Lima Stock Exchange. Photo: Chimi Fotos, Flickr, Creative Commons. S&P Dow Jones Indices and the Lima Stock Exchange Announce Indexing Agreement
S&P Dow Jones Indices have announced that, as part of its strategic growth plan to expand throughout Latin America, it has signed a landmark agreement with the Bolsa de Valores de Lima (BVL) to license, distribute, and govern all of the BVL indices including a new version of their flagship index, IGBVL (Indice General de la Bolsa de Valores de Lima).
S&P DJI will be responsible for the marketing and commercial licensing of the BVL indices. The agreement also allows S&P DJI to eventually calculate all of the BVL indices, and to jointly create new indices with the Exchange to meet the evolving needs of investors inside and out of Peru. Each of these indices will be designed with an eye toward being liquid enough to serve as the basis for potential investment products.
“Interest in passive investing through index-based investment products is just beginning to take shape in Latin America,” says Alex Matturri, CEO of S&P Dow Jones Indices. “With more ETF assets based upon our indices than any other index provider in the world, S&P Dow Jones Indices is in a unique position to help facilitate the growth of index-based investing in Peru by offering a deeper and more prolific lineup of benchmarks to its investors. By aligning with one of the premier exchanges in Latin America, the Bolsa de Valores de Lima, international and domestic investors will have the tools necessary to measure and potentially access opportunities in Peru, a country which has witnessed the fastest economic growth in South America over the past decade.”
Francis Stenning, CEO of the Lima Stock Exchange said: “This strategic alliance of S&P DJI with the Lima Stock Exchange will generate greater worldwide exposure of our stock market. In addition to measuring Peruvian market behavior, this agreement should make the BVL a source of international investment.” He also noted that a new blue chip index will be created for the local market, which shall include leading companies in terms of capitalization and liquidity.
According to the agreement, the BVL will transition index calculation of its indices to S&P DJI over time to ensure a smooth transition for existing clients. S&P DJI will be responsible for the commercial licensing of the indices, as well as the end-of-day data. In addition, all BVL indices will be co-branded “S&P”.
Apex Fund Services (Apex) has named Bill Salus as Chief Executive Officer with immediate effect. Salus will take over day-to-day running of Apex from current CEO Peter Hughes, who becomes Chairman. Hughes founded Apex 10 years ago.
The new appointments mark a new era for Apex, which is targeting further growth in all of its 34 offices located around the world. Salus, based in the Apex New York office, will have a particular focus on continuing Apex’s success in the US market where he will lead Apex’s North American team.
As Chairman, Hughes will focus on building Apex’s Capital Introductory Service, which helps Apex clients access investor capital. Hughes will also manage Apex’s largest clients as well as concentrate on the company’s growth strategy including acquisitions and targeting large institutional funds.
Salus, who has over 30 years of experience in sales, management and consulting in the investment and financial services industry, was previously Managing Director and Business Executive for BNY Mellon’s asset servicing organization.
Peter Hughes, Chairman and Founder, Apex Fund Services, said: “Outsourcing to specialists in the fund servicing sector is growing fast as managers look to keep headcount low and minimize operating costs. In addition, fund administration is playing an increasingly important role in the support of regulatory reporting as well as providing the right infrastructure needed for managers to get significant allocations. These trends are set to continue and going forward, Apex requires the strongest leadership team available to meet these changes. Having managed Apex since its formation I am proud of the global services and solutions Apex provides its clients. It is very satisfying to have set new standards for the fund administration sector and to be recognized as one of the largest independent providers of these services with the largest global footprint.
Salus also held senior positions at PNC Global Investment Servicing, KeyCorp, Security Pacific Bank and Bank of America. Salus was a member of the ICI International Operations Advisory Committee and the ICI International Committee. He was named to Global Custodian magazine’s Securities Services Hall of Fame.
