Internacional archivos - Page 303 of 549

What Wealthy Families in Latin America Need to Know About Compliance Rules

“Compliance rules have dramatically changed in the last few years, and the next two ones will be even more complicated or challenging for most wealthy families,” says Martin Litwak, from law firm Litwak & Partners who discusses how the new compliance rules are impacting private wealth management in Latin America.

According to the Lawyer, “there is a lot of information online about FATCA and CRS coming from banks and financial providers, but some families are not getting the best advice, from independent lawyers, on what to do or not do, how to manage the risks and the practical impact of these changes. It is not about filling out a new questionnaire. Families must make sure that the set of structures in place are in compliant with the new scenario. It is not just one piece of law that has changed; the whole system is now different.”

Nowadays countries are cooperating for tax purposes, and the information on a family’s assets is available to authorities as well as to third parties. “Which is a bigger issue in a region like Latin America, where kidnappings take place and many governments are corrupt. The fact that information could exchange hands for very little money is very dangerous” he says.

In his opinion, families must have the right structures in place before all these new rules take effect. They also should report whatever they have or own. “If they do not like the consequences this reporting may have, they can move to a different country with a better tax system. If they are not prepared to do this, they may be able to save or differ some taxes and/or to reach some level of confidentiality at least vis a vis third parties other than governments by setting up trusts and/or private family funds.”

Jurisdictions traditionally considered as offshore international financial centers have stronger protections of secrecy and privacy. “With offshore assets, it is better to structure them offshore too. Our clients usually pursue three objectives: privacy, tax optimization and succession planning. If they value secrecy the most, regulated investment funds (perhaps with their shares being publicly traded) are better than trusts. If succession planning is more important, a trust structure might be the best solution. We try to identify what matters to them the most, but they must also understand what can and cannot be achieved in this new transparent world.”

Litwak will be present at the marcus evans Latin Private Wealth Management Summit 2016 in Panama.

MiFID II and Lessons from The UK

| For Alicia Miguel | 0 Comentarios

Europe has been given some breathing space with the MiFID implementation being put back a year, but this is not an excuse to sit still and doing nothing. As RDR was the precursor for MiFID II, distributors in Continental Europe have turned to the UK to understand how it might affect the distribution landscape and what lessons if any can be learned.

First of all, it’s important to understand one of the fundamental differences between RDR and MiFID. In the UK, advice has to be paid for whether it is provided by an independent financial adviser, a tied adviser or a bank adviser. All advice must be paid for. This had the unwanted effect of creating an advice gap because modest investors were no longer able to afford advice. In addition, banks pulled out of advice provision because they could not offer a cost-effective service and because they were concerned of future poor advice scandals.

In Europe the situation is different. Under MiFID II, only independent advice has to be paid for, meaning that tied advisers can continue to benefit from retrocessions as long as these are declared to the investor. This will not create an advice gap as it has done in the UK, but it is likely to drive investors towards solutions where they do not have to pay for advice (although in reality they will pay much more over the years in rebates). For countries with nascent advice industries, such a move could spell trouble but there are plenty of ways that independent advisers and wealth managers can fight back and ensure they have a long-term future in financial services.

Lesson one: It is important to remember that this is a supply-side reform. Investors will always need advice, but how they access it will change. People will still need advice on their savings and investments and long-term plans. The industry is not going to end just because of this new legislation.

Lesson two: work closely with the regulator to ensure that you get the best out of this legislation in Spain. Don’t protest and be difficult, make sure your voice and opinions are heard and taken into account.

Lesson three: Don’t wait until it’s too late. The most successful advice and wealth businesses in the UK started working on their post RDR model straightaway. You can gain a competitive advantage by working out your proposition now. Review your costs, your client base and understand how you add value. Promote that message consistently.

Lesson four: Don’t try to do things the old way. You need to adapt and change to the new environment. Make the use of technology and the internet to deliver a streamlined and cost-effective service. Make your proposition as attractive as possible to your clients.

Lesson five: Do not wait for the regulator or the press to promote your business. Do it yourself and do it now. Push your trade associations to work with you to promote the value of independent advice and superior investment skills. Be proactive. Advertise. Place articles in the press. Do everything you can to persuade consumers that tied advice is not the best advice.

And if all else fails, there is one last thing you can do… define yourself as non-independent!

Opinion column by Bella Caridade-Ferreira, CEO at Fundscape

The presentations can be found here.

Jérémie Fastnacht Joins Banque de Luxembourg as a Portfolio Manager

| For Gabriela Huerta | 0 Comentarios

Jérémie Fastnacht has joined BLI – Banque de Luxembourg Investments as a portfolio manager. His main responsibility in this role will be to support Guy Wagner in managing the BL-Equities Dividend fund.

