According to Detlef Glow, Head of EMEA research at Lipper, assets under management in the European exchange-traded fund (ETF) industry declined from €432.7 billion to €430.0 billion during September.
This decrease of €4.7 billion was driven mainly by the performance of the underlying markets, -where €7.2 billion were lost-, while net sales contributed €2.4 billion to the overall assets under management in the ETF segment. Amongst the funds, Equity ones enjoyed by far the highest net inflows for September receiving €2 billion in inflows. The best selling Lipper Global Classifications in September where:
Equity EuroZone with €1.2 billion
Bond EMU Government Short-Term with €0.7 billion
Equity Europe with €0.7 billion
Amongst ETF promoters, iShares with €1.6 billion (of which the iShares MSCI Japan ETF, the best selling ETF fund in September, accounted for €0.7 billion), UBS ETF with €0.5 billion and ComStage €0.2 billion, were the best selling ones.
Foto: Dennis Jarvis
. El valor de los activos chinos construidos supera al de Estados Unidos y ya es el mayor del mundo
China has overtaken the US as the world’s wealthiest country measured by the value of its built environment according to the latest Global Built Asset Wealth Index published by Arcadis. The index calculates the value of all the buildings and infrastructure contributing to economic productivity in 32 countries, which collectively make up 87% of global GDP.
For the first time, built asset wealth in the US no longer leads the world. With wealth of $36.8 trillion, the US now trails China at $47.6 trillion. The US built asset stock is largely unchanged in the past two years, while since 2000, China has invested $33 trillion in its built assets, a total exceeding all other economies combined. The growth is evidence of China’s unprecedented level of investment in its infrastructure – 9% of GDP – which dwarfs global competitors like the US, which currently invests just 2% of GDP.
Tom Morgan, vice president, head of business advisory, North America at Arcadis –a design & consultancy firm for natural and built assets – explains: “A prosperous society is underpinned by a well-developed built environment that meets the needs of its people and economy. Therefore, a strategically planned, highly developed and well maintained built environment is critical to the economic and social success of a nation.
“Developed economies have experienced a long-term stagnation and decline of their built asset stock, as aging infrastructure falls into disrepair and investment fails to keep up. This decline puts even more urgency on public owners to find creative ways to attract finance, make smarter decisions regarding the maintenance of existing assets and to maximize every dollar spent – the whole asset lifecycle must be considered to meet society’s needs.”
Morgan continues: “China’s ranking this year marks a profound change in the global league table of the world’s wealthiest built asset nations. However, with so much global uncertainty from financial imbalances, unprecedented currency volatility and crashing commodity prices, even China and its fast-growth neighbors will need a renewed focus on quality over quantity.”
US trends
The Index notes that while the US built asset wealth embedded in real estate has demonstrated solid long-term growth, public infrastructure has not seen the consistent funding and policy needed to build investor confidence in such long term projects. In addition, the report notes that the US needs to find ways to maintain the integrity and service levels of its aging asset base for less money.
The shifting wealth to emerging economies
The Index shows a dramatic shift of wealth to emerging economies, such as Indonesia and Thailand, with the traditional economic superpowers – the G7 – showing a net decline in the value of their built assets since the 2013 report. Structural assets depreciate at a rate of around 5% per year, meaning this level of investment is the minimum required to maintain the status quo, a figure equating to $1.4 trillion in the US.
In Europe, the almost decade-long economic slowdown has also had the negative effect of holding back investment.
The top ten nations in the Arcadis Global Built Asset Wealth Index are:
Foto: RebeccaVC1
. Los incentivos a largo plazo ganan terreno en los family offices, que subirán un 3% sus salarios en 2016
Family Office Exchange (FOX) revealed that 88 percent of family offices plan to increase salariesnext yearwith a median increase of 3 percent. By contrast, in 2014, 83 percent of family offices saw salaries rise, with a median increase of 4 percent. The finding is part of the 2015 FOX Family Office Compensation and Benefits Report.
