BNY Mellon announced that it has signed an agreement with Deutsche Asset & Wealth Management to provide real estate and infrastructure fund administration services, representing roughly $46.3 billion in assets under administration.
Last July, BNY Mellon and Deutsche AWM announced that they had entered into exclusive negotiations to complete an agreement. Terms of the deal, which closed effective February 1, were not disclosed.
Under the agreement, Deutsche AWM will outsource its direct real estate and infrastructure fund finance,fund accounting, asset management accounting, and client and financial reporting functions to BNY Mellon. Up to 80 members of Deutsche AWM’s fund finance team are expected to transfer to BNY Mellon and become part of its Alternative Investment Services business.
“As investors shift into other alternative investments, the market for real estate asset servicing is poised for solid growth,” said Samir Pandiri, executive vice president and CEO of Asset Servicing at BNY Mellon. “Investment managers are turning to asset servicers like us who are better positioned to make the necessary investments in technology and people to deliver a higher level of service.
“This important new relationship will allow us to develop a more integrated accounting and client reporting solution that leverages Deutsche Asset & Wealth Management’s global presence and team, and help propel the growth of our real estate fund administration business,” Pandiri added.
“We have developed a close partnership with BNY Mellon and look forward to working with them on this innovative initiative,” said Pierre Cherki, head of Alternatives and Real Assets for Deutsche AWM. “Our goal is to provide clients the best service possible in this area and this strategic relationship will enable us to benefit from the resources of one of the world’s leading investment servicing companies.”
Foto: AndresNieto, Flickr, Creative Commons. El milagro del consumo emergente menos claro que hace un año por culpa del crudo y las divisas
India tops the Credit Suisse Emerging Consumer Scorecard 2015, moving up from fourth in last year’s scorecard. India was rewarded for its consistent performance; being the only country to score in the top three for each of the key metrics mentioned above. China falls from first in last year’s Scorecard to fifth this time round and while it tends to dominate the debate surrounding EM, Credit Suisse analysts would note that, although the gloss may have come off this story, it remains far from the greatest source of consumer vulnerability in emerging markets. That lies in Russia and South Africa according to The Credit Suisse Emerging Consumer Survey.
The report analyses which of these economies and consumers are most exposed to the current commodity and currency volatility. India, Turkey and China are less directly exposed versus Russia, Latin America and South Africa.
The Credit Suisse Research Institute has published its fifth annual Emerging Consumer Survey – a detailed study profiling consumer sentiment and its drivers across the emerging world. The study provides a timely insight regarding consumer sentiment and future consumption patterns at a time when emerging economies are under a spotlight of concern with growth rates slowing and the prevailing commodity price and foreign exchange volatility posing new challenges.
1. e-Commerce and the emerging consumer
This year’s survey provides very positive support for the outlook of e-Commerce across the countries surveyed, with feedback from this year’s study indicating that e-Commerce across the nine countries could become bigger as a share of total retail sales than in developed economies.
Some of the reasons for this are: the relatively underdeveloped “bricks and mortar” retail sector, especially in more rural areas, the rapid increase in the share of consumers with smartphone-related inter net access creating new verticals of spending and the underlying driver of expanding disposable income. Today’s survey estimates that this could lift total annual online retail sales across our surveyed markets to as much as $3trn, which would impact companies across multiple sectors including retail, finance, security and technology.
Of particular note is the growth in online behavior amongst Indian consumers. For example, the share of respondents in India that have used the internet for online shopping increased to 32% from 20% in 2013, while the share that is likely to use the internet for online shopping in the future is now higher than that of China. Sizeable potential also lies in Latin America.
2. Travel & leisure and the emerging consumer
The desire to increase future spending on holidays and travel has been a consistent theme of all our previous surveys, and this continues into 2015. The propensity to travel has risen again in this survey with consumers holidaying rising from 45% to 65% during the life of our surveys with multiple holidays now a feature.The short- term trends manifest themselves differently by country. For example, the desire to travel more has accelerated most meaningfully in Mexico and India but has slowed in China, Turkey and South Africa.