The 30-year-old Frenchman comes from Banque de Luxembourg, where he served for one and a half years as an analyst and equity portfolio manager in the Private Banking Investments department.

“Quality research is even more important in today’s market environment. We are therefore staying on our chosen path and – as we have done successfully with our BL-Equities Europe and BL-Equities America funds – have provided our fund manager with a co-manager,” said Guy Wagner. “With Jérémie we have selected an in-house candidate, especially as he knows the Bank, our investment philosophy, and shares our values.”

Jérémie Fastnacht added: “I am pleased to take on this new role on the equity fund team of BLI – Banque de Luxembourg Investments. Alongside Guy I will share responsibility for the Bank’s flagship funds, which is highly motivating.” Jérémie holds a master’s degree in Finance from Université Paris-Dauphine and completed a post-graduate program in Financial markets from SKEMA Business School / North Carolina State University. Jérémie began his career as an equity fund manager at BCEE Asset Management in Luxembourg in August 2012.

Why We Think Mexico Is a Standout in Latin America

| For Gabriela Huerta | 0 Comentarios

I recently traveled to Latin America and had the opportunity to visit and collaborate with a number of our team members based in the region, including Rodolfo Ramos Cevallos, who works out of our office in Mexico City. Oil prices have certainly had an impact on Latin American economies—for better or for worse—but it was clear to us that Mexico has many potential growth drivers, with reform efforts playing a key part. I’ve invited Rodolfo to talk more about the economic prospects in his home country.

Over the last two decades, Mexico has taken decisive steps to integrate with the global economy through trade agreements, so it can be affected by external factors such as slowing global growth. While 2015 was a challenging environment for investors—including those in Mexico—we think Mexico stands out from many other countries in Latin America, and as well as other emerging markets, for a number of reasons. Mexico has developed into a high-value-added exporting powerhouse to the United States. It has passed structural reforms geared to encourage competition and attract investments at a time when most countries are shying away from private investment and liberalization, and it has stable fiscal and macroeconomic management. Because of this differentiation, Mexico’s equity market has been able to outperform broader Latin America as well as emerging markets overall (as measured by MSCI indexes) in the last one-, three- and five-year periods.

Currently, we are seeing opportunities in the export sector, which has benefited from a weakening in the Mexican peso versus the US dollar over the past couple of years. The automotive industry is a good example; Mexico is the seventh-largest automobile manufacturer in the world and largest supplier of automobile parts to the United States. Production of light vehicles has been on the rise, expected to grow from 3.2 million units annually in 2014 to more than 5 million units by 2020. We are also seeing bargains in the mining sector. While the mining sector has been out of favor in recent years, we have been able to find cost-competitive companies in Mexico with solid balance sheets that appear well-positioned to potentially benefit when the cycle turns.

Within Mexico, we are also finding opportunities in the banking and financial services sectors and believe banks are likely to continue to grow as younger generations get more comfortable using credit than perhaps their parents or grandparents were. Overall loan penetration in Mexico currently stands among the lowest in all of Latin America, and we believe financial services companies should do well as new industries (namely energy and oil) get listed and monetized in the equity market.

Monetary Policy and the Peso

The Mexican peso is one of the most liquid currencies in the world and the most liquid in emerging markets, which is why it is widely used by market participants to hedge emerging market risk. A large derivatives market also drives currency prices. The peso has historically been correlated with oil prices due to Mexico’s oil assets and the government’s dependence on them for tax revenues. These dynamics pushed the peso to an all-time low versus the US dollar at the beginning of the year. The peso’s dismal performance has been a major area of frustration and concern for global investors, especially considering Mexico’s stable macroeconomic outlook. Mexico’s central bank, Bank of Mexico (or Banxico), has historically taken a hands-off approach to foreign exchange markets. However, this extreme volatility prompted Banxico to announce a surprise interest rate hike in February and to directly sell US dollars to banks (instead of its routine US dollar auctions) to bolster the currency. The Mexican peso reacted positively to these actions, but it currently remains undervalued, according to our calculations.

Monetary policy is very much coordinated between the US Federal Reserve and its Mexican counterpart, which should limit any adverse impacts from a tightening cycle in US monetary conditions. However, we believe any US tightening will be a slow and gradual process due to stubbornly low inflation in the United States, expected at a mere 1.3% for 2016, based on the current Bloomberg consensus forecast. We do not foresee a material impact on Mexico’s economy from a gradual increase in interest rates in the United States.

