Hubert de Marliave has joined The L.T. Funds as Senior Analyst. He is a financial analyst with 30 years’ experience, he began his career as auditor at Ernst & Young, moving to Barclays (Paris and London) as credit analyst.
Hubert then joined Paribas, the French investment bank, where for 10 years he was Mid & Small Caps analyst on the French equity market. After the merger with BNP, he sought to broaden his experience with coverage of the pan-European Mid & Small Caps market, first with WestLB, and then a London investment management company.
For the past 4 years, Hubert has been a fund manager at a European equities growth fund. Wishing to refocus his career on Long-Term fundamental analysis, Hubert will review and perform in-depth analysis of the portfolio’s stocks. He will concentrate particularly on the very diverse support services sector, traditionally the largest in The L.T. Funds´ portfolios.
After a fairly dire 2014, it appears that the arrival of spring has brought new shoots of growth for the Eurozone. Macroeconomic data this year has been improving and, to an extent, investor concerns over a deflationary spiral have largely been alleviated. Although the ECB’s quantitative easing programme has undoubtedly boosted optimism, the Comprehensive Assessment of the European banking system has also played a pivotal role. With the ECB taking responsibility for the region’s banks, the improved regulatory environment should ensure they are more resilient. Loans to both corporates and consumers have already shown signs of improvement and the new banking union will hopefully encourage cross-border lending.
On a three-year view, European banks offer strong absolute return potential. This is driven by operating leverage from a very depressed profitability base, and by reduced cost of equity as the beta of the sector comes down gradually over time. Currently, European banks trade cheaply on price to book, a function of low profitability and sentiment that is still badly damaged by the recent years of financial market stress, as well as by regulatory and oversight issues. However, the Eurozone growth backdrop appears set to improve; recent data releases, in particular bank lending surveys and money supply, confirm this positive upswing. The combination of the collapse in the oil price, a fall in the euro versus the US dollar and quantitative easing, acts as a powerful stimulant, and the banking sector is one of the most advantaged by a recovering economy.
This is initially likely to be reflected in falling provisions for non-performing loans and some write-backs, which will lead to earnings upgrades. There are obvious similarities with the US experience, albeit that the Eurozone is several years behind in forcing banks to raise capital and recognise non-performing loans. As growth improves and provisioning falls, banks will generate improved returns on equity (RoE), which for the best-capitalised will lead to significant dividend increases. Regulatory headwinds remain a challenge for the sector and a key focus for investors but, in the context of attractive valuations and a recovering economic backdrop, need not prevent the sector from outperforming. In the medium term, regulatory pressures will fade as banks comply with changing requirements, enabling higher dividend payout ratios, following the US example.
Banks are typically a higher beta play on equity outperformance, as the economy and regulatory environment continue to gradually improve we expect a higher RoE from smaller bad loan provisions and new loan growth. Despite this, we are cognisant of headwinds such as a weaker euro, the oil price and low government bond yields.
The majority of advisors intend to continue recommending alternative investments over the next year, yet believe the asset class has underperformed since the economic crisis, according to a new survey from Pershing LLC, a BNY Mellon company. The study,Help or Hype: Advisor Perceptions of Alternative Investments, which was released at Pershing’s INSITE™ 2015 conference, is based on a recent survey of 1,200 advisors conducted by Pershing in conjunction with Beacon Strategies LLC, along with interviews with advisors, broker-dealer firms, registered investment advisors (RIAs) and alternative investment managers.
“Alternative investments continue to interest all investors, from ultra-high-net-worth and high-net-worth investors to the mass affluent,” said Justin Fay, vice president of investment solutions at Pershing. “Though some lingering skepticism exists about alternatives, largely due to recent lukewarm performance, we are seeing strong flows into this asset category. The findings of our study suggest that most advisors are optimistic about the ability of alternatives to deliver diversification benefits over time.”
According to the survey, most advisors’ primary goal in using alternative investments is to reduce volatility and diversify their client portfolios. Advisors who were surveyed indicated that 73 percent of their clients have at least one type of alternative investment in their portfolios.
The survey also found that:
70 percent of advisors plan to maintain their current alternative investment allocation recommendation for clients over the next twelve months
However, almost half of advisors surveyed feel that alternative investments have underperformed since 2008
More than half of advisors (55 percent) surveyed believe that clients should allocate 6 to 15 percent of their portfolios to alternative investments
56 percent of respondents see value in allocating illiquid alternatives to investor portfolios
The principal drivers of product selection are the experience of the alternative investment manager and diversification options
The majority of advisors who do not currently recommend alternative investments to clients cited product expense, along with disagreement over the viability and basic premise of alternative investments
Broker-dealers and large RIAswho took part in the survey identified operational issues as an area of concern with regard to alternative investments–specifically with regard to processing, pricing/time to settlement, tax reporting and regulation.
