FINRA designa a Robert Cook como presidente y CEO - foto cedida. FINRA designa a Robert Cook como presidente y CEO
The Financial Industry Regulatory Authority (FINRA) announced on Monday that its Board of Governors has appointed Robert W. Cook as President and Chief Executive Officer, effective the second half of 2016. Mr. Cook will succeed Richard G. Ketchum, who has served as Chairman and CEO since 2009. The Board intends to name a new Chairman in the coming months.
Mr. Cook will join FINRA from Cleary Gottlieb Steen & Hamilton LLP, where he has served as a partner in the firm’s Washington, DC, office since June 2013. Prior to joining Cleary Gottlieb, Mr. Cook served as the Director of the Division of Trading and Markets (Division) of the U.S. Securities and Exchange Commission (SEC) from 2010 to 2013. Under his direction, the Division’s 250 professionals were responsible for regulatory policy and oversight with respect to broker-dealers, securities exchanges and markets, clearing agencies and FINRA. He also directed the staff’s review of equity market structure and its analysis of the Flash Crash of May 6, 2010. Prior to joining the SEC, Mr. Cook served as a partner at Cleary Gottlieb since 2001, and joined the firm in 1992.
“Robert has a deep understanding of the securities markets, and investors will greatly benefit from his broad regulatory expertise developed as Director of the SEC’s Division of Trading and Markets, where he led the organization in establishing and maintaining standards for fair, orderly and efficient markets,” said FINRA Lead Governor Jack Brennan, former CEO of Vanguard Group. “We thank Rick for his terrific leadership as FINRA’s Chairman and CEO, and express our gratitude on behalf of all investors for his decades of service.”
“Having known and worked alongside Robert for several years, I know that he brings extensive expertise as one of the leading practitioners on broker-dealer and market regulation, as well as proven regulatory and leadership experience,” said Mr. Ketchum. “Robert’s appointment is the result of the Board’s careful and thorough search process to identify the right leader to carry on FINRA’s important role of educating and protecting investors in the years ahead. It has been my honor and privilege to lead this extraordinary organization.”
“I am honored to join FINRA as CEO, and to have the opportunity to work alongside FINRA’s talented and dedicated staff in the critical role of protecting investors, as well as ensuring fair and orderly financial markets,” said Mr. Cook. “I look forward to building on Rick’s many years of excellent work and collaborating with FINRA’s Board, members and other stakeholders to strengthen investor protections, promote market integrity and enhance FINRA’s core competencies of examinations, enforcement, rulemaking, market transparency and market surveillance.”
Foto: gags9999
. UBS Wealth Management Americas reduce la contratación de advisors en un 40%
UBS Wealth Management Americas (WMA) has announced it is introducing a new operating model designed to move decision-making and resources closer to clients and drive organic growth through an increased focus on advisor retention. Specifically, WMA is changing its field structure and its compensation plans for financial advisors and field management, as well as reducing advisor recruiting by 40 percent.
WMA initiated several changes as part of the new operating model, including:
Delayering the field structure:WMA will now be organized into four divisions, 43 markets and 208 branches. Previously, its structure included two divisions, eight regions, 63 complexes and 189 branches. By eliminating the regional layer and realigning into larger markets, WMA is giving field leaders broader spans of control and moving decision-making authority closer to clients.
Enhancing and simplifying FA compensation: As part of a shift in focus from recruiting to retaining and rewarding its best advisors, WMA has launched a simpler advisor compensation plan that is easier to understand and rewards productivity, growth and loyalty. The plan includes increased payouts for advisors with the largest books of business, incentives for advisors to form teams, which has been shown to benefit clients, and an enhanced program for advisors seeking to transition out of the business and transfer their practice to another UBS advisor.
Aligning Field Manager compensation: WMA is modifying its compensation plans for field leaders so that they are both rewarded and held accountable for the decisions they make.
Shifting home office resources to the field: WMA is streamlining management in its home office in order to reinvest in staff and resources that make a tangible difference for clients and advisors.
As part of the new field structure, Brian Hull will continue as Head of the Client Advisory Group, overseeing four divisions, led by: Jason Chandler (Northeast), Bill Carroll (Central), Brad Smithy (Southeast), and Lane Strumlauf (West). John Mathews will continue as Head of Private Wealth Management.