The Impact of Oil, and Reforms

While oil is meaningful to the Mexican government in terms of revenues, Mexico’s reliance on oil is considerably less than is commonly believed, as oil represents only about 10% of its exports. With the decline in oil prices and an increase in economic activity, oil’s importance in Mexico has been significantly reduced in the last couple of years, with income tax and value-added tax (VAT) picking up the slack. Oil’s contribution to the federal budget has dropped by half in the last couple of years from about 40% in 2008 to about 20% in 2015. Unfortunately, consumers have generally not seen lower prices at the pump yet, but with the liberalization of the oil sector that could change in the coming years.

Throughout Latin America, governments can no longer rely on high commodity prices to help them finance key programs and projects, particularly related to infrastructure. So I think reforms are going to be very important. Energy reform in Mexico has opened up the oil sector to private investment through different participation schemes. Previously, the state-owned enterprise Pemex was the only firm that was allowed to capitalize on oil resources. Now, the newly established National Hydrocarbons Commission has the authority to auction fields to private parties. The commission has conducted three auctions so far, and each was more successful than the previous one, with the most recent auction securing a 100% assignment rate. The onshore fields already auctioned have low costs and have been profitable even at currently low oil prices. In addition to these auctions, Pemex will be able to partner with specialized oil players to develop its existing resources. The government is currently working on the rules governing the Mexican equivalent of a US master limited partnership (MLP) that will be used to list energy assets from Pemex and private parties. We believe all of these developments will likely lead to an increase in foreign direct investment.

Telecommunications has been another key area of reform, which has encouraged competition with the creation of an independent regulator, among other things. Telecommunications prices have dramatically declined since the reform’s implementation, translating into a direct saving to consumers. Last year, tumbling telecommunications prices played a major role in inflation falling to a record low of 2.13% in 2015.

In sum, the Mexican economy has been improving in a number of areas. Consumption has been very strong, and the government has been very proactive in announcing cuts as well as relying much more on private investment to finance a number of planned projects. Short-term market jitters aside, the US economy still looks strong, which should help Mexico going forward and make it an attractive place to invest.

Column by Mark Mobius and Rodolfo Ramos Cevallos

Family Investment Principals Will Gather at the 2016 FOX Spring Global Investment Forum

| For Fórmate a Fondo | 0 Comentarios

Family Office Exchange (FOX) will hold the 2016 FOX Spring Global Investment Forum, April 6 at the Harvard Club in New York City and it is the first of two family investment-focused Forums for the year.

By and for owners of investment capital and their CIOs, the Forum is designed from the FOX member’s perspective to meet the interests and needs of the family investment decision-makers and asset allocators who will be in attendance.

At the conference, a panel of families and top advisorswill talk about the challenge of finding alpha in the market today and share insights on how they are addressing the challenge

Acclaimed architect, designer, thought leader, and author William McDonough will shed light on business models that allow business professionals to do more with less—and note the impact this philosophy has on bottom line profits and the investment implications of the next industrial revolution.

And Bloomberg Television anchor and editor-at-large Erik Schatzker will share his unprecedented insight into the companies and stories moving the markets, and identify key macro-themes that are actionable and relevant for multi-generational ultra-wealthy families.

For additional info or registration, please use this link.

Is the U.S. Growth Slowdown Trending into a Recession?

| For Gabriela Huerta | 0 Comentarios

While the US Federal Reserve starts its two-day meeting, in which no rate hike is expected, Monica Defend, Head of Global Asset Allocation Research at Pioneer Investments writes that her outlook for the US economy for 2016 is for decent growth, driven by Personal Consumption, Government Consumption (finally back to contributing positively to growth after years of retrenchment) and Investments (particularly strong performance of Residential Investments, while Non-Residential Investments will face a difficult first part of the year).

She believes that “the probability of a U.S. recession this year is still limited and the resilience of our base case is confirmed against further stress on selected financial indicators. In particular, we expect the US consumer to be resilient and sustain growth on the back of a healthy labor market, improvements on the compensation profile, and still moderate inflation, which should support real income growth.”

Amongst the key insights that can be found on her latest publication titled “A US Recession is not on the Horizon” are:

Leading indicators seem to point to a tentative stabilization and improvement in growth of the US and sectors hit by the strong dollar and weak oil price.
They currently expect inflation to move gradually towards the Fed Target of 2%. Should the oil and commodity prices trend higher than they currently assume in our scenario, we may witness a higher than expected increase in inflation, still not priced in by the market.
On monetary policy, they believe that Fed will be on hold in March, and will manage market expectations carefully. “A move in March would been an unwelcome surprise for financial markets, but we see this risk very limited.”