RBC Global Asset Management, the asset management arm of Royal Bank of Canada, has announced the appointment of Clive Brown as CEO and managing director, RBC GAM International. In this newly created role, Mr. Brown will oversee RBC GAM’s business in Europe, the Middle East, Africa and the Asia-Pacific region excluding BlueBay Asset Management.
Officially assuming the role on October 1, 2014, Mr. Brown will be based in RBC GAM’s London office and will report to John Montalbano, CEO, RBC GAM Inc.
Mr. Brown joins RBC GAM with over 30 years’ experience in the financial services industry, including 21 years at JP Morgan Asset Management, where he held a number of senior roles, most recently as global chief operating officer and chairman of Asia, based in Hong Kong, and prior to that as CEO of JP Morgan Asset Management International. He started his career in 1982 at Price Waterhouse where he qualified as a Chartered Accountant.
“RBC Global Asset Management’s global growth plans include a focus on Europe, the Middle East, Africa and the Asia- Pacific region,” said John Montalbano, CEO, RBC GAM Inc. “The financial strength and stability of RBC, combined with our strong investment discipline and client-focused culture enable us to continue to attract top industry talent. Clive has an exceptional background and is ideally suited to provide focus and direction to our teams in London and Hong Kong in support of our business expansion plans in these regions.”
RBC GAM has over C$335 billion in assets under management globally, as at April 30, 2014. With sales and distribution teams located throughout Europe and in Hong Kong, RBC GAM offers a full spectrum of investment solutions for institutional and individual investors including mutual funds, exchange-traded funds, hedge funds, pooled funds, separate accounts and specialty investment strategies.
Today’s announcement reflects a continuation of a growth trajectory that includes consistent organic growth as well as acquisitions: Voyageur Asset Management (2001), Phillips, Hager & North Investment Management (2008) and BlueBay Asset Management (2010). It also follows the recent build-out of RBC GAM’s investment management teams in both London and Hong Kong, including the addition of 10 global equity specialists earlier this year and, more recently, the addition of three new members to RBC GAM’s London-based EMEA business development team. Globally, RBC GAM has more than 1,250 employees located across Canada, the United States, Europe and Asia.
“This is an exciting time for RBC GAM, our clients and our employees as we continue to bring to the global market the expertise and client-focused service we are known for in North America,” said Mr. Montalbano. “I am confident that under Clive’s leadership, RBC GAM’s international businesses will continue to attract clients globally that recognize the value of our approach.”
Escudo de armas del Reino de Escocia - foto de Chabacano. Implicaciones del Referéndum de Independencia de Escocia
Background
In 2013, the governments of Scotland and United Kingdom passed the Scottish Independence Referendum Bill inviting all United Kingdom residents living in Scotland and aged 16 and over to vote on the referendum question “Should Scotland be an independent country?” On 18 September 2014, 4.3 million registered voters will vote “Yes” or “No” on Scottish independence. A simple majority is required to gain independence.
Implications
Our base case view has remained that Scotland will vote “No” and view the possibility of a “Yes” vote as a low-probability (< 20%) tail-risk event. Recent opinion polls, suggesting that the outcome to the Scottish independence referendum will be close, have caught us by surprise. However, we view the narrowing of the gap in light of similar events which have resulted in spikes in the “Yes” votes. Here, we note the distinction between voters who feel the responsibility to vote and have registered to do so, and those who will actually end up voting. This could potentially swing the vote in favour of Scotland remaining a part of the United Kingdom.
In our view, there are three possible outcomes at this stage. Regardless of the results of the referendum vote, we believe that Prime Minister Cameron’s political strength has been significantly impacted.
No result due to a lack of voters voting, in which case uncertainty will prevail in financial markets until another referendum is organised
A “No” vote, which would have no impact on financial markets
A“Yes” vote would result in a slow and long transition towards an independent Scotland with broad and deep consequences for financial markets.
