Foto: Nicola Corboy, Flickr, Creative Commons. Allianz GI compra la gestora británica especialista en renta fija Rogge Global Partners
Allianz Global Investors (AllianzGI), one of the world’s leading active investment managers, has announced that it has agreed to acquire Rogge Global Partners (RGP), the London- based global fixed income specialist.
The transaction, for an undisclosed sum, will see AllianzGI acquire 100 per cent of the issued share capital in RGP from Old Mutual and RGP management. The combination will further strengthen AllianzGI’s growing fixed income capability and client proposition, while providing RGP with a strategic partner which will offer greater distribution potential for its strategies.
AllianzGI’s commitment to building out its fixed income capability has seen it make a number of investments in this area in recent years, including the creation of an Asian Fixed Income team under the leadership of David Tan, the development of its Emerging Market Debt team led by Greg Saichin and more recently the hiring of Mike Riddell to lead the development of its UK Fixed Income capability. These investments augment AllianzGI’s already substantial Fixed Income capability.
Commenting on the transaction, Andreas Utermann, Global CIO and CEO-elect of AllianzGI, said: ”We are delighted that RGP have chosen to partner with AllianzGI as the springboard for the next stage of their development. The two businesses are a natural fit – in terms of both product mix and culture – and we really look forward to working together closely for our clients’ mutual interests. The complementary nature of the fit extends also to geographic footprint, which will substantially enhance AllianzGI’s footprint in the UK as well as making RGP’s strategies available to more clients globally.”
Franck Dixmier, AllianzGI’s Global Head of Fixed Income and a member of its Global Executive Committee, added: ”The addition of RGP is a further important step in the development of AllianzGI’s global fixed income capability. It offers us a unique opportunity to accelerate the development of our client offering in fixed income. As active managers, we share a common philosophy on generating alpha in difficult market conditions and look forward to realising the fruits of this exciting new enterprise.”
Consistent with AllianzGI’s previous acquisitions and integrations, the integrity of the RGP investment team and process will be maintained. The RGP team will become part of the global investment platform, which is set up to preserve the distinct dynamics, processes and philosophies of different investment teams.
As a result of its client-centric strategy and focus on active investing, AllianzGI has attracted positive net inflows in each of the last 11 quarters and has seen the assets it manages in fixed income grow from EUR 109bn to EUR 167bn in the last four years.
Olaf Rogge, Founder, Executive Chairman and co-CIO of RGP, said: “We initiated the search for a new strategic partner back in 2015 with the support of our current majority owner, Old Mutual. Having had discussions with a number of interested parties, we are convinced that the combination with AllianzGI will be in the best interests of clients and will ensure the continued future growth of RGP’s successful investment approach.”
As at the end of September 2015, AllianzGI’s assets under management (AuM) totalled EUR 427bn on behalf of clients, of which EUR 167bn were in fixed income strategies. RGP’s AuM, all of which is in fixed income products, totalled EUR 34bn.
The transaction, which remains subject to regulatory approvals, is expected to close by the end of the second quarter of 2016.
Foto: Elza Fiuza. Mauricio Macri ofrece 6.500 millones de dólares para salir del default
Less than two months after President Mauricio Macri took office and expressed his commitment to a deal, Argentina offered a $6.5 billion cash payment to creditors suing the country over defaulted bonds from 2001. The offer represents a 27.5% discount for creditors who filed claims of about $9 billion.
According to a U.S. court-appointed mediator, two out of six leading bondholders have already accepted the offer, Montreux Equity Partners and Dart Management were the two funds that accepted the proposal, while Elliott Management and Aurelius Capital Management are the two lead creditors.
The payment will be financed through new sovereign debt issuances. If a settlement is reached, Macri’s next challenge will be to push it through Argentina’s left-leaning Congress, where no party holds a lower house majority.
According to Reuters, the offer contained two separate proposals, with full payment on the principle value of their bonds plus 50 percent for holders of defaulted debt who never joined the U.S. lawsuit and a 30 percent reduction on a creditor’s total claim, than can be reduced to 27.5% if signed in the next two weeks for all creditors who have sued Argentina through the U.S. law courts.