“The findings of the study indicate that communication, product understanding and improvements to operational processes will be critical to mitigating these challenges,” said Fay.
Fitch Ratings has published a special report titled ‘Mexican Corporates Rating Outlook Update’. The report explores the change in bias of the Rating Outlook to Negative from Positive for Mexican Companies, gives and overview of first quarter results and highlights things to watch in the future that can affect credit quality.
“The Rating Outlook continues to be Stable for Fitch’s portfolio of international and national scale publicly rated Mexican corporates, but the bias since September has turned to negative from positive,” said Sergio Rodriguez, Senior Director and Co-head of Fitch’s Mexican corporate group.
As of May 15, 2015, 86% of issuers have Stable Outlooks, 5% Positive and 9% Negative. Increased M&A activity has pressured ratings, as the vast majority of acquisitions have been funded with debt.
First quarter operating trends were favourable, although free cash flow was relatively unchanged. Leverage increased during the quarter but remains at manageable levels when compared to other Latin American countries and liquidity remains sound. Good performance by exporters along with a better environment for consumption than the previous year balance against lower oil prices and sluggish economic growth.
The delayed IMF repayment of Greece increases the likelihood of a default, according to new analysis from Diego Iscaro, Senior Economist at IHS Global Insight.
The Greece payment delay adds a new layer of uncertainty to an already very uncertain situation. Alexis Tsipras’ government is in a difficult position. Greece’s cash reserves are running thin and it will default without further official funds. However, it is also fighting increasing opposition, particularly from the left of the Syriza party, to making significant concession to the creditors.
Tsipras will need some concessions by creditors on key items to win over critics in his own party: either by dropping requirements to increase VAT or by scrapping benefits for low pensions, together with some gesture in terms of debt relief.
“If creditors do not concede on either of these, then default risks would increase rapidly. However, this is unlikely as Greece’s European counterparts are highly reluctant to see Greece default. Germany’s chancellor Angela Merkel especially will push for a higher degree of leniency towards Greece than other EU members”, point out Iscaro.
Merkel currently benefits from increased room to manoeuvre through Greece due to the implosion of the German Eurosceptic party (Alternative für Deutschland: AfD). The AfD owed its existence and recent electoral successes to discontent in Germany over successive bailouts for Greece. However, for several months, the party has been experiencing infighting between a far-right anti-immigrant wing and a more liberal Eurosceptic wing. As a result, they pose a much-reduced threat to Merkel’s Christian Democratic Union of Germany (Christlich Demokratische Union Deutschlands: CDU), which, in turn, gives Merkel more freedom to make concessions to Tsipras, analized the Senior Economist at IHS Global Insight.
“If creditors only offer minimal improvements, Tsipras is likely to negotiate for as long as he can, and then eventually accept what is offered; in this case, he would have to resort to support from other parties to approve such a deal in Parliament, as the left wing of Syriza would probably vote against it. Tsipras is likely try to engineer a national unity moment in Parliament to vote on the deal with creditors. A switch to a lasting coalition with centrist parties or a definite split within Syriza is unlikely, as party unity remains a high-priority goal for Tsipras”, said.
Elections would take at least 21 days to prepare
In case of only minimal concessions from creditors, the likelihood of early elections and a referendum on the deal would increase, as Syriza and Tsipras claim not to have a mandate to basically continue austerity as under previous governments, believes Iscaro. Calling elections would take at least 21 days to prepare, so the window to hold polls before the end of June (in order to vote and still be able to avert default) is closing fast: either it takes place over the next four days or it is no longer possible.
In any case, said Iscaro, time to reach a deal is running out. Although the next “hard” deadline is the end of June, when the IMF loans will have to be paid, both parties will have to reach an agreement before that date, as a deal will have to be approved by several Eurozone parliaments.
“As long as Greece and its creditors continue to negotiate, IHS does not expect the ECB to cut liquidity assistance to Greek banks, currently given via emergency liquidity assistance (ELA), as a result of yesterday’s decision. However, the ECB is likely to stop its support if Greece enters a default or if hopes of a deal completely disappear. Under that scenario, the Greek economy would suffer from a significant credit crunch, increasing the probability of capital controls and, eventually, an exit from the Eurozone”, concluded.
KBL European Private Bankers (KBL epb), headquartered in Luxembourg, announced the successful closing of the acquisition of the operations of UBS Belgium, which have been integrated into Puilaetco Dewaay Private Bankers, KBL epb’s Brussels-headquartered affiliate.