The main concerns surrounding a vote in favor of Scottish independence are around the management of currency and monetary arrangements; more specifically the choice of currency regime, management of deposit/capital outflows and capital controls. The choice of the currency to be adopted remains the predominant concern where the options are to continue with the Sterling as part of a formal currency union, using the Sterling but not in a formal currency union or “Sterlingisation”, joining the Euro currency bloc or creating Scotland’s own free-floating currency. The significant costs associated with creating a new currency may make this final option the riskiest and hence the least favorable.
Adopting the Euro may be Scotland’s favored option at this time, but may not be a likely outcome given the opposition from anti-Euro supporters as well as costs of currency conversions. Scotland would also need to become a member of the European Union first before it can adopt the Euro currency. In this case, it would still need to create a national currency which would have to remain stable for at least another two years before it is allowed to join the European Union. The probability of a formal currency union being accepted is low – the Bank of England and the Treasury have advised against this due to the lack of fiscal oversight. Hence, the only remaining option is for “Sterlingisation”. This could be damaging to financial markets as a lack of a formal commitment to a currency union could lead to a capital flight from Scotland.
Conclusion
Despite recent polls, we believe that the vote will swing in favor of “against” Scottish independence. However, we do expect short-term volatility to persist and have a negative impact primarily on equity and currency markets.
As a result, in terms of our asset allocation we have closed the long exposure to GBP versus EUR, taking advantage of the position, and maintained the hedges on our equity exposure.
JP Morgan Asset Management has appointed François Pirrello as senior client adviser and managing director in Geneva. He will report to Nicolas Deblauwe, who is responsible for the Benelux, Geneva and Ticino regions, JP Morgan Asset Management.
Pirrello will be responsible for business development and the advancement of client relations for professional investors in the French-speaking part and Italian-speaking part of Switzerland, according to Investment Europe.
He will manage a team of five fund marketing specialists, including senior sales executive Sophie Courmont Vezon.
Prior to joining JP Morgan Asset Management, Pirrello spent 13 years at Pictet Asset Management as regional head of Sales in Switzerland servicing financial institutions, third party clients, insurances and family offices. Previously, he served in various roles at Standard & Poor’s and Credit Suisse.
“We are pleased to welcome Francois. His experience in the funds industry, extensive knowledge of the Swiss marketplace and background in business development will enhance our Geneva team,” said Nicolas Deblauwe.
“Switzerland remains an integral marketplace for JP Morgan Asset Management. Francois’ appointment enables us to continue to provide exceptional client service across the investment spectrum.”
James Swanson, estratega jefe de Inversiones, MFS. Lecciones aprendidas este verano
There are two main things that have changed over the last few months, which affect markets and should be noticed by investors. James Swanson, Chief Investment Strategist at MFS Investment Management, discusses them in his latest video and blog:
U.S. corporate profits and margins keep risingeven if everyone predicted they had to revert to its mean. Corporations are growing in all types of environments, as in the U.S the first quarter of this year saw a drop, whereas the second one grew swiftly, and in both quarters margins and profits kept rising. Swanson numbers a series of reasons for this: U.S low relative labor costs, low energy costs, more effective use of resources, low interest rates and some financial engineering via share buybacks.
The direction of the U.S. economy, which seems to be accelerating, is different to the rest of the world. Meanwhile, Europe is heading towards its second recession, Japan is experimenting with totally new policies with an unknown outcome, and China is not growing at the same pace we are used to. The U.S. economy, according to Swanson, is benefiting from a pick up in car sales, a slightly better home market, better exports, factory production and growth in the service industry.
For investors, this has two implications: on one hand, slower growth in the rest of the world suggests that interest rates in the U.S. could stay low for a longer period of time. On the other hand, as stressed by Swanson, the resilience in margins and profits for U.S. corporations imply that investors can still find value in the U.S. equity market.
You can visit James Swanson’s investment blog “On the Lookout” thrugh this link.