New data, collected for the first time, shows a surprising proportion of the CEOs of family offices to be women. The study reports that 35 percent of the participating family offices have female CEOs, compared to just 4.6 percent of S&P 500 companies. The average family office CEO is 54 years old, and staff members range in age from 22 to 84 years old. Thirty-six percent of participants, with CEOs who are 60 years or older, are facing imminent succession issues.
“In an environment where finding and retaining talent is the number one concern, having peer data that addresses the entire package—from base salary to benefits and flexible work hours – helps the office leadership ensure that they are doing everything they can to be competitive.” Said Jane Flanagan, Director of Family Research at FOX.
This year’s report, which was co-sponsored by Grant Thornton LLP, contains compensation data for 25 different family office staff positions. The data comes from 112 different family offices reporting on nearly 800 individual staff positions, with information on salary, incentive compensation, benefit packages, and retirement plans.
“Long-term incentives are becoming more prevalent and can be a powerful tool for offices seeking to attract and retain the best available talent.” Said Bruce Benesh, Grant Thornton’s national partner-in-charge of Compensation and Benefits Consulting.
FOX is a global membership organization of enterprise families and their key advisors.
Many investment insights that exploit market inefficiencies follow a fairly predictable performance arc. Those that are first to discover and implement effective insights tend to reap the most alpha from them in the early stages after implementation. However, as the insights become more widely known and followed by an increasing number of market participants, they start to deliver less alpha and may ultimately become commoditized. As competition in active management has grown more intense, the effective life span on many such insights has meaningfully decreased in recent years. The chart below* illustrates this.
This phenomenon is affecting the entire investment management landscape, most notably in recent years through the rise of smart beta strategies. Smart beta harnesses broad, persistent drivers of return such as quality, size and value that were once firmly the province of active investors—increasing the urgency for both quantitative and fundamental active managers to come up with innovative techniques to deliver differentiated alpha. So, as the traditional line between passive and active has begun to blur with the rise of smart beta strategies, true alpha has proven increasingly elusive. In response, managers across the spectrum from equity, to fixed income, to impact investing are looking to big data for an edge.
So, what exactly is “big data?”
Worldwide, humans are generating some 2.5 quintillion (2.5 x 1018) bytes of information every day, and IBM estimates that about 90% of this was created in the last two years. The potential that comes with an understanding of this data is practically unending, yet sifting through it is almost impossible without a solid understanding of what you are looking for and the ability to compute it. From an investment perspective, this mass of information is particularly valuable in how it relates to human economic behavior. To make sense of all the data some investors and asset managers are employing new approaches, and developing a different set of tools to search the entire universe of information for new and potentially market-moving information.
For example, text mining and machine reading algorithms are being developed to interpret vast quantities of written materials, such as company reports, regulatory filings, blogs, social media, etc. From this data, more accurate information on consumer confidence and corporate sentiment, among other things, can be derived. It is also possible to identify non-intuitive relationships between companies that are fundamentally related—and therefore are exposed to similar return drivers—despite differences in industry classification, country of domicile, market capitalization and supply chain position.
The above example harnesses the power of technology to create entirely new datasets, however techniques like machine learning can advance how we analyze existing datasets as well. For example, by employing machine learning to sort through data, find patterns and automate processes we can identify combinations of traditional investment signals (e.g. return on assets, ratios, momentum measures, etc.) in a more effective way than when looking at these signals individually. This type of process is heavily reliant on computer processing, as there are simply too many permutations and interactions for humans to consider effectively.
The data revolution is not limited to these strategies alone—natural language processing, scientific data visualization, distributed computing and other techniques will also change how we handle information. A data-driven, scientifically-based, technologically-aware research culture can produce sustainable alpha. This is true not only for quantitative investment approaches, but also for fundamental managers that can use data analytics to make more informed decisions.
As the landscape of investing evolves, it will become increasingly important to consider the capabilities of who you chose to help you manage your assets. Investment managers that are able to unleash more of the power of data may be best positioned to rise to the top—uncovering important new insights and putting them to work for their clients.