To read Monica’s entire Update, follow this link.

We Are All in This Together

| For Fórmate a Fondo | 0 Comentarios

FIBA welcomed more than 1,300 people to its 16^th Annual Anti Money Laundering (AML) Compliance Conference held March 7^th to 9^th in Miami. Regulators, policy makers and financial leaders from 42 countries representing 330 financial institutions and corporations shared expertise on the evolving trends in the AML landscape with the intention of enhancing overall transparency across banking and non-banking institutions.

Among the highlights from this year’s program the recent corruption scandals involving FIFA, IAAF and ITF that have not only made news headlines, but have also called into question the level of risk assessment partnering financial institutions should be applying to sports or entertainment federations. These cases have highlighted the obvious intersection between sports and finance because without proper financing, sport federations would cease to exist, placing both parties at risk and in need of a practical solution. Increased scandals warrant an increased “know your customer’s customer” approach by banks to ensure they are proactively aware of any potential fraudulent behavior occurring among clients.

In a different session, an in depth conversation with FinCEN Director, Jennifer Shasky Calvery, shed light on how the organization works and what their goals include. Ultimately, they’re not looking to “jail anyone,” least of all compliance officers, but rather find mechanisms to collect information. The obligation of protecting the financial system from criminals and terrorists lies not just with the financial services industry, but also the regulators and law enforcement. “We all are in this together,” was the message.

Finally, a subject directly related to Miami was the theme of one of the key sessions of this edition of the conference. On March 1, 2016, FinCEN’s third and most recent GTO on Miami took effect. Issued by FinCEN, the GTO is not meant to be a regulatory solution for issues, but rather a tool to understand the source of fraud, which is particularly high in this region. Currently, 22% of US real estate purchases are via all-cash transactions. The GTO requires that title insurance companies identify the true owners of shell companies, in an effort to prevent the laundering of illicit proceeds.

“The opportunity to facilitate an open dialogue between regulators and banks in one room is incredibly fulfilling and truly moves the needle on our industry,” said FIBA CEO, David Schwartz. “Compliance responsibilities and regulations may differ from region-to-region in terms of what’s expected by regulators and what’s realistic for banks, however, the common goal is to find practical solutions that protect customers, institutions and the overall system. This was our most successful event yet, and we thank our sponsors, partners and speakers who helped make it possible.”

Low Visibility, High Opportunity

| For Gabriela Huerta | 0 Comentarios

Commentators speak about a “Something Must Be Done” approach to politics, where any action is deemed better than no action. Behavioral economists warn of a similar bias among investors, the need to tinker in ways that often end up eroding returns. In difficult environments like today’s, such biases can become irresistible.

From the standpoint of our Asset Allocation Committee, however, a dispassionate look at the global economy and markets leads to low levels of conviction. Large directional bets amongst broad asset classes, on a 6-18 month horizon, are mostly off the table for now. Global growth is uninspiring; central banks seem to have lost their ability to influence markets; political risks loom; and high levels of financial market volatility seem at odds with mostly benign fundamental economic data.

Positive results from policy moves now appear to have built-in limitations. Should the dollar rise too much, it will likely curtail U.S. corporate earnings and suppress the wider economy. Should corporate earnings and wages take off, Fed Chair Janet Yellen will likely raise rates and undermine confidence in market liquidity. There is somewhat of a guardrail around a neutral position that could limit the payoff for risk taking, and the time the market takes to second-guess these limitations gets shorter and shorter. The Bank of Japan’s move to negative rates was good news for 24 hours, but then sparked a big bout of market volatility. Last Thursday’s changes to ECB monetary policy pushed the euro down and risk markets up, before a few words in the press conference unleashed a quick reversal.

Against that background, on a 12-month horizon our Asset Allocation Committee is, not surprisingly, neutral on U.S. equity, neutral on emerging market equity, neutral on emerging market debt, neutral on inflation-protected Treasuries and neutral on commodities. Our only biases at the moment are slight overweights in non-U.S. developed market equities and high yield bonds and underweights in government and investment-grade bonds.

That’s good. The Committee is resisting the bias to action. But then again, there is a view that something should be done. And here’s the interesting thing: Underneath the disciplined neutrality at the asset class level there is a lot going on.

The S&P 500 Index ended 2015 almost exactly where it started. Today it is not far from that same level. Similarly, commodity prices and credit markets are back where they were at the start of 2016. It doesn’t feel that way, though. Recent months have witnessed some of the most vicious market rotations of the past five years.