Foto: Daniel Wehner
. Los alternativos crecieron hasta marcar un récord en 7,4 billones en 2015
The Preqin´s 2016 Global Alternatives Reports find that alternative assets fund managers hold a record $7.4tn in combined assets under management (AUM) in 2015, up from $6.9tn a year before. The private capital industry in particular has grown over the past year, as almost every constituent asset class saw its AUM increase. The industry as a whole added $193bn in AUM through H1 2015, more than the $149bn growth seen in the whole of 2014. The aggregate value of the portfolios of assets held by private capital fund managers is continuing to rise as GPs put more capital to work.
Hedge funds saw a challenging year in 2015, but combined assets under management grew from $3.0tn to $3.2tn despite performance concerns. Total hedge fund AUM grew by 13.3% over 2014 as funds added $355bn in total assets; this rate of growth halved in 2015 with just $178bn worth of assets added, an increase of 5.9%.
“The private capital industry has continued to show healthy growth over the past year, and is now worth over four trillion dollars. This has been fuelled by a rise in dry powder levels, following another strong year for fundraising, and an increase in the unrealized value of portfolio assets. This is not without its concerns, though; the fundraising market is more competitive than ever and dry powder levels continue to increase and put pressure on finding attractive investment opportunities.” Says Mark O´Hare, chief executive, Preqin.
“The hedge fund industry has not enjoyed the same gains made in 2013 and 2014, although it has nevertheless grown to well over three trillion dollars. While the prolonged period of weak returns has taken its toll, returns are also difficult to find in other asset classes. 2016 looks set to be a challenging year, but the industry still has the potential for significant further growth.” Concludes O´Hare.
Photo: PRO hjl. ¿Qué nacionalidad conviene más? ¿Cuántos países puedes visitar sin visa?
In today’s globalized world, individuals live and conduct business on an international scale, and the option of a second or even third residence or citizenship, and the freedom that comes with it, is enormously attractive. Countries themselves are also looking for new ways to generate growth, and have increasingly become focused on the benefits of offering investors residence or citizenship in return for some form of economic investment.
With that in mind, Henley & Partners, the global leader in residence and citizenship planning, launched on Friday the 5th edition of the Global Residence and Citizenship Handbook, an essential guide for wealthy individuals and their advisors, such as law firms, tax consultants, private banks and family offices, who are interested in international residence and citizenship.
The book presents in-depth yet practical information on all important aspects of residence rules, citizenship law, dual citizenship, passports and visa-free travel, tax and real estate planning, and many more internationally relevant topics. The new edition brings relevant updates on all featured countries, and new chapters on residence-by-investment in Australia and Guernsey, citizenship-by-investment in Grenada, an updated Henley & Partners Visa Restrictions Index, and new sections on the Global Residence Programs Index and the Global Citizenship Programs Index.
It is written by Christian H. Kälin, a Swiss lawyer and Chairman at Henley & Partners, and one of the pioneers and leading authorities in international residence and citizenship planning.
The Global Residence and Citizenship Handbook is available in print format from all major online book retailers including amazon.com and Barnes & Noble, and also in e-book format from all major online eBook retailers including amazon.com and iTunes.
Foto: Hugo A. Quintero G.
. Turquoise Partners y REYL Finance lanzan un fondo de private equity para invertir en Irán
Turquoise Partners is launching an Iran-focused private equity fund in partnership with REYL Finance, REYL & Cie’s Dubai based entity.
The new fund will be broadly focused on the rise of the Iranian consumer and will include, but will not be limited to, consumer goods, pharmaceuticals and hospitality. It aims to raise $200m in the first six months of the year.
Rouzbeh Pirouz, Chairman of Turquoise Partners, said: “Iranian companies are in great need of investment which can drive operational and financial restructuring that will allow them to realize tremendous potential”.
Pasha Bakhtiar, Partner & CEO of REYL Finance, added: “We believe this venture provides an excellent opportunity for international investors looking to gain exposure to the Iranian growth story. Together we bring a robust, thorough and diligent understanding on how to invest in Iran under the new economic environment, and we are extremely excited to be the first private equity vehicle for an international investor base.”
Turquoise has been the only Iranian group that has been active in the private equity market prior to the removal of sanctions and only one day after their removal the announced the launch of the Turquoise Variable Capital Investment Fund, together with Charlemagne Capital.
REYL Group is an independent banking group with services in Wealth Management, Asset Management, Corporate & Family Governance, Corporate Advisory & Structuring and Asset Services.
MUFG Investor Services, the global asset servicing group of Mitsubishi UFJ Financial Group, has reached an agreement with Neuberger Berman, one of the world’s leading private, employee-owned investment managers, to acquire its private equity fund administration business, Capital Analytics.
