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.
Carlos Fuenmayor - Foto cedida. BancTrust abre mesa de trading en Reino Unido
BancTrust has annunced that its London-based subsidiary, BancTrust Securities (Europe), has received a Variation of Permissions notice from the Financial Conduct Authority to enable it to commence secondary trading. The firm will now be dealing as principal for Asset Managers and Financial Institutions mainly based in Europe and the Middle East interested in investing in Emerging Markets Fixed Income.
Carlos Fuenmayor, CEO of BancTrust & Co., stated: “I’m honored to say that our London office has now been granted permission to operate its trading desk and offer true market color as well as execution. Our specialists in Emerging Markets provide unequaled coverage as well as exceptional investment opportunities.”
Capital Strategies Partners is a broker specializing in Spanish managers representing international niche profile in Spain, Italy, Switzerland, Portugal, Germany and Latin America.
Headquartered in Madrid, Capital Strategies, is launched by Daniel Rubio and Gregory Ratliff in 2000 with the objective of providing financial advisory services to institutions. In 2008 it became a broker (Agencia de Valores).
The agency carries out a careful process of selection of international Fund Managers groups whose talent and investment ideas will add value to the institutions.
The investment approach of the company is global. Based on the core values of independence and commitment, its goal is to identify and select the best investment ideas to optimize performance of financial institutions.
Foto: Kevin Doyle. Mercer Appoints David Anderson President of Growth Markets
Mercer, a global consulting leader in advancing health, wealth and careers, and a wholly owned subsidiary of Marsh & McLennan Companies (NYSE:MMC), today announced the appointment of David Anderson to President, Growth Markets region including Latin America, Asia, Middle East and Africa. He will report to President and Chief Executive Officer, Julio A. Portalatin, and will relocate to New York. Previously Anderson was Managing Director and Market Leader for Mercer in the Pacific region based in Sydney, Australia.
“Our Growth Markets region is a strategic driver as increased global growth comes from these economically important countries,” said Mr. Portalatin. “Mercer’s capability to meet the needs of local, regional and multinational clients is a key element of our value. David brings proven expertise in leveraging marketplace shifts that impact our clients and their employees — such as increased individual accountability in investments, retirement and health care decisions – and that leadership helps us create sustainable business advantage.”
“This opportunity comes at a critical time when we can learn from the innovation in emerging markets across the globe,” said Mr. Anderson. “The ability to bring the depth of our local and regional insights to our powerful global reach allows us to create better health, wealth and careers for individuals as well as the organizations they power.”
Mr. Anderson has more than 25 years of experience working in the financial services and insurance industries in Australia, New Zealand, the South Pacific, Asia and Africa. He has advised multinational companies and governments on investment and retirement savings strategies and has been with Mercer since 1998. Mr. Anderson will continue to hold a directorship role with Alexander Forbes in South Africa, of which Mercer became a key strategic shareholder in 2014.
Ben Walsh will move into the Managing Director and Pacific Market Leader role for Mercer. Mr. Walsh currently leads Mercer’s financial services business in Australia and New Zealand and has more than 20 years of experience at Mercer/MMC providing superannuation investment, administration, insurance and member services to more than 1.2 million customers leading a team of nearly 1,400 colleagues.
Mr. Anderson succeeds Gaurav D. Garg who is pursuing other interests outside of Mercer. Mr. Walsh will remain in Melbourne and report to Simon O’Regan, President of Mercer’s EuroPac region which includes Europe, Australia and New Zealand. Both appointments are effective immediately.
Photo: Diego Torres Silvestre. Paulo Sampaio Named Head of Latin America Southern Cone for S&P DJI
In support of its role as a leading index provider in Latin America, S&P Dow Jones Indices has today announced that it has named Paulo Sampaio as head of Latin American Southern Cone. Mr. Sampaio will be based out of S&P DJI’s newly opened office in Sao Paulo, Brazil.
Over the past six months, S&P DJI has announced several landmark exchange relationships within the Southern Cone of Latin America – in particular with the BM&FBOVESPA – that have led to the development of a wide range of new and representative benchmarks, as well as greater index based investment solutions for investors inside and out of Latin America. Mr. Sampaio will primarily focus on advancing S&P DJI’s business in the region and strengthening its local, strategic relationships.
Mr. Sampaio has over 22 years of experience (15 as Managing Director) leading one of Brazil’s largest financial associations, ANDIMA (National Association of Financial Institutions). Here he focused on developing ANDIMA’s strategic direction within Brazil as well as its product development. Mr. Sampaio comes to S&P DJI with significant experience managing institutional relationships, particularly at the government level. He began his career as an Economic Research Manager in 1989, and has a B.A. in Economic Sciences from Catholic Pontifícil University of Rio de Janeiro.
“We are very excited to bring someone with such a high level of industry expertise and proven success to the S&P DJI Latin America team,” says Antonio De Azpiazu, Head of Latin America for S&P DJI. “Paulo comes to our organization with a myriad of skills, particularly at the institutional level, that will allow S&P DJI to not only further its existing strategic exchange relationships within the Southern Cone of Latin America, but allow it to bring its world-class indexing capabilities to more investors and markets within South America.”
Coupling the appointment of Mr. Sampaio as head of Latin America Southern Cone with last year’s selection of Mexico-based Manuel Gonzalez as head of Latin America North Cone, S&P DJI now has complete Latin America coverage. Both Messrs. Sampaio and Gonzalez report into Antonio De Azpiazu, Head of Latin America for S&P DJI.