The acquisition, which has received the approval of the European Central Bank, adds substantial scale to Puilaetco Dewaay, strengthening its domestic franchise and positioning it as a top three pure-play private bank in Belgium.
Following closing, Puilaetco Dewaay – which was founded in 1868 and operates in eight cities in Belgium – now counts over 250 staff, who manages more than €10 billion in assets on behalf of some 10,000 clients.
Those clients now benefit from expanded advisory services, as well as access to the products, services and expertise of KBL epb, whose long-term development strategy targets organic, semi-organic and external growth.
“Today, as we close this important transaction, we are opening new doors of opportunity for the clients and staff of Puilaetco Dewaay,” said Yves Stein, Group CEO, KBL epb. “As we strive to be recognized as a trusted partner and leading private bank everywhere we operate, KBL epb continues to actively review additional acquisition opportunities in our core markets, and will seize them when conditions are right.”
“We are extremely pleased to have efficiently closed this transaction, thanks to the tremendous efforts of so many of our people, who demonstrated their full commitment to a seamless client experience,” said Thierry Smets, CEO, Puilaetco Dewaay Private Bankers. “At a time when the European private banking sector is in the midst of ongoing consolidation, we now benefit from greater size, scale and reach,” he said. “As a consequence, Puilaetco Dewaay is more strongly positioned for sustained future growth than at any time in our 150-year history.”
Mr. Smets highlighted that former UBS Belgium staff have been integrated into
Puilaetco Dewaay across every level of the organization – including the Executive Committee. That senior decision-making body has been expanded to include Ludivine Pilate, who joins as Chief Operating Officer, and Gregory Christians, who has assumed the role of Chief Investment Officer.
Ms. Pilate and Mr. Christians join existing members Mr. Smets, Sabine Caudron and Amaury de Laet to form the new Executive Committee of Puilaetco Dewaay.
Tennis champion Andy Murray announced yesterday that he has entered a long-term partnership arrangement with Seedrs, the London-based equity crowdfunding platform.
The arrangement will see Andy joining the Seedrs Advisory Board to provide advice to the firm with respect to businesses working in the health, sport and wearable technology spaces. Andy will not be offering advice to individual investors or recommending specific campaigns.
He will also be investing regularly in startups and other early-stage businesses through Seedrs and helping Seedrs to grow its brand in the UK and internationally.
Equity crowdfunding is revolutionising the way startups and other early-stage businesses are being funded. It involves the raising of funds by obtaining many small investments from a large number of people through online platforms.
This form of business fundraising is proving increasingly popular, and it allows businesses not only to obtain the capital they need but also to build a community of supportive investors who can help them grow.
The equity crowdfunding market is growing quickly. Since its launch in July 2012, Seedrs has reported 15% month-on-month growth, and within the next few years it expects to be funding hundred of millions of pounds into thousands of businesses each year.
This partnership represents the first time a major public figure has teamed up with an equity crowdfunding platform in this way, and it heralds a significant milestone in the development of the equity crowdfunding industry.
Andy Murray shared his perspective: “I’ve always been interested in investment, and being able to get involved in an innovative way to help support British startups really appealed to me. Equally as important was working with people I trusted and who fully understood the huge responsibility of handling people’s money. I’m looking forward to working with Seedrs and the entrepreneurs of tomorrow.”
Matt Gentry, who runs Andy’s management company, 77, added: “Andy is a keen investor, with his own management agency alongside a property portfolio, which includes a hotel. Crowdfunding is a space we’ve been looking at for a while, to complement his business interests, and he’s excited about being able to help startup businesses and entrepreneurs in the UK. Andy’s been lucky enough to have support from sponsors throughout his career, not only helping to aid him and his team financially, but also adding valuable mentoring in many cases. For him the opportunity to give something back to help to up and coming business men and women was very appealing.”
Jeff Lynn, CEO and co-founder of Seedrs, celebrated the announcement as follows: “Andy Murray is the perfect partner for Seedrs as we drive our growth to the next level. In many ways, he represents the exact combination of qualities that entrepreneurs need to be successful: determination, focus, integrity and skill. We are particularly looking forward to working with him as a member of our Advisory Board: we believe he can bring a different perspective into certain aspects of the early-stage business community in the health, sport and wearable technology spaces, and we look forward to his input and support.”
Lord Young of Graffham, the Prime Minister’s former Enterprise Adviser and a long-time champion of equity crowdfunding, said this about the announcement: “Both modern tennis and equity crowdfunding have their origins in Britain, and Andy Murray and Seedrs are world-leaders in their respective fields. It is wonderful to see the two coming together in this unique partnership, and I believe the outcome of it will be to see more great British businesses raising the capital they need, and more investors having the chance to be part of those businesses.”