*The strategies for the Tough Competition chart come from the following research papers: Do Stock Prices Fully Reflect Information in Accruals and Cash Flows about Future Earnings?, Richard G. Sloan, The Accounting Review, (July 1996); Accrual Reliability, Earnings Persistence and Stock Prices, Richardson, S. A., Sloan, R. G., Soliman, M. T., & Tuna, I, Journal of Accounting andEconomics (2005); and The Information in Option Volume for Future Stock Prices, Jun Pan, MIT Sloan School of Management and NBER and Allen M. Poteshman, University of Illinois at Urbana-Champaign, The Review of Financial Studies (2006).
This material is for educational purposes only and does not constitute investment advice nor an offer or solicitation to sell or a solicitation of an offer to buy any shares of any Fund (nor shall any such shares be offered or sold to any person) in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that jurisdiction. If any funds are mentioned or inferred to in this material, it is possible that some or all of the funds have not been registered with the securities regulator in any Latin American and Iberian country and thus might not be publicly offered within any such country. The securities regulators of such countries have not confirmed the accuracy of any information contained herein.
Foto: GotCredit
. Mandatos y coinversión: una forma más económica de invertir en private equity que con pools de fondos
Figures compiled for the forthcoming 2015 Preqin Private Equity Fund Terms Advisor show the significant disparity in fees private equity fund managers offer investors in their separate accounts and co-investment opportunities, with that of commingled fund investments. When calculating performance fees, 48% of fund managers charge a 20% carry rate for separate accounts, compared to 85% of managers running comingled funds. 48% of managers charge no carried interest on co-investments, while only a quarter keep the same rate as in their main vehicle.
With regards to management fees, private equity separate accounts have a median average fee of 1.00%, and a mean average of 1.15%. In addition, 42% of fund managers will reduce or remove these fees after the initial investment phase. By comparison, almost three-quarters (73%) of commingled buyout funds currently in market or with a 2014/2015 vintage charge the “industry standard” management fee of 2.00% or more during the investment period. Forty-nine percent of managers charge no management fees on co-investments, with only 16% maintaining their standard rate.
The research also finds average rate of management fees on separate accounts varies significantly according to fund type. Mean and median management rates for a buyout separate account are 1.69% and 1.88% respectively, just below the standard 2.00%. However, the median fund of funds separate account rate is 1.00%, and private equity real estate funds charged a median 0.78% management fee.
The proportion of investors that cite management fees as an area in need of improvement has dropped from 59% in June 2013, to 40% in June 2015, while fees charged on unspent capital have fallen off the top list of investor concerns.
Investor concern with performance fees has risen, both over the amount paid, and the structure of charges. Data shows that the amount of performance fees, and the fee structures, concern 32% and 21% of investors respectively, up from 28% of investors that were concerned with carry structure in 2014.
Twenty nine percent of private equity fund managers contribute 0-1.99% of the value of their separate accounts, broadly in line with the typical 1% rate of GP commitment. Almost half (47%) commit 5% or more, while 15% of fund managers contribute over half the total value of their separate accounts.
“Preqin’s latest analysis of private equity fund terms and conditions shows some progress in aspects that investors have previously marked as areas of concern. Far fewer investors are concerned about the level of management fees at present, and at the same time, the proportion of investors that believe their interests are aligned with those of managers has risen significantly.
Separate accounts and co-investment opportunities offer sophisticated investors a number of benefits in accessing private equity beyond traditional commingled fund investments, and in addition, the fees associated with these investments are significantly lower. The growing appetite for alternative routes to private equity has the potential to threaten the traditional, commingled fund structure, and GPs that adapt to the evolving fundraising environment will better meet the needs of LPs and create long-term, mutually beneficial LP-GP relationships.” Says Selina Sy, Senior Manager
You can find more detaills on the report, you may use this link
Foto: Intana, Flickr, Creative Commons. El repunte de los hedge funds en octubre revela optimismo en el mercado
October saw hedge funds delivering returns close to 2% on the back of a renewed sense of market optimism. Event-Driven and Global Macro strategies outperformed, up 2.5 and 3% respectively. CTAs, which were up 2.7% last week, underperformed for the full month of October as they failed to capture the market rebound.