This deal brings MUFG Investor Services’ private equity and real estate assets under administration (AUA) to US$ 145 billion and total AUA to US$ 384 billion.
Junichi Okamoto, Group Head of Integrated Trust Assets Business Group, Deputy President, Mitsubishi UFJ Trust and Banking Corporation said: “This transaction represents the next step in our strategy to support MUFG Investor Services position as an industry-leading administrator. Incorporating Capital Analytics’ capabilities will enhance MUFG Investor Services’ proposition and will enable us to continue to provide a full market offering for both new and existing clients, whilst maintaining the highest quality of service. We welcome Capital Analytics to our growing business.”
John Sergides, Managing Director, Global Head, Business Development and Marketing, MUFG Investor Services, said: “This acquisition will add 150 staff with specialist private equity and real estate expertise, enhancing MUFG Investor Services’ comprehensive offering in the alternative investment space and ensuring that we are the ideal partner to support clients of all sizes and complexities, as they maximize the growth opportunities that arise for their business.”
Anthony Tutrone, Global Head of Alternatives at Neuberger Berman, commented, “We believe the new ownership will create greater opportunities for Capital Analytics given trends in the fund administration industry, while allowing them to continue providing the best-in-class services that we and our clients have come to rely upon. We are confident that MUFG Investor Services, with its commitment to investing in the franchise and people, is the right steward to take Capital Analytics through to the next stage in its evolution and we look forward to continuing our close partnership.”
MUFG Investor Services is acquiring all of Capital Analytics’ business, and intends to provide a seamless transition for its employees and clients. Neuberger Berman funds will continue to receive administrative services from Capital Analytics, however, no funds or investment professionals will transfer as part of the acquisition.
Terms of the deal are undisclosed. The transaction is expected to close in second quarter of 2016, subject to regulatory approvals and customary closing conditions.
Bennett Golub, Ph.D., Chief Risk Officer and Co-Founder of BlackRock, was bestowed the 2016 Lifetime Achievement Award by Risk magazine at Risk’s annual awards event in London. Risk forms the leading subscription service covering financial risk management, regulation and derivatives news and analysis.
“As a founding partner of BlackRock, Ben has played a critical role in the firm’s success,” said Duncan Wood, editor in chief of Risk. “He is a strong advocate of fund industry changes that have the potential to mitigate systemic liquidity risk, and a passionate supporter of risk management as a profession.”
“BlackRock was built around risk management — it’s been in our DNA from the start. Ben epitomizes our belief that understanding and managing risk is the cornerstone to responsibly investing our clients’ assets,” said Rob Kapito, President of BlackRock. “Over the years, Ben has played a critical role in developing BlackRock’s Risk and Quantitative Analysis capabilities and firm’s Aladdin platform. He has ensured that BlackRock remains true to its legacy, keeping risk management as a core piece of its fiduciary culture. It is with great pleasure that I congratulate my friend and colleague on this well-deserved recognition.”
In his capacity as Chief Risk Officer for BlackRock, Dr. Golub also serves as co-head of the Risk and Quantitative Analysis team (RQA). RQA provides independent top-down and bottom-up oversight to help identify investment, operational, technology and counterparty risks. RQA ensures portfolio risks are consistent across mandates, reflect current investment themes within particular strategies, and comply with client-specific risk guidelines. RQA also provides independent quantitative analysis as part of the groups value add. RQA leverages Aladdin, BlackRock’s centralized, industry-leading operating platform within BlackRock Solutions, integrating risk, investment and client management, to assess and process manager investment, market and liquidity risks. Dr. Golub was one of eight founders of BlackRock in 1988.
“I am honored to be recognized by Risk for my efforts to promote effective risk management techniques to meet the challenges faced by investors,” added Dr. Golub, who attended the awards program in London.
The corporate default rate is at its highest level since 2009. In its latest study on 30 November, Standard & Poor’s reported a sharp increase in the number of companies defaulting in 2015: 101 issuers reneged on their obligations. The last time the figure was so high was in 2009. The latest two companies failing to repay their debt are Uralsib, a Russian bank, and China Fishery, a global fish and seafood supplier. Among these hundred plus companies, only 21, i.e. one-fifth, are from emerging markets. Most are in Brazil and Russia. And the main sector concerned is oil and gas, says Jean-Philippe Donge, Head of Fixed Income at Banque de Luxembourg.
