowing them to better serve their clients, according the firm information.
“Through evolving our technology platform, this ultra-transparent user portal connects market participants to ETFs at any point in the lifecycle and strengthens the broader ETF ecosystem,” said Christine Waldron, Global Head of Fund Services, BNY Mellon.
BNY Mellon collaborated with its clients to design and develop the new platform to address the evolving challenges of an ETF manager. Asset manager users of the platform will be able to customize and retrieve ETF baskets via API, as well as access the platform externally through the client gateway to view the workflow and status of outstanding processing exceptions.
This latest release builds on recent investments to improve ETF workflow, including delivery of the Intelligent Basket Builder custom negotiation tool and Asset Flow Analytics dashboard in 2022 and financial information exchange (FIX) protocol connectivity in 2023.
“This breakthrough in ETF technology can help greatly reduce complexity in the front-office ETF process,” said Bob Humbert, Global Head of ETF Product, BNY Mellon. “The result is a workflow which enables portfolio managers and support staff to fully focus on key objectives—to manage existing strategies more efficiently, generate ideas for new best-in-class ETF products and better serve liquidity providers and end investors.”
BNY Mellon’s ETF platform supports comprehensive technology across nearly 2,000 ETFs, presenting an all-in-one global solution for fund providers across the US, Europe, Canada, and APAC. It draws on BNY Mellon’s 240 years of experience and data from overseeing nearly $50 trillion in assets for our clients across the financial lifecycle – managing it, moving it, and keeping it safe.
KKR released “Loud and Clear,” a new Insights piece by Henry McVey, CIO of KKR’s Balance Sheet and Head of Global Macro and Asset Allocation (GMAA).
The research notes that family offices are allocating more to Alternatives, with 52 percent of assets allocated to Alternatives on average, up 200 basis points since 2020.
Based on a proprietary survey of more than 75 Chief Investment Officers (CIOs) who oversee over three billion dollars in assets, on average, the report examines how family office CIOs are leveraging their longer-term focus and owner/operator mentality to create a sustainable competitive advantage.
“We hear the message ‘Loud and Clear’ that this segment of the market is changing – and for the better,” said McVey. “These investors are diversifying across asset classes, and as they mature, they are getting better at harnessing the value of the illiquidity premium to compound capital. They are also using better hedging techniques and increasing both their desire and ability to lean into dislocations, strengths that we believe will position them to be at the winner’s table at the end of this cycle.”
In the report, McVey notes several key parallels between the asset allocation objectives of KKR’s Balance Sheet and those of the surveyed CIOs. These include a focus on compounding capital in a tax efficient manner to build wealth and investing behind key themes such as supply chain disruption, industrial automation, artificial intelligence and the ‘security of everything.’
Among the key findings of the survey is that in today’s investment landscape, alternatives are experiencing significant diversification, with a notable increase in allocations to Real Assets. Despite this, cash positions remain high at 9%, reinforcing the theory that many investors are not taking sufficient risk for current markets.
Family offices plan to increase their allocations to Private Credit, Infrastructure and Private Equity, to the detriment of Public Equities and Cash. This trend reveals a significant bifurcation in asset allocation approaches between family offices established in the last five years and those that had already scaled prior to COVID-19, with older family offices typically holding less cash and allocating more to Private Equity.
There are marked regional differences in asset allocation. U.S. family offices allocate less to traditional Private Equity compared to their counterparts in Latin America, Asia and Europe, while Asia-based family offices have relatively high allocations to Real Estate.
CIOs are looking for value-based private market opportunities, especially in the oil & gas and industrial sectors, contrary to conventional trends. Geopolitics is overtaking inflation as CIOs’ top concern, with more than 40% of respondents identifying geopolitics as the most important risk today. In addition, there is growing concern about the need for more resources to support both growth in assets under management and increased diversification across asset classes.
State Street has promoted Diana Donk to its team as ETFs sales for the US Offshore business.
Donk brings more than 15 years of experience in the financial services industry, specializing in ETFs, mutual funds, and business relationship management.
In her new role as Experienced ETF Sales VP, she leads the distribution of US ETFs to investors in the Andean Region and Eastern Canada, as well as UCITS ETFs to US Offshore clients.
She is responsible for “developing and executing sales strategies, creating and maintaining strong client relationships, and providing market and product insights,” as described on her LinkedIn profile.
Donk joined State Street in 2019 from J.P. Morgan Wealth Management, where she worked in for the US Offshore business.
Prior to J.P. Morgan, she began her career in her native Peru at CONFIDE as a Portfolio Manager from 2006 to 2010 and then spent nearly six years (2010-2016) at Inteligo, where she was a portfolio manager and Senior Product Manager for mutual funds in Lima.
She holds an MBA from Hult International Business School, a Master’s in Economics from Universidad del Pacífico, and has the CFA Level II certification.
Based in New York, she reports directly to Heinz Volquarts, Managing Director Head of Americas International for Canada and Latam at State Street.
Photo courtesyFred Bates, Managing Director at BECON IM
Barings will showcase the investment opportunities available in credit at the IV Funds Society Investment Summit in Houston.