The widening gap between the monetary stance in the US (hawkish bias) and in Europe (dovish) has fuelled the USD and dragged down commodity prices. This is supportive for CTAs and Macro managers on which we remain overweight. According to Lyxor proprietary data, both strategies are long USD vs major currencies and short commodities. There are nonetheless nuances: CTAs are relatively more aggressive on energy (net short) than Macro. In the wake of the ECB’s dovish words, long duration positions of CTAs are benefitting from the fall in bond yields in Europe.
Event Driven managers were up 2.4% in October, partially recouping some of the losses experienced during the summer. The S&P Health Care index was up 8.4% this month, supporting elevated exposures to the sector in their portfolios. Meanwhile, the announcement last week that Pfizer is considering a merger with Allergan has fuelled the stock price of the latter company by 20% in a week. Some managers have a long exposure to this stock in the range of 5-10% of net assets. This will support the performance of the strategy in the short term and will help to offset any negative developments from Valeant which has suffered allegations of fraud.
Finally, Lyxor is upgrading the European L/S Credit strategy to slight overweight. “We believe it is likely that European credit will be supported by both fundamentals and technicals. European corporate default rates are low and are projected to remain this way in H1-16 by Moody’s. On top of that, European companies are deleveraging which is supportive for credit risk. On the technical front, issuance is low and the ECB is likely to expand its asset purchase programme to include corporate debt, thus creating new sources of demand. In this environment, European L/S Credit funds are expected to benefit from supportive beta conditions on top of their ability to generate alpha (see chart below). An extension of the QE programme by the ECB involving corporate bonds is likely to support the high yield segment as a result of the portfolio rebalancing effect. It is also likely to fuel peripheral issuers and cyclical sectors in relative terms”.
Foto: Jonathan, Flickr, Creative Commons. Julius Baer: aún hay muchas razones para mirar a Asia como "el mayor jardín de crecimiento de millonarios"
Julius Baer has released its fifth annual Wealth Report: Asia, which monitors the cost of living in luxury and wealth creation in Asia. It finds that in Asia, Julius Baer’s second home market, the pool of investable assets held by High Net Worth Individuals (HNWI) could reach USD 14.5 trillion by 2020, or a growth of 160% in the current decade.
In addition to the Julius Baer Lifestyle Index, which was launched in 2011 tracking the costs of goods and services for HNWI in 11 Asian cities, this year’s report includes forecasts of HNWI wealth creation trends in ten Asian markets for the next five years until 2020. Despite its maturing economy, China’s HNWI wealth is expected to increase to USD 8,249.6 billion in 2020, trebling the 2010 figure and making it one of the biggest wealth creation engines in the region. The Philippines and India are also ranked in the top three in terms of HNWI wealth creation.
Boris F.J. Collardi, Chief Executive Officer of Bank Julius Baer, said: “For the first time since 2011, we revisit the growth of millionaires in Asia. Whilst we have tempered our optimism as to the rate of growth, there is still much reason to look to Asia as the greatest garden to grow millionaires. These findings also support our belief that wealth management is clearly a growth industry, with wealth set to continue its upward trajectory in Asia.”
China and India, in good shape
HNWI wealth is projected at USD 5.1 trillion in 2016, rising to USD 8.25 trillion billion by 2020. The projections of HNWI wealth are based on the assumptions of nominal GDP growth of around 10% between 2017 and 2020, boosted by expected appreciation of the Chinese currency versus the USD throughout the forecasting horizon. While the Renminbi (RMB) declines in 2015, the longer term outlook points to an appreciation trend.
Hong Kong’s HNWI wealth is expected to rise steadily to USD 1 trillion by the end of the decade. In recent years, Hong Kong’s stock index performance has been considerably better than that of Singapore’s stock market index. Further, Hong Kong benefits from strong trade and economic linkages with China. Hence, it comes as no surprise that, even as its nominal GDP rises 42% from USD 228.6 billion in 2010 to USD 325.3 billion by 2016, the HNWI wealth rises 56% from USD 484 billion to USD 756.3 billion in the same period.