Generali Investments Deutschland Kapitalanlagegesellschaft mbH (GID) has been merged into Generali Investments Europe S.p.A. Società di gestione del risparmio (Generali Investments) effective from the beginning of June 2016. The transaction is part of the Generali Group’s strategic decision to streamline its global asset management operations and has been enabled by recent regulatory changes facilitating the passporting of funds across Europe.
Santo Borsellino, CEO of Generali Investments, has commented: “The merger of GID into Generali Investments is another step forward in the process aimed at creating the pan- European and borderless asset management hub of the Generali Group. We have now simplified our structures in Germany, aiming at achieving better coordination across the company and serving our internal and external German clients more efficiently.”
GID was an asset management company belonging to the Generali Group, operating in Germany and acting as the management company for third-party and Generali Group insurance portfolios. As of year-end 2015, GID counted on 47 professionals and approximately €33 bn of total AuM. For most of GID’s AuM Generali Investments acted as the delegated investment manager. Furthermore, most of GID’s AuM consisted of German Spezialfonds (AIF) and mandates set up for the benefit of the Generali Group insurance companies.
Generali Investments is one of the first players in the European asset management industry to apply, at the same time, the passporting procedures as per the recently introduced UCITS and AIFMD EU directives. As a result, Generali Investments will offer its German clients, and manage, a comprehensive range of investment solutions including UCITS and AIFMD- compliant Germany-domiciled investment funds, such as the Spezialfonds, previously administered by GID as a Germany-based asset management company.
Peru’s president-elect, Pedro Pablo Kuczynski, faces the delicate task of balancing fiscal stimulus with prudent maintenance of public finances, Fitch Ratings says. Moreover, he will be tasked with ensuring that infrastructure investments and proposed tax-regime changes yield sustainable growth beyond their short-term impact. In the medium term, the sovereign rating will depend in part on the government’s ability to adjust public finances to lower copper mining revenues.
Peru’s creditworthiness is based on its track record of macroeconomic policy credibility, consistency and flexibility, as well as strong fiscal and external balance sheets. These factors have enabled the country to navigate risks such as its high commodity dependence, low government revenue base and financial dollarization.
Kuczynski’s party indicated it will rely on fiscal stimulus to offset the negative impact of decreased copper prices through a ramp-up of public investment and adjustments to the tax regime to favor small-business formalization and private investment. Rising copper production and increased public investment aim to achieve growth of 3.5% in 2016 and 4.0% in 2017. While Peru’s growth averaged 5.8% from 2011 to 2015, Fitch Ratings expects the economy will continue to outperform the ‘BBB’ median, with 2.4% and 2.9% growth in 2016 and 2017, respectively.
Peru maintains low general government debt of 22.8% of GDP in 2015. Savings, including a 4%-of-GDP stabilization fund and a large cushion of local and regional government deposits, would allow Peru to implement a moderate, short-term, counter-cyclical fiscal policy. However, the interim pace of fiscal deterioration and the medium-term consolidation strategy of maintaining fiscal credibility and policy consistency should be key in assessing Peru’s credit profile.
The president-elect and new Congress will be inaugurated on July 28, and the executive must publish a five-year policy agenda within 90 days of that date.
Sustaining Peru’s growth trajectory will depend upon the success of initiatives that include improving the country’s transit, energy and logistics infrastructure while raising the productivity of alternative sectors such as tourism and agriculture. It will also depend on creating conditions that will move labor formalization forward and broaden the tax base. Moreover, an improvement in credibly managing and resolving social conflicts in mining investments would be critical to the recovery of the country’s competitive mining sector.
The Congress will play an important role in these major reforms. On April 10, Kuczynski’s party, Peruanos por el Kambio, received a 15% minority share of deputies in Peru’s unicameral Congress, while the center-right party, Fuerza Popular, led by Keiko Fujimori, won a simple majority. However, the left-leaning Frente Amplio, with strong support in the southern mining provinces obtained similar representation as Kuczynski’s party. Therefore, the passage of the president-elect’s agenda will depend on how well Kuczynski’s administration builds consensus on key legislative reforms.
Foto: Clarissa Blackburn
. Lazard Asset Management lanza un nuevo fondo global multiactivo
Lazard Asset Management (LAM) has announced the expansion of its multi asset offerings with the launch of the Lazard Global Dynamic Multi Asset Portfolio.
The Lazard Global Dynamic Multi Asset Portfolio (the “Fund”) is an addition to the Lazard Multi Asset platform of strategies that deploy capital based on the team’s forecast of expected global market risks, returns and opportunities. The firm’s multi asset team manages it.
