CC-BY-SA-2.0, FlickrFoto: Roger Schultz
. BancTrust y el broker argentino Global Trading Desk anuncian una joint venture
BancTrust & Co. and the Argentinean Global Trading Desk, S.A. (GTD) have signed a strategic Joint Venture to expand the investment bank’s local presence throughout the Americas.
Among the Joint Venture’s highlights is its market Research Products built specifically for the region, as well as its Fixed Income trading platform, which is the “heart” of the services offered to local banks and asset managers.
“I’m honored to say that GTD Argentina has entered into an agreement with BancTrust & Co. with the purpose of better serving clients in the region through our offices in Buenos Aires,” states Alejandro Bueno, CEO of GTD Argentina.
Carlos Fuenmayor -Founder, Chairman & CEO of BancTrust & Co. Holdings- affirms “I’m excited about this new partnership with Mr. Bueno and his team at GTD that will allow us to offer local expertise to our investor base interested in the Southern Cone, while continuing to build upon our global reach.”
BancTrust & Co. is a boutique investment banking group dedicated to the Emerging Markets specializing in Latin America. The firm offers Capital Markets, Sales & Trading, Market Strategy and Asset Management products and services through various entities located across The Americas and Europe. As a group of companies, the firm facilitates global market transactions to a diverse client base that includes corporate treasuries, financial institutions, asset managers, and governments and its entities.
Global Trading Desk offers voice-electronic brokerage for financial products and commodities, for both OTC markets and derivatives and real time data over the products negotiated in wholesale. The firm combines experience and technology to generate simple and efficient negotiation processes that help reduce the risks associated to them.
Investors can help reduce their exposure to heavy emitters of greenhouse gasses and fulfil their fiduciary objectives by adapting a green beta investment approach, according to a white paper from Mellon Capital Management.
“Generating a return on capital that meets a benchmark set by institutional investors, while reducing the carbon intensity in a portfolio requires a more nuanced approach than simply eliminating or underweighting business sectors that are heavy carbon emitters,” said Karen Q. Wong, managing director and head of equity portfolio management at Mellon Capital and co-author of the report.
The Mellon Capital paper, Green Beta: Carbon Efficient Investing, notes that investors can take steps to make their portfolios more environmentally friendly even if they retain their exposure to the carbon-intensive sectors of the stock markets. The key, according to Mellon Capital, is to underweight the companies within those sectors that have the highest carbon intensity.
Carbon intensity measures the amount of carbon emitted per unit of revenue. Utilities and energy and materials companies account for more than 75 percent of the overall carbon emissions intensity of the Russell 3000 index, yet just over 16 percent of the index composition, the report said.
“One potential pitfall in pursuit of reducing carbon emissions exposure is to significantly underweight these three sectors, which can introduce unintended sector tilts,” said Wong. “We think it’s better to underweight companies within these sectors that have higher carbon intensity. We would maintain exposure to the sectors as a whole by overweighting companies within the same sectors that are taking a more proactive approach to reducing their carbon emissions.”
The report notes that a truly robust strategy goes beyond the sector level and neutralizes exposures at the industry level. This is particularly important when considering a sector as diverse as consumer discretionary, where an unintended bias can be created between the auto (heavier emissions) and apparel industries (lower emissions), according to the report. Many high carbon intensity companies tend to have lower volatility, larger market capitalizations, relatively high yields and tend to be oriented toward value instead of growth, according to Mellon Capital.
“It’s important to compensate for these exposures if such companies are underweighted to achieve lower carbon exposure,” said William Cazalet, managing director and global investment strategist at Mellon Capital and co-author of the report. “Also, portfolio managers must guard against introducing different types of risks into the management of the portfolio that could occur by lowering exposure to companies with these characteristics.”
BNY Mellon offers a wide range of products and services that help investors meet their return/risk goals, while considering the environmental, social and governance impact of their investments.
OppenheimerFunds has fully staffed its team covering private clients, bank trusts and family offices, reinforcing the Company’s strategic drive to expand its core retail base and increase its capabilities in the ultra-high-net-worth market.
Most recently, OppenheimerFunds hired Nancy Bong as Strategic Account Manager on the team. She and fellow Strategic Account Manager Josean Fernandez have primary responsibility for managing the Company’s relationships with the private banks, national trust companies and regional and super-regional banks that make up OppenheimerFunds’ Strategic Account list.
“Nancy’s addition enhances our strong, experienced team that provides robust service and value for this critical client sector,” said Ned Dane, Head of Private Client, Trust & Family Office.
In addition to Nancy and Josean, there are five Sales Directors who cover trusts, family offices and the local offices of several Strategic Account clients: Joe Stellato (Northeast), Tom Winnick (Mid-Atlantic), Justin Goldstein (Southeast), Chris Saul (Central) and Matt Brown (West).