The interaction with technology is a related theme and visible in the survey. Global travel distribution channels are evolving rapidly, with more emphasis on web-based bookings via both direct (company owned) and indirect channels (third party online travel agents). The associated changes in consumers’ chosen booking channel are having profound effects upon the industry value chain, especially for hotels, where margins are coming under pressure, though presenting great potential for the on-line platforms themselves
3. Autos and the emerging consumer
Mobility is another key trend for economies where GDP per capita is rising. The largest car market in the world, China, has continued its strong positive trend in car ownership, growing at a compound annual growth rate (CAGR) of 13% since our 2010 survey, the strongest growth in our survey. Turkey is also moving up the curve rapidly with a CAGR of 6%. Ownership rates have remained broadly stable in other regions. India and Indonesia have the lowest household car ownership rates, at 19% and 7% respectively, and in that respect are a source of great potential.
However, it important to note that the development of the car market in the emerging world, and particularly in China, cannot be looked at in isolation from regulatory developments in areas of pollution control, energy efficiency and also, if to a lesser extent, safety requirements. Where emissions are concerned in China, 2020targets for CO2, for example, require a 32% reduction from the 2013 actual level (versus 25% in Europe). This underlines the significance of technological developments in the auto component field addressing these needs.
4. Healthcare and the emerging consumer
Healthcare in emerging markets is seen as a structural growth opportunity by both companies and investors alike. Indeed the relationships between healthcare spending and rising GDP per capita are well established. The reality is that the picture is far more complicated than the simple relationships would suggest, particularly when translated into the revenue projections for companies. The nature of healthcare provision (public versus private), local versus global brand positioning and who is ultimately paying the bills are key considerations. Our survey provides a perspective on each of these issues and comes to a cautious view as to how the structural story translates to the corporate bottom line.
Access to healthcare growing -There is growing government involvement in most countries, with reported access to free medicines increasing from 26% of the emerging market population in 2011 to 48% in 2014.
Out-of-pocket spending remains stable – As a share of overall spending by consumers, out-of- pocket spending on healthcare has remained broadly flat at around 5% of income, but income that is of course growing.
Trust in local brands, safety concerns abating – We have seen an increase in overall trust for local brands (57% to 59% on a population-weighted basis, with increased confidence in India and China. The correlation between a lack of confidence in local brands and a willingness to pay for international brands continues to be a key feature.
The age/income conundrum – Both income and spending on pharmaceuticals increase with age in developed markets. The purchasing power and needs are aligned. Our survey continues to suggest that this is not the case in emerging markets in a world where disposable income continues to be more concentrated in the hands of the young. The need for healthcare and the location of purchasing power are not well aligned.
5. Brands and the emerging consumer
The report updates its unique brand analysis and draws out several key themes. The battle between domestic and global brands is a key focus, highlighting which products and preferences are skewed domestically.
The relevance of technology and e-commerce is a new feature to this debate and highlights the significance of domestic rather than global e-commerce brands and platforms and the challenges it poses to the global software companies and networks. In the hardware space, the analysis underpins the brand momentum of Apple, though Samsung displays the widest penetration and growing recognition across the emerging world. It is a standout brand across the widest range of categories.
Away from technology, a key theme from the survey is the accelerating penetration of the more typical “high street” brands such as H&M and Zara, at a time when luxury brands have been losing some of their gloss.
Photo: Mattbuck. Ficohsa Established as the Largest Bank in Honduras
After several consecutive years of growth, and following the acquisition of the consumer banking business of Banco Citibank Honduras and Cititarjetas de Honduras, Banco Ficohsa has established itself as the largest in Honduras, and among the 10 most important banks the Central American region. This is confirmed by official figures released by the National Banking and Insurance Commission (CNBS) in December 2014.
The financial institution has grown in several key banking indicators including assets, loans, and net worth, currently occupying the leading position in the country since the end of 2014.
“The results of the CNBS report confirm our position as the leading bank in Honduras,” said Camilo Atala, executive president of Grupo Financiero Ficohsa. “We believe in the region and will continue to explore growth opportunities that will allow us to reinforce our leadership position not only in Honduras, but in all of Central America.”
Ficohsa’s net assets grew 37.9% from December 2013 (USD $2,182 million) to December 2014 (USD $3,011 million), gaining 19.4 % of market share in Honduras. Ficohsa is followed by Banco Atlántida with 18.2% of market share (USD $2,821 million) and Banco Occidente with 13.7% market share (USD $ 2,123). The three Honduran banking institutions combined occupy more than 50% of market share in terms of net assets.
Additionally, Ficohsa occupies the leading position in terms of its loan portfolio, which grew 19.2%, from December 2013 (USD $1,596 million) to December 2014 (USD $1,902 million), granting Ficohsa 18.9% of market share in this area. Banco Atlántida’s loan portfolio reaches USD $1,751 million, followed by BAC with USD $1,348 million.