“We are focused on constructing a portfolio with the objective of delivering a consistent level of volatility regardless of market environment,” said Jai Jacob, Managing Director and Portfolio Manager/Analyst. “We put risk management at the center of our approach by targeting volatility to an 8-12% band. We feel that this approach helps alleviate drawdown risk, which is one of the major concerns for global investors.”
“The Fund marries our macroeconomic insight to our bottom-upsecurity selection across the global capital markets opportunity set to seek strong risk-adjusted returns for our investors,” said Ronald Temple, Managing Director and Co-Head of Multi Asset Investing. “We achieve this by allocating capital across asset classes and securities based on our market forecast,” he added.
As of March 31, 2016, LAM and affiliated asset management companies in the Lazard Group managed $191 billion worth of client assets.
The secondary debt market Debitos is to cooperate with the DDC Financial Group from Prague, which focuses on markets in the CEE region. Among other activities, the service company organises Forums across Europe & USA on the subject of buying and selling distressed investments.
By working with this new strategic partner the Frankfurt-based fintech company intends to focus more closely on other European countries. “We are looking forward to doing business with the DDC Financial Group. This partnership helps us to bridge the gap between the capital needed in the CEE region and specialised investors from US/UK markets. We were particularly impressed by DDC’s innovative online and multimedia offering and its Forum format. This is an important step for us to establish our business model in other countries”, said Timur Peters, managing director of Debitos GmbH. Already around one in ten of the 390 investors registered on the online portal come from outside Germany – mostly of them from English-speaking countries.
In the USA there is already an established market for distressed investments and this alternative asset class now plays an important role there in corporate turnarounds. Distressed investments are also gaining traction in Europe: DDC Financial Group helps its customers to open up new markets in this area and also supports them with market research.
Although most companies have perfected the art of managing analysts’ expectations, the corporate earnings season is producing fewer surprises although the general trend of a slowdown in profits seems to be continuing. This is the view of Guy Wagner, and his team, published in their monthly analysis, ‘Highlights’.
After the rebound in February and March, equity markets saw little change in April. The S&P 500 in the United States, the Stoxx 600 in Europe, and the MSCI Emerging Markets (in USD) gained respectively during the month, while the Topix in Japan gave up a bit. “Since most companies have perfected the art of managing analysts’ expectations, the corporate earnings season is producing fewer surprises although the general trend of a slowdown in profits seems to be continuing. The main support for the equity markets is the lack of alternatives, even though the deterioration of economic fundamentals is of increasing concern”, says Guy Wagner, Chief Investment Officer at Banque de Luxembourg and managing director of the asset management company BLI – Banque de Luxembourg Investments.
Stabilisation of China’s economy is due to the government’s stimulus measures Although the global economy is continuing to grow, there has been notable divergence in the different regions’ performance in recent weeks. While growth in US gross domestic product (GDP) slowed on the back of weak investment and exports, China’s GDP climbed. “However, the stabilisation of China’s economy is once again due to the government’s stimulus measures which are exacerbating the country’s excessive debt problem”, believes the Luxembourgish economist. In Europe, economic growth is stable despite a host of political crises. In Japan, the hoped-for economic recovery under the ‘Abenomics’ plan has not yet materialised.
Europe: no prospect of a change to the ECB’s accommodative monetary policy stance As expected, the US Federal Reserve kept its key interest rates unchanged at its April meeting. Fed Chairman Janet Yellen left the door open for a potential increase in interest rates during the year, although she remained very reticent about such a probability. In Europe, in response to a raft of criticism in recent weeks, European Central Bank’s (ECB) President Mario Draghi justified the rationale of the negative interest rate policy. Guy Wagner: “There is no prospect of a change to the ECB’s very accommodative monetary policy stance of recent years.”
European government bonds could despite weak or even negative yields gain Bond yields rose slightly in April. Over the month, the 10-year government bond yield inched up in Germany, in Italy, in Spain and in the United States. “In Europe, the main attraction of the bond markets, despite their weak yields, lies in the prospect of interest rates going deeper into negative territory and this being implemented on a greater scale by the ECB during 2016. In the United States, the higher yields on long bond issues give them some residual potential for appreciation without having to factor in negative yields to maturity”, concludes Guy Wagner.
According to the European Fund and Asset Management Association (EFAMA) the European investment fund industry during the first quarter of 2016 saw net sales of UCITS and AIF which reached EUR 37 billion, compared to EUR 171 billion in Q4 2015. The sharp drop in net sales was mostly due to lower net sales of UCITS.