Nancy joins OppenheimerFunds from Neuberger Berman, where she managed relationships with clients in the Private Bank and Trust channel. Previously, she worked at Lehman Brothers and Goldman Sachs. Nancy received her undergraduate degree from Queen’s University School of Business in Canada and her MBA from Harvard Business School. She is a CFA® charterholder and has her CAIA designation. Nancy is based in New York.
“Under Ned’s leadership, OppenheimerFunds is well positioned as a trusted, consultative advisor, aligned to meet the evolving needs of this essential client group,” said John McDonough, Head of Distribution.
CC-BY-SA-2.0, FlickrFoto: Tony Hisgett. Wells Fargo y Blackstone firman un mega acuerdo para adquirir la cartera inmobiliaria de GE Capital por 23.000 millones de dólares
Blackstone and Wells Fargo announced that they had signed agreements to purchase most of the assets of GE Capital Real Estate in a transaction valued at approximately $23 billion.
The transaction breaks down as follows:
Wells Fargo has agreed to purchase performing first mortgage commercial real estate loans valued at $9.0 billion in the United States, UK and Canada.
Blackstone’s latest flagship global real estate fund, BREP VIII, has agreed to purchase the US equity assets for $3.3 billion. These assets are primarily office properties in Southern California, Seattle and Chicago.
Blackstone’s European real estate fund, BREP Europe IV, has agreed to purchase the European equity real estate assets, for €1.9 billion. These consist of office, logistics and retail assets, largely in the UK, France and Spain. The logistics assets will be integrated into Blackstone’s European logistics platform, Logicor, and the retail assets into its European retail platform, Multi.
BREDS, Blackstone’s real estate debt fund, has agreed to purchase performing first mortgage loans in Mexico and Australia for $4.2 billion.
BXMT, Blackstone’s publicly traded commercial mortgage REIT, has agreed to purchase a $4.6 billion portfolio of first mortgage loans primarily in the US with Wells Fargo providing the financing.
Eastdil Secured/Wells Fargo Securities acted as advisor to Blackstone and Wells Fargo. Simpson Thacher & Bartlett LLP acted as legal counsel to Blackstone and Dechert LLP acted as legal counsel to Wells Fargo.
GE Capital was advised by Kimberlite Group and BofA Merrill Lynch and represented by Hogan Lovells.
Mark Myers, Head of Commercial Real Estate for Wells Fargo, said, “This is an important transaction in the commercial real estate industry and Wells Fargo is pleased to be working with our colleagues at GE Capital and Blackstone. The portfolio of performing loans we’ve purchased is a strong addition to our commercial real estate platform in the United States, the United Kingdom and Canada, which are all active lending markets for us.”
Jon Gray, Global Head of Real Estate for Blackstone, said, “We are delighted to partner with GE on another major transaction and we thank them for their confidence in us. We also thank Wells Fargo for our longstanding relationship, and for their swift execution on this investment. This transaction clearly demonstrates the unique scale and reach of our real estate platform.”
These transactions are subject to normal regulatory and other approvals. The initial closings will take place in the second and third quarter of the year.
CC-BY-SA-2.0, FlickrFoto: Dennis Skley
. La cultura del do-it-yourself gana posiciones en la distribución de fondos, según Cerulli
European distribution is entering a new era, but the pace of change differs considerably from one market to the next. In the United Kingdom the low-margin business of fund distribution is being standardized, innovative digital propositions are flourishing, and layers of distribution are being removed.
According to Cerulli’s European Distribution Dynamics 2015 report, more than 82% of the international asset managers expect the marketshare of direct-to-consumer and D2C platform distribution in the United Kingdom to grow over the next five years. 54% of them think that it will grow significantly.
But they seemed to be also optimistic about the outlook of these channels in the rest of the continent. Roughly half of asset managers think their marketshare will grow in Germany, France, Italy, Spain, and Sweden. The rest expect theirs to stay roughly the same and only a tiny minority counts on its fall. Managers were less bullish about Switzerland, though. Only one-third of those surveyed anticipated that marketshare will “grow somewhat.”
Angelos Gousios, associate director with Cerulli in London, and one of the main authors of European Distribution Dynamics 2015: Preparing for a New Era said, “Managers can benefit from the digital revolution in various ways: by renovating their proprietary D2C distribution facilities, by becoming a key partner of an ‘online’ distributor or taking a financial stake in one, or finally go it alone and try selling their funds directly to the general public themselves.”
Barbara Wall, Europe research director at Cerulli added: “There’s a global trend toward robo-advice that should not go unnoticed. It started in the United States, with companies like Wealthfront gaining traction and it is spreading in Europe –Nutmeg in the United Kingdom and MoneyFarm in Italy– and also in Asia, with 8 Securities in Hong Kong.”