The latest news concerning Petrobras, Glencore, Valeant and VW has echoes of the crisis we saw in the 2000s on the corporate debt market. At that time, a number of companies were posting record debt levels which ended up causing them to default or engage in major debt restructuring: World- Com, Enron, General Motors and France Télécom to name a few. We might well wonder whether the situation is different this time round. “But if it isn’t, does this mean the corporate debt cycle is at tipping point? Are we about to see major debt restructurings?”, asks Donge. Let’s look at the history of the price of the Glencore 1.25% bond maturing in March 2021. In 2012, Glencore launched its acquisition of the Swiss mining company Xstrata. In 2013, it took over the Canadian trader Viterra and in 2015 embarked on a merger with Rio Tinto. The latter did not succeed.
Primary sector debts and bank loans
Many companies are now posting debt and liquidity levels equivalent to those of the telecoms sector in the early 2000s. You only have to look at the sharp increase in global issue volumes, says the expert. In 2014, these came to 3.5 trillion dollars compared to 2.1 trillion in 2008 (3). Weak growth and the resulting deflationary pressures have led to a fall in earnings. The first companies to be affected are linked to oil and mining.
In emerging markets, Brazil and Russia have the greatest number of struggling companies. Petroleo Brasileiro (Petrobras) and the Brazilian Development Bank (BNDES) are a microcosm of the type of problems encountered on the corporate debt market: meltdown in commodity prices at the same time as an increase in corporate debt. Petrobras is a semi-public Brazilian and integrated energy company. BNDES is the Brazilian government’s financial arm for funding various projects, ranging from agriculture to infrastructure, in Brazil and elsewhere but mainly in South America.
The quantitative easing programs being conducted in developed countries, in particular by the US Federal Reserve, led to massive financial inflows to emerging markets between 2008 and 2014. These flows encouraged an increase in bond issues and bank loans, for a total of nearly 7 trillion dollars, he adds.
The case of BNDES illustrates the position of the corporate sector in emerging markets. Last year, after a continuous increase in its loan portfolio and with assets of 330 billion dollars, it was on the point of overtaking the World Bank as the world’s second-biggest development bank after the China Development Bank. Unfortunately, it has suffered a sharp slowdown in activity this year, leading to a decline in disbursements. From January to October, the total amount of loans made by the bank came to around R$105 billion, which represents a drop of 28% compared to the amounts disbursed in the same period in 2014. From January to September, the bank’s net income came to R$6.6 billion, which is 10.3% below the level recorded in the same period in 2014, specifies Donge.
Are we heading for a corporate debt crisis?
Potential fears for the corporate debt market would seem to be justified. Debt levels are high. Earnings are down. Monetary policies have taken or will be taking a less accommodative turn (despite the recent pronouncements by the President of the ECB). In particular, the return to a cycle of rising US interest rates coupled with a relatively strong dollar are looming over the market. If this does not happen, it would mean that the economic situation is not improving. “Heavily indebted companies therefore find themselves between a rock and a hard place, especially those that operate in sectors most sensitive to economic cycles. For the next few months, it would be logical to expect them to have a decreasing capacity to pay down debt.” He concludes.
The global economy’s moderate growth is becoming increasingly fragile, largely due to the weakness of investments in the energy sector and slower growth in the Chinese economy. This is the view of Guy Wagner, Chief Investment Officer at Banque de Luxembourg, and his team, published in their monthly analysis, ‘Highlights.’
In the United States, there are mounting signs of industrial activity slackening due to the strength of the dollar and the weakness of investments in the energy sector. The increase in household purchasing power – fuelled by falling oil prices and the recent uptick in wages – is nonetheless keeping the US economy on a path to growth. In Europe, economic statistics are pointing in the right direction, although the pace of growth in absolute terms remains subdued. Japan’s economy is continuing to stagnate while economic growth is slowing in China. “The global economy’s ‘moderate growth’ is becoming increasingly fragile,” observes Guy Wagner.
Inflation is staying low due to the ongoing slump in oil prices. In the United States, inflation edged up from 0.2% in October to 0.5% in November. The Federal Reserve’s favourite indicator, the PCE (personal consumption expenditures) deflator, excluding energy and food, remained unchanged at 1.3%. In the eurozone, the inflation rate held steady in December. Core inflation, excluding energy and food, which Mario Draghi, President of the European Central Bank (ECB), recently said was a more representative measure of the cost of living, was unchanged at 0.9%. “While oil prices remain depressed, the ECB’s target inflation rate of 2% hardly seems realistic,” says the Luxembourg economist.