EFAMA points out that UCITS net sales registered net outflows of EUR 6 billion, compared to net inflows of EUR 122 billion in Q4 2015. Long-term UCITS, i.e. UCITS excluding money market funds, recorded net outflows of 4 billion, compared to net inflows of EUR 83 billion in Q4 2015.
Equity funds recorded a turnaround in net sales, from net inflows of EUR 57 billion in Q4 2015 to net outflows of EUR 3 billion in Q1 2016. Net sales of multi-asset funds slowed down from EUR 31 billion in Q4 2015 to EUR 6 billion in Q1 2016. While Bond funds continued to record net outflows, i.e. EUR 9 billion, the same level as in Q4 2015.
UCITS money market funds also saw a turnaround in net sales, from net inflows of EUR 39 billion in Q1 2015 to net outflows of EUR 2 billion in Q1 2016. AIF net sales amounted to EUR 43 billion in Q1 2016, compared to EUR 48 billion in Q4 2015. The solid net sales performance of AIF reflected the good net sales level of equity funds (EUR 7 billion, compared to net outflows of EUR 5 billion in Q4 2015), and of multi-assets funds (EUR 20 billion, compared to EUR 15 billion in Q4 2015).
Given this, total European investment fund net assets decreased by 2.1% in Q1 2016 to EUR 13,039 billion. Net assets of UCITS fell by 3.4% in Q1 2016 to EUR 7,907 billion, and total net assets of AIFs only decreased by 0.1% to EUR.
Bernard Delbecque, Director of Economics and Research at EFAMA commented on these results: “The stock market sell-off in early 2016 and uncertainties about the future direction of interest rates had a negative impact on the net sales of UCITS during the first quarter of 2016. On a positive note, the net outflows remained very limited (0.07% of UCITS assets), and AIFs continued to show solid net sales level. This confirms that UCITS and AIF investors are resilient to market volatility”.
Foto: Michael Pardo
. El número de inversores institucionales activos en CTAs alcanza su record en 2015
The latest report from Preqin finds that increasing numbers of active investors and a positive general view of performance among existing investors have driven inflows into CTAs over recent quarters. The number of institutional investors actively investing in CTAs reached a record 1,067 in 2015, up from 1,017 in 2014. The total assets under management for CTAs is at $241bn as of the end of Q1, up from $204bn at the beginning of 2015.
Furthermore, 69% of investors interviewed at the end of 2015 reported that their CTA portfolios had met their performance expectations for the year, the second highest proportion of any leading hedge fund strategy. In the same survey, 29% of all hedge fund investors said they planned on increasing their exposure to CTAs in 2016, while only 5% intended to decrease it.
CTAs have seen four quarters of net inflows of capital since the start of 2015, with net asset flows of $38bn in new investor capital committed to the strategy. Although CTAs returned only -0.08% in 2015, 2016 began strongly with funds making gains of 1.52% in the first quarter. CTAs as a whole saw net inflows of $13.7bn in Q1 2016, the highest of any leading strategy.
New CTA launches peaked in 2013, with 153 funds launched in the year. Since then, the rate of launches has declined; there were just 73 new fund launches in 2015 and 12 so far in 2016, just 6% of all hedge fund inceptions.
“CTAs play an important role in a number of institutional investors’ portfolios. These vehicles, operating trading strategies across a wide range of commodity and financial markets, offer the possibility of returns with low correlation to other financial markets and can smooth returns in investor portfolios. With recent widespread turbulence, it is perhaps unsurprising that increasing numbers of investors have been attracted to CTAs’ potential for low correlation to other investments.
Partly as a result of this, so far in 2016 CTAs have seen the highest level of inflows across all leading hedge strategies. Despite a difficult performance year in 2015, CTAs have seen solid returns in the opening months of 2016, and if these gains persist we may yet see further inflows from investors,” said Amy Bensted, Head of Hedge Fund Products, Preqin.
Joël Reuland, manager of the BL-Global wealth management mixed funds, answers nine questions as he presents its fund BL-Global 50.
Joël, what type of assets does the fund invest in? Joël Reuland (JR): BL-Global 50 is invested between 35% and 65% in equities, the balance being in bonds, cash or precious metals. The fund’s equity portfolio is invested worldwide in high-quality companies with a sustainable competitive advantage. The bond portfolio only invests in government bonds. Exposure to precious metals is mainly an insurance against systemic risk.