The event, scheduled for February 29th at the JW Marriott Houston by The Galleria, will feature Fred Bates, Managing Director of BECON IM, presenting the Barings Global Senior Secured Bond Fund and Barings Private Credit Corporation strategies.
Regarding the Barings Global Senior Secured Bond Fund, it is “a developed markets bond fund with daily liquidity that invests exclusively in bonds that are senior in an issuer’s capital structure and are directly secured by collateral,” according to the firm’s description.
On the other hand, the Barings Private Credit Corporation is “a semi-liquid direct lending solution with variable rate managed by one of the sector’s largest private credit managers.”
After the experts’ presentations, guests will be transported to the NRG Stadium to enjoy the Houston’s Livestock Show and Rodeo from the Funds Society’s private suite.
Seats are limited, so Funds Society is asking professional investors from the US Offshore market of Texas and California interested in attending to complete their registration at the following link.
About Fred Bates
Frederick S. Bates is the Managing Director and co-founder of BECON IM, a third-party distribution company specialized in wholesale business development and sales to intermediaries across Latin America and US Offshore. BECON IM represents several world-class global asset managers throughout the Americas, including Barings, Neuberger Berman, Schafer Cullen, and New Capital. Prior to joining BECON IM, Bates amassed nearly 20 years of experience at MFS Investment Management and Fidelity, holding senior positions in the United States, Latin America, and Europe.
Photo courtesyKenneth Ward (left) and Euan McNeil (right), fund managers of Aegon AM
For a while now, the outlook for investment-grade markets has been directly linked to the outlook for global interest rates and the ongoing debate about how much longer central bank monetary policy will remain tight.
Since the second half of 2023, Aegon Asset Management has held the view that the threat of inflation – especially in the US and Europe – will begin to dissipate and reduce the threat of further rate hikes.
In turn, the manager believes that tangible evidence of a slowdown in continental Europe, and signs that economic activity in the U.S. is starting to turn negative, will remain in place in the early months of 2024, leading major central banks to cut rates over the next 12 months, ultimately propping up investment-grade credit spreads.
Funds Society had a conversation with Euan McNeil and Kenneth Ward, fund managers of the Aegon Investment Grade Global Bond Fund, to discuss the strategy and outlook for the actively managed fund, which was established 16 years ago and actively seeks opportunities in global corporate bond markets.
In the talk, the PMs noted that as cash starts to become a less attractive option as an asset class in this environment, the likely allocation toward investment grade credit should prove to be a very supportive technical driver. They also said that generic valuations (on a yield basis) are as attractive as they have been for several years.
“In this context, our expectation would be that subordinated (and higher yielding) financial paper would likely be the most attractive in such a scenario,” they stressed.
In 2023, the Aegon Investment Grade Global Bond Fund B Inc USD returned nearly 10% net of fees, putting it about 70 bps ahead of its benchmark, the Bloomberg Global Aggregate Corporate.
“We had a strong year,” Euan McNeil, a 20-year industry veteran, begins. “We benefited both from our proactive positioning of credit risk and from having managed interest rate and duration risk very actively throughout the year. This has been another important contributor to the fund’s performance”, he details.
“We were set up for much of the second half of 2023 for the market to start pricing in rate cuts across Europe, the US and UK, reflective of what we believed would be an improving inflation backdrop,” McNeil explains. They positioned the portfolio with a long duration bias and an increased credit overweight. With the first signs of change in central bank rhetoric coming through in October – reflective in part of the tangible deterioration in macroeconomic data and expectations of a dovish response – the fund benefitted from this positioning in the latter part of October and through all of November, with government bond yields falling across the curve and credit spreads tightening. “With the market now moving toward our view, we moderated the duration (and credit) overweight into year end”, he completes.
What are your expectations for asset class performance in 2024?
We would be reasonably comfortable with total return expectations for global investment grade credit in the 6% area, although, as always, nothing moves in a straight line. Given the rally we saw to close out 2023, we believed it was prudent to raise cash slightly with the aim to redeploy it to more attractive levels in the near term and take advantage of the traditional uptick in issuance you see in January. But ultimately, we believe the more subdued central bank outlook, rate cuts and potential slowdown in the economy should underpin spreads and provide a fairly favorable backdrop for the asset class in 2024.
What could be the risks in 2024?
One risk would be that the economic slowdown is greater than expected. There is also the risk that inflation accelerates. In other words, if inflation surprises to the upside and central banks feel they must continue to pursue tight monetary policy, that could pose a threat to risk assets, and credit spreads would be vulnerable in that scenario.
What is the fund’s current positioning?
We have recently undertaken a small reduction in aggregate risk across the portfolio. We are still slightly overweight in risk assets versus the benchmark, but the extent of that has moderated. We still like the financial sector, where we have recently reduced risk, but we have seen some rehabilitation and some recovery in that industry. However, we see the financial sector have strong fundamentals, as long as you can pick the geographic locations, such as Europe and the United States.