About India, HNWI wealth is forecasted at USD 1.425 trillion in 2016, rising to USD 2.3 trillion by 2020. India’s nominal GDP growth is projected to rise only by 3.2% this year due to the depreciation of the local currency versus the USD. However, the Indian economy has now found its footing and is in a period of positive development. Thus, India’s HNWI wealth in USD is projected to rise by 94% between 2014 and 2020 (versus 74% for China). If this trend persists for a decade or more, India will narrow the wealth and economic gap with China.
Thomas R. Meier, Region Head Asia Pacific of Julius Baer, said: “Notwithstanding slowing global conditions, we remain positive on the trajectory of Asian HNWI wealth led by China where we estimate a tripling of HNWI wealth this decade to more than USD 8 trillion. Our forecasts reflect the belief and confidence that China has ample room to ease monetary and fiscal policy to both stabilize and boost the economy. We also see great catch-up potential in India where we expect economic expansion to strengthen from next year. India has the potential to narrow the wealth and economic gap with China over the next decade.”
Julius Baer Lifestyle Index 2015
The Julius Baer Lifestyle Index compares 20 goods and services items in 11 cities, covering Hong Kong, Singapore, Shanghai, Mumbai, Taipei, Jakarta, Manila, Seoul, Kuala Lumpur, Bangkok and Tokyo. In 2015, the most expensive and best bargain cities as determined by the index are identified clearly for the first time.Shanghai is the overall most expensive city in the 2015 study, topping the tables for services and goods and the overall category. Shanghai was within the top four most expensive cities in 13 out of the 17 compared categories (excluding wine, university and boarding school). With possible devaluation of the RMB, interest rates cut to stimulate the market after a volatile summer in 2015, we expect some strong price movements next year.
Hong Kong and Singapore take a respectable second and third overall. Hong Kong’s expensive cost for services and Singapore’s relatively expensive pricing for all goods and services, firmly establish these three cities as the most expensive cities to purchase the items in the Julius Baer Lifestyle Index.
This year’s report also features dedicated sections on India and Japan. A positive outlook for HNWI wealth is projected in India in the years ahead, in contrast to the relative stagnation in HNWI wealth between 2011 and 2013. Therefore, it retains promise and attractiveness for wealth management institutions over the next half decade, if not longer.
A positive evaluation is held of Japan’s economy and outlook – despite the fact that the overall growth of the market should not be expected to increase much beyond 1.5% per year anymore. Overall growth will be slowed down by demographic decline and underperformance of entire regions outside the city centres. Within its urban growth centres, however, new services are thriving, already strong social infrastructure is being upgraded and restructured corporations have returned to profitability. This will also be the basis for Japan claiming a greater economic role in Asia again.
Jonathan Larsen, responsable global de banca retail en Citi, y Geoff Garrett, decano de la Wharton School, anunciaron el Citi Wharton Global Wealth Institute.. Citi y la Universidad de Pennsylvania lanzan un programa en Wharton para la formación de asesores
Citi and The Wharton School of the University of Pennsylvania announced the formation of the Citi Wharton Global Wealth Institute to provide Citi’s global advisor community with world-class business and executive training.
The new Institute, part of a new, three-year executive education initiative that will reach the Citigold, Citigold Private Client and Banamex global advisory network, will launch in December on the University of Pennsylvania’s campuses in Philadelphia and Beijing. The participants will comprise Citi’s top-performing Relationship Managers and Financial Advisors. Beginning in 2016, additional sessions will be taught in Latin America and Europe with further locations to be announced. Over the next three years, Citi expects to enroll as many as 500 Relationship Managers and Financial Advisors worldwide through the Institute.
“We are delighted to partner with Citi to create a custom executive education program that is a true investment in Citi’s vision for the future,” said Wharton School Dean Geoffrey Garrett. “The global nature of this program exemplifies our goal to be the best business school for the world.”
“Our collaboration with Wharton reflects an extraordinary learning commitment by Citi that we believe will serve our Relationship Managers, and ultimately our clients, well into the future,” said Jonathan Larsen, Citi Global Head of Retail Banking and Mortgage. “Citigold Private Client and Citigold globally have some of the most talented financial advisors in the industry, and by leveraging the remarkable expertise of one of the finest business schools in the world, we will cultivate and deepen that talent pool for many years to come.”