Foto: Dietmar Rabich. Las inversiones cross-border desde LatAm superarán los 350.000 millones en 2018
Latin America cross-border allocations from pension and mutual funds will exceed US$350 billion by 2018 as new research from global analytics firm Cerulli Associates found.
“Although most mutual fund markets in the region are investing less than 5% of total assets abroad as result of the heavy bias to local products, the size of the potential opportunity cannot be ignored,” states Nina Czarnowski, senior analyst at Cerulli. “An increase of 1% in allocation translates to an additional USD$20 billion in inflows to global managers.”
“Pensions will continue to be the largest buyers of cross-border instruments. We predict that cross-border allocations by the pension markets in Latin America should more than double over the next 5 years, with Chile expected to hold its position as the largest regional allocator to cross-border vehicles,” Czarnowski explains.
According to Cerulli’s research, while the current size of the marketplace is an important factor to global managers wishing to expand in Latin America, growth potential, market saturation, and integration with global markets should not be underweighted. Having a long-term commitment is crucial in a region that continues to progress, albeit slowly.
“The region needs to educate industry professionals and investors to reconcile the difference between investors’ high ability and low willingness to take on risk,” Czarnowski continues
Simon Brazier. Investec AM aumenta su oferta de Renta Variable UK mediante contrataciones clave
Investec Asset Management announced that Simon Brazier, Head of UK Equities at Threadneedle Investments, will be joining the company in November 2014.
Brazier currently manages the highly rated £2bn Threadneedle UK Fund as well as a number of institutional mandates. Also joining from Threadneedle are fund manager Blake Hutchins, analysts Ben Needham and Anna Farmbrough, and product specialist Neil Finlay.
On joining Brazier will run UK Equity strategies consistent with his current UK alpha strategy and Investec will launch a UK Equity Income strategy to be run by Hutchins. They will have access to the significant research platform provided by Investec Asset Management’s extensive team of investment professionals. Their strategies will complement the well-established range run by Investec’s Value Team Head, Alastair Mundy.
Brazier will form part of the Investec Quality capability where he will operate as co-head with Clyde Rossouw, manager of the successful Investec Global Franchise strategy.
Domenico Ferrini, Co-Chief Investment Officer, said, “We are delighted that such high-calibre investment professionals have decided to join Investec Asset Management. This deepens our capability in UK equities and positions us to better meet the requirements of our UK advisor and institutional clients, and respond to the increasing interest from international investors for UK Equity strategies. “
David Aird, Managing Director, UK Client Group, said “Simon has an excellent UK equities track record. Positioning him alongside Alastair Mundy and his complementary Value Team provides our clients with a compelling choice of UK equity-centric strategies that strengthens our market position and relevance.”
Matthews Asia 2014 Forum, San Francisco. Matthews Asia Brings Together Over 100 Investors in San Francisco to Discuss the Future of Asia as an Investment Destination
This week in San Francisco, MatthewsAsia brought together 125 investors from all over the U.S. as well as Asia, Latin America and Europe. In this conference, held every two years, the asset management company, which specializes in Asia, presented the region’s financial situation and the reasons that support the right of Asia to become an asset class with its own identity. The volume of wealth, population, and GDP growth does not correspond to the weight of the stock market capitalization of its markets, especially if Japan pulls out of the equation. The figures are striking, Asia ex Japan accounts for 22.5% of global GDP, even though their markets represent only 9% of global market capitalization.
The next decade could be crucial in bridging this gap, and there’s every indication that it will be brought about by the growth in their stock markets. MatthewsAsia offers extensive experience in investing in Asian equities, having gone through all kinds of market environments since its inception in 1991. Matthews is the largest dedicated Asia-only investment specialist in the United States. It offers several strategies, primarily in equities, although since three years ago it has also offered fixed income strategies. The firm is headquartered in San Francisco, California, where the entire investment team, which travels to the Asian region on a constant basis, is located. Matthews had US$28.0bn in AUMs as of August 31, 2014.