As expected, after seven years of a near-zero interest rate policy, the US Federal Reserve raised its key interest rate by 25 basis points. This was the first federal funds rate hike for nearly ten years. The monetary authorities have confirmed that any subsequent increases will be implemented slowly and gradually. In Europe, the ECB expanded the quantitative easing programme by extending the asset-purchase period from September 2016 to March 2017, by including regional and local government debt in the programme, and by further cutting its deposit rate. “If the inflation target is still not met, it is likely that additional QE (quantitative easing) measures will be introduced.”
Contrary to year-end tradition, equity markets performed poorly in December. Plummeting oil prices to below 40 dollars a barrel had a knock-on effect on equity markets out of a concern that the economic slowdown might worsen and that the financing capacity of lower-rated companies could suffer. According to Guy Wagner: “After a more volatile and less successful second half in 2015 and despite the lack of alternative investments, equities could suffer a difficult year in 2016 due to the slowdown in economic conditions, the sharp increase in share prices since 2009 and global geopolitical tensions.”
In December, the euro gained 3% against the dollar, with the euro/dollar exchange rate climbing from 1.06 to 1.09. The single currency’s rebound was prompted by investors’ disappointment over the scale of the ECB’s additional QE measures. Guy Wagner concludes: “If American and European monetary policies continue to diverge, the euro’s recent rebound is likely to be short-lived.”
Finding ways to counter the downward pressure on fees will be a focal point for asset managers across much of the world in 2016, according to the latest issue of The Cerulli Edge-Global Edition.
In assessing the outlook over the next 12 months for the asset management industry in Europe, the United States, Asia, and Latin America, Cerulli Associates, a global analytics firm, has identified a number of key threats and opportunities.
In Europe, the migration by insurance companies to unit-linked products represents an opportunity for asset managers, says Cerulli. The growing demand for multi-asset funds should also be exploited. Threats include the emerging trend by institutions to band together to make their own investments, thereby cutting costs by using fewer external managers or even completely dispensing with their services. Exchange-traded funds (ETFs) will continue to be a bugbear for active managers.
“In Europe, as with much of the world, the downward pressure on fees, fuelled by passives, the comparisons platforms enable, and regulators will not let up in 2016. Asset managers are responding–the move by veterans of active management into ETFs is an example. Other examples include, diversification and the acquisition/ creation of platforms and fintech capabilities,” said Barbara Wall, managing director of the Europe office of Cerulli Associates.
Europe accounts for just 18% of the world’s ETF market, compared with the U.S.’s 70% slice. Wall, however, believes that big change is afoot. “A few years ago, just a small number of Europeans would have known what ETF stood for–that is no longer the case, especially among the ranks of the mass affluent and those aspiring to that status. Prominent direct-to-consumer platforms such as Fidelity are offering ETFs from, for example, Vanguard, HSBC, and the iShare range, owned by BlackRock. Online wealth manager Nutmeg, though not a direct-to-consumer platform, is also helping to raise the profile of ETFs among retail investors.”
In the United States, Cerulli foresees fee pressure generating opportunities for managers that offer multi-asset and strategic beta products. Other major challenges cited by U.S. executives include the threat of passive investments, and the increased cost of revenue-sharing costs. The latter has U.S. asset managers looking at new pools of global assets to distribute abroad.
In Asia, Cerulli expects the spotlight to fall on passive products as institutions look for cost-effective solutions and regulators take steps to boost the appeal of ETFs for retail investors. Cross-border initiatives are likely to increase in 2016, offering investors diversified investment options and enabling managers to expand in other markets.
In Latin America, global managers will continue to be hampered by the knock-on effects of U.S. regulation, competition from other asset classes, and reduced flows due to unfavorable exchange rates and struggling economies. Global managers in the region are eyeing the private-equity craze sweeping the region, while separately a cottage industry of specialist distributors is promising to leverage their ties to local institutions to help global firms break into Latin pension space.
“In 2016, the clamor for reduced fees, greater transparency, and an end to ‘closet tracking’ will continue apace; competition will intensify; and institutions will be obliged to follow a road that will be a dead end for some asset managers,” said Wall. “All the while, activist investors will not let up; markets will continue to surprise; and rising costs will strain budgets. But there will be opportunities. To seize upon these, foresight, experience, and occasionally courage will be needed.”