Ficohsa also leads in home loans, offering 18.3% of home loans in the Honduran market, totaling USD $299 million. It is followed by Banpaís with a current offering of USD $260 million and Davivienda with USD $211 million.
Banco Ficohsa’s net worth represents 21.1% of the entire Honduran financial market, followed by Banco Atlántida with 15.6% of market share and Banco Occidente with 13.6%.
As the song goes, “You may say I’m a dreamer, but I’m not the only one.” For those who invest in projects with the potential to make a positive difference in society – so-called “impact investing” – there is an opportunity both to change the world and to achieve positive returns on investment.
Impact investing has been expanding throughout the Latin American region, including in markets whose governments encourage such investments. In many Latin countries, investment capital for small- to mid-size businesses is limited and not easy to access, requiring owners to seek non-traditional sources of capital.
Here is where the opportunity lies. Identifying well managed but under-capitalized businesses, without the ability to fully realize their potential, can create positive change and can provide positive returns for investors who choose correctly.
One such opportunity comes in the form of renewable power projects that promise to transform Latin America’s energy markets in the coming decades. With dramatic declines in technology costs in this industry, investors can participate in explosive growth in a sustainable sector. In particular, both wind and solar power are poised to grow rapidly, given the region’s great, untapped natural resources.
The $425 million Penonome wind energy project in Panama, backed by InterEnergy and financed by the International Finance Corporation (IFC) and other lenders, is expected to begin to produce power in early 2015. In Panama, the price of power is extremely high, and blackouts and brownouts are endemic. The power market is currently driven by hydroelectric energy, but during the so-called “El Niño” dry seasons – such as the one we are currently in – this becomes problematic. The Penonome wind project, which is expected to be the largest in Central America, provides great opportunity: for the Panamanian people, by re-balancing sources of electricity and reducing power prices; and for InterEnergy and its investors, who expect to achieve above-average returns on their investment.
Wind power is increasing prevalent in the Latin America markets. From 2010 to 2012, Brazil, Chile and Mexico added 3.7 GW of wind projects, collectively. Solar power is heating up as well, and the ceiling for growth is high, considering that Latin America only constitutes just 2 percent of the global demand for solar power.
Another opportunity is in businesses that provide non-traditional forms of financing, targeting people at the base of the pyramid, the “brotherhood of man” in Latin America that traditional banks don’t serve. And the knowledge of how these businesses work comes not from developed countries but from other emerging markets, whose people have the same needs. Bayport Finance, which has microfinance businesses across Southern Africa, sees a great opportunity to serve the large unbanked population in Colombia, which has the fewest bank branches per person of any country in Latin America.
Development Financial Institutions play a key role in supporting businesses that provide non-traditional sources financing. For example, the Inter-American Development Bank (IDB) has a specialist division, Opportunities for the Majority (OMJ), is leading what will be a $50 million financing for Bayport in Colombia, designed to spur just this kind of impact investment. The OMJ’s goal is helping to “promote and finance market-based, sustainable business models that… develop and deliver quality products and services for the Base of the Pyramid in Latin America and the Caribbean. ”[1]
And time is on the side of the impact investor. Timelines are more forgiving, and, given the stature and clout of supporting institutions such as IFC and IDB, impact investments often have protections against competitive constraints on their success. Developers of renewable energy projects, protected by guaranteed revenue contracts, can offer very long tenured financing, in order to provide adequate returns to their investors. Impact investors working with these international organizations can afford to give businesses that make a positive difference the time to mature.
Impact investing can yield above-average returns, including (but not only) in the renewable energy and non-traditional finance sectors, and leading global investors are beginning to see the light. Each of these areas of investment can make the Latin American and Caribbean region a better place, while also providing a still untapped opportunity for impact investors.
Article by Ben Moody, President and CEO of Miami-based Pan American Finance, a specialized investment banking advisory firm providing world-class advisory services in Latin America, the Caribbean and the U.S. markets, including for renewable energy and financial services.
[1]IDB Opportunities for the Majority – Serving the Base of the Pyramid in Latin America – Inter-American Development Bank. (n.d.). Retrieved December 4, 2014, from http://www.iadb.org/en/topics/opportunities-for-the-majority/idb-opportunities-for-the-majority-serving-the-base-of-the-pyramid-in-latin-america,1377.html
Wikimedia CommonsFoto: JohnArmagh. Eaton Vance incorpora a un nuevo gestor y analista global de high yield
Eaton Vance Management International (EVMI) announced the appointment of Jeffrey D. Mueller as Vice President, Portfolio Manager and Global High Yield Analyst.