Photo: Manuel. Afore Banamex Funds Two BlackRock Mandates for Global and European Equities
BlackRock has received an estimated almost US$500 mn from Afore Banamex to execute the global and European equities mandate granted in October 2013.
Thereby, the North American Fund Manager becomes part of the select club of foreign asset managementc firms to receive funds from this Afore, which is the only one which has funded its mandates since the “Comisión Nacional del Sistema de Ahorro para el Retiro” (CONSAR), a national commission for the retirement savings system, allowed these transactions.
Afore Banamex said in a statement that of the four mandates awarded, one is for US$220 mn in global equity granted to Blackrock (Global), and the other three totaling almost US$600 mn in European equity were granted to BNP Paribas, Franklin Templeton, and Blackrock in Europe, respectively.
“Through this strategy, workers affiliated to Afore Banamex will be able to maximize their returns. These four mandates bring to seven the total number of mandates which have already been funded,” said Grupo Financiero Banamex’ Retirement Funds Administrator.
Afore SURA and Afore Banorte, two other major pension fund managers in the country, have granted mandates, BlackRock has mandates from both, but have not as yet funded any of them.
“We are thrilled to confirm that we have funded two mandates for Afore Banamex, which will promote the diversification of their investment strategy. Through the mandates, Afore Banamex hired BlackRock in order to offer its clients access to global and European equities’ investment markets,” said Samantha Ricciardi, CEO of BlackRock Mexico.
“These are the first two investment mandates which we fund in the Mexican market, and we believe that the valuable experience we have established throughout this process, coupled with the dedicated local team, and our commitment to bring to Mexico a local supply of global investment resources, is essential in order to continue offering Afores the best active investment solutions,” continues Ricciardi. “ These factors will contribute to the funding process for other mandates for which we have been selected as managers and which are in the pipeline, positioning ourselves as the leading international asset manager in the active investment sector in Mexico “
The management company, strongly committed to the Mexican institutional market, reinforced its team about a year ago with the appointment of Roque Calleja as the new Head responsible for developing the list of Afore mandates. These institutions currently manage a total of US$200 bn and, so far, have been awarded about US$5.5 bn in mandates. Since it is expected that up to 10% of its assets shall be granted in mandates, the potential for management companies is very high. On the other hand, one would expect that, given that there is a real breakthrough in terms of mandates and funding, Afores will shortly begin to consider other types of assets, such as commodities, for example, as so far they have opted for simple assets (global, European, and American equities).
CONSAR authorized Afore Banamex to carry out a transaction through investment mandates for the first time in SAR’s history in August 2013. The mandate was granted to Schroeders, and although it was for US$200 mn initially, it was ultimately extended to US$400 mn. Schroeders also funded its second mandate, amounting to US$470 mn for European equities, in April 2014. In September 2014 Pioneer Investments received funding of $ 400 million for European equities.
There are further transactions pending, as in January this year Afore Banamex reported that it had awarded a new international investment mandate for an amount between US$500-600 mn in separate accounts to four international management companies: Wellington Management, BlackRock, Pioneer Investments, and Nomura Asset Management.
Foto: Thomas Rousing
. Pemex y First Reserve firman un memorándum de colaboración de 1.000 millones de dólares
Petroleos Mexicanos (“Pemex”) and First Reserve, the largest global private equity and infrastructure investment firmexclusively focused on energy, announced a US$1 billion agreement to mutually invest in energy infrastructure for Mexico.
The two organizations recently announced the first of such investments – the Los Ramones pipelines – which are expected to consist of 744 kilometers of natural gas pipelines, creating an essential energy connection for Mexico. Construction of the projects has already begun, with full commercial operations expected in mid-2016. Additional projects the two companies are pursuing include other large-scale essential infrastructure opportunities across the energy value chain.
The joint venture represents a significant milestone for both parties towards continuing to invest in energy infrastructure projects in Mexico and a statement of foreign confidence in the Mexican energy industry. With this landmark partnership established, Pemex and First Reserve plan to invest capital in energy infrastructure projects throughout Mexico, combining the financing, structuring and industrial and operational experience needed to bring these critical projects to fruition. These investments are expected to enhance the country’s energy profile, lowering electricity prices and supporting Mexican industry.
William Macaulay, Chairman and Co-CEO of First Reserve, commented, “As global investors, First Reserve is excited to be expanding our existing portfolio in Mexico, where we have believed there to be attractive investment opportunities for some time. Through formal collaboration with Pemex, we feel we have gained substantial access to a region with strong supportive macro dynamics alongside a motivated and accomplished partner. First Reserve looks forward to mutually exploring multiple investment opportunities throughout the country’s vast energy value chain on behalf of our investors and the country of Mexico.”