And we remain more cautious in sectors such as commodities, where we have seen more mixed results. As of December, the fund had approximately 67% exposure to dollar-denominated investment grade credit with 22% in euros and 10% in sterling.
What are the differentiating factors of the fund’s strategy?
The first is the willingness and ability to manage the top-down credit risk of a portfolio to actively adjust its duration and interest rate. Many investment-grade funds simply operate with a duration-neutral position versus the benchmark; we, on the other hand, take active duration positions, and we also actively manage the overall credit portions of the portfolio. We’ve also built a fund that is a concentrated, high-conviction portfolio with a bottom-up approach. I think that differentiates us from the competition: the concentrated nature of the portfolios we manage.
The Aegon Investment Grade Global Bond Fund aims to provide a combination of capital growth and income. Its fund managers specialize in seeking to add value through security selection driven by solid bottom-up credit research, investing primarily in investment grade government and corporate bonds in any currency, which can be fixed or floating rate, rated or unrated. The fund may also hold selected high yield bonds and cash.
As of December, sector allocation is currently distributed 47% in industrials and 36% in financial institutions, while roughly 8% is positioned in the utilities sector. In terms of credit rating breakdown, 55% is BBB; 30% is A; and 11% is AA. Geographically, almost 49% of the credit is from the United States, while credit from Europe, distributed by country, has a similar proportion.
According to a new survey by Natixis Investment Managers (Natixis IM), 72% of professional fund selectors from some of the largest wealth management firms in North America agree that active management will be crucial for achieving superior investment returns in 2024.
This comes after 61% reported that actively managed funds on their platforms outperformed their benchmark indices last year, and 67% expect markets to continue favoring active management.
The balance between active and passive investments has been a topic of debate for the past decade, with significant inflows into passively managed index funds across the industry. However, 46% of fund selectors surveyed by Natixis IM attribute the outperformance of passive investments to monetary policy, or a decade of artificially low interest rates and relatively little inflation. The factors that boosted passive investment may no longer hold up. Half (50%) of the selectors believe that investors overly reliant on passive investments like index funds will face some hard lessons in 2024.
Selectors Seeking More Active Funds and ETFs
Natixis IM surveyed 223 North American fund selectors, professionals responsible for evaluating and selecting funds and investment products for their company’s investment platform. These respondents represent private banks, wirehouses, registered investment advisors (RIAs) and RIA aggregators, independent or individual wealth managers, and other investment advisory firms that collectively manage $20.7 trillion in client assets in Canada and the United States.
“Fund selectors expect the investment landscape of 2024 to be anything but normal, not by historical, new, or soon-to-be-normal standards,” said Dave Goodsell, executive director of the Natixis Center for Investor Insights. “They’re looking to manage client investments, experiences, and relationships by adjusting the product and portfolio offerings of their firms to help clients stay invested and armed with protection in uncharted investment territory.”
45% of fund selectors aim to add more actively managed funds to their platforms. 67% say their firms now offer semi-transparent ETFs, and 89% of them plan to maintain or add more of these actively managed ETFs. 69% offer direct indexing options, with 84% planning to maintain or increase access to these direct indexing strategies, which allow investment managers to establish direct ownership of individual securities that make up an index through a separate account.
Active ETFs Gaining Popularity
Active ETF assets have surged in recent years. Active ETFs differ from traditional, passively managed ETFs in that they have a management team behind the portfolio, selecting securities based on a specific underlying investment strategy, rather than simply replicating an index.
The use of active ETFs helps address concerns about price pressures, which have been a promise of passive investing, and the need to generate risk-adjusted returns, which passive funds do not inherently provide. The majority of fund selectors (53%) cite return potential as the primary benefit of active ETFs, while also recognizing other advantages such as tax efficiency (46%), access to innovative strategies (44%), intraday trading (41%), and greater potential alpha (23%).
Model Portfolios and Separately Managed Accounts
Model portfolios and separately managed accounts (SMAs) are also critical components of fund selectors’ product plans for 2024. Three-quarters (75%) say that models provide greater investor confidence in uncertain markets and help keep clients invested during periods of volatility (70%) and offer a more consistent investment experience across the firm (80%). Not surprisingly, 63% say that using models also helps advisors build solid relationships with their clients.
In adittion, 82% of fund selectors say their firms offer some type of model portfolio.
Economic and Market Uncertainty
While most (57%) are optimistic about the market’s performance this year, their outlook is clouded by a high degree of uncertainty and unpredictable risk. The specter of slower growth in the future places a recession atop economic threats (53%), followed by the threat of war and terrorism (51%) and a feared drop in consumer spending (41%). Most fund selectors (68%) believe that valuations still do not reflect company fundamentals, and 60% expect stock market volatility to be even higher this year than last.
If recession fears were to materialize, 61% believe it would further expose the shortcomings of passive investments.
The Natixis Investment Managers Fund Selector Survey is part of a larger survey of 500 professional fund selectors in Asia, Europe/EMEA, North America, and the United Kingdom. The full report on the global survey findings can be found at the following link.