In other words, while taking medium-term, high-conviction directional positions in asset classes has become very difficult for asset allocators, there are widespread opportunities for individual underlying investment category managers, adding value through shorter-term trading or relative-value positions (which also tend to be more tactical). In our view, positioning within asset classes may be more beneficial than positioning between them. There is also value in thinking about your portfolio as a collection of individual positions with different time horizons, as well as a collection of different asset classes.

Within fixed income, some opportunities are easier to identify: You can buy higher-yielding bonds and companies with decent credit positions and sell lower (or indeed negative) yielding sovereign debt. In currencies, everything is a relative value position by default, so this can be a robust source of added value in these environments. In equities, there are some extreme valuations out there if you look in the right places: The cumulative outperformance of momentum stocks over value stocks is higher than at any time since the dot-com bubble, for example, and we believe that relationship will eventually begin reverting to the mean.

Having said that, short-term volatility does still create opportunity at the asset class level. In this environment, you could well boost positions in risky assets more broadly when markets sell off, but perhaps on a hedged basis through long/short strategies, paying away some of the asset-class exposure in exchange for limited downside. Visibility may be low, but opportunity needn’t be.

From all of this, three principles stand out. Active management becomes crucial. Incorporating alternative sources of compensated risk—value versus momentum, liquidity and volatility plays, spread trades—becomes an important tool in the toolbox. And risk management is paramount when you include these more tactical sources of excess return potential in portfolios.

What would make us comfortable favoring more directional risk? A breakdown in the correlation between oil and stock markets; a bottom for commodity prices; stabilization for some of the fundamental data points coming out of China; improved U.S. corporate earnings; and less reliance on negative interest rate policy from central banks.

Given the current mixed signals from the global economy, markets and policymakers, the full toolbox in multi-asset investing is likely to be useful for a good while yet.

Neuberger Berman’s CIO insight

AXA IM Real Assets Launches a New Pan European Open Ended Real Estate Fund

| For Fórmate a Fondo | 0 Comentarios

The open ended fund, AXA CoRE Europe has an initial investment capacity close to EUR 700 million and aims to build a highly diversified portfolio of Core European real estate assets, it has already raised over EUR 500 million from a range of European institutions.

AXA CoRE Europe will seek to provide institutional investors with long-term stable income through the acquisition of Core real estate assets across Europe, capitalizing on individual market dynamics and timing. Over the long term AXA IM – Real Assets aims to grow AXA CoRE Europe steadily into a flagship European fund with a target size of EUR 3 billion to EUR 5 billion.

AXA CoRE Europe was one of the club of investors which AXA IM – Real Assets put together and have agreed to acquire the France’s tallest tower, Tour First in Paris La Défense. This project is in-line with the Fund’s strategy to focus investments on Europe’s largest and most established and transparent markets – UK, Germany and France – while maintaining the ability to invest across the entire continent from Spain to Benelux and the Nordics or Switzerland. AXA CoRE Europe will target mainstream asset classes, primarily offices and retail, and primarily seek investments into well-located assets which have high building technical and sustainability specifications and are let to strong tenants on medium or long term leases. The Fund will also consider selective investments where it can enhance returns by improving occupancy rates and/ or through repositioning works and will also retain a flexibility of allocation which provides for the ability to manage real estate cycles over the long term.

The fund will leverage on the established capabilities of AXA IM – Real Assets to source and actively manage European Core assets in all sectors and geographies by utilizing its unrivalled network of over 300 asset management, deal sourcing and transaction professionals, as well as fund management professionals who are locally based in 10 offices and operating in 13 countries across Europe.

Regulatory Clarity Could Pave Way for Significant Increase in Active ETFs

| For Gabriela Huerta | 0 Comentarios

The number of actively managed exchange-traded funds (ETFs) is likely to increase significantly once the U.S. Securities & Exchange Commission rules on proposals designed to discourage high-frequency traders from stepping ahead of active managers, according to BNY Mellon‘s ETF Services group.

While traditional ETFs are highly transparent, this characteristic has been a detriment to some active managers who do not want every move studied by high-frequency traders seeking to front-run their transactions. The various proposals being considered by regulators would limit the transparency required for managers of active ETFs. However, many in the industry believe that investors are willing to give up a measure of transparency to access active management in a cost-effective vehicle.

Steve Cook, business executive, structured product services at BNY Mellon, said, “Uncertainty around which proposal will be adopted has slowed the launch of actively managed ETFs this year. However, once we have regulatory clarity, we expect a rebound in launches of actively managed ETFs. It will result in more options for investors, which is what everyone wants.”