When liquidity in a market dries up, it can contribute to financial disruptions such as the Flash Crash of 2010, when the Dow Jones dropped almost 1,000 points in a matter of minutes.
Traditional thinking has been that natural market forces create enough liquidity to keep markets moving, but an interesting tactic some European companies use caught the attention of Dr. Hendrik Bessembinder, an A. Blaine Huntsman Chaired Presidential Professor in the David Eccles School of Business Finance Department at the University of Utah.
In some European countries, companies will hire what’s called a Designated Market Maker to improve liquidity. Bessembinder detailed his findings in the paper he co-wrote, “Market Making Contracts, Firm Value, and the IPO Decision,” which has been accepted for publication in the Journal of Finance.
“We sat down to do some mathematical modeling of the economics of these markets, and found that indeed there is reason to think that competitive market forces don’t provide as much liquidity as the markets actually need and could benefit from,” Bessembinder said. “In other words, a contract where somebody is hired to improve liquidity can make sense and improve a company’s value by more than what the designated market makers need to be paid.”
Congress is working to improve liquidity through a pilot program that will increase the tick size of certain small stocks from a penny to a nickel to see if that will increase liquidity. The goal of the pilot program is to encourage IPOs.
“Our model and our study actually lead us to be skeptical that this will be an effective mechanism for enhancing IPOs. In fact, our model says that a designated market contract which is intended to decrease the bid-ask spread can enhance IPOs by improving liquidity and encouraging investors to pay more for shares in an IPO,” Bessembinder said. “The U.S. Securities and Exchange Commission is going to implement the pilot program where they widen the bid-ask spread. So, it will be of great interest to see if this in fact improves the liquidity of the stocks.”
Bessembinder thinks DMMs could work in U.S. stock markets, but FINRA Rule 5250 expressly prohibits the use of DMMs.
“We actually think that the situation would be improved if the FINRA rule would be repealed to allow firms to have designated market makers in order to improve liquidity,” Bessembinder said.
Uncertainty about the timing of a U.S. Federal Reserve rate hike continues to intensify. But, warns a leading global analyst at one of the world’s largest financial advisory organizations, investors should start preparing now for when the inevitable rise comes – and there are three key approaches to consider.
The warning from Tom Elliott, International Investment Strategist at deVere Group, follows Minneapolis Fed PresidentNarayana Kocherlakotaon Tuesday setting out his case for waiting until the second half of 2016 to start raising interest rates. This is contrary to the opinion of most Fed Policymakers, including the Fed Chair Janet Yellen, who believes that rates will need to start rising this year.
Mr Elliott explains: “Currently, the situation regarding when the Fed might move away from its zero rates policy of the last six years, is as clear as mud. However, when, finally, the Fed does start to raise interest rates the impact on capital markets could be severe. Therefore, investors who are, understandably, uncertain, should start preparing for this. I would advise investors to consider three steps.”
He continues: “First,find a multi-asset benchmark that you trust will deliver solid risk-adjusted returns throughout the business cycle. It maybe a 60 per cent global equity, 40 per cent global fixed income portfolio or a variation of that. Having such a benchmark should be a part of your long-term investment strategy.”
“Second,refuse to take active positions in what looks like a difficult investment environment. Hog the benchmark. Sitting on the fence is better than being caught on the wrong side of a central bank decision. Rebalance quarterly, forcing yourself to cash in winners and to buy losers. This discipline will protect you from rash decision making during periods of market volatility.
“Third, wait until the Fed has begun tightening monetary policy before returning to active bets.”
Mr Elliott adds: “Finally, if the need to take active positions is too strong to resist, I do think that Europe, excluding the UK, and Japan will continue to outperform. Europe, because of improved economic growth and the weak euro; and Japan because of rapidly improving corporate governance that is resulting in dividend and return on equity growth. It could be worth considering balancing this position with an underweight in U.S. large cap and emerging equities.”
CC-BY-SA-2.0, FlickrFoto: Moyan Brenn. Amanda Augustine se incorpora al equipo de análisis de BBVA Compass
Amanda Augustine has joined the BBVA Compass economic research team, led by the chief economist Nathaniel Karp. The bank’s six-member research team analyzes the U.S.economy and Federal Reserve monetary policy. The economic research team also follows a variety of issues that affect the Sunbelt states where BBVA Compass operates.
Before joining the bank, Augustine worked as a project manager at consulting firm American World Services Corp. in Washington, D.C., focusing on the health care sector.
“We are pleased to have Amanda join us as her expertise on health care will add depth on a topic that’s so important to our economy,” said Nathaniel Karp, chief economist for BBVA Compass.
Augustine earned her MBA from the IESE Business School in Barcelona, Spain, and a bachelor’s degree in business administration and Spanish from American University in Washington, D.C.