What is the management strategy? JR: Pour In our view, the fund manager’s role is largely to avoid errors: an investment that loses 50% has to double before it can get back to square one. The asymmetrical pattern of losses and gains explains our aversion to risk, to which end we are prepared to sacrifice exceptional gains. We aim to achieve asset growth over the long term by avoiding losses. Accordingly, we only invest in things we understand and we steer clear of areas outside our expertise. We don’t invest in financial stocks because they are not transparent or in mining companies as their results are too dependent on commodity price trends which we can’t predict. We are reluctant to invest in highly cyclical companies given the difficulty of accurately anticipating periods of recession. We limit potential errors by not investing in products we don’t understand.
How else can you reduce the portfolio’s risk? JR: For each proposed investment, we calculate an intrinsic value. For equities, this is based on our forecast for the company’s recurrent cash flow. To reduce the probability of losses, we invest when the share price offers a discount to the company’s intrinsic value. Losses will be mitigated as long as our investment thesis is not mistaken.
Given such a prudent approach, at what point are you prepared to take more risk? JR: We take more risks when valuation discounts are favourable. Psychologically this is not always easy as the discounts can become significant during very stressful periods on the market. This is when opportunities open up, as they did at the end of 2008 and beginning of 2009. And since we select high quality stocks, their share price tends to recover after the crisis period. Once the stress has subsided, we become more cautious again. This may mean that we don’t extract every ounce from episodes of stock market euphoria but it’s the price we pay for avoiding substantial losses. And it’s a strategy that proves its worth over a full economic cycle. What we don’t lose in the downturn more than outweighs what we miss out on during the euphoric phases. Losses and gains are so very asymmetrical…
Do you put more into bonds when you have less investment in equities? JR: To some extent, yes. However, the fund is limited to government bonds. We don’t take any corporate risk in the bond portfolio, which should stabilise the portfolio during stock market stress periods. With high debt levels around the world, our credit risk is currently confined to Germany and the United States.
This is despite the fact that yields to maturity on German government bonds are negative, even for long maturities… JR: Obviously bonds aren’t as attractive now as they have been over the last 25 years. But having said that, even with negative yields to maturity, bonds could continue to appreciate if yields go deeper into negative territory. It may seem absurd, but that is a consequence of Mario Draghi‘s negative interest rate policy. And if the ECB cuts interest rates even further, to -2% or -3% to “force” consumers to spend their savings, government bond prices will continue to rise. Eventually, this type of monetary policy is likely to be inflationary, but bonds will go up in the meantime. This is why, despite negative YTMs, we are still invested in German government bonds. However, we have confined ourselves to maturities of 2017 to 2020 due to the longer-term inflation risks of such a policy.
In the United States, YTMs are still positive JR: In relative terms, US Treasury bonds continue to be attractive. This is why the US bonds in our portfolio have longer maturities than the German bonds. But we are keeping a close watch on the situation. With such high debt, it is increasingly likely that the central banks will deploy a deliberately inflationary monetary policy. We haven’t got to that point yet but it’s getting closer. This is why bonds with longer maturities are much more risky.
Given the low attraction of bonds, is there an alternative for diversification? JR: Gold is a definite option. The more disconnected the central banks’ monetary policies become, the greater the rationale for having gold in a portfolio. The main reason why gold has not gone up more so far despite the central banks’ quantitative easing policies is that these policies have not created inflation. But weak inflation is not surprising if the technique of quantitative easing is fully understood. On the other hand, if the central banks change tack and decide to deliberately create inflation, that is certainly achievable. And at that point, the gold price will pick up. But then you never can tell. If investors lose confidence in the central banks’ disconnected strategies, it could be useful to have exposure to the ultimate currency as, unlike paper currencies, it cannot be printed at will.
What performance can investors in BL-Global 50 expect? JR: Since the fund’s launch in October 1993, BL-Global 50 has generated a return of 4.5% per annum. However, this historic return cannot be considered representative for the future now that market conditions have totally changed. Due to the central banks’ unconventional monetary policies, money market and bond investments offer almost zero yield. So everything hangs on equities which, given the scale of the economic imbalances, are likely to trade at lower valuations. Protecting purchasing power without suffering excessive volatility has become the watchword for the future. This might seem like an ambitious target, but given the virtually zero or even negative yields on offer for bond and money market investments, protecting purchasing power takes on a totally new meaning.