Based in London, Mr. Mueller will be responsible for spearheading continued growth in Eaton Vance’s global corporate credit capabilities. He will lead investment management and credit research for all non-U.S. high yield opportunities.
Mr. Mueller will join Eaton Vance in March 2015 from Threadneedle Asset Management, where he has been a High Yield Portfolio Manager and Investment Analyst since 2009. He managed European high yield credit portfolios, with focused research coverage of the automobile, industrials and services sectors. Mr. Mueller previously spent six years working as a European sub-investment-grade Research Analyst and Trader for Centaurus Capital and Amaranth Advisors, both in London. Mr. Mueller graduated from University of Wisconsin School of Business with a bachelor of business administration degree.
“Jeff’s skills and experience will enable us to further develop the scope and scale of our London-based global corporate credit capabilities,” said Michael W. Weilheimer, CFA, Eaton Vance’s Director of high yield, based in Boston. “Our team’s research analysts have long maintained significant coverage of non-U.S. credits. Jeff’s addition to the team allows us to leverage existing investment capabilities while enhancing the depth of our research and the reach of our global presence. We plan to hire additional global credit analysts later this year who will report to Jeff.”
Eaton Vance Corp., is one of the oldest investment management firms in the United States, with a history dating back to 1924. Eaton Vance and its affiliates managed $296.0 billion (USD) in assets as of 31 December 2014, offering individuals and institutions a broad array of investment strategies and wealth management solutions. EVMI, based in London since 2001, is a subsidiary of Eaton Vance Management, and provides investment services to financial institutions, banks, and asset management firms globally.
Foto: juan Antonio Capo, Flickr, Creative Commons. Dos de cada 3 nuevos fondos nunca llegan a alcanzar los 100 millones de euros
New research highlights the generally low success rate of fund groups in their product launches. Analysis by specialist research house, MackayWilliams, reveals that just 3% of funds launched between 2006 and 2011 reached more than €1bn of assets under management by 2014 (1) and less than 30% ever achieve assets of more than €100m.
“Most groups set the success bar for new products much higher, at around €500m, and with this target they have less than a one in 10 chance of hitting the mark” says Diana Mackay, CEO of MackayWilliams.
In the heavily regulated arena of asset management, the success of new funds has become a critical measure of a group’s asset building achievement. In the course of a year fund groups will launch 2,000 funds, on average, and yet the overwhelming majority will fail to gather meaningful assets. With a product choice of around 35,000 in Europe, why do investors need more?
“New funds are the revenue generators of the future and, like it or not, they are responsible for significant net sales inflow, regardless of whether they are launched by a group with captive clients or are reliant on third party distribution”, explains Diana Mackay. “Of the €2.5trn of asset growth that has occurred over the last five years, nearly half (€1.1trn) has come from funds that were launched during the period. Innovation has always been the lifeblood of the fund management business but with regulatory pressures growing it is taking longer and getting harder to introduce new ideas. Nowadays, product developers and strategists must make every fund work for its space on distributors’ shelves and this means culling the dead wood as well as launching funds that really have appeal with changing investor appetite.”
Increasingly success will be linked to independent evaluation of feedback from fund selectors about where the product gaps exist. An extensive interview process conducted by Fund Buyer Focus provides the voice of clients, and represents a vital additional source of information for product developers. The latest product innovation report highlights rising interest amongst distributors for ESG products, some niche appetite for frontier funds and other thematics, as well as more ‘solutions’.
Radisson Victoria Plaza Hotel, Montevideo. Montevideo Will Host FIAP’s Traditional International Seminar to be Held in September
The International Federation of Pension Funds, FIAP, changes the traditional date for the celebration of its International Seminar to September. As reported by the organization, the venue for the 13thFIAP International Seminar, to be held on the 24th and 25th of September 2015, is the Radisson Victoria Plaza Hotel in Montevideo, Uruguay.
As in previous occasions, the event will feature international experts who will discuss their experience and knowledge in different areas of interest, and participants from different global latitudes (FIAP members and others), including government officials, parliamentarians, officials from international organizations, representatives from pension fund management, mutual funds, and insurance companies, and other personalities related to the financial sector and social security.