WilliamHackett, CEO, and FrankWheeler, Global Director of Marketing and Distribution, opened the conference, which received a stellar presentation by Sydney Rittenberg. Rittenberg has personally known all Chinese leaders from Mao Zedong to Hu Jintao, as well as the father of the current Chinese leader. Sydney traveled to China during World War II and decided to stay, becoming the only US citizen accepted into the Chinese Communist Party. Years later, he was accused of espionage and was detained for 16 years in solitary confinement in China. In 1977 he was released and officially declared “friend of China”.
The 35 years spent in thecountry and his subsequent dedication to teaching and consulting on political and business ties with China make Sydney one of the most knowledgeable people on China. Of all that is currently happening in the country, Sydney Rittenberg emphasized the anti–corruption crusade which Xi Jinping is carrying out in China and how the next decade will see a big change in the country’s business fabric. On the one hand, he predicts that the private sector will continue to gain weight on the GDP, while on the other hand he also predicts a radical transformation of large state conglomerates (SOEs). For starters, they will open their books to both Chinese and international private investors, and thus will begin to be managed under market criteria, applying the fundamentals of corporate governance now absent.
The conference also featured presentations by Robert Boyda, Senior Managing Director and Senior Portfolio Manager for Portfolio Solutions Group at Manulife Asset Management, and Gary Rieschel, founder of Qiming Venture Partners, a venture capital firm specializing in China.
Meanwhile, members of Matthews Asia’s investment and distribution team reviewed the prospects for long-term investment in the region, and the situation of specific countries such as China; as well as which commenting on the investment process and philosophy of the firm, and the criteria used for stock selection. There were also specific panels dedicated to technology, innovation, sustainability of investment trends, demographics, energy, and entrepreneurship.
Matthews Asia has 15 investment strategies domiciled in the U.S., nine of which have a UCITS vehicle registered in Luxembourg.
Building where the RBC headquarters is located in Miami. Photo Regus.com. RBC Wealth Management Closes in Houston and Miami, as Part of its Reorganization in the U.S.
As confirmed to Funds Society by bank sources, RBC Wealth Management is in full process of reorganizing its international private banking business in the United States, a process that so far has lead to the closure of its Miami office as well as its agency in Houston, both specialized in cross border business.
That same source wished to point out that RBC shall continue to provide credit services and loans to American residents from its New York branch, while stressing that these changes affect “a very small segment of our business in the United States.”
Likewise, the source also underlined that the changes will have no impact on its growing retail broker dealer business, which is currently the eighth largest in the United States. “USA continues to be a fundamental market for the growth of RBC Wealth Management,” he said.
Finally, RBC wanted to make it quite clear that they remain operational and shall continue to serve their clients during this transition period, a period which has already started and which will continue until April 2015. During this stage, both RBC clients and employees will continue to receive timely information, which will give them enough time to make thoughtful decisions.
RBC wants to underlined too that the bank counts with International Advisory Group (IAG) that is separate from the U.S. Private Banking business. The IAG will continue to operate as a business line within WM – International, under the leadership of Ricardo Morean and will continue to leverage the infrastructure provided by the U.S. broker-dealer business to serve the investment needs of international clients from offices in the U.S.
As other sources familiar with the closure told Funds Society, the decision to close the Miami and Houston offices was reported internally last Wednesday and approximately 20 bankers have been affected: 15 of them in Miami, and five in Houston, as well as five investment specialists in New York. In Miami, where in addition to the private banking division there is a broker dealer, the bank employs around 100 people.
The international division of RBC Wealth Management serves high-net-worth (HNW) clients and a niche of corporate and institutional clients worldwide.
It should be recalled that last July RBC Wealth Management reported the closure of its office in Santiago de Chile after six years in the country and as part of a strategic review of its business in Latin America, while just over one year ago, the Canadian bank´s office announced its departure from Uruguay, also on the grounds of strategic reasons.