Led by Christopher Geczy, academic director of the Wharton Wealth Management Initiative, the Citi Wharton Global Wealth Institute’s curriculum will feature world-class instruction and experiential learning to enhance participants’ business acumen and leadership skills.
“Citi is refining what advisors will look like in the future and expanding the horizon of their role with customers,” said Geczy. “This program will impart supportive knowledge and skills in areas ranging from client service to the deep expertise of technical wealth management and on to leadership, ethics and personal effectiveness, all of which are critical for serving clients broadly at a world-class level.”
Foto: Simon Cunningham
. Seedrs, líder europeo en "equity crowdfunding", aterrizará en Estados Unidos en 2016
Seedrs announced that it will commence a beta test of its platform in the United States within weeks, following Friday’s vote by the U.S. Securities and Exchange Commission (SEC) to implement Title III of the JOBS Act.
The beta test will offer US accredited investors the opportunity to invest in selected campaigns listed on the platform, with an official launch expected in early 2016.
In late 2014, the largest crowdfunding platform in Europe to focus solely on equity investments acquired California-based crowdfunding platform Junction Investments in preparation for its push into the United States. It has been working tirelessly in 2015 developing the right approach to commence operation in the United States, as compliance with applicable law has always been a non-negotiable element of the company´s approach to business.
The firm has been active in supporting the JOBS Act equity crowdfunding regime with Jeff Lynn, Seedrs CEO, having provided expert testimony to subcommittees of the U.S. House Oversight & Government Reform Committee in September 2011 and the U.S. House Financial Services Committee in May 2014.
The firm believes Friday’s SEC vote on Title III of the JOBS Act represents a significant step forward for early-stage and growth-focused businesses that wish to use equity crowdfunding as a platform to raise capital for their businesses.
Jeff Lynn, CEO, said:“I have had the privilege of being involved in the lawmaking process for U.S. crowdfunding ever since the JOBS Act was introduced in 2011, and I am very pleased to see that the SEC has finally adopted rules implementing Title III. We believe this heralds the emergence of equity crowdfunding as a vibrant form of finance in the United States – just as it has become in the UK and Europe – and Seedrs is perfectly positioned to take advantage of the sector’s growth. The beta testing will be the first foray into the market, and we look forward to growing our presence there significantly in 2016.”
Foto: David
. Lloyd Jones Capital adquiere dos comunidades de viviendas en Texas
Lloyd Jones Capital, a Miami-based multifamily investment firm, has acquired the Carol Oaks and the Villa Oaks apartment communities in Fort Worth and Houston, respectively. Both are considered exceptional value -add opportunities which the company anticipates improving and rebranding in order to enhance the asset value.
Says Chris Finlay, Chairman/CEO, “These properties are a great fit for our value-add portfolio. They are both currently producing cash flow, and with selective renovations and exciting rebranding they will prove to be fabulous opportunities for our investors.”
The Carol Oaks is a gated community consisting of 224 units on 18 acres. It is undergoing rebranding to the company’s proprietary ‘Vibe” concept that offers high tech opportunities for its residents with Wi-Fi and collaborative work areas. It is now called The Vibe at Landry Way.
The Houston property, Villa Oaks, with 212 units of affordable housing will be rebranded as TownParc at Sherwood. This townhouse community offers large units with numerous floor plans.
According to Finlay, two additional properties – in St. Petersburg, FL and Houston – are scheduled for closing in the next few weeks. These will add an additional 610 units to the company’s growing investment portfolio. Finlay says “One of the things that gives us great confidence in the ability to turn these C and B properties into C+ and B+ assets is Finlay Management, Inc., our property management arm.” He explains that the company is an Accredited Management Organization (AMO) In fact the company was named “AMO of the Year” of North FL for 2013 by IREM (Institute of Real Estate Management.)
The company specializes in multifamily investment in FL, TX and the Southeast. The company acquires well located, cash-flowing assets with value-add potential. It was founded by real estate veteran, Chris Finlay, who has over 35 years in the multifamily industry.