The current pension system in Uruguay is a “mixed retirement system” where there are two subsystems, one called intergenerational solidarity and another based on individual savings. The covered employee makes contributions to both systems according to their income level. Contributions to the first are administered by the Social Security Bank, while the contributions to individual accounts make up the “Fondo de Ahorro Previsional” an independent Pension Savings Fund, which is the property of members and indefeasible, and which is under the administration of the Pension Savings Fund Administrators (AFAP).
For more information about the event, please contact FIAP through the following email: fiap@fiap.
Guernsey-based Praxis Group and Jersey-based IFM Group have announced plans to merge and create one of the largest independent and owner-managed financial services groups headquartered in the Channel Islands.
With combined revenues of over £23 million, assets under administration of more than $30bn, nine offices around the world and over 200 people, PraxisIFM will offer private and corporate clients an increased range of services and a global footprint. Subject to regulatory approval, the new group will be known as PraxisIFM to reflect the merger of two existing businesses of a similar size with strong performance, proud histories and solid reputations.
‘As long-standing, independently-owned and managed businesses, Praxis and IFM share similar values and culture. Both businesses strive to offer excellent client service, added value and continuity of teams. These will remain at the heart of the PraxisIFM Group,’ said Brian Morris, who will become the merged group’s executive chairman.
PraxisIFM will continue to focus on delivering outstanding private client services, fund administration, corporate and trade services including cross-border trade facilitation, asset finance, pensions and treasury operations. PraxisIFM’s offices will be located in Guernsey, Jersey, Switzerland, Malta, Luxembourg, South Africa, New Zealand, Mauritius and Dubai, with representation in the UK.
Wyvern Partners have assisted with the transaction.
Photo: Ted McGrath. Colombia's ASOFONDOS Celebrates the Eight Edition of its Annual Congress
The eighth version of the FIAP-ASOFONDOS Congress is to be held at the Hilton Hotel in Cartagena de Indias, Colombia, on the 16th and 17th of April 2015.
Last year’s event, attended by 489 participants from 16 countries, presentations by 14 international and 15 national speakers, allowed experts and attendees to debate on issues such as pension systems and their influence on the economic environment, the recovery of the world economy, with special reference to financial markets in Latin America, and successful international experiences in those sectors currently posing Colombia’s greatest challenges, such as education, infrastructure, and agriculture.
The FIAP ASOFONDOS Congress has established itself as an event of academic excellence in which knowledge on the most relevant topics for the region and the country is promoted through the opinions of a select group of international and national speakers, and the perspective of key government agents.
To register for this event or to obtain further information, please follow this link.
Photo: Giuseppe Milo. Irish Domiciled Mutual Funds Continue to be Repositioned in Chilean AFPs’ Portfolios
2014 ended with about US$52.5 billion invested in international funds (excluding ETFs) by the Chilean AFPs. The year was marked by the return of funds registered in Ireland to pension funds’ investment portfolios, since Chile’s Risk Classification Committee Risk (CCR), decided in September 2011 to remove all mutual funds domiciled in Ireland from its list of approved funds, due to Ireland’s perceived risk at that time in the context of the euro crisis.
This situation was reverted during 2014, normalizing steadily as the CCR gradually re-approved funds domiciled in Ireland. In total, at the end of December there were US$2.2 billion invested by Chilean pension funds in funds registered in Ireland. We continue to see new additions to this list monthly. In December, one of the three funds which premiered among Chilean AFPs was domiciled in Ireland; this was the Muzinich Short Duration High Yield Fund, which becomes part of the list of international funds in the hands of Chilean AFPs with US$40 million in assets. Nicolás Lasarte, head for Latin America at Capital Strategies, a company which is the exclusive distributor of Muzinich funds in Latin America, expressed his “great satisfaction” to Funds Society with this change which provides the opportunity to increase the availability of niche products for Chilean pension funds. “Although since 2011 we have been increasing Muzinich assets very steadily in the Chilean market, we could not be completely satisfied without access to pension funds and other institutions in the scope of influence of the CCR” added Lasarte. This is the first Muzinich fund which has obtained assets from Chilean pension fund management companies.
During the month of December, there have been only two other international funds, excluding ETFs, that have become part of this select group of funds. These are the Luxembourg domiciled Aberdeen Global Japanese Equity Fund, which has obtained assets of US$30 million from pension funds, and the Henderson UK Equity Income and Growth Fund, a fund domiciled in the UK which has obtained inflows of US$3.5 million.
For the time being, Luxembourg continues to be the quintessential home of international funds in which Chilean AFPs invest, with US$40.6 billion in assets at the end of December. Following is a list of the 10 international funds with most assets invested by the AFPs:
