BNY Mellon announced that it is teaming with Sustainalytics, a leading provider of environmental, social and governance (ESG) research and analysis, to make available a wide range of ESG data and insight to its depositary receipts clients. BNY Mellon is the first depositary bank to offer such services to securities issuers.
Momentum is growing both from investors and companies to more carefully consider the implications of ESG factors. The number of institutional signatories participating in the United Nations-backed Principles for Responsible Investment (PRI) Initiative – an international network of investors dedicated to advancing responsible investment practices – grew by 19% last year and now includes more than 1,300 signatories representing over $45 trillion in assets under management.
To support growing interest in ESG investing, BNY Mellon’s Depositary Receipts business will offer its clients access to Sustainalytics’ ESG research and ratings, as well as custom benchmark reports that provide a lens through which issuers are viewed by investors. Sustainalytics will also offer clients access to in-house industry analysts who can provide deeper insight on ESG issues.
“More investors are evaluating corporate ESG practices and performance as part of their decision-making process. Through Sustainalytics, we can create an important link to help global firms gain insight into the approaches of investors and asset owners,” said Christopher M. Kearns, CEO of BNY Mellon’s Depositary Receipts business. “Sustainalytics’ coverage of international issuers is excellent and widely utilized by institutional shareholders.
“This new offering signals the next phase of BNY Mellon’s unmatched DR advisory service, enabling us to help clients better understand the needs of investors and develop strategies around enhanced corporate disclosure. We want to keep firms at the forefront of these trends,” Kearns added.
“Companies working with BNY Mellon will benefit from a deeper understanding of how investors view their sustainability practices and how they can improve upon them to attract new investments,” said Sustainalytics’ CEO, Michael Jantzi. “We look forward to working closely with BNY Mellon as they break new ground in being the first depositary bank to offer ESG data to its clients.”
According to new research from global analytics firm Cerulli Associates, broker/dealers, custodians, and asset managers need to adapt as advisor teaming grows.
“The appeal of advisor teaming has grown among both established and new advisors,” comments Kenton Shirk, associate director at Cerulli. “For advisors, a successful merger can generate substantial growth and productivity enhancements.”
With the growing complexity of planning needs, investment products, technology, and regulations, small advisor practices may struggle to tread water, opening the door to consolidation opportunities for larger practices with a robust infrastructure.
“The growth of multi-advisor practices is most pronounced in independent channels. The average number of total professional staff per practice is 3.3 in the wirehouse channel. That compares to an average of 5.2 for dually registered practices and 4.5 for registered investment advisors,” Shirk explains.
“The advisory industry is increasingly shifting away from an individual producer mindset to that of a multi-advisor team,” Shirk continues. “The industry’s largest practices and mega teams also typically serve affluent investors, which reinforces their propensity for teaming. The desired result is providing broader and deeper services to meet the more sophisticated needs of their high-net-worth clientele.”
“Mega teams cite the ability to provide more services as the primary reason for teaming. By pooling resources, they are better equipped to specialize advisor and staff roles,” Shirk adds. “Teaming offers an opportunity to develop specialized roles for both advisors and staff, which greatly enhances advisor growth opportunities and productivity levels.”
Foto: Latin America terrain. H.I.G. Capital incluye a Henri Penchas en su Consejo Latinoamericano
H.I.G. Capital has appointed Mr. Henri Penchas to its Latin America Advisory Board. H.I.G. established a local presence in Brazil in 2012 and is one of the most active private investors in the country. Its 31-member team, operating out of four offices across Brazil, has completed nine transactions to date.
Henri Penchas is a senior executive at Itaúsa, one of the largest conglomerates in Brazil, with whom he has been associated since 1985. He is currently a member of several Boards of Directors, including those of Itaúsa, Itaú Unibanco, the largest bank in Brazil, Duratex and Elekeiroz.
Fernando Marques Oliveira, Managing Director and Head of H.I.G. Brazil & H.I.G. Latin America, added: “The creation of a regional Advisory Board, which already includes Gustavo Loyola, a former Chairman of the Brazilian Central Bank, is another strong statement of our long-term commitment to Brazil and Latin America. It is with great pleasure that I welcome Mr. Penchas, with whom I have already worked in the past, to our Advisory Board. He is one of the most influential business leaders in Brazil and I am confident he will make a significant contribution to our team and to our success.”
H.I.G. is a leading global private equity and alternative assets investment firm with more than $17 billion of equity capital under management. Based in Miami, and with offices in New York, Boston, Chicago, Dallas, San Francisco and Atlanta in the U.S., as well as international affiliate offices in London, Hamburg, Madrid, Milan, Paris and Rio de Janeiro, H.I.G. specializes in providing both debt and equity capital to small and mid-sized companies, utilizing a flexible and operationally focused/ value-added approach.
. Alberto Belinchón se incorpora a Capital Group como ejecutivo de Ventas
Following the opening of its Spanish office in Madrid last October, Capital Group has announced the hiring of Alberto Belinchón Azpeitia as a Business Development associate.
Based in Madrid, Belinchón Azpeitia will be responsible for supporting Capital Group´s business development efforts in Iberia.
This hire follows that of other two Business Development Directors, Álvaro Fernández Arrieta and Mario González-Pérez, earlier in 2014.
Belinchón Azpeitia, who has a Bachelor of Business Administration and is EFPA (European Financial Planning Association) holder, started his professional career at Deloitte, in the marketing and institutional relations department. After that, he moved to Barclays where he held a number of different positions, latterly that of Premier Relationship Manager.
Capital Group now has eight offices in Europe, having opened in Luxembourg, Milan, Madrid, Zurich, Frankfurt and Amsterdam since 2012 – in line with its growth strategy for its European business.
Grant Leon, Senior Vice President at Capital Group, said: “Alberto’s appointment responds to our strategy of expanding our presence in the Spanish market while also ensuring we continue to deliver world-class client service. This is also aligned with our goal of continuing to establish new – and deepen our existing – relationships with intermediaries and our distribution partners in Spain and across Europe.”
Foto: DiNo
. Perú acogerá la reunión anual del Banco Mundial en octubre
The Peruvian Minister of Economy and Finance Alonso Segura officially announced that the Annual Meeting of the World Bank will take place in Lima, Peru this October. He was joined by President of the World Bank Jim Yong Kim; Managing Director of the IMF Christine Lagarde and the President of the Peruvian Central Bank, Julio Velarde.
It is the first time in 48 years that the Annual Meeting will be held in Latin America, emphasizing the great progress that Peru and the region have made in their economic sectors. Over 15,000delegates and representatives are expected to attend this meeting from the 9th-11th October 2015. The construction of a new convention centre is nearing completion and hundreds of new hotel rooms are being made available for this event.
Mr. Velarde noted the good micro economic policies that the Peruvian government has implemented during the last few years in light of the fall in government earnings due to the decline in commodity prices. Peru was chosen as the location for the summit due to the country’s growth, which has averaged 6.4% annually over the past decade.
Foto:SpeedPropertyBuyers. JP Morgan Asset Management lanza una plataforma de inversión en activos reales
J.P. Morgan Asset Management Global Real Assets has launch Tactical Direct Investments(“TDI”), a dedicated cross-real assets group to help further meet client demand for direct and co-investment real asset opportunities across the risk/return spectrum and around the world.
Global Real Assets (GRA) currently manages or advises more than $17 billion of direct and co-investment transactions globally on behalf of clients. The new unit, a dedicated cross-real assets group within GRA,will be under the leadership of Avik Mukhopadhyay.
“Institutional investors are increasingly seeking to complement their real asset fund holdings with direct investments. However, for both the investor and the investment manager, direct investing is fundamentally different from fund investing,” said Joe Azelby, Global Head of Real Assets.
Avik Mukhopadhyay said, “In many ways, Tactical Direct Investments is leveraging what the group has been doing exceptionally well for more than four decades. And by creating a dedicated team focused on providing bespoke investment solutions – be it co-investments, direct single asset transactions or thematic separately managed accounts – for clients across real estate, infrastructure and maritime/transports globally, we hope to both deepen our relationships with existing clients and help new clients achieve their individual goals.”
CC-BY-SA-2.0, FlickrFoto: Ryan McKee
. Ben Bernanke participa como ponente destacado en INSITE 2015, que este año cambia su sede habitual
The annual event for advisors – investment professionals, RIAs, dually registered and hybrid advisors as well as senior-level product and marketing executives- hosted by Pershing will take place June 3-5 at The Hyatt Regency Orlando in Florida. The factors that are rapidly redefining today’s business environment for advisors, broker-dealers and other professionals in our industry to exam: The growth of global wealth, new and wide ranges of investment solutions, changing client expectations and other important developments in the marketplace.
INSITE 2015 will feature nearly 40 sessions around technology, regulation and practice management. Keynote speakers include Madeleine K. Albright, the first woman to be named Secretary of State of the United States and Chair of Albright Capital Management; Dr. Ben S. Bernanke, two-term chairman of the Board of Governors of the Federal Reserve System; Derek Jeter, a five-time World Series champion and New York Yankees captain. Mr. Jeter is pursuing philanthropic and entrepreneurial ventures; Leon E. Panetta, the 23rd Secretary of Defense and former Director of the Central Intelligence Agency.
Presentations and sessions will center on: Management and Protection of Clients’ Wealth; Positioning Yourself for Growth; Rev Up Retirement Practices; How to Stay Ahead of the Regulatory Curve and Transformation Through Technology.
CC-BY-SA-2.0, FlickrFoto: The Tax Haven. ¿Triunfar en el largo plazo? No siga a la masa
It’s human nature to follow the pack whether people find safety in numbers or fear they’ll miss an opportunity others are enjoying. For your clients as investors, however, joining the pack might do more harm than good. It could mean they’re jumping in and out of the market at the wrong times, causing irreparable damage to their long-term returns. Or the pack might take them where they don’t belong — into higher risk or “hot” products that don’t match their investment goals.
Let the ship sail
As advisors, you know all too well how investors run toward the strongest performance and run from the weakest. They want to win. They don’t want to lose. In reality, though, by the time most investors decide to dive into a fund or abandon a sinking ship, they’re already in troubled waters. More often than not, pack-driven investing results in buying close to market peaks and selling at market troughs; it rarely leads to sustainable returns.
In fact, during the global financial crisis of October 2007 to February 2009, $208 billion flowed out of equity funds during the last 12 months of the downturn, and from March 2009 to December 2013, $161 billion flowed into equity funds during the last 12 months of the rebound. Those investors would likely have been better off in funds with longer views and high-quality portfolios designed for less volatility in choppy markets. Of course, many investors who stayed the course and continued making contributions throughout the downturn also had some good growth in their accounts due to the simple but powerful benefits of dollar-cost averaging.
Turn down the trends
For investors, trends can be tempting and tough to ignore. Whether it’s the promise of better returns in exotic fixed-income strategies designed to combat a low interest rate environment, or a new “uncorrelated” asset class for those who think equities have run their course, products like liquid alternatives and unconstrained bond funds are entering the market in waves. But these products can be complicated — and expensive. As evidence, the average expense ratio for alternatives is 1.71%, compared to 0.74% for equity funds. For an unconstrained bond fund, the average expense ratio is 1.15%, compared to 0.81% for core bond funds.
Are these costs justifiable? Do these products truly align with your clients’ long-term goals, or is the appeal performance-driven? As an advisor, are you confident that the investment managers have the relevant expertise — in derivatives, for example, given that many liquid alternatives use leverage to boost returns? Just because investment managers can bring new products to market, doesn’t necessarily mean they should. The best companies in this business will only bring to market products where they see promise in the long-term value proposition of an asset class and where they have the requisite expertise and resources in place to deliver on that promise.
More importantly, there are always opportunities in traditional equity and fixed income if you’ve got a skilled active management team to find them. I’d suggest this is as true now as ever, especially as we continue to see more market volatility. That’s when active management provides the greatest opportunity to differentiate returns. That’s when good research pays off. And that’s when focusing on solid fundamentals, which truly drive value and sticking with your convictions, regardless of short-term momentum, provide the most meaningful opportunities for clients.
To get your clients to leave the pack mentality behind, take a page from the playbook of active managers. They purposely turn away from the pack — in this case their benchmark — avoiding full market risk and choosing the risks they take intentionally. Think of it this way: If everyone is fishing in the same pond, they’re all swayed by the same tide and they’re after the same catch. So it stands to reason, if you fish somewhere else and know where to look, you can reel in opportunities that others are missing.
James Jessee is Co-head of Global Distribution at MFS Investment Management. His comments, opinions and analyses are for informational purposes only and should not be considered investment advice or a recommendation to invest in any security or to adopt any investment strategy. Comments, opinions and analyses are rendered as of the date given and may change without notice due to market conditions and other factors. This material is not intended as a complete analysis of every material fact regarding any market, industry, investment or strategy.
CC-BY-SA-2.0, FlickrLuis Téllez - Courtesy photo. Luis Téllez Appointed Senior Advisor for KKR in Mexico
The investmentfirm KKR announced the appointment of Luis Téllez, former Chairman of the Board and CEO of The Mexican Stock Exchange (Bolsa Mexicana de Balores, BMV), as a Senior Advisor to the firm, effective immediately.
Mr. Téllez has been active in public service for over 20 years, being involved in macroeconomic, financial, energy and agricultural issues. Specific roles include serving as Secretary of Communications and Transportation (2006-2009), Secretary of Energy (1997-2000) and Chief of Staff to President Ernesto Zedillo (1994-1997). Téllez was also Deputy Secretary of Agriculture and Head Economist at the Treasury.
He is the former Chairman of the Board and CEO of the MSE where served for the last five years. Prior to MSE, he was Managing Director of the Carlyle Group in Mexico (2003-2006) and Chief Executive Officer of Desc (2001-2003), one of Mexico’s largest industrial and real estate companies.
Commenting on the appointment, Alex Navab, Head of KKR’s Private Equity business in the Americas, said: “Luis Téllez has had a distinguished career in both the public and private sector, and we are pleased to have him as an advisor to KKR. We believe that both investors and companies in Mexico are looking for partners to aid their growth and investment objectives and Luis Téllez will offer valuable insights that support those endeavors and help grow our franchise in Mexico.”
“KKR is known as a pioneering, innovative investment partner with a terrific long-term track record. I am honored to work with an iconic firm that has demonstrated its long-term interests in such an important economy as Mexico,” Luis Téllez said.
Mr. Téllez has been a member of the board of FEMSA, Grupo México, BBVA Bancomer, Cultiva and Global Industries. He currently serves as a Director of Sempra Energy (San Diego based utility) and is the Mexican Associate of McLarty Associates. Téllez is also member of several non-profit organizations such as the Mexican Council of Foreign Affairs.
CC-BY-SA-2.0, FlickrFoto: smlp.co.uk
. El Departamento de Trabajo de Estados Unidos obligará a los asesores a primar los intereses de sus clientes
The U.S. Department of Labor has released a proposed rule that will protect 401(k) and IRA investors by mitigating the effect of conflicts of interest in the retirement investment marketplace. A White House Council of Economic Advisors analysis found that these conflicts of interest result in annual losses of about 1 percentage point for affected investors — or about $17 billion per year in total.
Retirement advisors–including brokers, registered investment advisors (RIAs), bankers, insurance agents and lawyers among others- will be required to put their clients’ best interests before their own profits. Those who wish to receive payments from companies selling products they recommend and forms of compensation that create conflicts of interest will need to rely on one of several proposed prohibited transaction exemptions.
“This boils down to a very simple concept: if someone is paid to give you retirement investment advice, that person should be working in your best interest,” said Secretary of Labor Thomas E. Perez. “As commonsense as this may be, laws to protect consumers and ensure that financial advisors are giving the best advice in a complex market have not kept pace. Our proposed rule would change that. Under the proposed rule, retirement advisors can be paid in various ways, as long as they are willing to put their customers’ best interest first.”
The proposal would expand the number of persons who are subject to fiduciary best interest standards when they provide retirement investment advice and would require enter into a contract with their customers in which they commit to fundamental standards of impartial conduct. These include giving advice that is in the customer’s best interest and making truthful statements about investments and their compensation.
The landscape has dramatically changed in the last 40 years. The share of working Americans covered by traditional pension plans— which offer a guaranteed income stream in retirement— has fallen sharply. Today, most workers participating in a retirement plan at work are covered by a defined contribution plan, such as a 401(k). Importantly, the income available in retirement from a defined contribution plan depends on both the amount initially saved and the return on those savings. Collectively, more than 40 million American families have savings of more than $7 trillion in Individual Retirement Accounts (IRAs). More than 75 million families have an employer-based retirement plan; own an IRA, or both.