Pixabay CC0 Public DomainCarinaHofi. Momentum adecuado para invertir en Cocos
Since 2006, La Française has implemented a governance structure based on an Executive Board and a Supervisory Board. In order to meet the strictest governance requirements, La Française is opening its Supervisory Board to two independent specialists of the property and financial sector.
Jean-Baptiste de Franssu and Philippe Marini now form part of the La Française Supervisory Board, joining forces with André Halipré, Vice Chairman of the Crédit Mutuel Nord Europe Federation, and Eric Charpentier, Chief Executive Officer of Crédit Mutuel Nord Europe.
Philippe Marini is the Mayor of Compiègne, President of the Greater Compiègne urban community (ARC) and President of the Syndicat Mixte de la Vallée de l’Oise (SMVO, Joint Union of the Oise Valley). He has served on the Gimar et Cie Supervisory Board since 1999 and became Chairman of their Management Board on 8 January 2015.
Jean-Baptiste de Franssu is the Chairman of INCIPIT, a Mergers & Acquisitions advisory and consulting firm which he founded in 2011. He is non-executive director of ACOFI SCA, Petercam S.A. and Tages LLP. He has been President of the Istituto per le Opere di Religione (IOR) since July 2014.
Foto: Sagrario Gallego, Flickr, Creative Commons. La mitad de los españoles suscribiría un plan de pensiones si su empresa se lo ofreciese
Under the terms of the agreement, Aegon has acquired a 25% stake in La Banque Postale Asset Management for a consideration of EUR 112.5 million. LBPAM is the fifth largest asset manager in France, with approximately EUR 150 billion assets under management.
“I am delighted that Aegon is teaming up with La Banque Postale”, said Alex Wynaendts, CEO of Aegon. “By leveraging Aegon’s global investment expertise and La Banque Postale’s extensive distribution network, this strategic asset management partnership opens up a large market opportunity. This will enable us to help many new customers in France secure their financial future through long-term investment solutions.”
The opportunity to create a strategic partnership with La Banque Postale supports Aegon’s ambition to grow and diversify its customer base and to provide fee-based, capital-light products. It also represents a significant step in implementing Aegon Asset Management’s strategy to expand its services and solutions for third-party customers internationally.
The two companies will work together to further strengthen the development of LBPAM, which will offer a comprehensive range of products – including international equity and multi-asset investment products. These will be distributed through La Banque Postale’s network of approximately 17,000 points of sale, online and by its institutional sales team.
For the last 10 years, Ivan Bouillot has been managing the European equities fund BL-Equities Europe. Let’s find out more about how fund manager Ivan Bouillot achieves this.
What are the specific characteristics of the BL-Equities Europe fund?
The strategy is concentrated on around 40 shares, which is small compared to other funds in the same category. They represent our strong investment convictions, both in terms of each share’s potential appreciation and the quality of the company.
Why the 40-share limit?
So we don’t spread ourselves too thinly and so we can follow each of our investments very closely. These 40 shares are selected from a universe that is itself limited and very stable over time, comprising around 150 shares altogether. This means we don’t have to constantly search through several thousand listed companies. From this sample of 150 stocks, we select those with the share prices we feel are attractive.
How do you select the companies?
Our selection is based on our criteria of quality and understanding the business. We satisfy ourselves that the product or service offered by the company is different to that offered by its competitors. We avoid companies that do not offer added value as they are likely to operate in more competitive markets, usually have lower profit margins, and make a loss at the slightest hint of economic slowdown. In situations like these, the management and board of directors of these types of companies tend to waste a lot of time resolving all sorts of problems. Our preferred companies are those that have some protection against the advent of new competitors: for example ones with a brand in the consumer sector, specific know-how in manufacturing or a therapeutic specialisation in pharmaceuticals. We call these barriers to entry. We also like companies with the capacity to increase their dividends year-on-year as part of a policy of profit distribution to shareholders. Good examples are SKF in industrials and Unilever in foods. In addition, our investment choices are made with a 3 to 5 year horizon in order to take some of the markets’ day-to-day ups and downs out of the equation.
What other selection criteria do you use?
The fund aims to focus more on capital growth than yield. So we do not include companies with inherently low business growth, such as telecoms operators and utilities. We also steer clear of sectors or companies that are difficult to understand. And generally, we tend to favour manufacturers or intermediaries which supply high-added-value solutions over companies that sell their products directly to the end consumer, as the former are more profitable and less capital intensive. In the automotive sector, for example, we prefer to buy shares in a high-performance brake manufacturer, like the Italian company Brembo, rather than in the car manufacturer itself.
